EXHIBIT 4.2
BEAR XXXXXXX ASSET BACKED SECURITIES I LLC,
Depositor
[_______________________],
Seller and Company
[_______________________],
Master Servicer and Securities Administrator
and
[_______________________],
Trustee
--------------------
POOLING AND SERVICING AGREEMENT
Dated as of ____ 1, 200__
----------------------------------------
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 200__-___
ASSET-BACKED CERTIFICATES, SERIES 200__-___
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 2
Section 1.01 Defined Terms .............................................................................. 2
Section 1.02 Allocation of Certain Interest Shortfalls .................................................. 26
ARTICLE II CONVEYANCE OF TRUST FUND REPRESENTATIONS AND WARRANTIES 26
Section 2.01 Conveyance of Trust Fund ................................................................... 26
Section 2.02 Acceptance of the Mortgage Loans ........................................................... 28
Section 2.03 Representations, Warranties and Covenants of the Company and the Seller .................... 30
Section 2.04 Representations and Warranties of the Depositor ............................................ 40
Section 2.05 Delivery of Opinion of Counsel in Connection with Substitutions and Repurchases ............ 41
Section 2.06 Countersignature and Delivery of Certificates .............................................. 42
Section 2.07 Purposes and Powers of the Trust ........................................................... 42
ARTICLE III ADMINISTRATION AND SERVICING OF COMPANY MORTGAGE LOANS BY COMPANY 43
Section 3.01 The Company ................................................................................ 43
Section 3.02 Due-on-Sale Clauses; Assumption Agreements ................................................. 44
Section 3.03 Subservicers ............................................................................... 45
Section 3.04 Documents, Records and Funds in Possession of Company to Be Held for Trustee ............... 45
Section 3.05 Maintenance of Hazard Insurance ............................................................ 46
Section 3.06 Presentment of Claims and Collection of Proceeds ........................................... 47
Section 3.07 Maintenance of the Primary Mortgage Insurance Policies ..................................... 47
Section 3.08 Fidelity Xxxx, Errors and Omissions Insurance .............................................. 48
Section 3.09 Realization upon Defaulted Mortgage Loans; Determination of Excess Liquidation Proceeds
and Realized Losses; Repurchases of Certain Mortgage Loans ................................. 48
Section 3.10 Servicing Compensation ..................................................................... 51
Section 3.11 REO Property ............................................................................... 51
Section 3.12 Liquidation Reports ........................................................................ 51
Section 3.13 Annual Statement as to Compliance .......................................................... 52
Section 3.14 Assessments of Compliance and Attestation Reports .......................................... 52
Section 3.15 Books and Records .......................................................................... 54
ARTICLE IV ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY MASTER SERVICER 54
Section 4.01 Master Servicer ............................................................................ 54
Section 4.02 REMIC-Related Covenants .................................................................... 55
Section 4.03 Monitoring of Company and Servicer ......................................................... 56
Section 4.04 Fidelity Bond .............................................................................. 57
Section 4.05 Power to Act; Procedures ................................................................... 57
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Section 4.06 Due-on-Sale Clauses; Assumption Agreements ................................................. 58
Section 4.07 Release of Mortgage Files .................................................................. 58
Section 4.08 Documents, Records and Funds in Possession of Master Servicer, Company and Servicer to Be
Held for Trustee. .......................................................................... 59
Section 4.09 Standard Hazard Insurance and Flood Insurance Policies ..................................... 60
Section 4.10 Presentment of Claims and Collection of Proceeds ........................................... 60
Section 4.11 Maintenance of the Primary Mortgage Insurance Policies ..................................... 61
Section 4.12 Trustee to Retain Possession of Certain Insurance Policies and Documents ................... 61
Section 4.13 Realization upon Defaulted Mortgage Loans .................................................. 62
Section 4.14 Compensation for the Master Servicer ....................................................... 62
Section 4.15 REO Property ............................................................................... 62
Section 4.16 Annual Statement as to Compliance .......................................................... 63
Section 4.17 Assessments of Compliance and Attestation Reports .......................................... 63
Section 4.18 [Reserved.] ................................................................................ 65
Section 4.19 Company .................................................................................... 65
Section 4.20 UCC ........................................................................................ 65
Section 4.21 Optional Purchase of Certain Mortgage Loans ................................................ 65
Section 4.22 Books and Records .......................................................................... 66
ARTICLE V ACCOUNTS 66
Section 5.01 Collection of Mortgage Loan Payments; Protected Account .................................... 66
Section 5.02 Permitted Withdrawals From the Protected Account ........................................... 68
Section 5.03 Collection of Taxes; Assessments and Similar Items; Escrow Accounts ........................ 70
Section 5.04 Servicer Protected Accounts ................................................................ 71
Section 5.05 Master Servicer Collection Account ......................................................... 72
Section 5.06 Permitted Withdrawals and Transfers from the Master Servicer Collection Account ............ 73
Section 5.07 Distribution Account ....................................................................... 74
Section 5.08 Permitted Withdrawals and Transfers from the Distribution Account .......................... 74
ARTICLE VI DISTRIBUTIONS AND ADVANCES 76
Section 6.01 Advances ................................................................................... 76
Section 6.02 Compensating Interest Payments ............................................................. 77
Section 6.03 [Reserved.] ................................................................................ 78
Section 6.04 Distributions .............................................................................. 78
Section 6.05 Monthly Statements to Certificateholders ................................................... 80
Section 6.06 REMIC Designation .......................................................................... 84
ARTICLE VII THE CERTIFICATES 84
Section 7.01 The Certificates ........................................................................... 84
Section 7.02 Certificate Register; Registration of Transfer and Exchange of Certificates ................ 85
Section 7.03 Mutilated, Destroyed, Lost or Stolen Certificates .......................................... 88
Section 7.04 Persons Deemed Owners ...................................................................... 89
Section 7.05 Access to List of Certificateholders' Names and Addresses .................................. 89
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Section 7.06 Book-Entry Certificates .................................................................... 89
Section 7.07 Notices to Depository ...................................................................... 90
Section 7.08 Definitive Certificates .................................................................... 90
Section 7.09 Maintenance of Office or Agency ............................................................ 91
ARTICLE VIII THE COMPANY AND THE MASTER SERVICER 91
Section 8.01 Liabilities of the Depositor, the Company and the Master Servicer .......................... 91
Section 8.02 Merger or Consolidation of the Depositor, the Company or the Master Servicer ............... 91
Section 8.03 Indemnification of the Trustee, the Master Servicer and the Securities Administrator ....... 92
Section 8.04 Limitations on Liability of the Depositor, the Company, the Master Servicer and Others ..... 93
Section 8.05 Master Servicer and Company Not to Resign .................................................. 94
Section 8.06 Successor Master Servicer .................................................................. 95
Section 8.07 Sale and Assignment of Master Servicing .................................................... 95
ARTICLE IX DEFAULT; TERMINATION OF MASTER SERVICER; TERMINATION OF COMPANY 96
Section 9.01 Events of Default .......................................................................... 96
Section 9.02 Trustee to Act; Appointment of Successor ................................................... 97
Section 9.03 Notification to Certificateholders ......................................................... 99
Section 9.04 Waiver of Defaults ......................................................................... 99
Section 9.05 Company Default ............................................................................ 99
Section 9.06 Waiver of Company Defaults ................................................................. 101
ARTICLE X CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR 101
Section 10.01 Duties of Trustee and Securities Administrator ............................................ 101
Section 10.02 Certain Matters Affecting the Trustee and the Securities Administrator .................... 103
Section 10.03 Trustee and Securities Administrator Not Liable for Certificates or Mortgage Loans ........ 105
Section 10.04 Trustee and Securities Administrator May Own Certificates ................................. 105
Section 10.05 Trustee's and Securities Administrator's Fees and Expenses ................................ 105
Section 10.06 Eligibility Requirements for Trustee and Securities Administrator ......................... 106
Section 10.07 Insurance ................................................................................. 106
Section 10.08 Resignation and Removal of Trustee and Securities Administrator ........................... 106
Section 10.09 Successor Trustee or Securities Administrator ............................................. 107
Section 10.10 Merger or Consolidation of Trustee or Securities Administrator ............................ 108
Section 10.11 Appointment of Co-Trustee or Separate Trustee ............................................. 108
Section 10.12 Tax Matters ............................................................................... 109
Section 10.13 Reports Filed with Securities and Exchange Commission ..................................... 112
Section 10.14 Intention of the Parties and Interpretation ............................................... 114
ARTICLE XI TERMINATION 115
Section 11.01 Termination upon Liquidation or Repurchase of all Mortgage Loans .......................... 115
Section 11.02 Final Distribution on the Certificates .................................................... 116
Section 11.03 Additional Termination Requirements ....................................................... 117
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ARTICLE XII MISCELLANEOUS PROVISIONS 118
Section 12.01 Amendment ................................................................................. 118
Section 12.02 Recordation of Agreement; Counterparts .................................................... 119
Section 12.03 Governing Law ............................................................................. 119
Section 12.04 Intention of Parties ...................................................................... 120
Section 12.05 Notices ................................................................................... 120
Section 12.06 Severability of Provisions ................................................................ 121
Section 12.07 Assignment ................................................................................ 121
Section 12.08 Limitation on Rights of Certificateholders ................................................ 121
Section 12.09 Inspection and Audit Rights ............................................................... 122
Section 12.10 Certificates Nonassessable and Fully Paid ................................................. 122
Exhibits
Exhibit A-1 Form of Class A Certificates
Exhibit A-2 Form of Class M Certificates
Exhibit A-3 Form of Class B Certificates
Exhibit A-4 Form of Class R Certificate
Exhibit B Mortgage Loan Schedule
Exhibit C-1 Form of Initial Certification of Trustee
Exhibit C-2 Form of Interim Certification of Trustee
Exhibit C-3 Form of Final Certification of Trustee
Exhibit D Form of Transfer Affidavit
Exhibit E Form of Transferor Certificate
Exhibit F Form of Investment Letter (Non-Rule 144A)
Exhibit G Form of Rule 144A Investment Letter
Exhibit H Form of Request for Release
Exhibit I DTC Letter of Representations
Exhibit J Schedule of Mortgage Loans with Lost Notes
Exhibit K Form of Custodial Agreement
Exhibit L Form of Back-Up Certification
Exhibit M Form of Mortgage Loan Purchase Agreement
Exhibit N Servicing Criteria to Be Addressed in Assessment of Compliance
Exhibit O Form 10-D, Form 8-K and Form 10-K Reporting Responsibility
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POOLING AND SERVICING AGREEMENT, dated as of _____ 1, 200__, among BEAR
XXXXXXX ASSET BACKED SECURITIES I LLC, a Delaware limited liability company, as
depositor (the "Depositor"), _________________________________________, a
_______________________, as seller (in such capacity, the "Seller") and as
company (in such capacity, the "Company"),
______________________________________________________, a
_____________________________, as master servicer (in such capacity, the "Master
Servicer") and as securities administrator (in such capacity, the "Securities
Administrator") and ________________________________________, a
___________________________________, not in its individual capacity, but solely
as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby conveyed to
the Trustee in return for the Certificates.
As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as the "REMIC Trust." The Class R Certificate will
represent the sole class of "residual interests" in the REMIC Trust for purposes
of the REMIC Provisions (as defined herein) under federal income tax law.
The following table irrevocably sets forth the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for each Class of
Certificates that represents one or more of the "regular interests" in the REMIC
Trust created hereunder:
Initial Certificate
Assumed Final Class
Designation Maturity Date (1) Principal Balance Pass-Through Rate
----------------------------- ----------------- ---------------------------
[Class A-1] $ Class A-1 Pass-Through Rate
[Class M-1] $ Class M-1 Pass Through Rate
[Class M-2] $ Class M-2 Pass-Through Rate
[Class B-1] $ Class B-1 Pass Through Rate
----------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the maturity
date for the Mortgage Loan with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates that represents one or more of the "regular interests" in the
REMIC Trust.
The Trust Fund shall be named, and may be referred to as, the "Bear
Xxxxxxx Asset Backed Securities Trust 200__-___." The Certificates issued
hereunder may be referred to as "Asset-Backed Certificates Series 200__-___"
(including for purposes of any endorsement or assignment of a Mortgage Note or
Mortgage).
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer, the Securities Administrator, the Seller, the Company and
the Trustee agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
In addition to those terms defined in Section 1.02, whenever used in this
Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
Accepted Master Servicing Practices: With respect to any Mortgage Loan, as
applicable, either (a) those customary mortgage servicing practices of prudent
mortgage servicing institutions that master service mortgage loans of the same
type and quality as such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is located, to the extent applicable to the Trustee or the
Master Servicer (except in its capacity as successor to the Company or the
related Servicer), or (b) as provided in Section 3.01 hereof or as provided in
the related Servicing Agreement, but, in each case, in no event below the
standard set forth in clause (a).
Accepted Servicing Practices: With respect to each Company Mortgage Loan,
those mortgage servicing practices (including collection procedures) that are in
accordance with all applicable statutes, regulations and prudent mortgage
banking practices for similar mortgage loans.
Account: The Distribution Account, the Master Servicer Collection Account,
the Net WAC Reserve Fund and any Protected Account.
Accrual Period: With respect to the Certificates (other than the Class
[M-2], Class [B-1] and Class R Certificates) and any Distribution Date, the
calendar month immediately preceding such Distribution Date. With respect to the
Class [M-2] Certificates and Class [B-1] Certificates and any Distribution Date,
the period from and including the 25th day of the calendar month preceding the
calendar month in which the Distribution Date occurs (or with respect to the
first Accrual Period, the Closing Date) to and including the 24th day of the
calendar month in which such Distribution Date occurs. All calculations of
interest on the Certificates (other than the Class [M-2], Class [B-1] and Class
R Certificates) will be made on the basis of a 360-day year consisting of twelve
30-day months. All calculations of interest on the Class [M-2] Certificates and
Class [B-1] Certificates will be made on the basis of the actual number of days
elapsed in the related Accrual Period.
Advance: An advance of delinquent payments of principal or interest in
respect of a Mortgage Loan required to be made by the Company as provided in
Section 6.01(a) hereof, by the related Servicer in accordance with the related
Servicing Agreement or by the Master Servicer as provided in Section 6.01(b)
hereof.
Agreement: This Pooling and Servicing Agreement and any and all amendments
or supplements hereto made in accordance with the terms herein. Amount Held for
Future Distribution: As to any Distribution Date, the aggregate amount held in
the Company's or the related Servicer's Protected Account at the close of
business on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage Loans
due after the related Due Period and (ii) Principal Prepayments, Liquidation
Proceeds and Insurance Proceeds received in respect of such Mortgage Loans after
the last day of the related Prepayment Period.
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Applied Realized Loss Amount: With respect to any Distribution Date and a
Class of Subordinated Certificates the sum of the Realized Losses with respect
to the Mortgage Loans which are to be applied in reduction of the Certificate
Principal Balance of that Class of Certificates pursuant to this Agreement,
which shall, on any such Distribution Date equal with respect to the Class
[B-1], Class [M-2] and Class [M-1] Certificates, so long as their respective
Certificate Principal Balances have not been reduced to zero, the amount, if
any, by which, (i) the aggregate Certificate Principal Balance of all of the
Certificates (after all distributions of principal on such Distribution Date and
the allocation of Realized Losses on such Distribution Date) exceeds (ii) the
aggregate Stated Principal Balance of all of the Mortgage Loans as of the last
day of the related Due Period.
Appraised Value: With respect to any Mortgage Loan originated in
connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised value of the
Mortgaged Property based upon the appraisal made by a fee appraiser at the time
of the origination of the related Mortgage Loan, and (y) the sales price of the
Mortgaged Property at the time of such origination.
Assessment of Compliance: As defined in Section 4.17.
Assignment Agreement: Collectively, the _______________ Assignment
Agreement, the _______________ Assignment Agreement and the _______________
Assignment Agreement.
Attestation Report: As defined in Section 4.17.
Available Funds: The sum of Interest Funds and Principal Funds with
respect to the Mortgage Loans.
Bankruptcy Code: Title 11 of the United States Code.
Basic Principal Distribution Amount: Shall mean, with respect to any
Distribution Date, the lesser of (a) the excess of (i) the Available Funds for
such Distribution Date over (ii) the aggregate Monthly Interest Distributable
Amount for the Certificates (other than the Class R Certificate) for such
Distribution Date and (b) the excess of (i) the Principal Remittance Amount for
such Distribution Date over (ii) the Overcollateralization Release Amount, if
any, for such Distribution Date.
Book-Entry Certificates: Any of the Certificates that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a person maintaining
an account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 7.06). As of the Closing Date, each Class
of Regular Certificates constitutes a Class of Book-Entry Certificates.
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Business Day: Any day other than (i) a Saturday or a Sunday, or (ii) a day
on which banking institutions in The City of New York, New York,
_______________, or the city in which the Corporate Trust Office of the Trustee
or the principal office of the Company or the Master Servicer is located are
authorized or obligated by law or executive order to be closed.
Certificate: Any one of the certificates of any Class executed and
authenticated by the Trustee in substantially the forms attached hereto as
Exhibits A-1 through A-7.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other than the Class
R Certificate) and as of any Distribution Date, the Initial Certificate
Principal Balance of such Certificate less the sum of (i) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to Section
6.04, and (ii) in the case of any Subordinated Certificate, any Applied Realized
Loss Amounts allocated to such Certificate on previous Distribution Dates.
Certificate Register: The register maintained pursuant to Section 7.02
hereof.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register (initially, Cede & Co., as nominee for
the Depository, in the case of any Book-Entry Certificates).
Class: All Certificates bearing the same Class designation as set forth in
Section 7.01 hereof.
Class A-1 Certificate: Any Certificate designated as a "Class A-1
Certificate" on the face thereof, in the form of Exhibit A-1 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class A-1 Certificates as set forth herein and evidencing a Regular Interest
in the REMIC Trust.
Class A-1 Pass-Through Rate: Shall mean (i) on any Distribution Date which
occurs on or prior to the Optional Termination Date, _____% per annum and (ii)
for each Distribution Date thereafter, _____% per annum[, in each case subject
to a cap equal to the Net WAC Rate Cap for such Distribution Date].
Class B-1 Certificate: Any Certificate designated as a "Class B-1
Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class B-1 Certificates as set forth herein and evidencing a Regular Interest
in the REMIC Trust.
Class B-1 Pass-Through Rate: Shall mean (i) on any Distribution Date which
occurs on or prior to the Optional Termination Date, the related LIBOR Rate and
(ii) for each Distribution Date thereafter, the related LIBOR Rate plus _____%
per annum, [in each case subject to a cap equal to the Net WAC Rate Cap for such
Distribution Date].
Class M-1 Certificate: Any Certificate designated as a "Class M-1
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class M-1 Certificates as set forth herein and evidencing a Regular Interest
in the REMIC Trust.
4
Class M-1 Pass-Through Rate: Shall mean (i) on any Distribution Date which
occurs on or prior to the Optional Termination Date, _____% per annum and (ii)
for each Distribution Date thereafter, _____% per annum[, in each case subject
to a cap equal to the Net WAC Rate Cap for such Distribution Date].
Class M-2 Certificate: Any Certificate designated as a "Class M-2
Certificate" on the face thereof, in the form of Exhibit A-2 hereto,
representing the right to the Percentage Interest of distributions provided for
the Class M-2 Certificates as set forth herein and evidencing a Regular Interest
in the REMIC Trust.
Class M-2 Pass-Through Rate: Shall mean (i) on any Distribution Date which
occurs on or prior to the Optional Termination Date, the related LIBOR Rate and
(ii) for each Distribution Date thereafter, the related LIBOR Rate plus _____%
per annum[, in each case subject to a cap equal to the Net WAC Rate Cap for such
Distribution Date].
Class R Certificate: The Certificate designated the "Class R Certificate"
on the face thereof, in substantially the form set forth in Exhibit A-4 hereto,
evidencing the sole class of "residual interests" (within the meaning of Section
860G(a)(2) in the REMIC Trust.
Closing Date: _____ __, 200__.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Company Assessment of Compliance: As defined in Section 3.14.
Company Attestation Report: As defined in Section 3.14.
Compensating Interest: An amount, not to exceed the Servicing Fee, to be
deposited in the Master Servicer Collection Account by the Company or the
related Servicer to the payment of a Prepayment Interest Shortfall on a Mortgage
Loan subject to this Agreement; provided that in the event the Company or the
related Servicer fails to make such payment, the Master Servicer shall be
obligated to do so pursuant to Section 6.02(c) hereof.
Corporate Trust Office: The designated office of the Trustee where at any
particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
Agreement is located at ______________________________, or at such other address
as the Trustee may designate from time to time.
Cross-Over Date: The first Distribution Date on which the aggregate
Certificate Principal Balance of the Subordinated Certificates has been reduced
to zero (giving effect to all distributions on such Distribution Date).
Custodial Agreement: An agreement dated as of the Closing Date among the
Depositor, the Seller, the Trustee and the Custodian in substantially the form
of Exhibit K hereto.
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Custodian: ________________________________________________, or any
successor custodian appointed pursuant to the provisions hereof and the
Custodial Agreement.
Cut-off Date: The close of business on _____ 1, 200__.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof as of the close of business on the Cut-off Date after
application of all Principal Prepayments received prior to the Cut-off Date and
scheduled payments of principal due on or before the Cut-off Date, whether or
not received, but without giving effect to any installments of principal
received in respect of Due Dates after the Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction by
a court of competent jurisdiction in a proceeding under the Bankruptcy Code in
the Scheduled Payment for such Mortgage Loan that became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any other reduction that results in a permanent forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under such Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any Scheduled Payment that
results in a permanent forgiveness of principal, which valuation or reduction
results from an order of such court that is final and non-appealable in a
proceeding under the Bankruptcy Code.
Definitive Certificates: As defined in Section 7.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced by a
Replacement Mortgage Loan.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
Denomination: With respect to each Certificate, the amount set forth on
the face thereof as the "Initial Principal Balance of this Certificate".
Depositor: Bear Xxxxxxx Asset Backed Securities I LLC, a Delaware limited
liability company, or its successor in interest.
Depository: The initial Depository shall be The Depository Trust Company
("DTC"), the nominee of which is Cede & Co., or any other organization
registered as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended. The Depository shall initially be the
registered Holder of the Book-Entry Certificates. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
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Depository Agreement: With respect to the Class of Book-Entry
Certificates, the agreement among the Depositor, the Trustee and the initial
Depository, dated as of the Closing Date, substantially in the form of Exhibit
I.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to any Distribution Date, the _____th day
of the month of such Distribution Date or, if such _____th day is not a Business
Day, the immediately preceding Business Day.
Distribution Account: The separate Eligible Account created and maintained
by the Trustee pursuant to Section 5.07 in the name of the Trustee for the
benefit of the Certificateholders and designated "[Name of Trustee], in trust
for registered holders of Bear Xxxxxxx Asset Backed Securities Trust 200__-___,
Asset-Backed Certificates, Series 200__-___". Funds in the Distribution Account
shall be held in trust for the Certificateholders for the uses and purposes set
forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date, on or
before 3:00 p.m. Eastern time on the Business Day immediately preceding such
Distribution Date.
Distribution Date: The _____th day of each calendar month after the
initial issuance of the Certificates, or if such _____th day is not a Business
Day, the next succeeding Business Day, commencing in _____ 200__.
Due Date: As to any Mortgage Loan, the date in each month on which the
related Scheduled Payment is due, as set forth in the related Mortgage Note.
Due Period: With respect to any Distribution Date, the period from the
second day of the calendar month preceding the calendar month in which such
Distribution Date occurs through close of business on the first day of the
calendar month in which such Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, so long as Xxxxx'x is not a Rating Agency) are rated by each
Rating Agency in one of its two highest long-term and its highest short-term
rating categories respectively, at the time any amounts are held on deposit
therein, or (ii) an account or accounts in a depository institution or trust
company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
the Trustee and to each Rating Agency, the Certificateholders have a claim with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a trust account or accounts maintained with
the corporate trust department of a federal or state chartered depository
institution or trust company having capital and surplus of not less than
$50,000,000, acting in its fiduciary capacity or (iv) any other account
acceptable to the Rating Agencies. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee.
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Company Mortgage Loans: Shall mean those Mortgage Loans serviced by the
Company pursuant to the terms of this Agreement.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
ERISA Restricted Certificate: The Class R Certificate.
Event of Default: As defined in Section 9.01 hereof.
Exemption: Prohibited Transaction Exemption 90-30, as amended from time to
time.
Excess Liquidation Proceeds: To the extent not required by law to be paid
to the related Mortgagor, the excess, if any, of any Liquidation Proceeds with
respect to a Mortgage Loan over the Stated Principal Balance of such Mortgage
Loan and accrued and unpaid interest at the related Mortgage Rate through the
last day of the month in which the Mortgage Loan has been liquidated.
Extra Principal Distribution Amount: With respect to any Distribution Date
(a) on or prior to the earlier of (1) the [10]% Clean-Up Call Date and (2) the
Distribution Date in _____ 20_____, the lesser of (x) the Net Monthly Excess
Cashflow for such Distribution Date and (y) the Overcollateralization Increase
Amount for such Distribution Date; and (b) thereafter, the Net Monthly Excess
Cashflow for such Distribution Date.
Xxxxxx Xxx: Xxxxxx Xxx (formerly, Federal National Mortgage Association),
or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Final Recovery Determination: With respect to any defaulted Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property purchased by the
Seller or the [Master Servicer] pursuant to or as contemplated by Section
2.03(c) or Section 11.01), a determination made by the Company pursuant to this
Agreement or the applicable Servicer pursuant to the related Servicing Agreement
that all Insurance Proceeds, Liquidation Proceeds and other payments or
recoveries which the Company or such Servicer, in its reasonable good faith
judgment, expects to be finally recoverable in respect thereof have been so
recovered. The Master Servicer shall maintain records, based solely on
information provided by each Servicer, of each Final Recovery Determination made
thereby.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act
of 1989.
8
Freddie Mac: Freddie Mac (formerly The Federal Home Loan Mortgage
Corporation), or any successor thereto.
Indemnified Persons: The Trustee, the Master Servicer, the Company, the
Trust Fund and the Securities Administrator and their officers, directors,
agents and employees and, with respect to the Trustee, any separate co-trustee
and its officers, directors, agents and employees.
Initial Certificate Principal Balance: With respect to any Certificate,
the Certificate Principal Balance of such Certificate or any predecessor
Certificate on the Closing Date.
Insurance Policy: With respect to any Mortgage Loan included in the Trust
Fund, any insurance policy or LPMI Policy, including all riders and endorsements
thereto in effect with respect to such Mortgage Loan, including any replacement
policy or policies for any Insurance Policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Insurance Policy or any other insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, the Company, the related Servicer or the trustee under the deed of
trust and are not applied to the restoration of the related Mortgaged Property
or released to the Mortgagor in accordance with the procedures that the Company
or the related Servicer would follow in servicing mortgage loans held for its
own account, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses.
Insured Expenses: Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
Interest Determination Date: Shall mean the second LIBOR Business Day
preceding the commencement of each Accrual Period.
Interest Funds: For any Distribution Date, (i) the sum, without
duplication, of (a) all scheduled interest during the related Due Period with
respect to the related Mortgage Loans less the Servicing Fee, the Master
Servicing Fee and the LPMI Fee, if any, (b) all Advances relating to interest
with respect to the related Mortgage Loans made on or prior to the related
Distribution Account Deposit Date, (c) all Compensating Interest with respect to
the related Mortgage Loans and required to be remitted by the Company or the
Master Servicer pursuant to this Agreement or the related Servicer pursuant to
the related Servicing Agreement with respect to such Distribution Date, (d)
Liquidation Proceeds with respect to the related Mortgage Loans collected during
the related Prepayment Period (to the extent such Liquidation Proceeds relate to
interest), (e) all amounts relating to interest with respect to each Mortgage
Loan repurchased by the Seller pursuant to Sections 2.02 and 2.03 and by Company
pursuant to Section 4.21 and (f) all amounts in respect of interest paid by the
Master Servicer pursuant to Section 11.01, in each case to the extent remitted
by the Company or the related Servicer, as applicable, to the Distribution
Account pursuant to this Agreement or the related Servicing Agreement minus (ii)
all amounts relating to interest required to be reimbursed pursuant to Sections
5.02, 5.04, 5.06 and 5.08 or as otherwise set forth in this Agreement.
Interest Shortfall: With respect to any Distribution Date, means the
aggregate shortfall, if any, in collections of interest (adjusted to the related
Net Mortgage Rates) on Mortgage Loans resulting from (a) Principal Prepayments
in full received during the related Prepayment Period, (b) the partial Principal
Prepayments received during the related Prepayment Period to the extent applied
prior to the Due Date in the month of the Distribution Date and (c) interest
payments on certain of the Mortgage Loans being limited pursuant to the
provisions of the Relief Act or similar state laws.
9
Last Scheduled Distribution Date: _____ __, 20___.
Latest Possible Maturity Date: The Distribution Date following the final
scheduled maturity date of the Mortgage Loan in the Trust Fund having the latest
scheduled maturity date as of the Cut-off Date.
LIBOR Business Day: Shall mean a day on which banks are open for dealing
in foreign currency and exchange in London and New York City.
LIBOR Rate: Shall mean (i) with respect to the Class [M-2] Certificates,
[One-Month] LIBOR plus _____% per annum and (ii) with respect to the Class [B-1]
Certificates, [One-Month] LIBOR plus _____% per annum.
Liquidated Loan: With respect to any Distribution Date, a defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of foreclosure,
foreclosure sale, trustee's sale or other realization as provided by applicable
law governing the real property subject to the related Mortgage and any security
agreements and as to which the Company or the related Servicer has made a Final
Recovery Determination with respect thereto.
Liquidation Proceeds: Amounts, other than Insurance Proceeds, received in
connection with the partial or complete liquidation of a Mortgage Loan, whether
through trustee's sale, foreclosure sale or otherwise, or in connection with any
condemnation or partial release of a Mortgaged Property and any other proceeds
received with respect to an REO Property, less the sum of related unreimbursed
Advances, Servicing Fees, Master Servicing Fees and Servicing Advances and all
expenses of liquidation, including property protection expenses and foreclosure
and sale costs, including court and reasonable attorneys' fees.
Loan-to-Value Ratio: The fraction, expressed as a percentage, the
numerator of which is the original principal balance of the related Mortgage
Loan and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Loss Allocation Limitation: The meaning specified in Section 6.04A(c)
hereof.
LPMI Fee: Shall mean the fee payable to the insurer for each Mortgage Loan
subject to an LPMI Policy as set forth in such LPMI Policy.
LPMI Policy: A policy of mortgage guaranty insurance issued by an insurer
meeting the requirements of Xxxxxx Xxx and Freddie Mac in which the Company or
the related Servicer of the related Mortgage Loan is responsible for the payment
of the LPMI Fee thereunder from collections on the related Mortgage Loan.
Master Servicer: ________________________________________________, in its
capacity as master servicer, and its successors and assigns.
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Master Servicer Collection Account: The trust accounts or accounts created
and maintained pursuant to Section 5.05 hereof, which shall be entitled "[Name
of Servicer], as Trustee f/b/o holders of Bear Xxxxxxx Asset Backed Securities
Trust 200__-___, Asset Backed Certificates, Series 200__-___, Master Servicer
Collection Account".
Master Servicing Fee: As to each Mortgage Loan and any Distribution Date,
an amount equal to 1/12th of the Master Servicing Fee Rate multiplied by the
Stated Principal Balance of such Mortgage Loan as of the last day of the related
Due Period or, in the event of any payment of interest that accompanies a
Principal Prepayment in full during the related Due Period made by the Mortgagor
immediately prior to such prepayment, interest at the Master Servicing Fee Rate
on the Stated Principal Balance of such Mortgage Loan for the period covered by
such payment of interest.
Master Servicing Fee Rate: ___% per annum.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with
MERS on the MERS(R) System.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.
Monthly Interest Distributable Amount: With respect to the Certificates
(other than the Class R Certificate) for any Distribution Date, means an amount
equal to the interest accrued during the related Accrual Period at the
applicable Pass-Through Rate on the Certificate Principal Balance of such
Certificate immediately prior to such Distribution Date less such Certificate's
share of any Unpaid Interest Shortfall and the interest portion of any Realized
Losses on the Mortgage Loans allocated to such Certificate pursuant to Section
1.02. Accrued Certificate Interest is calculated on the basis of a 360-day year
consisting of twelve 30-day months. No Accrued Certificate Interest will be
payable with respect to any Class of Certificates after the Distribution Date on
which the outstanding Certificate Principal Balance of such Certificate has been
reduced to zero.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 6.05.
Moody's: Xxxxx'x Investors Service, Inc.
Mortgage: The mortgage, deed of trust or other instrument creating a first
lien on or first priority ownership interest in an estate in fee simple in real
property securing a Mortgage Note.
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Mortgage File: The mortgage documents listed in Section 2.01 hereof
pertaining to a particular Mortgage Loan and any additional documents delivered
to the Trustee to be added to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the Mortgage Loans transferred and assigned to the
Trustee pursuant to the provisions hereof, as from time to time are held as a
part of the Trust Fund (including any REO Property), the mortgage loans so held
being identified in the Mortgage Loan Schedule, notwithstanding foreclosure or
other acquisition of title of the related Mortgaged Property. Any mortgage loan
that was intended by the parties hereto to be transferred to the Trust Fund as
indicated by such Mortgage Loan Schedule which is in fact not so transferred for
any reason including, without limitation, a breach of the representation
contained in Section 2.03(b)(v) hereof, shall continue to be a Mortgage Loan
hereunder until the Purchase Price with respect thereto has been paid to the
Trust Fund.
Mortgage Loan Purchase Agreement: The Mortgage Loan Purchase Agreement
dated as of ____ __, 200__, between the Seller, as seller and the Depositor, as
purchaser.
Mortgage Loan Purchase Price: The price, calculated as set forth in
Section 11.01, to be paid in connection with the repurchase of the Mortgage
Loans pursuant to Section 11.01.
Mortgage Loan Schedule: The list of Mortgage Loans (as from time to time
amended by the Company or the Master Servicer to reflect the deletion of Deleted
Mortgage Loans and the addition of Replacement Mortgage Loans pursuant to the
provisions of this Agreement) transferred to the Trustee as part of the Trust
Fund and from time to time subject to this Agreement, the initial Mortgage Loan
Schedule being attached hereto as Exhibit B, setting forth the following
information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Mortgage Rate in effect as of the Cut-off Date;
(iii) the Servicer (or the Company, if it services the Mortgage Loan),the
Servicing Fee Rate and the Master Servicing Fee Rate;
(iv) the Net Mortgage Rate in effect as of the Cut-off Date;
(v) the maturity date;
(vi) the original principal balance;
(vii) the Cut-off Date Principal Balance;
(viii) the original term;
(ix) the remaining term;
(x) the property type; and
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(xi) the MIN with respect to each Mortgage Loan. Such schedule shall also
set forth the aggregate Cut-off Date Principal Balance for all of
the Mortgage Loans.
Mortgage Note: The original executed note or other evidence of
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage Note.
Mortgaged Property: The underlying property securing a Mortgage Loan.
Mortgagor: The obligors on a Mortgage Note.
Net Interest Shortfalls: Shall mean Interest Shortfalls net of payments by
the Company, the Servicer or the Master Servicer in respect of Compensating
Interest.
Net Monthly Excess Cashflow: With respect to any Distribution Date, the
sum of (a) any Overcollateralization Release Amount and (b) the excess of (x)
the Available Funds for such Distribution Date over (y) the sum for such
Distribution Date of (A) the aggregate amount of the Monthly Interest
Distributable Amount for the Offered Certificates and (B) the Principal
Remittance Amount.
Net Mortgage Rate: As to each Mortgage Loan, and at any time, the per
annum rate equal to the related Mortgage Rate less the sum of (i) the Servicing
Fee Rate, (ii) the Master Servicing Fee Rate and (iii) the rate at which the
LPMI Fee is calculated, if any.
Net WAC Rate Cap: With respect to each Class of Offered Certificates and
each Distribution Date shall mean the weighted average of the Net Mortgage Rates
of the Mortgage Loans, weighted based on their Stated Principal Balances as of
the first day of the calendar month preceding the month in which the
Distribution Date occurs.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Nonrecoverable Advance: Any portion of an Advance previously made or
proposed to be made by the Company or the Master Servicer pursuant to this
Agreement or the related Servicer pursuant to the related Servicing Agreement,
that, in the good faith judgment of the Company, the Master Servicer or the
related Servicer, will not or, in the case of a proposed advance, would not, be
ultimately recoverable by it from the related Mortgagor, related Liquidation
Proceeds, Insurance Proceeds or otherwise.
Offered Certificates: The Class [A-1], Class [M-1], Class [M-2] and Class
[B-1] Certificates.
Officer's Certificate: A certificate (i) signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Vice President (however
denominated), an Assistant Vice President, the Treasurer, the Secretary, or one
of the assistant treasurers or assistant secretaries of the Depositor or the
Master Servicer (or any other officer customarily performing functions similar
to those performed by any of the above designated officers and also to whom,
with respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with a particular subject) or (ii), if
provided for in this Agreement, signed by a Servicing Officer, as the case may
be, and delivered to the Depositor, the Seller, the Securities Administrator,
the Master Servicer and/or the Trustee, as the case may be, as required by this
Agreement.
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One-Month LIBOR: With respect to any Accrual Period, the rate determined
by the Securities Administrator on the related Interest Determination Date on
the basis of the rate for U.S. dollar deposits for one month that appears on
Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such Interest
Determination Date; provided that the parties hereto acknowledge that One-Month
LIBOR for the first Accrual Period shall equal _____% per annum. If such rate
does not appear on such page (or such other page as may replace that page on
that service, or if such service is no longer offered, such other service for
displaying One-Month LIBOR or comparable rates as may be reasonably selected by
the Securities Administrator), One-Month LIBOR for the applicable Accrual Period
will be the Reference Bank Rate. If no such quotations can be obtained by the
Securities Administrator and no Reference Bank Rate is available, One-Month
LIBOR will be One-Month LIBOR applicable to the preceding Accrual Period. The
establishment of One-Month LIBOR on each Interest Determination Date by the
Securities Administrator and the Securities Administrator's calculation of the
rate of interest applicable to the Class [M-2] Certificates and Class [B-1]
Certificates for the related Accrual Period shall, in the absence of manifest
error, be final and binding.
Opinion of Counsel: A written opinion of counsel, who may be counsel for
the Seller, the Depositor, the Company or the Master Servicer, reasonably
acceptable to each addressee of such opinion; provided that with respect to
Section 2.05, 8.05, 8.07 or 12.01, or the interpretation or application of the
REMIC Provisions, such counsel must (i) in fact be independent of the Seller,
Depositor, the Company and the Master Servicer, (ii) not have any direct
financial interest in the Seller, Depositor, the Company or the Master Servicer
or in any affiliate of either, and (iii) not be connected with the Seller,
Depositor, the Company or the Master Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Optional Termination: The termination of the Trust Fund created hereunder
as a result of the purchase of all of the Mortgage Loans and any REO Property
pursuant to the last sentence of Section 11.01 hereof.
Optional Termination Date: The first Distribution Date on which the Trust
Fund may be terminated at the option of the [Master Servicer] as described under
Section 11.01.
Original Value: The value of the property underlying a Mortgage Loan
based, in the case of the purchase of the underlying Mortgaged Property, on the
lower of an appraisal or the sales price of such property or, in the case of a
refinancing, on an appraisal.
Originator: With respect to each Mortgage Loan, shall mean the originator
set forth in the Mortgage Loan Schedule for such Mortgage Loan.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
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(a) Certificates theretofore canceled by the Trustee or delivered to the
Trustee for cancellation; and
(b) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to this
Agreement.
Outstanding Mortgage Loan: As of any date of determination, a Mortgage
Loan with a Stated Principal Balance greater than zero that was not the subject
of a Principal Prepayment in full, and that did not become a Liquidated Loan,
prior to the end of the related Prepayment Period.
Overcollateralized Amount: With respect to any Distribution Date, is the
excess, if any, of (a) the aggregate Stated Principal Balances of the Mortgage
Loans as of the last day of the related Due Period over (b) the Certificate
Principal Balances of the Offered Certificates on such Distribution Date (after
taking into account the payment of principal other than any Extra Principal
Distribution Amount on such Certificates).
Overcollateralization Increase Amount: As of any Distribution Date after
the Distribution Date in ______ 200__ the excess, if any, of (a) the
Overcollateralization Target Amount over (b) the Overcollateralized Amount on
such Distribution Date (after taking into account payments to the Offered
Certificates of the Basic Principal Distribution Amount on such Distribution
Date).
Overcollateralization Release Amount: With respect to any Distribution
Date, the lesser of (x) the Principal Remittance Amount for such Distribution
Date and (y) the excess, if any, of (i) the Overcollateralized Amount for such
Distribution Date (assuming that 100% of the Principal Remittance Amount is
applied as a principal payment on such Distribution Date) over (ii) the
Overcollateralization Target Amount for such Distribution Date.
Overcollateralization Target Amount: With respect to any Distribution
Date, $________.
Ownership Interest: As to any Certificate, any ownership interest in such
Certificate including any interest in such Certificate as the Holder thereof and
any other interest therein, whether direct or indirect, legal or beneficial.
Pass-Through Rate: With respect to each Class of Certificates, the
applicable Pass-Through Rate for each such Class as set forth in the Preliminary
Statement.
Percentage Interest: With respect to any Certificate of a specified Class,
the Percentage Interest set forth on the face thereof or the percentage obtained
by dividing the Denomination of such Certificate by the aggregate of the
Denominations of all Certificates of the such Class.
Permitted Investments: At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof, provided
such obligations are backed by the full faith and credit of the
United States;
(ii) general obligations of or obligations guaranteed by any state of the
United States or the District of Columbia receiving the highest
long-term debt rating of each Rating Agency, or such lower rating as
will not result in the downgrading or withdrawal of the ratings then
assigned to the Certificates by each Rating Agency;
15
(iii) [Reserved];
(iv) commercial or finance company paper which is then receiving the
highest commercial or finance company paper rating of each Rating
Agency, or such lower rating as will not result in the downgrading
or withdrawal of the ratings then assigned to the Certificates by
each Rating Agency;
(v) certificates of deposit, demand or time deposits, or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States or of any state
thereof and subject to supervision and examination by federal and/or
state banking authorities (including the Trustee in its commercial
banking capacity), provided that the commercial paper and/or long
term unsecured debt obligations of such depository institution or
trust company are then rated one of the two highest long-term and
the highest short-term ratings of each such Rating Agency for such
securities, or such lower ratings as will not result in the
downgrading or withdrawal of the rating then assigned to the
Certificates by any Rating Agency;
(vi) demand or time deposits or certificates of deposit issued by any
bank or trust company or savings institution to the extent that such
deposits are fully insured by the FDIC;
(vii) guaranteed reinvestment agreements issued by any bank, insurance
company or other corporation containing, at the time of the issuance
of such agreements, such terms and conditions as will not result in
the downgrading or withdrawal of the rating then assigned to the
Certificates by any such Rating Agency;
(viii) repurchase obligations with respect to any security described in
clauses (i) and (ii) above, in either case entered into with a
depository institution or trust company (acting as principal)
described in clause (v) above;
(ix) securities (other than stripped bonds, stripped coupons or
instruments sold at a purchase price in excess of [115]% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the
two highest long term ratings of each Rating Agency (except if the
Rating Agency is Xxxxx'x, such rating shall be the highest
commercial paper rating of Xxxxx'x for any such securities), or such
lower rating as will not result in the downgrading or withdrawal of
the rating then assigned to the Certificates by any Rating Agency,
as evidenced by a signed writing delivered by each Rating Agency;
(x) interests in any money market fund (including any such fund managed
or advised by the Trustee or Master Servicer or any affiliate
thereof) which at the date of acquisition of the interests in such
fund and throughout the time such interests are held in such fund
has the highest applicable long term rating by each Rating Agency or
such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by each
Rating Agency;
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(xi) short term investment funds sponsored by any trust company or
banking association incorporated under the laws of the United States
or any state thereof (including any such fund managed or advised by
the Trustee or any affiliate thereof) which on the date of
acquisition has been rated by each Rating Agency in their respective
highest applicable rating category or such lower rating as will not
result in the downgrading or withdrawal of the ratings then assigned
to the Certificates by each Rating Agency; and
(xii) such other investments having a specified stated maturity and
bearing interest or sold at a discount acceptable to each Rating
Agency as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by any Rating Agency, as
evidenced by a signed writing delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted Investment if
such instrument (i) evidences the right to receive interest only
payments with respect to the obligations underlying such instrument,
(ii) is purchased at a premium or (iii) is purchased at a deep
discount; provided further that no such instrument shall be a
Permitted Investment (A) if such instrument evidences principal and
interest payments derived from obligations underlying such
instrument and the interest payments with respect to such instrument
provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, or (B) if it may be
redeemed at a price below the purchase price (the foregoing clause
(B) not to apply to investments in units of money market funds
pursuant to clause (vii) above); provided further that no amount
beneficially owned by the REMIC Trust may be invested in investments
(other than money market funds) treated as equity interests for
federal income tax purposes, unless the Master Servicer shall
receive an Opinion of Counsel, at the expense of the Master
Servicer, to the effect that such investment will not adversely
affect the status of the REMIC Trust as a REMIC under the Code or
result in imposition of a tax on the REMIC Trust. Permitted
Investments that are subject to prepayment or call may not be
purchased at a price in excess of par.
Permitted Transferee: Any person other than (i) the United States, any
State or political subdivision thereof, any possession of the United States or
any agency or instrumentality of any of the foregoing, (ii) a foreign
government, International Organization or any agency or instrumentality of
either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in section 521 of the Code) that is exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by section 511 of
the Code on unrelated business taxable income) on any excess inclusions (as
defined in section 860E(c)(1) of the Code) with respect to the Class R
Certificate, (iv) rural electric and telephone cooperatives described in section
1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or resident of the
United States, a corporation, partnership (other than a partnership that has any
direct or indirect foreign partners) or other entity (treated as a corporation
or a partnership for federal income tax purposes), created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia, an estate whose income from sources without the United States is
includible in gross income for United States federal income tax purposes
regardless of its connection with the conduct of a trade or business within the
United States, or a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more United States persons have authority to control all substantial decisions
of the trustor and (vi) any other Person so designated by the Trustee based upon
an Opinion of Counsel addressed to the Trustee (which shall not be an expense of
the Trustee) that states that the Transfer of an Ownership Interest in the Class
R Certificate to such Person may cause the REMIC Trust created hereunder to fail
to qualify as a REMIC at any time that any Certificates are Outstanding. The
terms "United States," "State" and "International Organization" shall have the
meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of Freddie Mac, a majority
of its board of directors is not selected by such government unit.
17
Person: Any individual, corporation, partnership, joint venture,
association, joint- stock company, limited liability company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Prepayment Assumption: The applicable rate of prepayment, as described in
the Prospectus Supplement relating to each Class of Offered Certificates.
Prepayment Interest Shortfall: With respect to any Distribution Date, for
each Mortgage Loan that was the subject of a partial Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan during the
related Prepayment Period, (other than a Principal Prepayment in full resulting
from the purchase of a Mortgage Loan pursuant to Section 2.02, 2.03, 4.21 or
11.01 hereof), the amount, if any, by which (i) one month's interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of such Mortgage
Loan immediately prior to such prepayment (or liquidation) or in the case of a
partial Principal Prepayment on the amount of such prepayment (or liquidation
proceeds) exceeds (ii) the amount of interest paid or collected in connection
with such Principal Prepayment or such liquidation proceeds less the sum of (a)
the related Servicing Fee and (b) the LPMI Fee, if any.
Prepayment Period: As to any Distribution Date and (i) each Company
Mortgage Loan, the calendar month immediately preceding the month in which such
Distribution Date occurs and (ii) any other Mortgage Loan, the period set forth
in the related Servicing Agreement.
Primary Mortgage Insurance Policy: Any primary mortgage guaranty insurance
policy issued in connection with a Mortgage Loan which provides compensation to
a Mortgage Note holder in the event of default by the obligor under such
Mortgage Note or the related security instrument, if any or any replacement
policy therefor through the related Accrual Period for such Class relating to a
Distribution Date.
Principal Distribution Amount: With respect to each Distribution Date, is
equal to the sum of the Basic Principal Distribution Amount for such
Distribution Date, plus any Extra Principal Distribution Amount for such
Distribution Date.
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Principal Funds: With respect to any Distribution Date, (i) the sum,
without duplication, of (a) all scheduled principal collected during the related
Due Period, (b) all Advances relating to principal made on or prior to the
Distribution Account Deposit Date, (c) Principal Prepayments exclusive of
prepayment charges or penalties collected during the related Prepayment Period,
(d) the Stated Principal Balance of each Mortgage Loan that was repurchased by
the Seller pursuant to Sections 2.02 or 2.03 or by the Company pursuant to
Section 4.21, (e) the aggregate of all Substitution Adjustment Amounts for the
related Determination Date in connection with the substitution of Mortgage Loans
pursuant to Section 2.03(c), (e) all Liquidation Proceeds collected during the
related Prepayment Period (to the extent such Liquidation Proceeds relate to
principal) and remitted by the Company or the related Servicer to the
Distribution Account pursuant to this Agreement or the related Servicing
Agreement and (f) amounts in respect of principal paid by the [Master Servicer]
pursuant to Section 11.01 minus (ii) all amounts required to be reimbursed
pursuant to Sections 5.02, 5.04, 5.06 and 5.08 or as otherwise set forth in this
Agreement.
Principal Remittance Amount: With respect to each Distribution Date, the
sum of the amounts listed in clauses (a) through (e) of the definition of
Principal Funds.
Principal Prepayment: Any Mortgagor payment or other recovery of (or
proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 4.21 and 11.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Company or the related Servicer, as
appropriate, in accordance with the terms of the related Mortgage Note.
Private Certificate: The Class R Certificate.
Prospectus Supplement: The Prospectus Supplement dated ___________ __,
20__ relating to the public offering of the Offered Certificates.
Protected Account: Each account established and maintained by the Company
with respect to receipts on the Mortgage Loans and REO Property in accordance
with Section 5.01 hereof or by the related Servicer in accordance with the
related Servicing Agreement.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan required to be
repurchased by the Seller pursuant to Section 2.02 or 2.03 hereof, an amount
equal to the sum of (i) 100% of the outstanding principal balance of the
Mortgage Loan as of the date of such purchase plus (ii) accrued interest thereon
at the applicable Mortgage Rate through the first day of the month in which the
Purchase Price is to be distributed to Certificateholders, reduced by any
portion of the Servicing Fee, Master Servicing Fee, Servicing Advances and
Advances payable to the purchaser of the Mortgage Loan plus and (iii) any costs
and damages (if any) incurred by the Trust in connection with any violation of
such Mortgage Loan of any predatory or abusive lending laws.
Rating Agency: Each of [Xxxxx'x] and [S&P]. If any such organization or
its successor is no longer in existence, "Rating Agency" shall be a nationally
recognized statistical rating organization, or other comparable Person,
designated by the Depositor, notice of which designation shall be given to the
Trustee. References herein to a given rating category of a Rating Agency shall
mean such rating category without giving effect to any modifiers.
19
Realized Loss: With respect to each Mortgage Loan as to which a Final
Recovery Determination has been made, an amount (not less than zero) equal to
(i) the unpaid principal balance of such Mortgage Loan as of the commencement of
the calendar month in which the Final Recovery Determination was made, plus (ii)
accrued interest from the Due Date as to which interest was last paid by the
Mortgagor through the end of the calendar month in which such Final Recovery
Determination was made, calculated in the case of each calendar month during
such period (A) at an annual rate equal to the annual rate at which interest was
then accruing on such Mortgage Loan and (B) on a principal amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, minus (v) the proceeds, if
any, received in respect of such Mortgage Loan during the calendar month in
which such Final Recovery Determination was made, net of amounts that are
payable therefrom to the Company pursuant to this Agreement or the applicable
Servicer pursuant to the related Servicing Agreement.
With respect to any REO Property as to which a Final Recovery
Determination has been made, an amount (not less than zero) equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the date of
acquisition of such REO Property on behalf of the REMIC Trust, plus (ii) accrued
interest from the Due Date as to which interest was last paid by the Mortgagor
in respect of the related Mortgage Loan through the end of the calendar month
immediately preceding the calendar month in which such REO Property was
acquired, calculated in the case of each calendar month during such period (A)
at an annual rate equal to the annual rate at which interest was then accruing
on the related Mortgage Loan and (B) on a principal amount equal to the Stated
Principal Balance of the related Mortgage Loan as of the close of business on
the Distribution Date during such calendar month, plus (iii) REO Imputed
Interest for such REO Property for each calendar month commencing with the
calendar month in which such REO Property was acquired and ending with the
calendar month in which such Final Recovery Determination was made, minus (iv)
the aggregate of all unreimbursed Advances and Servicing Advances.
With respect to each Mortgage Loan which has become the subject of a
Deficient Valuation, the difference between the principal balance of the
Mortgage Loan outstanding immediately prior to such Deficient Valuation and the
principal balance of the Mortgage Loan as reduced by the Deficient Valuation.
With respect to each Mortgage Loan which has become the subject of a Debt
Service Reduction, the portion, if any, of the reduction in each affected
Monthly Payment attributable to a reduction in the Mortgage Rate imposed by a
court of competent jurisdiction. Each such Realized Loss shall be deemed to have
been incurred on the Due Date for each affected Monthly Payment.
Record Date: With respect to the Certificates (other than the Class [M-2]
Certificates and Class [B-1] Certificates) and any Distribution Date, the close
of business on the last Business Day of the month preceding the month in which
such Distribution Date occurs. With respect to any Distribution Date and the
Class [M-2] Certificates and Class [B-1] Certificates, so long as the Class
[M-2] Certificates and Class [B-1] Certificates are Book-Entry Certificates, the
Business Day preceding such Distribution Date, and otherwise, the close of
business on the last Business Day of the month preceding the month in which such
Distribution Date occurs.
20
Reference Banks: Shall mean leading banks selected by the Securities
Administrator and engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, (ii) which have been designated as such by the Securities Administrator
and (iii) which are not controlling, controlled by, or under common control
with, the Depositor, the Seller or the Master Servicer.
Reference Bank Rate: With respect to any Accrual Period shall mean the
arithmetic mean, rounded upwards, if necessary, to the nearest whole multiple of
[0.03125%], of the offered rates for United States dollar deposits for one month
that are quoted by the Reference Banks as of 11:00 a.m., New York City time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month in an amount approximately equal to the
aggregate Certificate Principal Balance of the Class [M-2] Certificates and
Class [B-1] Certificates for such Accrual Period, provided that at least two
such Reference Banks provide such rate. If fewer than two offered rates appear,
the Reference Bank Rate will be the arithmetic mean, rounded upwards, if
necessary, to the nearest whole multiple of [0.03125]%, of the rates quoted by
one or more major banks in New York City, selected by the Securities
Administrator, as of 11:00 a.m., New York City time, on such date for loans in
United States dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Certificate Principal Balance of
the Class [M-2] Certificates and Class [B-1] Certificates for such Accrual
Period.
Regular Certificate: Any Certificate other than the Class R Certificate.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
Relief Act: The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended or any similar state law.
REMIC: A "real estate mortgage investment conduit" within the meaning of
section 860D of the Code.
REMIC Trust: The segregated pool of assets described in Section 6.06(a).
REMIC Certificates: The REMIC Regular Certificates and the Class R
Certificate.
REMIC Opinion: Shall mean an Opinion of Counsel to the effect that the
proposed action will not have an adverse affect on the REMIC Trust.
21
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
REMIC Regular Certificate: A Class A-1, Class M-[1], Class M-[2] or Class
[B-1] Certificate.
Remittance Date: Shall mean (i) with respect to the Company, the Business
Day immediately preceding the Distribution Account Deposit Date and (ii) with
respect to the related Servicer, the date specified in the related Servicing
Agreement.
Remittance Report: As defined in Section 6.04(d).
REO Imputed Interest: As to any REO Property, for any calendar month
during which such REO Property was at any time part of the REMIC Trust, one
month's interest at the applicable Net Mortgage Rate on the Stated Principal
Balance of such REO Property (or, in the case of the first such calendar month,
of the related Mortgage Loan, if appropriate) as of the close of business on the
Distribution Date in such calendar month.
REO Property: A Mortgaged Property acquired by the Company or the related
Servicer through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan or Mortgage Loans in the
aggregate substituted by the Seller for a Deleted Mortgage Loan, which must, on
the date of such substitution, as confirmed in a Request for Release, (i) have a
Stated Principal Balance, after deduction of the principal portion of the
Scheduled Payment due in the month of substitution, not in excess of, and not
less than [90]% of, the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) have a fixed Mortgage Rate not less than or more than 1% per annum higher
than the Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or
higher credit quality characteristics than that of the Deleted Mortgage Loan;
(iv) have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage
Loan; (v) have a remaining term to maturity no greater than (and not more than
one year less than) that of the Deleted Mortgage Loan; (vi) not permit
conversion of the Mortgage Rate from a fixed rate to a variable rate; (vii) have
the same lien priority as the Deleted Mortgage Loan; (viii) constitute the same
occupancy type as the Deleted Mortgage Loan or be owner occupied; and (ix)
comply with each representation and warranty set forth in Section 2.03 hereof.
Repurchase Price: With respect to each Mortgage Loan, a price equal to (i)
the outstanding principal balance of such Mortgage Loan, plus (ii) interest on
such outstanding principal balance at the Mortgage Rate (net of the Servicing
Fee Rate) from the last date through which interest has been paid to the end of
the month of repurchase, less (iii) amounts advanced by the Company or the
related Servicer in respect of such repurchased Mortgage Loan which are being
held in the Master Servicer Collection Account for remittance to the Trustee
plus (iv) any costs and damages (if any) incurred by the Trust in connection
with any violation of such Mortgage Loan of any predatory or abusive lending
laws.
22
Request for Release: The Request for Release to be submitted by the
Seller, the Company, the related Servicer or the Master Servicer to the
Custodian substantially in the form of Exhibit H. Each Request for Release
furnished to the Custodian by the Seller, the Company, the related Servicer or
the Master Servicer shall be in duplicate and shall be executed by an officer of
such Person or a Servicing Officer (or, if furnished electronically to the
Custodian, shall be deemed to have been sent and executed by an officer of such
Person or a Servicing Officer) of the Company or the related Servicer, as
applicable.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy that is required to be maintained from time to time under this
Agreement or the related Servicing Agreement.
Responsible Officer: With respect to the Trustee, any Vice President, any
Assistant Vice President, the Secretary, any Assistant Secretary, or any Trust
Officer with specific responsibility for the transactions contemplated hereby,
any other officer customarily performing functions similar to those performed by
any of the above designated officers or other officers of the Trustee specified
by the Trustee, as to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan due on
any Due Date allocable to principal and/or interest on such Mortgage Loan.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator:
________________________________________________, in its capacity as securities
administrator hereunder, and its successors and assigns.
Seller: ________________________, a ____________________, and its
successors and assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Senior Certificates: The Class [A-1] Certificates.
Servicer: Either ___________________ or _____________.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable legal fees) incurred in the
performance by the Company or the related Servicer of its servicing obligations
hereunder or under the related Servicing Agreement, including, but not limited
to, the cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
and including any expenses incurred in relation to any such proceedings that
result from the Mortgage Loan being registered in the MERS(R) System, (iii) the
management and liquidation of any REO Property (including, without limitation,
realtor's commissions) and (iv) compliance with any obligations under Section
3.07 hereof to cause insurance to be maintained.
Servicing Agreement: Shall mean ______________________.
23
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: As to each Mortgage Loan and any Distribution Date, an
amount equal to 1/12th of the Servicing Fee Rate multiplied by the Stated
Principal Balance of such Mortgage Loan as of the last day of the related Due
Period or, in the event of any payment of interest that accompanies a Principal
Prepayment in full during the related Due Period made by the Mortgagor
immediately prior to such prepayment, interest at the Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan for the period covered by such
payment of interest.
Servicing Fee Rate: ___% per annum.
Servicing Modification: With respect to any Mortgage Loan that is in
default or, in the reasonable judgment of the Company or the related Servicer,
as to which default is reasonably foreseeable, any modification which is
effected by the Company or the related Servicer in accordance with the terms of
this Agreement or the related Servicing Agreement which results in any change in
the outstanding Stated Principal Balance, any change in the Mortgage Rate or any
extension of the term of such Mortgage Loan.
Servicing Officer: Any officer of the Company or the related Servicer
involved in, or responsible for, the administration and servicing of the
Mortgage Loans (i) in the case of the Company, whose name and facsimile
signature appear on a list of servicing officers furnished to the Trustee by the
Company on the Closing Date pursuant to this Agreement, as such list may from
time to time be amended and (ii) in the case of the related Servicer, as to
which evidence reasonably acceptable to the Trustee, as applicable, of due
authorization, by such party has been furnished from time to time to the
Trustee.
Startup Day: The Startup Day for the REMIC Trust formed hereunder shall be
the Closing Date.
Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property and any Distribution Date, the Cut-off Date Principal Balance thereof
minus the sum of (i) the principal portion of the Scheduled Payments due with
respect to such Mortgage Loan during each Due Period ending prior to such
Distribution Date (and irrespective of any delinquency in their payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan received prior to
or during the related Prepayment Period, and all Liquidation Proceeds to the
extent applied by the Company or the related Servicer as recoveries of principal
in accordance with Section 3.09 or the related Servicing Agreement with respect
to such Mortgage Loan, that were received by the Company or the Servicer as of
the close of business on the last day of the Prepayment Period related to such
Distribution Date and (iii) any Realized Losses on such Mortgage Loan incurred
during the related Prepayment Period. The Stated Principal Balance of a
Liquidated Loan equals zero.
Subordinated Certificates: The Class [M-1], Class [M-2] and Class [B-1]
Certificates.
24
Subservicer Assignment Agreement: The Assignment, Assumption and
Recognition Agreement, dated as of _____ ___, 200___, by and among the Seller,
Subservicer and the Trustee evidencing the assignment of the Subservicer
Servicing Agreement to the Trust.
Subservicer Loans: Those Mortgage Loans subject to this Agreement which
were purchased by the Seller from Subservicer pursuant to the Subservicer
Servicing Agreement.
Subservicer Servicing Agreement: The Servicing Agreement, dated as of
_____ 1, 200__, by and between the Seller and Subservicer.
Subservicing Agreement: Any agreement entered into between the Company and
a subservicer with respect to the subservicing of any Mortgage Loan hereunder by
such subservicer.
Substitution Adjustment Amount: The meaning ascribed to such term pursuant
to Section 2.03(c).
Successor Master Servicer: The meaning ascribed to such term pursuant to
Section 9.01.
Tax Matters Person: The person designated as "tax matters person" in the
manner provided under Treasury regulation ss. 1.860F-4(d) and temporary Treasury
regulation ss. 301.6231(a)(7)-1T. The holder of the Class R Certificate shall be
the Tax Matters Person for the REMIC Trust. The Securities Administrator, or any
successor thereto or assignee thereof shall serve as tax administrator hereunder
and as agent for the related Tax Matters Person.
[10%] Clean-up Call Date: Shall mean the first Distribution Date in or
after __________ 200__ upon which the Stated Principal Balance of the Mortgage
Loans as of the end of the related Due Period is less than or equal to [10%] of
the aggregate Cut-off Date Principal Balance of the Mortgage Loans.
Transfer Affidavit: As defined in Section 7.02(c).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Certificate.
Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest accruing and principal due with respect
thereto after the Cut-off Date to the extent not applied in computing the
Cut-off Date Principal Balance thereof; (ii) the Distribution Account, the
Master Servicer Collection Account maintained by the Master Servicer and the
Protected Accounts maintained by the Company and the Servicers and all amounts
deposited therein pursuant to the applicable provisions of this Agreement and
the Servicing Agreements; (iii) property that secured a Mortgage Loan and has
been acquired by foreclosure, deed in lieu of foreclosure or otherwise; (iv) the
mortgagee's rights under the Insurance Policies with respect to the Mortgage
Loans; (v) the Servicing Agreement and the Assignment Agreements; (vi) the
rights under the Mortgage Loan Purchase Agreement, and (vii) all proceeds of the
foregoing, including proceeds of conversion, voluntary or involuntary, of any of
the foregoing into cash or other liquid property.
Trustee: ____________________, a ____________________________, not in its
individual capacity, but solely in its capacity as trustee for the benefit of
the Certificateholders under this Agreement, and any successor thereto, and any
corporation or national banking association resulting from or surviving any
consolidation or merger to which it or its successors may be a party and any
successor trustee as may from time to time be serving as successor trustee
hereunder.
25
Unpaid Interest Shortfalls: Shall mean Interest Shortfalls net of payments
by the Company, the related Servicer or the Master Servicer in respect of
Compensating Interest.
Voting Rights: The portion of the voting rights of all the Certificates
that is allocated to any Certificate for purposes of the voting provisions
hereunder. All of the Voting Rights shall be allocated to the Certificates other
than the Class R Certificate, with the allocation among the Certificates other
than the Class R Certificate to be in proportion to the Certificate Principal
Balance of each such Class relative to the Certificate Principal Balance of all
other such Classes. Voting Rights will be allocated among the Certificates of
each such Class in accordance with their respective Percentage Interests.
Section 1.02 Allocation of Certain Interest Shortfalls.
For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class [A-1], Class [M-1], Class [M-2] and the Class
[B-1] Certificates for any Distribution Date, (1) the aggregate amount of any
Unpaid Interest Shortfalls in respect of the Mortgage Loans for any Distribution
Date shall be allocated among the Certificates in proportion to the amount of
the Monthly Interest Distributable Amount that would have been allocated to such
Certificates in the absence of such Unpaid Interest Shortfalls and (2) the
interest portion of Realized Losses for the Mortgage Loans will be allocated
first to the Class [B-1] Certificates, second to the Class [M-2] Certificates,
and third to the Class [M-1] Certificates, and following the Cross-Over Date to
the Class [A-1] Certificates.
ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Trust Fund.
The Seller hereby sells, transfers, assigns, sets over and otherwise
conveys to the Depositor, without recourse, all the right, title and interest of
the Seller in and to the assets in the Trust Fund.
The Seller has entered into this Agreement in consideration for the
purchase of the Mortgage Loans by the Depositor and has agreed to take the
actions specified herein.
The Depositor, concurrently with the execution and delivery hereof, hereby
sells, transfers, assigns, sets over and otherwise conveys to the Trustee for
the use and benefit of the Certificateholders, without recourse, all the right,
title and interest of the Depositor in and to the Trust Fund.
26
In connection with such sale, the Depositor has delivered to, and
deposited with, the Trustee or the Custodian, as its agent, the following
documents or instruments with respect to each Mortgage Loan so assigned: (i) the
original Mortgage Note, including any riders thereto, endorsed without recourse
to the order of "[Name of Trustee], as Trustee for certificateholders of Bear
Xxxxxxx Asset Backed Securities Trust 200__-___, Asset Backed Certificates,
Series 200__-___," and showing to the extent available to the Seller an unbroken
chain of endorsements from the original payee thereof to the Person endorsing it
to the Trustee, (ii) the original Mortgage and, if the related Mortgage Loan is
a MOM Loan, noting the presence of the MIN and language indicating that such
Mortgage Loan is a MOM Loan, which shall have been recorded (or if the original
is not available, a copy), with evidence of such recording indicated thereon (or
if clause (x) in the proviso below applies, shall be in recordable form), (iii)
unless the Mortgage Loan is a MOM Loan, the assignment (either an original or a
copy, which may be in the form of a blanket assignment if permitted in the
jurisdiction in which the Mortgaged Property is located) to the Trustee of the
Mortgage with respect to each Mortgage Loan in the name of "[Name of Trustee],
as Trustee for certificateholders of Bear Xxxxxxx Asset Backed Securities Trust
200__-___, Asset Backed Certificates, Series 200__-___," which shall have been
recorded (or if clause (x) in the proviso below applies, shall be in recordable
form) (iv) an original or a copy of all intervening assignments of the Mortgage,
if any, to the extent available to the Seller, with evidence of recording
thereon, (v) the original policy of title insurance or mortgagee's certificate
of title insurance or commitment or binder for title insurance, if available, or
a copy thereof, or, in the event that such original title insurance policy is
unavailable, a photocopy thereof, or in lieu thereof, a current lien search on
the related Mortgaged Property and (vi) originals or copies of all available
assumption, modification or substitution agreements, if any; provided, however,
that in lieu of the foregoing, the Seller may deliver the following documents,
under the circumstances set forth below: (x) if any Mortgage, assignment thereof
to the Trustee or intervening assignments thereof have been delivered or are
being delivered to recording offices for recording and have not been returned in
time to permit their delivery as specified above, the Depositor may deliver a
true copy thereof with a certification by the Seller or the title company
issuing the commitment for title insurance, on the face of such copy,
substantially as follows: "Certified to be a true and correct copy of the
original, which has been transmitted for recording"; and (y) in lieu of the
Mortgage Notes relating to the Mortgage Loans identified in the list set forth
in Exhibit J, the Depositor may deliver a lost note affidavit and indemnity and
a copy of the original note, if available; and provided, further, however, that
in the case of Mortgage Loans which have been prepaid in full after the Cut-Off
Date and prior to the Closing Date, the Depositor, in lieu of delivering the
above documents, may deliver to the Trustee and its Custodian a certification of
a Servicing Officer to such effect and in such case shall deposit all amounts
paid in respect of such Mortgage Loans, in the Master Servicer Collection
Account or in the Distribution Account on the Closing Date. In the case of the
documents referred to in clause (x) above, the Depositor shall deliver such
documents to the Trustee or its Custodian promptly after they are received. The
Seller shall cause, at its expense, the Mortgage and intervening assignments, if
any, and to the extent required in accordance with the foregoing, the assignment
of the Mortgage to the Trustee to be submitted for recording promptly after the
Closing Date; provided that the Seller need not cause to be recorded any
assignment (a) in any jurisdiction under the laws of which, as evidenced by an
Opinion of Counsel addressed to the Trustee delivered by the Seller to the
Trustee and the Rating Agencies, the recordation of such assignment is not
necessary to protect the Trustee's interest in the related Mortgage Loan or (b)
if MERS is identified on the Mortgage or on a properly recorded assignment of
the Mortgage as mortgagee of record solely as nominee for Seller and its
successors and assigns. In the event that the Seller, the Depositor or the
Master Servicer gives written notice to the Trustee that a court has
recharacterized the sale of the Mortgage Loans as a financing, the Seller shall
submit or cause to be submitted for recording as specified above or, should the
Seller fail to perform such obligations, the Master Servicer shall cause each
such previously unrecorded assignment to be submitted for recording as specified
above at the expense of the Trust. In the event a Mortgage File is released to
the Company or the Servicer as a result of such Person having completed a
Request for Release, the Custodian shall, if not so completed, complete the
assignment of the related Mortgage in the manner specified in clause (iii)
above.
27
In connection with the assignment of any Mortgage Loan registered on the
MERS(R) System, the Seller further agrees that it will cause, at the Seller's
own expense, within 30 days after the Closing Date, the MERS(R) System to
indicate that such Mortgage Loans have been assigned by the Seller to the
Depositor and by the Depositor to the Trustee in accordance with this Agreement
for the benefit of the Certificateholders by including (or deleting, in the case
of Mortgage Loans which are repurchased in accordance with this Agreement) in
such computer files (a) the code in the field which identifies the specific
Trustee and (b) the code in the field "Pool Field" which identifies the series
of the Certificates issued in connection with such Mortgage Loans. The Seller
further agrees that it will not, and will not permit the Company, the Servicer
or the Master Servicer to, and the Master Servicer agrees that it will not,
alter the codes referenced in this paragraph with respect to any Mortgage Loan
during the term of this Agreement unless and until such Mortgage Loan is
repurchased in accordance with the terms of this Agreement or the Mortgage Loan
Purchase Agreement.
Section 2.02 Acceptance of the Mortgage Loans.
(a) Based on the Initial Certification received by it from the Custodian,
the Trustee acknowledges receipt of, subject to the further review and
exceptions reported by the Custodian pursuant to the procedures described below,
the documents (or certified copies thereof) delivered to the Trustee or the
Custodian on its behalf pursuant to Section 2.01 and declares that it holds and
will continue to hold directly or through a custodian those documents and any
amendments, replacements or supplements thereto and all other assets of the
Trust Fund delivered to it in trust for the use and benefit of all present and
future Holders of the Certificates. On the Closing Date, the Trustee or the
Custodian on its behalf will deliver an Initial Certification in the form
annexed hereto as Exhibit C-1 confirming whether or not it has received the
Mortgage File for each Mortgage Loan, but without review of such Mortgage File,
except to the extent necessary to confirm whether such Mortgage File contains
the original Mortgage Note or a lost note affidavit and indemnity in lieu
thereof. No later than [90] days after the Closing Date, the Trustee or the
Custodian on its behalf shall, for the benefit of the Certificateholders, review
each Mortgage File delivered to it and execute and deliver to the Seller and, if
reviewed by the Custodian, the Trustee, an Interim Certification substantially
in the form annexed hereto as Exhibit C-2. In conducting such review, the
Trustee or the Custodian on its behalf will ascertain whether all required
documents have been executed and received and whether those documents relate,
determined on the basis of the Mortgagor name, original principal balance and
loan number, to the Mortgage Loans identified in Exhibit B to this Agreement, as
supplemented (provided, however, that with respect to those documents described
in subclauses (iv) and (vi) of Section 2.01, such obligations shall extend only
to documents actually delivered pursuant to such subclauses). In performing any
such review, the Trustee and the Custodian may conclusively rely on the
purported due execution and genuineness of any such document and on the
purported genuineness of any signature thereon. If the Trustee or the Custodian
on its behalf finds any document constituting part of the Mortgage File not to
have been executed or received, or to be unrelated to the Mortgage Loans
identified in Exhibit B or to appear to be defective on its face, the Trustee or
the Custodian on its behalf shall include such information in the exception
report attached to Exhibit C-2. The Seller shall correct or cure any such defect
or, if prior to the end of the second anniversary of the Closing Date, the
Seller may substitute for the related Mortgage Loan a Replacement Mortgage Loan,
which substitution shall be accomplished in the manner and subject to the
conditions set forth in Section 2.03 or shall deliver to the Trustee an Opinion
of Counsel addressed to the Trustee to the effect that such defect does not
materially or adversely affect the interests of the Certificateholders in such
Mortgage Loan within [60] days from the date of notice from the Trustee of the
defect and if the Seller fails to correct or cure the defect or deliver such
opinion within such period, the Seller will, subject to Section 2.03, within 90
days from the notification of the Trustee purchase such Mortgage Loan at the
Purchase Price; provided, however, that if such defect relates solely to the
inability of the Seller to deliver the Mortgage, assignment thereof to the
Trustee, or intervening assignments thereof with evidence of recording thereon
because such documents have been submitted for recording and have not been
returned by the applicable jurisdiction, the Seller shall not be required to
purchase such Mortgage Loan if the Seller delivers such documents promptly upon
receipt, but in no event later than [360] days after the Closing Date.
28
(b) No later than [180] days after the Closing Date, the Trustee or the
Custodian on its behalf will review, for the benefit of the Certificateholders,
the Mortgage Files and will execute and deliver or cause to be executed and
delivered to the Seller and, if reviewed by the Custodian, the Trustee, a Final
Certification substantially in the form annexed hereto as Exhibit C-3. In
conducting such review, the Trustee or the Custodian on its behalf will
ascertain whether each document required to be recorded has been returned from
the recording office with evidence of recording thereon and the Trustee or the
Custodian on its behalf has received either an original or a copy thereof, as
required in Section 2.01 (provided, however, that with respect to those
documents described in subclauses (iv) and (vi) of Section 2.01, such
obligations shall extend only to documents actually delivered pursuant to such
subclauses). If the Trustee or the Custodian on its behalf finds any document
with respect to a Mortgage Loan has not been received, or to be unrelated,
determined on the basis of the Mortgagor name, original principal balance and
loan number, to the Mortgage Loans identified in Exhibit B or to appear
defective on its face, the Trustee or the Custodian on its behalf shall note
such defect in the exception report attached to the Final Certification and
shall promptly notify the Seller. The Seller shall correct or cure any such
defect or, if prior to the end of the second anniversary of the Closing Date,
the Seller may substitute for the related Mortgage Loan a Replacement Mortgage
Loan, which substitution shall be accomplished in the manner and subject to the
conditions set forth in Section 2.03 or shall deliver to the Trustee an Opinion
of Counsel addressed to the Trustee to the effect that such defect does not
materially or adversely affect the interests of Certificateholders in such
Mortgage Loan within [60] days from the date of notice from the Trustee of the
defect and if the Seller is unable within such period to correct or cure such
defect, or to substitute the related Mortgage Loan with a Replacement Mortgage
Loan or to deliver such opinion, the Seller shall, subject to Section 2.03,
within [90] days from the notification of the Trustee, purchase such Mortgage
Loan at the Purchase Price; provided, however, that if such defect relates
solely to the inability of the Seller to deliver the Mortgage, assignment
thereof to the Trustee or intervening assignments thereof with evidence of
recording thereon, because such documents have not been returned by the
applicable jurisdiction, the Seller shall not be required to purchase such
Mortgage Loan, if the Seller delivers such documents promptly upon receipt, but
in no event later than [360] days after the Closing Date.
29
(c) In the event that a Mortgage Loan is purchased by the Seller in
accordance with subsections 2.02(a) or (b) above or Section 2.03, the Seller
shall remit the applicable Purchase Price to the Master Servicer for deposit in
the Master Servicer Collection Account and shall provide written notice to the
Trustee detailing the components of the Purchase Price, signed by a Servicing
Officer. Upon deposit of the Purchase Price in the Master Servicer Collection
Account and upon receipt of a Request for Release with respect to such Mortgage
Loan, the Trustee or the Custodian will release to the Seller the related
Mortgage File and the Trustee shall execute and deliver all instruments of
transfer or assignment, without recourse, representation or warranty furnished
to it by the Seller, as are necessary to vest in the Seller title to and rights
under the Mortgage Loan. Such purchase shall be deemed to have occurred on the
date on which the deposit into the Master Servicer Collection Account was made.
The Trustee shall promptly notify the Rating Agencies of such repurchase. The
obligation of the Seller to cure, repurchase or substitute for any Mortgage Loan
as to which a defect in a constituent document exists shall be the sole remedies
respecting such defect available to the Certificateholders or to the Trustee on
their behalf.
(d) The Seller shall deliver to the Trustee, and Trustee agrees to accept
the Mortgage Note and other documents constituting the Mortgage File with
respect to any Replacement Mortgage Loan, which the Trustee or the Custodian
will review as provided in subsections 2.02(a) and 2.02(b), provided, that the
Closing Date referred to therein shall instead be the date of delivery of the
Mortgage File with respect to each Replacement Mortgage Loan.
Section 2.03 Representations, Warranties and Covenants of the Company and
the Seller.
(a) The Company hereby represents and warrants to the Master Servicer, the
Depositor, the Securities Administrator and the Trustee as follows, as of the
Closing Date:
(i) It is duly organized and is validly existing and in good
standing under the laws of _______________________ and is duly authorized
and qualified to transact any and all business contemplated by this
Agreement to be conducted by it in any state in which a Mortgaged Property
is located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to service the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(ii) It has the full corporate power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on its part the execution,
delivery and performance of this Agreement; and this Agreement, assuming
the due authorization, execution and delivery hereof by the other parties
hereto, constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (b) the remedy of specific performance and injunctive
and other forms of equitable relief may be subject to equitable defenses
and to the discretion of the court before which any proceeding therefor
may be brought.
30
(iii) The execution and delivery of this Agreement by it, the
servicing of the Company Mortgage Loans by it under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof are
in its ordinary course of business and will not (A) result in a material
breach of any term or provision of its charter or by-laws or (B)
materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which it is a party or by which
it may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to it of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it;
and it is not in breach or violation of any material indenture or other
material agreement or instrument, or in violation of any statute, order or
regulation of any court, regulatory body, administrative agency or
governmental body having jurisdiction over it which breach or violation
may materially impair its ability to perform or meet any of its
obligations under this Agreement.
(iv) It is an approved servicer of conventional mortgage loans for
Xxxxxx Xxx or Freddie Mac and is a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to sections 203 and 211 of the
National Housing Act.
(v) No litigation is pending or, to the best of its knowledge,
threatened, against it that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or its ability to
service the Company Mortgage Loans or to perform any of its other
obligations under this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for its execution, delivery and
performance of, or compliance with, this Agreement or the consummation of
the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, it has obtained the same.
(b) The Seller hereby represents and warrants to the Depositor, the
Securities Administrator, the Master Servicer and the Trustee as follows, as of
the Closing Date:
(i) The Seller is duly organized as a ____________________ and is
validly existing and in good standing under the laws of
_____________________ and is duly authorized and qualified to transact any
and all business contemplated by this Agreement to be conducted by the
Seller in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such qualification
and, in any event, is in compliance with the doing business laws of any
such state, to the extent necessary to ensure its ability to enforce each
Mortgage Loan, to sell the Mortgage Loans in accordance with the terms of
this Agreement and to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
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(ii) The Seller has the full corporate power and authority to sell
each Mortgage Loan, and to execute, deliver and perform, and to enter into
and consummate the transactions contemplated by this Agreement and has
duly authorized by all necessary corporate action on the part of the
Seller the execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery hereof
by the other parties hereto, constitutes a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance
with its terms, except that (a) the enforceability hereof may be limited
by bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by the Seller,
the sale of the Mortgage Loans by the Seller under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof are
in the ordinary course of business of the Seller and will not (A) result
in a material breach of any term or provision of the charter or by-laws of
the Seller or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under, the
terms of any other material agreement or instrument to which the Seller is
a party or by which it may be bound, or (C) constitute a material
violation of any statute, order or regulation applicable to the Seller of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over the Seller; and the Seller is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair the
Seller's ability to perform or meet any of its obligations under this
Agreement.
(iv) The Seller is an approved seller of conventional mortgage loans
for Xxxxxx Xxx or Freddie Mac and is a mortgagee approved by the Secretary
of Housing and Urban Development pursuant to sections 203 and 211 of the
National Housing Act.
(v) No litigation is pending or, to the best of the Seller's
knowledge, threatened, against the Seller that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Seller to sell the Mortgage Loans or to
perform any of its other obligations under this Agreement in accordance
with the terms hereof.
(vi) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this
Agreement or the consummation of the transactions contemplated hereby, or
if any such consent, approval, authorization or order is required, the
Seller has obtained the same.
32
(vii) With respect to each Mortgage Loan as of the Cut-off Date
(unless otherwise expressly provided):
(A) The information set forth in the Mortgage Loan Schedule on
the Closing Date is complete, true and correct.
(B) All payments required to be made prior to the Cut-off Date
with respect to each Mortgage Loan have been made and no Mortgage
Loan is delinquent ____ or more days; and the Seller has not
advanced funds, or induced, solicited or knowingly received any
advance of funds from a party other than the owner of the Mortgaged
Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required under any Mortgage Loan.
(C) Except with respect to taxes, insurance and other amounts
previously advanced by a prior servicer with respect to any Mortgage
Loan, to the best of Seller's knowledge, there are no delinquent
taxes, water charges, sewer rents, assessments, insurance premiums,
leasehold payments, including assessments payable in future
installments, or other outstanding charges affecting the related
Mortgaged Property.
(D) The terms of the Mortgage Note and the Mortgage have not
been impaired, waived, altered or modified in any respect, except by
written instruments which in the case of the Mortgage Loans are in
the Mortgage File and have been or will be recorded, if necessary to
protect the interests of the Trustee, and which have been or will be
delivered to the Trustee, all in accordance with this Agreement. The
substance of any such waiver, alteration or modification has been
approved by the title insurer, to the extent required by the related
policy. No Mortgagor has been released, in whole or in part, except
in connection with an assumption agreement approved by the title
insurer, to the extent required by the policy, and which assumption
agreement in the case of the Mortgage Loans is part of the Mortgage
File.
(E) The Mortgage Note and the Mortgage are not subject to any
right of rescission, set-off, counterclaim or defense, including the
defense of usury, nor will the operation of any of the terms of the
Mortgage Note and the Mortgage, or the exercise of any right
thereunder, render the Mortgage unenforceable, in whole or in part,
or subject to any right of rescission, set-off, counterclaim or
defense, including the defense of usury and no such right of
rescission, set-off, counterclaim or defense has been asserted with
respect thereto.
(F) All buildings upon, or comprising part of, the Mortgaged
Property are insured by an insurer acceptable to Xxxxxx Xxx and
Freddie Mac against loss by fire, hazards of extended coverage and
such other hazards as are customary in the area where the Mortgaged
Property is located, and such insurer is licensed to do business in
the state where the Mortgaged Property is located. All such
insurance policies contain a standard mortgagee clause naming the
originator, its successors and assigns as mortgagee and Xxxxxx has
received no notice that all premiums thereon have not been paid. If
upon origination of the Mortgage Loan, the Mortgaged Property was,
or was subsequently deemed to be, in an area identified in the
Federal Register by the Federal Emergency Management Agency as
having special flood hazards (and such flood insurance has been made
available), which require under applicable law that a flood
insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration (or any successor thereto)
be obtained, such flood insurance policy is in effect which policy
is with a generally acceptable carrier in an amount representing
coverage not less than the least of (A) the Stated Principal Balance
of the related Mortgage Loan, (B) the minimum amount required to
compensate for damage or loss on a replacement cost basis, or (C)
the maximum amount of insurance that is available under the Flood
Disaster Protection Act of 1973. The Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at Xxxxxxxxx's
cost and expense and, on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at
Xxxxxxxxx's cost and expense and to obtain reimbursement therefor
from the Mortgagor.
33
(G) Any and all requirements of any federal, state or local
law including, usury, truth in lending, real estate settlement
procedures including, the Real Estate Settlement Procedures Act of
1974, as amended, consumer credit protection, equal credit
opportunity or disclosure laws applicable to the Mortgage Loan have
been complied with in all material respects.
(H) The Mortgage has not been satisfied, canceled,
subordinated, or rescinded, in whole or in part, and the Mortgaged
Property has not been released from the lien of the Mortgage, in
whole or in part, nor has any instrument been executed that would
effect any such release, cancellation, subordination or rescission.
(I) The Mortgage is a valid, existing and enforceable [first]
[junior] lien on the Mortgaged Property, including all improvements
on the Mortgaged Property, if any, subject only to (1) the lien of
current real property taxes and assessments not yet due and payable,
(2) covenants, conditions and restrictions, rights of way, easements
and other matters of the public record as of the date of recording
being acceptable to mortgage lending institutions generally and
specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and which do not
adversely affect the Appraised Value of the Mortgaged Property, (3)
other matters to which like properties are commonly subject which do
not materially interfere with the benefits of the security intended
to be provided by the Mortgage [and if a junior lien, the related
Senior Liens]. The Seller has full right to sell and assign the
Mortgage to the Depositor.
(J) The Mortgage Note and the related Mortgage are genuine and
each is the legal, valid and binding obligation of the maker
thereof, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or
reorganization or general principles of equity.
34
(K) All parties to the Mortgage Note and the Mortgage had the
legal capacity to enter into the Mortgage Loan transaction and to
execute and deliver the Mortgage Note and the Mortgage, and the
Mortgage Note and the Mortgage have been duly and properly executed
by such parties.
(L) The proceeds of the Mortgage Loan have been fully
disbursed and there is no requirement for future advances thereunder
and any and all requirements as to completion of any on-site or
off-site improvement and as to disbursements of any escrow funds
therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of
the Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or
Mortgage.
(M) Immediately prior to the conveyance of the Mortgage Loans
by the Seller to the Depositor hereunder, the Seller was the sole
owner and holder of the Mortgage Loan; the related Originator or the
Seller or the Servicer was the custodian of the related escrow
account, if applicable; the Mortgage Loan had neither been assigned
nor pledged, and the Seller had good and marketable title thereto,
and had full right to transfer and sell the Mortgage Loan and the
related servicing rights to the Depositor free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security
interest subject to the related Servicing Agreement, if applicable,
and had full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and
assign the Mortgage Loan and the related servicing rights to the
Depositor pursuant to the terms of this Agreement.
(N) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing
requirements of the laws of the state wherein the Mortgaged Property
is located, and (2) organized under the laws of such state,
qualified to do business in such state, a federal savings and loan
association or national bank having principal offices in such state
or not deemed to be doing business in such state under applicable
law.
(O) The Mortgage Loan is covered by an ALTA lender's title
insurance policy or equivalent form acceptable to the Department of
Housing and Urban Development, or any successor thereto, and
qualified to do business in the jurisdiction where the Mortgaged
Property is located, insuring (subject to the exceptions contained
in clause (I) above) the Seller (as assignee), its successors and
assigns as to the [first] priority lien of the Mortgage in the
original principal amount of the Mortgage Loan and against any loss
by reason of the invalidity or unenforceability of the lien
resulting from the provisions of the Mortgage Note and/or Mortgage
providing for adjustment in the Mortgage Rate and monthly payment.
Additionally, such lender's title insurance policy affirmatively
insures ingress and egress, and against encroachments by or upon the
Mortgaged Property or any interest therein. With respect to each
Mortgage Loan, the Seller (as assignee) is the sole insured of such
lender's title insurance policy, and such lender's title insurance
policy is in full force and effect. No claims have been made under
such lender's title insurance policy, and no prior holder of the
related Mortgage, including the Seller in the case of a Mortgage
Loan, has done, by act or omission, anything which would impair the
coverage of such lender's title insurance policy. Except as provided
in clause (B), immediately prior to the Cut-off Date, there was no
default, breach, violation or event of acceleration existing under
the Mortgage or the Mortgage Note and there was no event which, with
the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or
event of acceleration, and the Seller has not waived any default,
breach, violation or event of acceleration.
35
(P) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such lien) affecting
the related Mortgaged Property which are or may be liens prior to or
equal with, the lien of the related Mortgage.
(Q) All improvements which were considered in any appraisal
which was used in determining the Appraised Value of the related
Mortgaged Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property, and no improvements on
adjoining properties encroach upon the Mortgaged Property.
(R) [Reserved]
(S) The origination, servicing and collection practices with
respect to each Mortgage Note and Mortgage including, the
establishment, maintenance and servicing of the escrow accounts and
escrow payments, if any, since origination, have been conducted in
all respects in accordance with the terms of Mortgage Note and in
compliance with all applicable laws and regulations and, unless
otherwise required by law or Xxxxxx Xxx/Xxxxxxx Mac standard, in
accordance with the proper, prudent and customary practices in the
mortgage origination and servicing business. With respect to the
escrow accounts and escrow payments, if any, and any Company
Mortgage Loan all such payments are in the possession or under the
control of the Seller and there exists no deficiencies in connection
therewith for which customary arrangements for repayment thereof
have not been made. Any interest required to be paid pursuant to
state and local law has been properly paid and credited.
(T) The Mortgaged Property is free of material damage and
waste and there is no proceeding pending for the total or partial
condemnation thereof.
(U) The Mortgage contains customary and enforceable provisions
to render the rights and remedies of the holder thereof adequate for
the realization against the Mortgaged Property of the benefits of
the security intended to be provided thereby, including, (1) in the
case of a Mortgage designated as a deed of trust, by trustee's sale,
and (2) otherwise by judicial foreclosure. There is no other
exemption available to the Mortgagor which would interfere with the
right to sell the Mortgaged Property at a trustee's sale or the
right to foreclose the Mortgage. The Mortgagor has not notified the
Seller and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Relief Act.
36
(V) The Mortgage Note is not and has not been secured by any
collateral except the lien of the applicable Mortgage.
(W) [Reserved]
(X) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has
been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the
Certificateholders to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor.
(Y) No Mortgage Loan contains a permanent or temporary
"buydown" provision. The Mortgage Loan is not a graduated payment
mortgage loan.
(Z) The Mortgagor has received all disclosure materials
required by applicable law with respect to the making of the
Mortgage Loan.
(AA) No Mortgage Loan was made in connection with the
construction or rehabilitation of a Mortgaged Property.
(BB) To the best of Seller's knowledge, the Mortgaged Property
is lawfully occupied under applicable law and all inspections,
licenses and certificates required to be made or issued with respect
to all occupied portions of the Mortgaged Property and, with respect
to the use and occupancy of the same, including but not limited to
certificates of occupancy, have been made or obtained from the
appropriate authorities.
(CC) The assignment of Mortgage with respect to a Mortgage
Loan is in recordable form and is acceptable for recording under the
laws of the jurisdiction in which the Mortgaged Property is located.
(DD) [Reserved].
(EE) [Reserved].
(FF) The Mortgaged Property consists of a single parcel of
real property with or without a detached single family residence
erected thereon, or an individual condominium unit, or a 2-4 family
dwelling, or an individual unit in a planned unit development as
defined by Xxxxxx Xxx or a manufactured dwelling which conforms with
Xxxxxx Xxx and Xxxxxxx Mac requirements regarding such dwellings, or
a townhouse, each structure of which is permanently affixed to the
Mortgaged Property, and is legally classified as real estate.
(GG) [Reserved]
(HH) [Reserved]
37
(II) Each Mortgage Loan at the time of origination was
underwritten in general in accordance with guidelines not
inconsistent with the guidelines set forth in the Prospectus
Supplement and generally accepted prime credit underwriting
guidelines.
(JJ) No error, omission, misrepresentation, fraud or similar
occurrence with respect to a Mortgage Loan has taken place on the
part of the Seller or the related Originator.
(KK) [None of the Mortgage Loans is (i) a loan subject to 12
CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of
Regulation Z, the regulation implementing the Truth-in-Lending Act,
which implements the Home Ownership and Equity Protection Act of
1994, as amended or (ii) classified and /or defined as a "high
cost", "covered", or "predatory" loan under any other state, federal
or local law or regulation or ordinance, including, but not limited
to, the States of Georgia or North Carolina, or the City of New
York.]
(c) Upon discovery by any of the parties hereto of a breach of a
representation or warranty set forth in Section 2.03(b)(vii) that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the party discovering such breach shall give prompt written notice thereof to
the other parties. Any breach of a representation or warranty contained in
clause (KK) above, shall be automatically deemed to affect materially and
adversely the interests of the Certificateholders. The Seller hereby covenants
with respect to the representations and warranties set forth in Section
2.03(b)(vii), that within 90 days of the discovery of a breach of any
representation or warranty set forth therein that materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, it shall
cure such breach in all material respects and, if such breach is not so cured,
(i) if such 90-day period expires prior to the second anniversary of the Closing
Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund
and substitute in its place a Replacement Mortgage Loan, in the manner and
subject to the conditions set forth in this Section; or (ii) repurchase the
affected Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price
in the manner set forth below; provided that any such substitution pursuant to
(i) above or repurchase pursuant to (ii) above shall not be effected prior to
the delivery to the Trustee of an Opinion of Counsel if required by Section 2.05
hereof and any such substitution pursuant to (i) above shall not be effected
prior to the additional delivery to the Trustee of a Request for Release. The
Seller shall promptly reimburse the Master Servicer and the Trustee for any
expenses reasonably incurred by the Master Servicer or the Trustee in respect of
enforcing the remedies for such breach. To enable the Securities Administrator
to amend the Mortgage Loan Schedule, the Seller shall, unless it cures such
breach in a timely fashion pursuant to this Section 2.03, promptly notify the
Securities Administrator whether it intends either to repurchase, or to
substitute for, the Mortgage Loan affected by such breach. With respect to the
representations and warranties in Section 2.03(b)(vii) that are made to the best
of the Seller's knowledge, if it is discovered by any of the Depositor, the
Master Servicer, the Seller, the Securities Administrator or the Trustee that
the substance of such representation and warranty is inaccurate and such
inaccuracy materially and adversely affects the value of the related Mortgage
Loan, notwithstanding the Seller's lack of knowledge with respect to the
substance of such representation or warranty, the Seller shall nevertheless be
required to cure, substitute for or repurchase the affected Mortgage Loan in
accordance with the foregoing.
38
With respect to any Replacement Mortgage Loan or Loans, the Seller shall
deliver to the Trustee for the benefit of the Certificateholders such documents
and agreements as are required by Section 2.01. No substitution will be made in
any calendar month after the Determination Date for such month. Scheduled
Payments due with respect to Replacement Mortgage Loans in the Due Period
related to the Distribution Date on which such proceeds are to be distributed
shall not be part of the Trust Fund and will be retained by the Seller. For the
month of substitution, distributions to Certificateholders will include the
Scheduled Payment due on any Deleted Mortgage Loan for the related Due Period
and thereafter the Seller shall be entitled to retain all amounts received in
respect of such Deleted Mortgage Loan. The Securities Administrator shall amend
the Mortgage Loan Schedule for the benefit of the Certificateholders to reflect
the removal of such Deleted Mortgage Loan and the substitution of the
Replacement Mortgage Loan or Loans and the Securities Administrator shall
deliver the amended Mortgage Loan Schedule to the Trustee and the Custodian.
Upon such substitution, the Replacement Mortgage Loan or Loans shall be subject
to the terms of this Agreement in all respects, and the Seller shall be deemed
to have made with respect to such Replacement Mortgage Loan or Loans, as of the
date of substitution, the representations and warranties set forth in Section
2.03(b)(vii) with respect to such Mortgage Loan. Upon any such substitution and
the deposit into the Master Servicer Collection Account of the amount required
to be deposited therein in connection with such substitution as described in the
following paragraph and receipt by the Trustee of a Request for Release for such
Mortgage Loan, the Trustee or the Custodian shall release to the Seller the
Mortgage File relating to such Deleted Mortgage Loan and held for the benefit of
the Certificateholders and the Trustee shall execute and deliver at the Seller's
direction such instruments of transfer or assignment as have been prepared by
the Seller, in each case without recourse, representation or warranty as shall
be necessary to vest in the Seller, or its respective designee, title to the
Trustee's interest in any Deleted Mortgage Loan substituted for pursuant to this
Section 2.03.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for a Deleted Mortgage Loan, the Master Servicer will determine
the amount (if any) by which the aggregate principal balance of all the
Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of such Deleted Mortgage
Loan. An amount equal to the aggregate of such deficiencies, described in the
preceding sentence for any Distribution Date (such amount, the "Substitution
Adjustment Amount") shall be deposited into the Master Servicer Collection
Account, by the Seller delivering such Replacement Mortgage Loan on the
Determination Date for the Distribution Date relating to the Prepayment Period
during which the related Mortgage Loan became required to be purchased or
replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited into the Master Servicer Collection
Account maintained by the Master Servicer, on the Determination Date for the
Distribution Date in the month following the month during which the Seller
became obligated to repurchase or replace such Mortgage Loan and upon such
deposit of the Purchase Price, the delivery of an Opinion of Counsel if required
by Section 2.05 and the receipt of a Request for Release, the Trustee or the
Custodian shall release the related Mortgage File held for the benefit of the
Certificateholders to the Seller, and the Trustee shall execute and deliver at
such Person's direction the related instruments of transfer or assignment
prepared by the Seller, in each case without recourse, representation or
warranty as shall be necessary to transfer title from the Trustee for the
benefit of the Certificateholders and transfer the Trustee's interest to the
Seller to any Mortgage Loan purchased pursuant to this Section 2.03. It is
understood and agreed that the obligation under this Agreement of the Seller to
cure, repurchase or replace any Mortgage Loan as to which a breach has occurred
and is continuing shall constitute the sole remedies against the Seller
respecting such breach available to Certificateholders, the Depositor or the
Trustee.
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(d) The representations and warranties set forth in Section 2.03 hereof
shall survive delivery of the respective Mortgage Loans and Mortgage Files to
the Trustee or the Custodian for the benefit of the Certificateholders.
Section 2.04 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master Servicer, the
Securities Administrator and the Trustee as follows, as of the date hereof and
as of the Closing Date:
(i) The Depositor is duly organized and is validly existing as a
limited liability company in good standing under the laws of the State of
Delaware and has full power and authority (corporate and other) necessary
to own or hold its properties and to conduct its business as now conducted
by it and to enter into and perform its obligations under this Agreement.
(ii) The Depositor has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by, this Agreement and has duly authorized, by all necessary
corporate action on its part, the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due authorization,
execution and delivery hereof by the other parties hereto, constitutes a
legal, valid and binding obligation of the Depositor, enforceable against
the Depositor in accordance with its terms, subject, as to enforceability,
to (i) bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting creditors' rights generally and (ii) general
principles of equity, regardless of whether enforcement is sought in a
proceeding in equity or at law.
(iii) The execution and delivery of this Agreement by the Depositor,
the consummation of the transactions contemplated by this Agreement, and
the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of the Depositor and will not (A) result in a material
breach of any term or provision of the charter or by-laws of the Depositor
or (B) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any
other material agreement or instrument to which the Depositor is a party
or by which it may be bound or (C) constitute a material violation of any
statute, order or regulation applicable to the Depositor of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Depositor; and the Depositor is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair the
Depositor's ability to perform or meet any of its obligations under this
Agreement.
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(iv) No litigation is pending, or, to the best of the Depositor's
knowledge, threatened, against the Depositor that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Depositor to perform its obligations under
this Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Depositor of, or compliance by the Depositor with, this
Agreement or the consummation of the transactions contemplated hereby, or
if any such consent, approval, authorization or order is required, the
Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee as of the
Closing Date, following the transfer of the Mortgage Loans to it by the Seller,
the Depositor had good title to the Mortgage Loans and the related Mortgage
Notes were subject to no offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and warranties set
forth in the immediately preceding paragraph shall survive delivery of the
Mortgage Files to the Trustee or the Custodian for the benefit of the
Certificateholders. Upon discovery by the Depositor or the Trustee of a breach
of such representations and warranties, the party discovering such breach shall
give prompt written notice to the others and to each Rating Agency.
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement, with respect
to any Mortgage Loan that is not in default or as to which default is not
imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03 shall
be made unless the Seller delivers to the Trustee an Opinion of Counsel,
addressed to the Trustee, to the effect that such repurchase or substitution
would not (i) result in the imposition of the tax on "prohibited transactions"
of the REMIC Trust contributions after the Closing Date, as defined in sections
860F(a)(2) and 860G(d) of the Code, respectively or (ii) cause the REMIC Trust
to fail to qualify as a REMIC at any time that any Certificates are outstanding.
Any Mortgage Loan as to which repurchase or substitution was delayed pursuant to
this paragraph shall be repurchased or the substitution therefor shall occur
(subject to compliance with Sections 2.02 or 2.03) upon the earlier of (a) the
occurrence of a default or imminent default with respect to such Mortgage Loan
and (b) receipt by the Trustee of an Opinion of Counsel addressed to the Trustee
to the effect that such repurchase or substitution, as applicable, will not
result in the events described in clause (i) or clause (ii) of the preceding
sentence.
(b) Upon discovery by the Depositor, the Seller or the Master Servicer
that any Mortgage Loan does not constitute a "qualified mortgage" within the
meaning of section 860G(a)(3) of the Code, the party discovering such fact shall
promptly (and in any event within 5 Business Days of discovery) give written
notice thereof to the other parties and the Trustee. In connection therewith,
the Trustee shall require the Seller, at the Seller's option, to either (i)
substitute, if the conditions in Section 2.03(c) with respect to substitutions
are satisfied, a Replacement Mortgage Loan for the affected Mortgage Loan, or
(ii) repurchase the affected Mortgage Loan within 90 days of such discovery in
the same manner as it would a Mortgage Loan for a breach of representation or
warranty contained in Section 2.03. The Trustee shall reconvey to the Seller the
Mortgage Loan to be released pursuant hereto (and the Custodian shall deliver
the related Mortgage File) in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
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Section 2.06 Countersignature and Delivery of Certificates.
The Trustee acknowledges the sale, transfer and assignment to it of the
Trust Fund and, concurrently with such transfer and assignment, has executed,
countersigned and delivered, to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing the entire ownership of the
Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the rights
referred to above for the benefit of all present and future Holders of the
Certificates and to perform the duties set forth in this Agreement in accordance
with its terms.
Section 2.07 Purposes and Powers of the Trust.
The purpose of the common law trust, as created hereunder, is to engage in
the following activities:
(a) acquire and hold the Mortgage Loans and the other assets of the Trust
Fund and the proceeds therefrom;
(b) to issue the Certificates sold to the Depositor in exchange for the
Mortgage Loans;
(c) to make payments on the Certificates;
(d) to engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and
(e) subject to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of the Trust Fund
and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing
activities. The Trustee shall not cause the trust to engage in any activity
other than in connection with the foregoing or other than as required or
authorized by the terms of this Agreement while any Certificate is outstanding,
and this Section 2.07 may not be amended, without the consent of the
Certificateholders evidencing 51% or more of the aggregate Voting Rights of the
Certificates.
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ARTICLE III
ADMINISTRATION AND SERVICING OF COMPANY MORTGAGE LOANS BY COMPANY
Section 3.01 The Company.
The Company shall service and administer the Company Mortgage Loans in
accordance with customary and usual standards of practice of prudent mortgage
loan servicers in the respective states in which the related Mortgaged
Properties are located. In connection with such servicing and administration,
the Company shall have full power and authority, acting alone and/or through
subservicers as provided in Section 3.03, to do or cause to be done any and all
things that it may deem necessary or desirable in connection with such servicing
and administration, including but not limited to, the power and authority,
subject to the terms hereof (i) to execute and deliver, on behalf of the
Certificateholders and the Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any related Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided herein), (iii) to collect any Insurance Proceeds and
other Liquidation Proceeds, and (iv) subject to Section 3.09, to effectuate
foreclosure or other conversion of the ownership of the Mortgaged Property
securing any Company Mortgage Loan; provided that the Company shall take no
action that is inconsistent with or prejudices the interests of the Trust Fund
or the Certificateholders in any Company Mortgage Loan or the rights and
interests of the Depositor and the Trustee under this Agreement.
Without limiting the generality of the foregoing, the Company, in its own
name or in the name of the Trust, the Depositor or the Trustee, is hereby
authorized and empowered by the Trust, the Depositor and the Trustee, when the
Company believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Trustee, the Depositor, the Certificateholders or any
of them, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge and all other comparable instruments, with respect
to the Company Mortgage Loans, and with respect to the related Mortgaged
Properties held for the benefit of the Certificateholders. The Company shall
prepare and deliver to the Depositor and/or the Trustee such documents requiring
execution and delivery by any or all of them as are necessary or appropriate to
enable the Company to service and administer the Company Mortgage Loans. Upon
receipt of such documents, the Depositor and/or the Trustee shall execute such
documents and deliver them to the Company.
In accordance with the standards of the first paragraph of this Section
3.01, the Company shall advance or cause to be advanced funds as necessary for
the purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties relating to the Company Mortgage Loans, which advances shall be
reimbursable in the first instance from related collections from the Mortgagors
pursuant to Section 5.03, and further as provided in Section 5.02. All costs
incurred by the Company, if any, in effecting the timely payments of taxes and
assessments on the Mortgaged Properties relating to the Company Mortgage Loans
and related insurance premiums shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the Stated Principal
Balance under the related Company Mortgage Loans, notwithstanding that the terms
of such Mortgage Loans so permit.
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Section 3.02 Due-on-Sale Clauses; Assumption Agreements.
(a) Except as otherwise provided in this Section 3.02, when any property
subject to a Mortgage has been or is about to be conveyed by the Mortgagor, the
Company shall to the extent that it has knowledge of such conveyance, enforce
any due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing, the Company
is not required to exercise such rights with respect to an Company Mortgage Loan
if the Person to whom the related Mortgaged Property has been conveyed or is
proposed to be conveyed satisfies the terms and conditions contained in the
Mortgage Note and Mortgage related thereto and the consent of the mortgagee
under such Mortgage Note or Mortgage is not otherwise so required under such
Mortgage Note or Mortgage as a condition to such transfer. In the event that the
Company is prohibited by law from enforcing any such due-on-sale clause, or if
coverage under any Required Insurance Policy would be adversely affected, or if
nonenforcement is otherwise permitted hereunder, the Company is authorized,
subject to Section 3.02(b), to take or enter into an assumption and modification
agreement from or with the person to whom such property has been or is about to
be conveyed, pursuant to which such person becomes liable under the Mortgage
Note and, unless prohibited by applicable state law, the Mortgagor remains
liable thereon, provided that the Mortgage Loan shall continue to be covered (if
so covered before the Company enters such agreement) by the applicable Required
Insurance Policies. The Company, subject to Section 3.02(b), is also authorized
with the prior approval of the insurers under any Required Insurance Policies to
enter into a substitution of liability agreement with such Person, pursuant to
which the original Mortgagor is released from liability and such Person is
substituted as Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the foregoing, the Company shall not be deemed to be in default
under this Section 3.02(a) by reason of any transfer or assumption that the
Company reasonably believes it is restricted by law from preventing.
(b) Subject to the Company's duty to enforce any due-on-sale clause to the
extent set forth in Section 3.02(a), in any case in which a Mortgaged Property
has been conveyed to a Person by a Mortgagor, and such Person is to enter into
an assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage that requires the signature of the Trustee, or if an instrument
of release signed by the Trustee is required releasing the Mortgagor from
liability on the related Company Mortgage Loan, the Company shall prepare and
deliver or cause to be prepared and delivered to the Trustee for signature and
shall direct, in writing, the Trustee to execute the assumption agreement with
the Person to whom the Mortgaged Property is to be conveyed and such
modification agreement or supplement to the Mortgage Note or Mortgage or other
instruments as are reasonable or necessary to carry out the terms of the
Mortgage Note or Mortgage or otherwise to comply with any applicable laws
regarding assumptions or the transfer of the Mortgaged Property to such Person.
In connection with any such assumption, no material term of the Mortgage Note
(including, but not limited to, the Mortgage Rate, the amount of the Scheduled
Payment and any other term affecting the amount or timing of payment on the
Mortgage Loan) may be changed. In addition, the substitute Mortgagor and the
Mortgaged Property must be acceptable to the Company in accordance with its
servicing standards as then in effect. The Company shall notify the Trustee that
any such substitution or assumption agreement has been completed by forwarding
to the Trustee the original of such substitution or assumption agreement, which
in the case of the original shall be added to the related Mortgage File and
shall, for all purposes, be considered a part of such Mortgage File to the same
extent as all other documents and instruments constituting a part thereof. Any
fee collected by the Company for entering into an assumption or substitution of
liability agreement will be retained by the Company as additional servicing
compensation.
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Section 3.03 Subservicers.
The Company shall perform all of its servicing responsibilities hereunder
or may cause a subservicer to perform any such servicing responsibilities on its
behalf, but the use by the Company of a subservicer shall not release the
Company from any of its obligations hereunder and the Company shall remain
responsible hereunder for all acts and omissions of each subservicer as fully as
if such acts and omissions were those of the Company. The Company shall pay all
fees of each subservicer from its own funds, and a subservicer's fee shall not
exceed the Servicing Fee payable to the Company hereunder.
At the cost and expense of the Company, without any right of reimbursement
from its Protected Account, the Company shall be entitled to terminate the
rights and responsibilities of a subservicer and arrange for any servicing
responsibilities to be performed by a successor subservicer; provided, however,
that nothing contained herein shall be deemed to prevent or prohibit the
Company, at the Company's option, from electing to service the related Company
Mortgage Loans itself. In the event that the Company's responsibilities and
duties under this Agreement are terminated pursuant to Section 9.03, the Company
shall at its own cost and expense terminate the rights and responsibilities of
each subservicer effective as of the date of termination of the Company. The
Company shall pay all fees, expenses or penalties necessary in order to
terminate the rights and responsibilities of each subservicer from the Company's
own funds without reimbursement from the Trust Fund.
Notwithstanding the foregoing, the Company shall not be relieved of its
obligations hereunder and shall be obligated to the same extent and under the
same terms and conditions as if it alone were servicing and administering the
Company Mortgage Loans. The Company shall be entitled to enter into an agreement
with a subservicer for indemnification of the Company by the subservicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Any subservicing agreement and any other transactions or services relating
to the Company Mortgage Loans involving a subservicer shall be deemed to be
between such subservicer and the Company alone, and neither the Master Servicer
nor the Trustee shall have any obligations, duties or liabilities with respect
to such subservicer including any obligation, duty or liability of either the
Master Servicer or the Trustee to pay such subservicer's fees and expenses. For
purposes of remittances to the Master Servicer pursuant to this Agreement, the
Company shall be deemed to have received a payment on an Company Mortgage Loan
when a subservicer has received such payment.
Section 3.04 Documents, Records and Funds in Possession of Company to Be
Held for Trustee.
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Notwithstanding any other provisions of this Agreement, the Company shall
transmit to the Trustee as required by this Agreement all documents and
instruments in respect of an Company Mortgage Loan coming into the possession of
the Company from time to time and shall account fully to the Trustee for any
funds received by the Company or that otherwise are collected by the Company as
Liquidation Proceeds or Insurance Proceeds in respect of any such Mortgage Loan.
All Mortgage Files and funds collected or held by, or under the control of, the
Company in respect of any Company Mortgage Loans, whether from the collection of
principal and interest payments or from Liquidation Proceeds, including but not
limited to, any funds on deposit in the Protected Account maintained by the
Company, shall be held by the Company for and on behalf of the Trustee and shall
be and remain the sole and exclusive property of the Trustee, subject to the
applicable provisions of this Agreement. The Company also agrees that it shall
not create, incur or subject any Mortgage File or any funds that are deposited
in the Protected Account maintained by the Company or the Master Servicer
Collection Account or in any Escrow Account, or any funds that otherwise are or
may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of set off against any Mortgage File or any funds collected on,
or in connection with, an Company Mortgage Loan, except, however, that the
Company shall be entitled to set off against and deduct from any such funds any
amounts that are properly due and payable to the Company under this Agreement.
Section 3.05 Maintenance of Hazard Insurance.
The Company shall cause to be maintained, for each Company Mortgage Loan,
hazard insurance on buildings upon, or comprising part of, the Mortgaged
Property against loss by fire, hazards of extended coverage and such other
hazards as are customary in the area where the related Mortgaged Property is
located with an insurer which is licensed to do business in the state where the
related Mortgaged Property is located. Each such policy of standard hazard
insurance shall contain, or have an accompanying endorsement that contains, a
standard mortgagee clause. The Company shall also cause flood insurance to be
maintained on property acquired upon foreclosure or deed in lieu of foreclosure
of any Company Mortgage Loan, to the extent described below. Pursuant to Section
5.01, any amounts collected by the Company under any such policies (other than
the amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Company's normal servicing procedures) shall be deposited in
the Protected Account maintained by the Company. Any cost incurred by the
Company in maintaining any such insurance shall not, for the purpose of
calculating monthly distributions to the Certificateholders or remittances to
the Trustee for their benefit, be added to the principal balance of the Mortgage
Loan, notwithstanding that the terms of the Company Mortgage Loan so permit.
Such costs shall be recoverable by the Company out of late payments by the
related Mortgagor or out of Liquidation Proceeds to the extent permitted by
Section 5.02. It is understood and agreed that no earthquake or other additional
insurance is to be required of any Mortgagor or maintained on property acquired
in respect of a Mortgage other than pursuant to such applicable laws and
regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property is located at the time of
origination of the Company Mortgage Loan in a federally designated special flood
hazard area and such area is participating in the national flood insurance
program, the Company shall cause flood insurance to be maintained with respect
to such Mortgage Loan. Such flood insurance shall be in an amount equal to the
least of (i) the Stated Principal Balance of the related Mortgage Loan, (ii)
minimum amount required to compensate for damage or loss on a replacement cost
basis or (iii) the maximum amount of such insurance available for the related
Mortgaged Property under the Flood Disaster Protection Act of 1973, as amended.
46
In the event that the Company shall obtain and maintain a blanket policy
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.05, it being understood and agreed that such
policy may contain a deductible clause on terms substantially equivalent to
those commercially available and maintained by comparable servicers. If such
policy contains a deductible clause, the Company shall, in the event that there
shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.05, and there shall have
been a loss that would have been covered by such policy, deposit in the
Protected Account maintained by the Company the amount not otherwise payable
under the blanket policy because of such deductible clause. Such deposit shall
be from the Company's own funds without reimbursement therefor. In connection
with its activities as administrator and servicer of the Company Mortgage Loans,
the Company agrees to present, on behalf of itself, the Depositor and the
Trustee for the benefit of the Certificateholders, claims under any such blanket
policy.
Section 3.06 Presentment of Claims and Collection of Proceeds.
The Company shall prepare and present on behalf of the Trustee and the
Certificateholders all claims under the Insurance Policies 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 Insurance
Policies. Any proceeds disbursed to the Company in respect of such Insurance
Policies shall be promptly deposited in the Protected Account maintained by the
Company upon receipt, except that any amounts realized that are to be applied to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable Insurance Policy need not be so deposited (or
remitted).
Section 3.07 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Company shall not take any action that would result in noncoverage
under any applicable Primary Mortgage Insurance Policy of any loss which, but
for the actions of the Company would have been covered thereunder. The Company
shall use its best efforts to keep in force and effect (to the extent that the
Mortgage Loan requires the Mortgagor to maintain such insurance), Primary
Mortgage Insurance applicable to each Company Mortgage Loan. The Company shall
not cancel or refuse to renew any such Primary Mortgage Insurance Policy that is
in effect at the date of the initial issuance of the Mortgage Note and is
required to be kept in force hereunder.
(b) The Company agrees to present on behalf of the Trustee and the
Certificateholders, claims to the insurer under any Primary Mortgage Insurance
Policies and, in this regard, to take such reasonable action as shall be
necessary to permit recovery under any Primary Mortgage Insurance Policies
respecting defaulted Mortgage Loans. Pursuant to Section 5.01, any amounts
collected by the Company under any Primary Mortgage Insurance Policies shall be
deposited in the Protected Account maintained by the Company, subject to
withdrawal pursuant to Section 5.02 hereof.
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Section 3.08 Fidelity Bond, Errors and Omissions Insurance.
The Company shall maintain, at its own expense, a blanket fidelity bond
and an errors and omissions insurance policy, with broad coverage with
responsible companies on all officers, employees or other persons acting in any
capacity with regard to the Company Mortgage Loans and who handle funds, money,
documents and papers relating to the Company Mortgage Loans. The fidelity bond
and errors and omissions insurance shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Company against losses, including
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of
such persons. Such fidelity bond shall also protect and insure the Company
against losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of an
Company Mortgage Loan which is not in accordance with Accepted Servicing
Practices. No provision of this Section 3.08 requiring the fidelity bond and
errors and omissions insurance shall diminish or relieve the Company from its
duties and obligations as set forth in this Agreement. The minimum coverage
under any such bond and insurance policy shall be at least equal to the
corresponding amounts required by Accepted Servicing Practices. The Company
shall deliver to the Master Servicer a certificate from the surety and the
insurer as to the existence of the fidelity bond and errors and omissions
insurance policy and shall obtain a statement from the surety and the insurer
that such fidelity bond or insurance policy shall in no event be terminated or
materially modified without thirty days prior written notice to the Master
Servicer and the Trustee. The Company shall notify the Master Servicer and the
Trustee within five business days of receipt of notice that such fidelity bond
or insurance policy will be, or has been, materially modified or terminated. The
Trustee for the benefit of the Certificateholders must be named as loss payees
on the fidelity bond and as additional insured on the errors and omissions
policy.
Section 3.09 Realization upon Defaulted Mortgage Loans; Determination of
Excess Liquidation Proceeds and Realized Losses; Repurchases of Certain Mortgage
Loans.
(a) The Company shall use reasonable efforts to foreclose upon or
otherwise comparably convert the ownership of properties securing such of the
Company Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments. In
connection with such foreclosure or other conversion, the Company shall follow
such practices and procedures as it shall deem necessary or advisable and as
shall be normal and usual in its general mortgage servicing activities and the
requirements of the insurer under any Required Insurance Policy; provided that
the Company shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration of any property unless it shall determine
(i) that such restoration and/or foreclosure will increase the proceeds of
liquidation of the Company Mortgage Loan after reimbursement to itself of such
expenses and (ii) that such expenses will be recoverable to it through Insurance
Proceeds or Liquidation Proceeds (respecting which it shall have priority for
purposes of withdrawals from the Protected Account maintained by the Company
pursuant to Section 5.02). If the Company reasonably believes that Liquidation
Proceeds with respect to any such Mortgage Loan would not be increased as a
result of such foreclosure or other action, such Mortgage Loan will be
charged-off and will become a Liquidated Loan. The Company will give notice of
any such charge-off to the Trustee and the Securities Administrator. The Company
shall be responsible for all other costs and expenses incurred by it in any such
proceedings; provided that such costs and expenses shall be Servicing Advances
and that it shall be entitled to reimbursement thereof from the proceeds of
liquidation of the related Mortgaged Property, as contemplated in Section 5.02.
If the Company has knowledge that a Mortgaged Property that the Company is
contemplating acquiring in foreclosure or by deed- in-lieu of foreclosure is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Company, the Company will, prior to acquiring the
Mortgaged Property, consider such risks and only take action in accordance with
its established environmental review procedures.
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With respect to any REO Property, the deed or certificate of sale shall be
taken in the name of the Trustee for the benefit of the Certificateholders (or
the Trustee's nominee on behalf of the Certificateholders). The Trustee's name
shall be placed on the title to such REO Property solely as the Trustee
hereunder and not in its individual capacity. The Company shall ensure that the
title to such REO Property references this Agreement and the Trustee's capacity
hereunder. Pursuant to its efforts to sell such REO Property, the Company shall
either itself or through an agent selected by the Company protect and conserve
such REO Property in the same manner and to such extent as is customary in the
locality where such REO Property is located and may, incident to its
conservation and protection of the interests of the Certificateholders, rent the
same, or any part thereof, as the Company deems to be in the best interest of
the Company and the Certificateholders for the period prior to the sale of such
REO Property. The Company shall prepare for and deliver to the Trustee and the
Securities Administrator a statement with respect to each REO Property that has
been rented showing the aggregate rental income received and all expenses
incurred in connection with the management and maintenance of such REO Property
at such times as is necessary to enable the Trustee to comply with the reporting
requirements of the REMIC Provisions. The net monthly rental income, if any,
from such REO Property shall be deposited in the Protected Account maintained by
the Company no later than the close of business on each Determination Date. The
Company shall perform the tax reporting and withholding related to foreclosures,
abandonments and cancellation of indebtedness income as specified by Sections
1445, 6050J and 6050P of the Code by preparing and filing such tax and
information returns, as may be required.
In the event that the Trust Fund acquires any Mortgaged Property as
aforesaid or otherwise in connection with a default or imminent default on an
Company Mortgage Loan, the Company shall dispose of such Mortgaged Property
prior to three years after its acquisition by the Trust Fund or, at the expense
of the Trust Fund, request more than 60 days prior to the day on which such
three-year period would otherwise expire, an extension of the three-year grace
period unless the Trustee shall have been supplied with an Opinion of Counsel
addressed to the Trustee (such opinion not to be an expense of the Trustee) to
the effect that the holding by the Trust Fund of such Mortgaged Property
subsequent to such three-year period will not result in the imposition of taxes
on "prohibited transactions" of the REMIC Trust as defined in section 860F of
the Code or cause the REMIC Trust to fail to qualify as a REMIC at any time that
any Certificates are outstanding, in which case the Trust Fund may continue to
hold such Mortgaged Property (subject to any conditions contained in such
Opinion of Counsel). Notwithstanding any other provision of this Agreement, no
Mortgaged Property acquired by the Trust Fund shall be rented (or allowed to
continue to be rented) or otherwise used for the production of income by or on
behalf of the Trust Fund in such a manner or pursuant to any terms that would
(i) cause such Mortgaged Property to fail to qualify as "foreclosure property"
within the meaning of section 860G(a)(8) of the Code or (ii) subject the REMIC
Trust to the imposition of any federal, state or local income taxes on the
income earned from such Mortgaged Property under section 860G(c) of the Code or
otherwise, unless the Company has agreed to indemnify and hold harmless the
Trust Fund with respect to the imposition of any such taxes.
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The decision of the Company to foreclose on a defaulted Company Mortgage
Loan shall be subject to a determination by the Company that the proceeds of
such foreclosure would exceed the costs and expenses of bringing such a
proceeding. The income earned from the management of any Mortgaged Properties
acquired through foreclosure or other judicial proceeding, net of reimbursement
to the Company for expenses incurred (including any property or other taxes) in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Company Mortgage
Loans (with interest accruing as though such Mortgage Loans were still current)
and all such income shall be deemed, for all purposes in the Agreement, to be
payments on account of principal and interest on the related Mortgage Notes and
shall be deposited into the Protected Account maintained by the Company. To the
extent the income received during a Prepayment Period is in excess of the amount
attributable to amortizing principal and accrued interest at the related
Mortgage Rate on the related Company Mortgage Loan, such excess shall be
considered to be a partial Principal Prepayment for all purposes hereof.
The Liquidation Proceeds from any liquidation of a Mortgage Loan, net of
any payment to the Company as provided above, shall be deposited in the
Protected Account maintained by the Company on the next succeeding Determination
Date following receipt thereof for distribution on the related Distribution
Date, except that any Excess Liquidation Proceeds shall be retained by the
Company as additional servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery resulting
from a partial collection of Liquidation Proceeds or any income from an REO
Property, will be applied in the following order of priority: first, to
reimburse the Company for any related unreimbursed Servicing Advances and
Servicing Fees, pursuant to Section 5.02 or this Section 3.09; second, to
reimburse the Company for any unreimbursed Advances, pursuant to Section 5.02 or
this Section 3.09; third, to accrued and unpaid interest (to the extent no
Advance has been made for such amount) on the Company Mortgage Loan or related
REO Property, at the Net Mortgage Rate to the first day of the month in which
such amounts are required to be distributed; and fourth, as a recovery of
principal of the Mortgage Loan.
(b) On each Determination Date, the Company shall determine the respective
aggregate amounts of Excess Liquidation Proceeds and Realized Losses, if any,
for the related Prepayment Period.
(c) The Company has no intent to foreclose on any Company Mortgage Loan
based on the delinquency characteristics as of the Closing Date; provided, that
the foregoing does not prevent the Company from initiating foreclosure
proceedings on any date hereafter if the facts and circumstances of such
Mortgage Loans including delinquency characteristics in the Company's discretion
so warrant such action.
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Section 3.10 Servicing Compensation.
As compensation for its activities hereunder, the Company shall be
entitled to retain or withdraw from its Protected Account out of each payment of
interest on a Company Mortgage Loan included in the Trust Fund an amount equal
to the Servicing Fee.
Additional servicing compensation in the form of any Excess Liquidation
Proceeds, assumption fees, late payment charges, all income and gain net of any
losses realized from Permitted Investments with respect to funds in or credited
to the Protected Account maintained by the Company shall be retained by the
Company to the extent not required to be deposited in the Protected Account
maintained by the Company pursuant to Section 5.02. The Company shall be
required to pay all expenses incurred by it in connection with its servicing
activities hereunder (including payment of any premiums for hazard insurance, as
required by Section 3.05 and maintenance of the other forms of insurance
coverage required by Section 3.07) and shall not be entitled to reimbursement
therefor except as specifically provided in Section 5.02.
Section 3.11 REO Property.
(a) In the event the Trust Fund acquires ownership of any REO Property in
respect of any related Company Mortgage Loan, the deed or certificate of sale
shall be issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Company shall sell any REO Property as expeditiously as
possible and in accordance with the provisions of this Agreement. Pursuant to
its efforts to sell such REO Property, the Company shall protect and conserve
such REO Property in the manner and to the extent required herein, in accordance
with the REMIC Provisions.
(b) The Company shall deposit all funds collected and received in
connection with the operation of any REO Property into the Protected Account
maintained by the Company.
(c) The Company, upon the final disposition of any REO Property, shall be
entitled to reimbursement for any related unreimbursed Advances, unreimbursed
Servicing Advances or Servicing Fees from Liquidation Proceeds received in
connection with the final disposition of such REO Property; provided, that any
such unreimbursed Advances or Servicing Fees as well as any unpaid Servicing
Fees may be reimbursed or paid, as the case may be, prior to final disposition,
out of any net rental income or other net amounts derived from such REO
Property.
Section 3.12 Liquidation Reports.
Upon the foreclosure of any Mortgaged Property relating to an Company
Mortgage Loan or the acquisition thereof by the Trust Fund pursuant to a
deed-in-lieu of foreclosure, the Company shall submit a liquidation report to
the Master Servicer containing such information as shall be mutually acceptable
to the Company and the Master Servicer with respect to such Mortgaged Property.
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Section 3.13 Annual Statement as to Compliance.
The Company will deliver to the Trustee, not later than March 1st of each
calendar year beginning in 2007, an Officers' Certificate (an "Annual Statement
of Compliance") stating, as to each signatory thereof, that (i) a review of the
activities of the Company during the preceding calendar year and of performance
under this Agreement or other applicable servicing agreement has been made under
such officers' supervision and (ii) to the best of such officers' knowledge,
based on such review, the Company has fulfilled all of its obligations under
this Agreement or other applicable servicing agreement in all material respects
throughout such year, or, if there has been a failure to fulfill any such
obligation in any material respect, specifying each such failure known to such
officer and the nature and status of cure provisions thereof. Such Annual
Statement of Compliance shall contain no restrictions or limitations on its use.
In the event that the Company has delegated any servicing responsibilities with
respect to the Company Mortgage Loans to a subservicer, the Company shall
deliver a similar Annual Statement of Compliance by that subservicer to the
Trustee as described above as and when required with respect to the Company.
If the Company cannot deliver the related Annual Statement of Compliance
by March 1st of such year, the Trustee, at its sole option, may permit a cure
period for the Company to deliver such Annual Statement of Compliance, but in no
event later than March 10th of such year.
Failure of the Company to timely comply with this Section 3.13 shall be
deemed an Event of Default, and the Trustee may, in addition to whatever rights
the Trustee may have under this Agreement and at law or equity or to damages,
including injunctive relief and specific performance, upon notice immediately
terminate all the rights and obligations of the Company under this Agreement and
in and to the Company Mortgage Loans and the proceeds thereof without
compensating the Company for the same. This paragraph shall supersede any other
provision in this Agreement or any other agreement to the contrary.
Section 3.14 Assessments of Compliance and Attestation Reports.
On and after January 1, 2006, the Company shall service and administer the
Company Mortgage Loans in accordance with all applicable requirements of the
Servicing Criteria. Pursuant to Rules 13a-18 and 15d-18 of the Exchange Act and
Item 1123 of Regulation AB, the Company shall deliver to the Trustee on or
before March 1st of each calendar year beginning in 2007, a report regarding the
Company's assessment of compliance (a "Company Assessment of Compliance") with
the Servicing Criteria during the preceding calendar year. The Company
Assessment of Compliance, as set forth in Regulation AB, must contain the
following:
(a) A statement by such officer of its responsibility for assessing
compliance with the Servicing Criteria applicable to the Company;
(b) A statement by such officer that such officer used the Servicing
Criteria attached as Exhibit M hereto, and which will also be attached to the
Company Assessment of Compliance, to assess compliance with the Servicing
Criteria applicable to the Company;
(c) An assessment by such officer of the Company's compliance with the
applicable Servicing Criteria for the period consisting of the preceding
calendar year, including disclosure of any material instance of noncompliance
with respect thereto during such period, which assessment shall be based on the
activities it performs with respect to asset-backed securities transactions
taken as a whole involving the Company, that are backed by the same asset type
as the Company Mortgage Loans;
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(d) A statement that a registered public accounting firm has issued an
attestation report on the Company Assessment of Compliance for the period
consisting of the preceding calendar year; and
(e) A statement as to which of the Servicing Criteria, if any, are not
applicable to the Company, which statement shall be based on the activities it
performs with respect to asset-backed securities transactions taken as a whole
involving the Company, that are backed by the same asset type as the Company
Mortgage Loans.
Such report at a minimum shall address each of the Servicing Criteria
specified on Exhibit M hereto which are indicated as applicable to the Company.
On or before March 1st of each calendar year beginning in 2007, the
Company shall furnish to the Trustee a report (a "Company Attestation Report")
by a registered public accounting firm that attests to, and reports on, the
Company Assessment of Compliance made by the Company, as required by Rules
13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, which
Attestation Report must be made in accordance with standards for attestation
reports issued or adopted by the Public Company Accounting Oversight Board.
The Company shall cause any subservicer, and each subcontractor determined
by the Company to be "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB, to deliver to the Trustee and the
Depositor a Company Assessment of Compliance and Company Attestation Report as
and when provided above.
Such Company Assessment of Compliance, as to any subservicer, shall at a
minimum address each of the Servicing Criteria specified on Exhibit M hereto
which are indicated as applicable to any "primary servicer." Notwithstanding the
foregoing, as to any subcontractor (as defined in the related servicing
agreement), an Assessment of Compliance is not required to be delivered unless
it is required as part of a Form 10-K with respect to the Trust Fund.
If the Company cannot deliver any Company Assessment of Compliance or
Company Attestation Report by March 1st of such year, the Trustee, at its sole
option, may permit a cure period for the Company to deliver such Company
Assessment of Compliance or Company Attestation Report, but in no event later
than March 10th of such year.
Failure of the Company to timely comply with this Section 3.14 shall be
deemed an Event of Default, and the Trustee may, in addition to whatever rights
the Trustee may have under this Agreement and at law or equity or to damages,
including injunctive relief and specific performance, upon notice immediately
terminate all the rights and obligations of the Company under this Agreement and
in and to the Company Mortgage Loans and the proceeds thereof without
compensating the Company for the same. This paragraph shall supersede any other
provision in this Agreement or any other agreement to the contrary.
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The Trustee shall also provide a Company Assessment of Compliance and
Company Attestation Report, as and when provided above, which shall at a minimum
address each of the Servicing Criteria specified on Exhibit M hereto which are
indicated as applicable to the "trustee." In addition, the Trustee shall cause
the Custodian to deliver to the Trustee and the Depositor a Company Assessment
of Compliance and Company Attestation Report, as and when provided above, which
shall at a minimum address each of the Servicing Criteria specified on Exhibit M
hereto which are indicated as applicable to a "custodian." Notwithstanding the
foregoing, as to any Custodian, a Company Assessment of Compliance is not
required to be delivered unless it is required as part of a Form 10-K with
respect to the Trust Fund.
Section 3.15 Books and Records.
The Company shall be responsible for maintaining, and shall maintain, a
complete set of books and records for the Company Mortgage Loans which shall be
appropriately identified in the Company's computer system to clearly reflect the
ownership of the Company Mortgage Loans by the Trust. In particular, the Company
shall maintain in its possession, available for inspection by the Master
Servicer and the Trustee and shall deliver to the Master Servicer and the
Trustee upon demand, evidence of compliance with all federal, state and local
laws, rules and regulations. To the extent that original documents are not
required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Company may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including, but not limited to, optical imagery techniques so long as the Company
complies with the requirements of Accepted Servicing Practices.
The Company shall maintain with respect to each Company Mortgage Loan and
shall make available for inspection by the Master Servicer and the Trustee the
related servicing file during the time such Company Mortgage Loan is subject to
this Agreement and thereafter in accordance with applicable law.
Payments on the Company Mortgage Loans, including any payoffs, made in
accordance with the related Mortgage File will be entered in the Company's set
of books and records no more than two business days after receipt and
identification, and allocated to principal or interest as specified in the
related Mortgage File.
ARTICLE IV
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY MASTER SERVICER
Section 4.01 Master Servicer
The Master Servicer shall supervise, monitor and oversee the obligation of
the Company and the related Servicer to service and administer their respective
Mortgage Loans in accordance with the terms of this Agreement and the related
Servicing Agreement and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with the
Company and the related Servicer as necessary from time-to-time to carry out the
Master Servicer's obligations hereunder, shall receive, review and evaluate all
reports, information and other data provided to the Master Servicer by the
Company and the related Servicer and shall cause the Company and related
Servicer to perform and observe the covenants, obligations and conditions to be
performed or observed by such Person under this Agreement and the related
Servicing Agreement. The Master Servicer shall independently and separately
monitor the Company and the related Servicer's servicing activities with respect
to each related Mortgage Loan, reconcile the results of such monitoring with
such information provided in the previous sentence on a monthly basis and
coordinate corrective adjustments to the Company's, the related Servicer's and
Master Servicer's records, and based on such reconciled and corrected
information, prepare the statements specified in Section 6.05 and any other
information and statements required hereunder. The Master Servicer shall
reconcile the results of its Mortgage Loan monitoring with the actual
remittances of the Company and the Servicer to the Protected Accounts pursuant
to this Agreement and the related Servicing Agreement.
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The Trustee shall furnish the Company, the Servicers and the Master
Servicer with any powers of attorney and other documents in form as provided to
it necessary or appropriate to enable the Company, the Servicer and the Master
Servicer to service and administer the related Mortgage Loans and REO Property.
The Trustee and the Securities Administrator shall provide access to the
records and documentation in possession of the Trustee or the Securities
Administrator regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Certificateholders, the FDIC, and the supervisory
agents and examiners of the FDIC, such access being afforded only upon
reasonable prior written request and during normal business hours at the office
of the Trustee or the Securities Administrator; provided, however, that, unless
otherwise required by law, neither the Trustee nor the Securities Administrator
shall be required to provide access to such records and documentation if the
provision thereof would violate the legal right to privacy of any Mortgagor. The
Trustee and the Securities Administrator shall allow representatives of the
above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at a charge that covers the Trustee's or the
Securities Administrator's actual costs.
The Trustee shall execute and deliver to the Company or the related
Servicer and the Master Servicer any court pleadings, requests for trustee's
sale or other documents necessary or desirable to (i) the foreclosure or
trustee's sale with respect to a Mortgaged Property; (ii) any legal action
brought to obtain judgment against any Mortgagor on the Mortgage Note or
Security Instrument; (iii) obtain a deficiency judgment against the Mortgagor;
or (iv) enforce any other rights or remedies provided by the Mortgage Note or
Security Instrument or otherwise available at law or equity.
Section 4.02 REMIC-Related Covenants.
For as long as the REMIC Trust shall exist, the Trustee and the Securities
Administrator shall act in accordance herewith to assure continuing treatment of
such REMIC as a REMIC, and the Trustee and the Securities Administrator shall
comply with any directions of the Seller, the Company, the Servicers or the
Master Servicer to assure such continuing treatment. In particular, the Trustee
shall not (a) sell or permit the sale of all or any portion of the Mortgage
Loans or of any investment of deposits in an Account unless such sale is as a
result of a repurchase of the Mortgage Loans pursuant to this Agreement or the
Trustee has received a REMIC Opinion addressed to the Trustee prepared at the
expense of the Trust Fund; and (b) other than with respect to a substitution
pursuant to the Mortgage Loan Purchase Agreement or Section 2.04 of this
Agreement, as applicable, accept any contribution to the REMIC Trust after the
Startup Day without receipt of a REMIC Opinion.
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Section 4.03 Monitoring of Company and Servicer.
(a) The Master Servicer shall be responsible for reporting to the Trustee
and the Seller the compliance by the Company and the related Servicer with its
duties under this Agreement and the related Servicing Agreement. In the review
of the Company's and the related Servicer's activities, the Master Servicer may
rely upon an Officer's Certificate of the Company and the related Servicer with
regard to such Person's compliance with the terms of this Agreement or the
related Servicing Agreement. In the event that the Master Servicer, in its
judgment, determines that the Company or the related Servicer should be
terminated in accordance with this Agreement or the related Servicing Agreement,
or that a notice should be sent pursuant to this Agreement or the related
Servicing Agreement with respect to the occurrence of an event that, unless
cured, would constitute grounds for such termination, the Master Servicer shall
notify the Seller and the Trustee thereof and the Master Servicer shall issue
such notice or take such other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee and the
Certificateholders, shall enforce the obligations of the Company under this
Agreement and the related Servicer under the related Servicing Agreement, and
shall, in the event that the Company or the related Servicer fails to perform
its obligations in accordance with this Agreement or the related Servicing
Agreement, subject to the preceding paragraph, terminate the rights and
obligations of such Person thereunder and act as servicer of the related
Mortgage Loans or to cause the Trustee to enter in to a new Servicing Agreement
with a successor Servicer selected by the Master Servicer; provided, however, it
is understood and acknowledged by the parties hereto that there will be a period
of transition (not to exceed 90 days) before the actual servicing functions can
be fully transferred to such successor Servicer. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of the related
Servicing Agreement and the pursuit of other appropriate remedies, shall be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the related Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, subject to its right of reimbursement pursuant
to the provisions of this Agreement or the related Servicing Agreement, provided
that the Master Servicer shall not be required to prosecute or defend any legal
action except to the extent that the Master Servicer shall have received
reasonable indemnity for its costs and expenses in pursuing such action.
(c) To the extent that the costs and expenses of the Master Servicer
related to any termination of the Company or the related Servicer, appointment
of a successor Servicer or the transfer and assumption of servicing by the
Master Servicer with respect to this Agreement or the related Servicing
Agreement (including, without limitation, (i) all legal costs and expenses and
all due diligence costs and expenses associated with an evaluation of the
potential termination of the Company or the related Servicer as a result of an
event of default by such Person and (ii) all costs and expenses associated with
the complete transfer of servicing, including all servicing files and all
servicing data and the completion, correction or manipulation of such servicing
data as may be required by the successor servicer to correct any errors or
insufficiencies in the servicing data or otherwise to enable the successor
service to service the Mortgage Loans in accordance with this Agreement or the
related Servicing Agreement) are not fully and timely reimbursed by the Company
or the terminated Servicer, the Master Servicer shall be entitled to
reimbursement of such costs and expenses from the Master Servicer Collection
Account.
(d) The Master Servicer shall require the Company and the related Servicer
to comply with the remittance requirements and other obligations set forth in
this Agreement or the related Servicing Agreement, as applicable.
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(e) If the Master Servicer acts as a servicer, it will not assume
liability for the representations and warranties of the Company or the related
Servicer, if any, that it replaces.
Section 4.04 Fidelity Bond.
The Master Servicer, at its expense, shall maintain in effect a blanket
fidelity bond and an errors and omissions insurance policy, affording coverage
with respect to all directors, officers, employees and other Persons acting on
such Master Xxxxxxxx's behalf, and covering errors and omissions in the
performance of the Master Servicer's obligations hereunder. The errors and
omissions insurance policy and the fidelity bond shall be in such form and
amount generally acceptable for entities serving as master servicers or
trustees.
Section 4.05 Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans and shall have
full power and authority, subject to the REMIC Provisions and the provisions of
Article XI hereof, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing any Mortgage Loan, in each
case, in accordance with the provisions of this Agreement and the related
Servicing Agreement, as applicable; provided, however, that the Master Servicer
shall not (and, consistent with its responsibilities under Section 4.03, shall
not permit the Company or the related Servicer to) knowingly or intentionally
take any action, or fail to take (or fail to cause to be taken) any action
reasonably within its control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, would cause the REMIC Trust to fail to qualify as a REMIC or result
in the imposition of a tax upon the Trust Fund (including but not limited to the
tax on prohibited transactions as defined in Section 860F(a)(2) of the Code and
the tax on contributions to a REMIC set forth in Section 860G(d) of the Code)
unless the Master Servicer has received an Opinion of Counsel (but not at the
expense of the Master Servicer) to the effect that the contemplated action will
not would cause the REMIC Trust to fail to qualify as a REMIC or result in the
imposition of a tax upon the REMIC Trust. The Trustee shall furnish the Master
Servicer, upon written request from a Servicing Officer, with any powers of
attorney empowering the Master Servicer, the Company or the related Servicer to
execute and deliver instruments of satisfaction or cancellation, or of partial
or full release or discharge, and to foreclose upon or otherwise liquidate
Mortgaged Property, and to appeal, prosecute or defend in any court action
relating to the Mortgage Loans or the Mortgaged Property, in accordance with the
related Servicing Agreement and this Agreement, and the Trustee shall execute
and deliver such other documents, as the Master Servicer may request, to enable
the Master Servicer to master service and administer the Mortgage Loans and
carry out its duties hereunder, in each case in accordance with Accepted Master
Servicing Practices (and the Trustee shall have no liability for misuse of any
such powers of attorney by the Master Servicer, the Company or the related
Servicer). If the Master Servicer or the Trustee has been advised that it is
likely that the laws of the state in which action is to be taken prohibit such
action if taken in the name of the Trustee or that the Trustee would be
adversely affected under the "doing business" or tax laws of such state if such
action is taken in its name, the Master Servicer shall join with the Trustee in
the appointment of a co-trustee pursuant to Section 10.11 hereof. In the
performance of its duties hereunder, the Master Servicer shall be an independent
contractor and shall not, except in those instances where it is taking action in
the name of the Trustee, be deemed to be the agent of the Trustee.
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Section 4.06 Due-on-Sale Clauses; Assumption Agreements
To the extent provided in this Agreement or the related Servicing
Agreement, to the extent Mortgage Loans contain enforceable due-on-sale clauses,
the Master Servicer shall cause the Company and the related Servicer to enforce
such clauses in accordance with this Agreement or the related Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with this Agreement or
the related Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the original Mortgagor may be released from liability in accordance
with this Agreement or the related Servicing Agreement.
Section 4.07 Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or
the receipt by the Company or the related Servicer of a notification that
payment in full has been escrowed in a manner customary for such purposes for
payment to Certificateholders on the next Distribution Date, the Company or the
related Servicer will, if required under the related Servicing Agreement (or if
the Company or the related Servicer does not, the Master Servicer may), promptly
furnish to the Custodian, on behalf of the Trustee, two copies of a
certification substantially in the form of Exhibit H hereto signed by a
Servicing Officer or in a mutually agreeable electronic format which will, in
lieu of a signature on its face, originate from a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
in connection with such payment that are required to be deposited in the
Protected Account maintained by the Company or the Servicer pursuant to Article
V or by the related Servicer pursuant to the related Servicing Agreement have
been or will be so deposited) and shall request that the Custodian, on behalf of
the Trustee, deliver to the Company or the related Servicer the related Mortgage
File. Upon receipt of such certification and request, the Custodian, on behalf
of the Trustee, shall promptly release the related Mortgage File to the Company
or the related Servicer and the Trustee and Custodian shall have no further
responsibility with regard to such Mortgage File. Upon any such payment in full,
the Company or the related Servicer is authorized, to give, as agent for the
Trustee, as the mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of satisfaction (or assignment of mortgage without recourse,
representation or warranty) regarding the Mortgaged Property subject to the
Mortgage, which instrument of satisfaction or assignment, as the case may be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of such payment, it being understood and agreed that no expenses
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Protected Account.
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(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan and in accordance with this Agreement or the related
Servicing Agreement, the Trustee shall execute such documents as shall be
prepared and furnished to the Trustee by the Company, the related Servicer or
the Master Servicer (in form reasonably acceptable to the Trustee) and as are
necessary to the prosecution of any such proceedings. The Custodian, on behalf
of the Trustee, shall, upon the request of the Company, the related Servicer or
the Master Servicer, and delivery to the Custodian, on behalf of the Trustee, of
two copies of a request for release signed by a Servicing Officer substantially
in the form of Exhibit H (or in a mutually agreeable electronic format which
will, in lieu of a signature on its face, originate from a Servicing Officer),
release the related Mortgage File held in its possession or control to the
Company, the related Servicer or the Master Servicer, as applicable. Such trust
receipt shall obligate the Company, the related Servicer or the Master Servicer
to return the Mortgage File to the Custodian on behalf of the Trustee, when the
need therefor by such Person no longer exists unless the Mortgage Loan shall be
liquidated, in which case, upon receipt of a certificate of a Servicing Officer
similar to that hereinabove specified, the Mortgage File shall be released by
the Custodian, on behalf of the Trustee, to the Company, the related Servicer or
the Master Servicer.
Section 4.08 Documents, Records and Funds in Possession of Master
Servicer, Company and Servicer to Be Held for Trustee.
(a) The Master Servicer shall transmit and the Company or the related
Servicer (to the extent required by this Agreement or the related Servicing
Agreement) shall transmit to the Trustee or Custodian such documents and
instruments coming into the possession of such Person from time to time as are
required by the terms hereof, or in the case of the related Servicer, the
related Servicing Agreement, to be delivered to the Trustee or Custodian. Any
funds received by the Master Servicer, the Company or by the related Servicer in
respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer, the Company or by the related Servicer as Liquidation Proceeds or
Insurance Proceeds in respect of any Mortgage Loan shall be held for the benefit
of the Trustee and the Certificateholders subject to the Master Servicer's right
to retain or withdraw from the Master Servicer Collection Account the Master
Servicing Fee and other amounts provided in this Agreement, and to the right of
the Company and the related Servicer to retain its Servicing Fee and other
amounts as provided in this Agreement or the related Servicing Agreement. The
Master Servicer shall, and (to the extent provided in this Agreement or the
related Servicing Agreement) shall cause the Company and the related Servicer
to, provide access to information and documentation regarding the Mortgage Loans
to the Trustee, its agents and accountants at any time upon reasonable request
and during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the OTS, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners of
any other federal or state banking or insurance regulatory authority if so
required by applicable regulations of the Office of Thrift Supervision or other
regulatory authority, such access to be afforded without charge but only upon
reasonable request in writing and during normal business hours at the offices of
the Master Servicer designated by it. In fulfilling such a request the Master
Servicer shall not be responsible for determining the sufficiency of such
information.
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(b) All Mortgage 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, shall be held by the Master Servicer for and on behalf of
the Trustee and the Certificateholders and shall be and remain the sole and
exclusive property of the Trustee; provided, however, that the Master Servicer,
the Company and the related Servicer shall be entitled to setoff against, and
deduct from, any such funds any amounts that are properly due and payable to the
Master Servicer or such Servicer under this Agreement or the related Servicing
Agreement.
Section 4.09 Standard Hazard Insurance and Flood Insurance Policies.
(a) For each Mortgage Loan, the Master Servicer shall enforce any
obligation of the Company and the related Servicer under this Agreement or the
related Servicing Agreement to maintain or cause to be maintained standard fire
and casualty insurance and, where applicable, flood insurance, all in accordance
with the provisions of this Agreement or the related Servicing Agreement. It is
understood and agreed that such insurance shall be with insurers meeting the
eligibility requirements set forth in this Agreement and the related Servicing
Agreement and that no earthquake or other additional insurance is to be required
of any Mortgagor or to be maintained on property acquired in respect of a
defaulted loan, other than pursuant to such applicable laws and regulations as
shall at any time be in force and as shall require such additional insurance.
(b) Pursuant to Sections 5.01, 5.03 and 5.04 any amounts collected by the
Company, the Servicers or the Master Servicer, or by the Company or the
Servicers, under any insurance policies (other than amounts to be applied to the
restoration or repair of the property subject to the related Mortgage or
released to the Mortgagor in accordance with this Agreement or the Servicing
Agreements) shall be deposited by the Company in its Protected Account or by the
related Servicer or the Master Servicer into the Master Servicer Collection
Account, subject to withdrawal pursuant to Sections 5.02, 5.03, 5.04 and 5.06,
as applicable. Any cost incurred by the Master Servicer, the Company or the
related Servicer in maintaining any such insurance if the Mortgagor defaults in
its obligation to do so shall be added to the amount owing under the Mortgage
Loan where the terms of the Mortgage Loan so permit; provided, however, that the
addition of any such cost shall not be taken into account for purposes of
calculating the distributions to be made to Certificateholders and shall be
recoverable by the Master Servicer, the Company or the related Servicer pursuant
to Sections 5.02, 5.03, 5.04 and 5.06, as applicable.
Section 4.10 Presentment of Claims and Collection of Proceeds.
The Master Servicer shall (to the extent provided in this Agreement and
the related Servicing Agreement) cause the Company or the Servicer to, prepare
and present on behalf of the Trustee and the Certificateholders all claims under
the Insurance Policies 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 policies. Any proceeds disbursed to the
Master Servicer (or disbursed to the Company or the related Servicer and
remitted to the Master Servicer) in respect of such policies, bonds or contracts
shall be promptly deposited in the Master Servicer Collection Account upon
receipt, except that any amounts realized that are to be applied to the repair
or restoration of the related Mortgaged Property as a condition precedent to the
presentation of claims on the related Mortgage Loan to the insurer under any
applicable Insurance Policy need not be so deposited (or remitted).
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Section 4.11 Maintenance of the Primary Mortgage Insurance Policies.
(a) The Master Servicer shall not take, or permit the Company or the
related Servicer (to the extent such action is prohibited under this Agreement
or the related Servicing Agreement) to take, any action that would result in
noncoverage under any applicable Primary Mortgage Insurance Policy of any loss
which, but for the actions of the Master Servicer, the Company or the related
Servicer, would have been covered thereunder. The Master Servicer shall use its
best reasonable efforts to cause the Company and the related Servicer (to the
extent required under this Agreement and the related Servicing Agreement) to
keep in force and effect (to the extent that the Mortgage Loan requires the
Mortgagor to maintain such insurance), primary mortgage insurance applicable to
each Mortgage Loan (including any LPMI Policy) in accordance with the provisions
of this Agreement and the related Servicing Agreement, as applicable. The Master
Servicer shall not, and shall not permit the Company or the related Servicer (to
the extent required under this Agreement or the related Servicing Agreement) to,
cancel or refuse to renew any such Primary Mortgage Insurance Policy that is in
effect at the date of the initial issuance of the Mortgage Note and is required
to be kept in force hereunder except in accordance with the provisions of this
Agreement and the related Servicing Agreement, as applicable.
(b) The Master Servicer agrees to cause the Company and the related
Servicer (to the extent required under this Agreement and the related Servicing
Agreement) to present, on behalf of the Trustee and the Certificateholders,
claims to the insurer under any Primary Mortgage Insurance Policies and, in this
regard, to take such reasonable action as shall be necessary to permit recovery
under any Primary Mortgage Insurance Policies respecting defaulted Mortgage
Loans. Pursuant to Sections 5.01, 5.03 and 5.04, any amounts collected by the
Company or the related Servicer under any Primary Mortgage Insurance Policies
shall be deposited by the Company in its Protected Account or by the related
Servicer in the Master Servicer Collection Account, subject to withdrawal
pursuant to Section 5.03 or 5.04, as applicable.
Section 4.12 Trustee to Retain Possession of Certain Insurance Policies
and Documents.
The Trustee (or the Custodian, as directed by the Trustee), shall retain
possession and custody of the originals (to the extent available) of any Primary
Mortgage Insurance Policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time
as contemplated by this Agreement. Until all amounts distributable in respect of
the Certificates have been distributed in full and the Master Servicer otherwise
has fulfilled its obligations under this Agreement, the Trustee (or its
Custodian, if any, as directed by the Trustee) shall also retain possession and
custody of each Mortgage File in accordance with and subject to the terms and
conditions of this Agreement. The Master Servicer shall promptly deliver or
cause to be delivered to the Trustee (or the Custodian, as directed by the
Trustee), upon the execution or receipt thereof the originals of any Primary
Mortgage Insurance Policies, any certificates of renewal, and such other
documents or instruments that constitute portions of the Mortgage File that come
into the possession of the Master Servicer from time to time.
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Section 4.13 Realization upon Defaulted Mortgage Loans.
The Master Servicer shall cause the Company and the related Servicer (to
the extent required under this Agreement and the related Servicing Agreement) to
foreclose upon, repossess or otherwise comparably convert the ownership of
Mortgaged Properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments, all in accordance with this Agreement or the
related Servicing Agreement.
Section 4.14 Compensation for the Master Servicer.
The Master Servicer shall be entitled to the Master Servicing Fee on each
Distribution Date as compensation for the performance of its obligations
hereunder. In addition, pursuant to Article V all income and gain realized from
any investment of funds in the Distribution Account and the Master Servicer
Collection Account shall be for the benefit of the Master Servicer as additional
compensation. The Master Servicer will be entitled to retain, as additional
compensation, any interest remitted by the related Servicer in connection with a
Principal Prepayment in full or otherwise in excess of amounts required to be
remitted to the Master Servicer Collection Account. The Master Servicer shall be
required to pay all expenses incurred by it in connection with its activities
hereunder and shall not be entitled to reimbursement therefor except as provided
in this Agreement.
Section 4.15 REO Property.
(a) In the event the Trust Fund acquires ownership of any REO Property in
respect of any related Mortgage Loan, the deed or certificate of sale shall be
issued to the Trustee, or to its nominee, on behalf of the related
Certificateholders. The Master Servicer shall, to the extent provided in this
Agreement or the related Servicing Agreement, cause the Company or the related
Servicer to sell, any REO Property as expeditiously as possible and in
accordance with the provisions of this Agreement and the related Servicing
Agreement, as applicable. Pursuant to its efforts to sell such REO Property, the
Master Servicer shall cause the Company or the related Servicer to protect and
conserve, such REO Property in the manner and to the extent required by this
Agreement or the related Servicing Agreement, in accordance with the REMIC
Provisions and in a manner that does not result in a tax on "net income from
foreclosure property" or cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code.
(b) The Master Servicer shall, to the extent required by this Agreement or
the related Servicing Agreement, cause the Company or the related Servicer to
deposit all funds collected and received in connection with the operation of any
REO Property in the Protected Account.
(c) The Master Servicer and the Company or the related Servicer, upon the
final disposition of any REO Property, shall be entitled to reimbursement for
any related unreimbursed Advances and other unreimbursed advances as well as any
unpaid Servicing Fees from Liquidation Proceeds received in connection with the
final disposition of such REO Property; provided, that any such unreimbursed
Monthly Advances as well as any unpaid Servicing Fees may be reimbursed or paid,
as the case may be, prior to final disposition, out of any net rental income or
other net amounts derived from such REO Property.
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(d) To the extent provided in this Agreement or the related Servicing
Agreement, the Liquidation Proceeds from the final disposition of the REO
Property, net of any payment to the Master Servicer and the Company or the
related Servicer as provided above shall be deposited in the Protected Account
on or prior to the Determination Date in the month following receipt thereof and
be remitted by wire transfer in immediately available funds to the Master
Servicer for deposit into the related Master Servicer Collection Account on the
next succeeding Remittance Date.
Section 4.16 Annual Statement as to Compliance.
(a) The Master Servicer will deliver to the Trustee, not later than
February 28 of each calendar year beginning in 2007, an Officers' Certificate
(an "Annual Statement of Compliance") stating, as to each signatory thereof,
that (i) a review of the activities of the Master Servicer during the preceding
calendar year and of performance under this Agreement or other applicable
servicing agreement has been made under such officers' supervision and (ii) to
the best of such officers' knowledge, based on such review, the Master Servicer
has fulfilled all of its obligations under this Agreement or other applicable
servicing agreement in all material respects throughout such year, or, if there
has been a failure to fulfill any such obligation in any material respect,
specifying each such failure known to such officer and the nature and status of
cure provisions thereof. Such Annual Statement of Compliance shall contain no
restrictions or limitations on its use. In the event that the Master Servicer
has delegated any servicing responsibilities with respect to the Mortgage Loans
to a subservicer, the Master Servicer shall deliver a similar Annual Statement
of Compliance by that subservicer to the Trustee as described above as and when
required with respect to the Master Servicer.
(b) If the Master Servicer cannot deliver the related Annual Statement of
Compliance by February 28th of such year, the Trustee, at its sole option, may
permit a cure period for the Master Servicer to deliver such Annual Statement of
Compliance, but in no event later than March 10th of such year.
(c) Failure of the Master Servicer to timely comply with this Section 4.16
shall be deemed an Event of Default, and the Trustee may, in addition to
whatever rights the Trustee may have under this Agreement and at law or equity
or to damages, including injunctive relief and specific performance, upon notice
immediately terminate all the rights and obligations of the Master Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without compensating the Master Servicer for the same. This paragraph shall
supersede any other provision in this Agreement or any other agreement to the
contrary.
Section 4.17 Assessments of Compliance and Attestation Reports.
On and after January 1, 2006, the Master Servicer shall service and
administer the Mortgage Loans in accordance with all applicable requirements of
the Servicing Criteria. Pursuant to Rules 13a-18 and 15d-18 of the Exchange Act
and Item 1123 of Regulation AB, the Master Servicer shall deliver to the Trustee
on or before February 28 of each calendar year beginning in 2007, a report
regarding the Master Servicer's assessment of compliance (an "Assessment of
Compliance") with the Servicing Criteria during the preceding calendar year. The
Assessment of Compliance must be reasonably satisfactory to the Trustee, and as
set forth in Regulation AB, the Assessment of Compliance must contain the
following:
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(a) A statement by such officer of its responsibility for assessing
compliance with the Servicing Criteria applicable to the Master Servicer;
(b) A statement by such officer that such officer used the Servicing
Criteria attached as Exhibit M hereto, and which will also be attached to the
Assessment of Compliance, to assess compliance with the Servicing Criteria
applicable to the Master Servicer;
(c) An assessment by such officer of the Master Servicer's compliance with
the applicable Servicing Criteria for the period consisting of the preceding
calendar year, including disclosure of any material instance of noncompliance
with respect thereto during such period, which assessment shall be based on the
activities it performs with respect to asset-backed securities transactions
taken as a whole involving the Master Servicer, that are backed by the same
asset type as the Mortgage Loans;
(d) A statement that a registered public accounting firm has issued an
attestation report on the Master Servicer's Assessment of Compliance for the
period consisting of the preceding calendar year; and
(e) A statement as to which of the Servicing Criteria, if any, are not
applicable to the Master Servicer, which statement shall be based on the
activities it performs with respect to asset-backed securities transactions
taken as a whole involving the Master Servicer, that are backed by the same
asset type as the Mortgage Loans.
Such report at a minimum shall address each of the Servicing Criteria
specified on Exhibit M hereto which are indicated as applicable to the Master
Servicer.
On or before February 28 of each calendar year beginning in 2007, the
Master Servicer shall furnish to the Trustee a report (an "Attestation Report")
by a registered public accounting firm that attests to, and reports on, the
Assessment of Compliance made by the Company, as required by Rules 13a-18 and
15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, which Attestation
Report must be made in accordance with standards for attestation reports issued
or adopted by the Public Company Accounting Oversight Board.
The Master Servicer shall cause any subservicer, and each subcontractor
determined by the Master Servicer to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB, to deliver to the
Trustee and the Depositor an Assessment of Compliance and Attestation Report as
and when provided above.
Such Assessment of Compliance, as to any subservicer, shall at a minimum
address each of the Servicing Criteria specified on Exhibit M hereto which are
indicated as applicable to any "primary servicer." Notwithstanding the
foregoing, as to any subcontractor, an Assessment of Compliance is not required
to be delivered unless it is required as part of a Form 10-K with respect to the
Trust Fund.
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If the Master Servicer cannot deliver any Assessment of Compliance or
Attestation Report by February 28th of such year, the Trustee, at its sole
option, may permit a cure period for the Master Servicer to deliver such
Assessment of Compliance or Attestation Report, but in no event later than March
10th of such year.
Failure of the Master Servicer to timely comply with this Section 4.17
shall be deemed an Event of Default, and the Trustee may, in addition to
whatever rights the Trustee may have under this Agreement and at law or equity
or to damages, including injunctive relief and specific performance, upon notice
immediately terminate all the rights and obligations of the Master Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without compensating the Master Servicer for the same. This paragraph shall
supersede any other provision in this Agreement or any other agreement to the
contrary.
The Trustee shall also provide an Assessment of Compliance and Attestation
Report, as and when provided above, which shall at a minimum address each of the
Servicing Criteria specified on Exhibit M hereto which are indicated as
applicable to the "trustee" or "securities administrator." In addition, the
Trustee shall cause the Custodian to deliver to the Trustee and the Depositor an
Assessment of Compliance and Attestation Report, as and when provided above,
which shall at a minimum address each of the Servicing Criteria specified on
Exhibit M hereto which are indicated as applicable to a "custodian."
Notwithstanding the foregoing, as to any Custodian, an Assessment of Compliance
is not required to be delivered unless it is required as part of a Form 10-K
with respect to the Trust Fund
Section 4.18 [Reserved.]
Section 4.19 Company.
On the Closing Date, the Company will receive from the Seller a payment of
$_____].
Section 4.20 UCC.
The Trustee agrees to file continuation statements for any Uniform
Commercial Code financing statements which the Seller has informed the Trustee
were filed on the Closing Date in connection with the Trust. The Seller shall
file any financing statements or amendments thereto required by any change in
the Uniform Commercial Code.
Section 4.21 Optional Purchase of Certain Mortgage Loans.
With respect to any Mortgage Loans which as of the first day of a Calendar
Quarter is delinquent in payment by 90 days or more or is an REO Property, the
Company shall have the right to purchase any Mortgage Loan from the Trust which
becomes 90 days or more delinquent or becomes an REO Property at a price equal
to the Repurchase Price; provided, however, (i) that such Mortgage Loan is still
90 days or more delinquent or is an REO Property as of the date of such purchase
and (ii) this purchase option, if not theretofore exercised, shall terminate on
the date prior to the last day of the related Calendar Quarter. This purchase
option, if not exercised, shall not be thereafter reinstated unless the
delinquency is cured and the Mortgage Loan thereafter again becomes 90 days or
more delinquent or becomes an REO Property, in which case the option shall again
become exercisable as of the first day of the related Calendar Quarter.
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In addition, the Company shall, at its option, purchase any Mortgage Loan
from the Trust if the first Due Date for such Mortgage Loan is subsequent to the
Cut-off Date and the initial Monthly Payment is not made within thirty (30) days
of such Due Date. Such purchase shall be made at a price equal to the Repurchase
Price.
If at any time the Company remits to the Master Servicer a payment for
deposit in the Master Servicer Collection Account covering the amount of the
Repurchase Price for such a Mortgage Loan, and the Company provides to the
Trustee a certification signed by a Servicing Officer stating that the amount of
such payment has been deposited in the Master Servicer Collection Account, then
the Trustee shall execute the assignment of such Mortgage Loan prepared and
delivered to the Trustee, at the request of the Company, without recourse,
representation or warranty, to the Company which shall succeed to all the
Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. The Company will thereupon own such Mortgage, and
all such security and documents, free of any further obligation to the Trustee
or the Certificateholders with respect thereto.
Section 4.22 Books and Records.
The Master Servicer shall be responsible for maintaining, and shall
maintain, a complete set of books and records for the Mortgage Loans which shall
be appropriately identified in the Master Servicer's computer system to clearly
reflect the ownership of the Mortgage Loans by the Trust. In particular, the
Master Servicer shall maintain in its possession, available for inspection by
the Trustee and shall deliver to the Trustee upon demand, evidence of compliance
with all federal, state and local laws, rules and regulations. To the extent
that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Master
Servicer may be in the form of microfilm or microfiche or such other reliable
means of recreating original documents, including, but not limited to, optical
imagery techniques so long as the Master Servicer complies with the requirements
of Accepted Servicing Practices.
The Master Servicer shall maintain with respect to each Mortgage Loan and
shall make available for inspection by the Trustee the related servicing file
during the time such Mortgage Loan is subject to this Agreement and thereafter
in accordance with applicable law.
Payments on the Mortgage Loans, including any payoffs, made in accordance
with the related Mortgage File will be entered in the Master Servicer's set of
books and records no more than two business days after receipt and
identification, and allocated to principal or interest as specified in the
related Mortgage File.
ARTICLE V
ACCOUNTS
Section 5.01 Collection of Mortgage Loan Payments; Protected Account.
(a) The Company shall make reasonable efforts in accordance with customary
and usual standards of practice of prudent mortgage lenders in the respective
states in which the Mortgaged Properties are located to collect all payments
called for under the terms and provisions of the Mortgage Loans to the extent
such procedures shall be consistent with this Agreement and the terms and
provisions of any related Required Insurance Policy. Consistent with the
foregoing, the Company may in its discretion (i) waive any late payment charge
and (ii) extend the due dates for payments due on a Mortgage Note for a period
not greater than 125 days. In the event of any such arrangement, the Company
shall make Advances on the related Mortgage Loan during the scheduled period in
accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, and shall be entitled to
reimbursement therefor in accordance with Section 6.01. The Company shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note or otherwise or against any
public or governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law. In addition, if (x) a Mortgage Loan is in default or default is
imminent or (y) the Company delivers to the Trustee a certification addressed to
the Trustee, based on the advice of counsel or certified public accountants, in
either case, that have a national reputation with respect to taxation of REMICs,
that a modification of such Mortgage Loan will not result in the imposition of
taxes on or disqualify the REMIC Trust, the Company may, (A) amend the related
Mortgage Note to reduce the Mortgage Rate applicable thereto, provided that such
reduced Mortgage Rate shall in no event be lower than ___% with respect to any
Mortgage Loan and (B) amend any Mortgage Note to extend to the maturity thereof.
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(b) The Company shall establish and maintain a Protected Account (which
shall at all times be an Eligible Account) with a depository institution in the
name of the Company for the benefit of the Trustee on behalf of the
Certificateholders and designated "[Name of Trustee], in trust for registered
holders of Bear Xxxxxxx Asset Backed Securities Trust 200__-___, Asset-Backed
Certificates Series 200__-___". The Company shall deposit or cause to be
deposited into the Protected Account on a daily basis within one Business Day of
receipt, except as otherwise specifically provided herein, the following
payments and collections remitted by subservicers or received by it in respect
of the Company Mortgage Loans subsequent to the Cut-off Date (other than in
respect of principal and interest due on the Company Mortgage Loans on or before
the Cut-off Date) and the following amounts required to be deposited hereunder:
(i) all payments on account of principal, including Principal
Prepayments, on the Company Mortgage Loans;
(ii) all payments on account of interest on the Company Mortgage
Loans net of the related Servicing Fee permitted under Section 3.10 and
LPMI Fees, if any;
(iii) all Liquidation Proceeds and Insurance Proceeds, other than
proceeds to be applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Company's
normal servicing procedures;
(iv) any amount required to be deposited by the Company pursuant to
Section 5.01(c) in connection with any losses on Permitted Investments;
(v) any amounts required to be deposited by the Company pursuant to
Section 3.05; and
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(vi) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Company into the
Protected Account shall be exclusive, it being understood and agreed that,
without limiting the generality of the foregoing, payments in the nature of late
payment charges or assumption fees, if collected, need not be remitted by the
Company. In the event that the Company shall remit any amount not required to be
remitted and not otherwise subject to withdrawal pursuant to Section 5.02, it
may at any time withdraw or direct the institution maintaining the Protected
Account, to withdraw such amount from the Protected Account, any provision
herein to the contrary notwithstanding. Such withdrawal or direction may be
accomplished by delivering written notice thereof to the institution maintaining
the Protected Account, that describes the amounts deposited in error in the
Protected Account. The Company shall maintain adequate records with respect to
all withdrawals made pursuant to this Section. All items requiring
reconciliation will be resolved within 90 calendar days of their original
identification. All funds deposited in the Protected Account shall be held in
trust for the Certificateholders until withdrawn in accordance with Section
5.02.
(c) The institution that maintains the Protected Account shall invest the
funds in the Protected Account, in the manner directed by the Company, in
Permitted Investments which shall mature not later than the Remittance Date and
shall not be sold or disposed of prior to its maturity. All such Permitted
Investments shall be made in the name of the Trustee, for the benefit of the
Certificateholders. All income and gain net of any losses realized from any such
investment shall be for the benefit of the Company as servicing compensation and
shall be remitted to it monthly as provided herein. The amount of any losses
incurred in the Protected Account in respect of any such investments shall be
deposited, by the Company into the Protected Account, out of the Company's own
funds.
(d) The Company shall give at least 30 days advance notice to the Trustee,
the Seller, the Master Servicer, each Rating Agency and the Depositor of any
proposed change of location of the Protected Account prior to any change
thereof.
Section 5.02 Permitted Withdrawals From the Protected Account.
(a) The Company may from time to time make withdrawals from the Protected
Account for the following purposes:
(i) to pay itself (to the extent not previously paid to or withheld
by the Company), as servicing compensation in accordance with Section
3.10, that portion of any payment of interest that equals the Servicing
Fee for the period with respect to which such interest payment was made,
and, as additional servicing compensation, those other amounts set forth
in Section 3.10;
(ii) to reimburse the Company for Advances made by it with respect
to the Mortgage Loans, provided, however, that the Company's right of
reimbursement pursuant to this subclause (ii) shall be limited to amounts
received on particular Mortgage Loan(s) (including, for this purpose,
Liquidation Proceeds and Insurance Proceeds) that represent late
recoveries of payments of principal and/or interest on such particular
Mortgage Loan(s) in respect of which any such Advance was made;
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(iii) to reimburse the Company for any previously made portion of a
Servicing Advance or an Advance made by the Company that, in the good
faith judgment of the Company, will not be ultimately recoverable by it
from the related Mortgagor, any related Liquidation Proceeds, Insurance
Proceeds or otherwise (a "Nonrecoverable Advance"), to the extent not
reimbursed pursuant to clause (ii) or clause (v);
(iv) to reimburse the Company from Insurance Proceeds for Insured
Expenses covered by the related Insurance Policy;
(v) to pay the Company any unpaid Servicing Fees and to reimburse it
for any unreimbursed Servicing Advances, provided, however, that the
Company's right to reimbursement for Servicing Advances pursuant to this
subclause (v) with respect to any Mortgage Loan shall be limited to
amounts received on particular Mortgage Loan(s) (including, for this
purpose, Liquidation Proceeds, Insurance Proceeds and purchase and
repurchase proceeds) that represent late recoveries of the payments for
which such Servicing Advances were made;
(vi) to pay to the Seller, the Depositor or itself, as applicable,
with respect to each Mortgage Loan or property acquired in respect thereof
that has been purchased pursuant to Section 2.02, 2.03 or 4.21 of this
Agreement, all amounts received thereon and not taken into account in
determining the related Stated Principal Balance of such repurchased
Mortgage Loan;
(vii) to pay any expenses recoverable by the Company pursuant to
Section 8.04 of this Agreement;
(viii) to withdraw pursuant to Section 5.01 any amount deposited in
the Protected Account and not required to be deposited therein; and
(ix) to clear and terminate the Protected Account upon termination
of this Agreement pursuant to Section 11.01 hereof.
In addition, no later than 1:00 p.m. Eastern time on the Remittance Date,
the Company shall withdraw from the Protected Account and remit to the Master
Servicer the amount required to be withdrawn therefrom pursuant to Section 5.04
hereof. In addition, on or before the Remittance Date, the Company shall remit
to the Master Servicer for deposit in the Master Servicer Collection Account any
Advances or any payments of Compensating Interest required to be made by the
Company with respect to the Company Mortgage Loans.
The Company shall keep and maintain separate accounting, on a Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any withdrawal from
the Protected Account pursuant to subclauses (i), (ii), (iv), (v) and (vi)
above. Prior to making any withdrawal from the Protected Account pursuant to
subclause (iii), the Company shall deliver to the Trustee an Officer's
Certificate of a Servicing Officer indicating the amount of any previous Advance
or Servicing Advance determined by the Company to be a Nonrecoverable Advance
and identifying the related Mortgage Loan(s), and their respective portions of
such Nonrecoverable Advance.
Section 5.02A Reports to Master Servicer.
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On or before the tenth calendar day of each month, the Company shall
furnish to the Master Servicer electronically in a format acceptable to the
Master Servicer loan accounting reports in the investor's assigned loan number
order to document the payment activity on each Company Mortgage Loan on an
individual mortgage loan basis. With respect to each month, such loan accounting
reports shall contain the following:
(i) With respect to each Scheduled Payment (on both an actual and
scheduled basis with respect to mortgage loan balances and on an actual
basis with respect to paid-through dates), the amount of such remittance
allocable to principal (including a separate breakdown of any Principal
Prepayment, including the amount of any Prepayment Interest Shortfall);
(ii) with respect to each Monthly Payment, the amount of such remittance
allocable to scheduled interest;
(iii) the amount of servicing compensation received by the Company during
the prior calendar month;
(iv) the aggregate scheduled principal balance of the Company Mortgage
Loans;
(v) the aggregate amount of Advances made by the Company pursuant to
Section 6.01;
(vi) the aggregate of any expenses reimbursed to the Company during the
prior calendar month pursuant to Section 5.02; and
(vii) the number and aggregate outstanding principal balances of Company
Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89 days, (3) 90
days or more; (b) as to which foreclosure has commenced; and (c) as to
which REO Property has been acquired.
Section 5.03 Collection of Taxes; Assessments and Similar Items; Escrow
Accounts.
With respect to each Company Mortgage Loan, to the extent required by the
related Mortgage Note, the Company shall establish and maintain one or more
accounts (each, an "Escrow Account") and deposit and retain therein all
collections from the Mortgagors (or advances by the Company) for the payment of
taxes, assessments, hazard insurance premiums or comparable items for the
account of the Mortgagors. Nothing herein shall require the Company to compel a
Mortgagor to establish an Escrow Account in violation of applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
condominium or PUD association dues, or comparable items, to reimburse the
Company out of related collections for any payments made with respect to each
Company Mortgage Loan pursuant to Section 3.01 (with respect to taxes and
assessments and insurance premiums) and Section 3.05 (with respect to hazard
insurance), to refund to any Mortgagors for any Company Mortgage Loans any sums
as may be determined to be overages, to pay interest, if required by law or the
terms of the related Mortgage or Mortgage Note, to such Mortgagors on balances
in the Escrow Account or to clear and terminate the Escrow Account at the
termination of this Agreement in accordance with Section 11.01 thereof. The
Escrow Account shall not be a part of the Trust Fund.
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Section 5.04 Servicer Protected Accounts.
(a) The Master Servicer shall enforce the obligation of the Company and
the Servicers to establish and maintain a Protected Account in accordance with
this Agreement and the Servicing Agreements, with records to be kept with
respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts
shall be deposited within one Business Day (or as of such other time specified
in the Servicing Agreements) of receipt all collections of principal and
interest on any Mortgage Loan and with respect to any REO Property received by
the Company or the related Servicer, including Principal Prepayments, Insurance
Proceeds, Liquidation Proceeds, and advances made from the Company's or such
Servicer's own funds (less servicing compensation as permitted by this Agreement
or the related Servicing Agreement) and all other amounts to be deposited in the
Protected Accounts. Each of the Company and the Servicers are hereby authorized
to make withdrawals from and deposits to the related Protected Account for
purposes required or permitted by this Agreement. To the extent provided in this
Agreement or any Servicing Agreement, the Protected Account shall be held in a
Designated Depository Institution and segregated on the books of such
institution in the name of the Trustee for the benefit of Certificateholders.
(b) To the extent provided in this Agreement or any Servicing Agreement,
amounts on deposit in a Protected Account may be invested in Permitted
Investments in the name of the Trustee for the benefit of Certificateholders
and, except as provided in the preceding paragraph, not commingled with any
other funds, such Permitted Investments to mature, or to be subject to
redemption or withdrawal, no later than the date on which such funds are
required to be withdrawn for deposit in the Master Servicer Collection Account,
and shall be held until required for such deposit. The income earned from
Permitted Investments made pursuant to this Section 5.04 shall be paid to the
Company or the related Servicer under this Agreement or the related Servicing
Agreement, and the risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Company or the related Servicer, as the case may be. The Company or
the related Servicer (to the extent provided in this Agreement or the related
Servicing Agreement) shall deposit the amount of any such loss in the Protected
Account within two Business Days of receipt of notification of such loss but not
later than the second Business Day prior to the Distribution Date on which the
moneys so invested are required to be distributed to the Certificateholders.
(c) To the extent provided in this Agreement or the related Servicing
Agreement and subject to this Article V, on or before each Remittance Date, the
Company or the related Servicer shall withdraw or shall cause to be withdrawn
from its Protected Account and shall immediately deposit or cause to be
deposited in the Master Servicer Collection Account amounts representing the
following collections and payments (other than with respect to principal of or
interest on the Mortgage Loans due on or before the Cut-off Date):
(i) Scheduled Payments on the Mortgage Loans received or any related
portion thereof advanced by the Company or the related Servicer pursuant
to the related Servicing Agreement which were due on or before the related
Due Date, net of the amount thereof comprising the Servicing Fees;
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(ii) Full Principal Prepayments and any Liquidation Proceeds
received by the Company or the related Servicer with respect to such
Mortgage Loans in the related Prepayment Period, with interest to the date
of prepayment or liquidation, net of the amount thereof comprising the
Servicing Fees and LPMI Fees, if any;
(iii) Partial Principal Prepayments received by the Company or the
related Servicer for such Mortgage Loans in the related Prepayment Period;
and
(iv) Any amount to be used as an Advance.
(d) Withdrawals may be made from a Protected Account by the Company as
described in Section 5.02 hereof and by the Master Servicer or the related
Servicer only to make remittances as provided in Section 5.04(c), 5.05 and 5.06;
to reimburse the Master Servicer or the Servicer for Advances which have been
recovered by subsequent collection from the related Mortgagor; to remove amounts
deposited in error; to remove fees, charges or other such amounts deposited on a
temporary basis; or to clear and terminate the account at the termination of
this Agreement in accordance with Section 11.01. As provided in Sections 5.04(c)
and 5.05(b) certain amounts otherwise due to the related Servicer may be
retained by the related Servicer and need not be deposited in the Master
Servicer Collection Account.
Section 5.05 Master Servicer Collection Account.
(a) The Master Servicer shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Master Servicer
Collection Account which shall be an Eligible Account. The Master Servicer will
deposit in the Master Servicer Collection Account as identified by the Master
Servicer and as received by the Master Servicer, the following amounts:
(i) Any amounts withdrawn from a Protected Account;
(ii) Any Advance and any Compensating Interest Payments;
(iii) Any Insurance Proceeds or Liquidation Proceeds received by or
on behalf of the Master Servicer or which were not deposited in a
Protected Account;
(iv) The Repurchase Price with respect to any Mortgage Loans
purchased by the Seller or Section 2.02 or 2.03, any amounts which are to
be treated pursuant to Section 2.04 of this Agreement as the payment of
such a Repurchase Price, the Repurchase Price with respect to any Mortgage
Loans purchased by the Company pursuant to Section 4.21, and all proceeds
of any Mortgage Loans or property acquired with respect thereto
repurchased by the Seller or its designee pursuant to Section 11.01;
(v) Any amounts required to be deposited with respect to losses on
investments of deposits in an Account; and
(vi) Any other amounts received by or on behalf of the Master
Servicer or the Trustee and required to be deposited in the Master
Servicer Collection Account pursuant to this Agreement.
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(b) All amounts deposited to the Master Servicer Collection Account shall
be held by the Master Servicer in the name of the Trustee in trust for the
benefit of the Certificateholders in accordance with the terms and provisions of
this Agreement. The requirements for crediting the Master Servicer Collection
Account or the Distribution Account shall be exclusive, it being understood and
agreed that, without limiting the generality of the foregoing, payments in the
nature of late payment charges or assumption, tax service, statement account or
payoff, substitution, satisfaction, release and other like fees and charges,
need not be credited by the Master Servicer or the related Servicer to the
Distribution Account or the Master Servicer Collection Account, as applicable.
In the event that the Master Servicer shall deposit or cause to be deposited to
the Distribution Account any amount not required to be credited thereto, the
Trustee, upon receipt of a written request therefor signed by a Servicing
Officer of the Master Servicer, shall promptly transfer such amount to the
Master Servicer, any provision herein to the contrary notwithstanding.
(c) The amount at any time credited to the Master Servicer Collection
Account may be invested, in the name of the Trustee, or its nominee, for the
benefit of the Certificateholders, in Permitted Investments or be held in cash
as directed by Master Servicer. All Permitted Investments shall mature or be
subject to redemption or withdrawal on or before, and shall be held until, the
next succeeding Distribution Account Deposit Date. Any and all investment
earnings from the Master Servicer Collection Account shall be paid to the Master
Servicer. The risk of loss of moneys required to be distributed to the
Certificateholders resulting from such investments shall be borne by and be the
risk of the Master Servicer. The Master Servicer shall deposit the amount of any
such loss in the Master Servicer Collection Account within two Business Days of
receipt of notification of such loss but not later than the second Business Day
prior to the Distribution Date on which the moneys so invested are required to
be distributed to the Certificateholders.
Section 5.06 Permitted Withdrawals and Transfers from the Master Servicer
Collection Account.
(a) The Master Servicer will, from time to time on demand of the Master
Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Master Servicer Collection Account as the
Master Servicer has designated for such transfer or withdrawal pursuant to this
Agreement and the related Servicing Agreement. The Master Servicer may clear and
terminate the Master Servicer Collection Account pursuant to Section 11.01 and
remove amounts from time to time deposited in error.
(b) On an ongoing basis, the Master Servicer shall withdraw from the
Master Servicer Collection Account to pay itself as provided in Section 4.14 and
to pay any expenses recoverable by the Trustee, the Master Servicer, the
Custodian or the Securities Administrator pursuant to Sections 4.03, 8.03, 8.04
and 10.05.
(c) In addition, on or before each Distribution Account Deposit Date, the
Master Servicer shall deposit in the Distribution Account (or remit to the
Trustee for deposit therein) any Advances required to be made by the Master
Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each Distribution Account
Deposit Date, the Master Servicer will transfer all available funds on deposit
in the Master Servicer Collection Account with respect to the related
Distribution Date to the Trustee for deposit in the Distribution Account.
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Section 5.07 Distribution Account.
(a) The Trustee shall establish and maintain in the name of the Trustee,
for the benefit of the Certificateholders, the Distribution Account as a
segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account shall be held by the
Trustee in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement.
(c) The Distribution Account shall constitute an Eligible Account of the
Trust Fund segregated on the books of the Trustee and held by the Trustee and
the Distribution Account and the funds deposited therein shall not be subject
to, and shall be protected from, all claims, liens, and encumbrances of any
creditors or depositors of the Trustee (whether made directly, or indirectly
through a liquidator or receiver of the Trustee). The amount at any time
credited to the Distribution Account may be, as directed by the Master Servicer,
held either uninvested in a trust or deposit account of the Trustee with no
liability for interest or other compensation thereof, except as otherwise agreed
in writing with the Master Servicer, or invested in the name of the Trustee, in
such Permitted Investments which mature not later than the Business Day next
preceding the succeeding Distribution Date, except if such Permitted Investment
is an obligation of or is managed by the institution that maintains such fund or
account, then such Permitted Investment shall mature not later than such
Distribution Date. Permitted Investments in respect of the Distribution Account
shall not be sold or disposed of prior to their maturity. All investment
earnings on amounts on deposit in the Distribution Account or benefit from funds
uninvested therein from time to time shall be for the account of the Master
Servicer. The Master Servicer shall be permitted to receive distribution of any
and all investment earnings from the Distribution Account on each Distribution
Date. If there is any loss on a Permitted Investment or demand deposit, the
Master Servicer shall deposit the amount of the loss in the Distribution
Account. With respect to the Distribution Account and the funds deposited
therein, the Trustee shall take such action as may be necessary to ensure that
the Certificateholders shall be entitled to the priorities afforded to such a
trust account (in addition to a claim against the estate of the Trustee) as
provided by 12 U.S.C. ss. 92a(e), and applicable regulations pursuant thereto,
if applicable, or any applicable comparable state statute applicable to state
chartered banking corporations.
Section 5.08 Permitted Withdrawals and Transfers from the Distribution
Account.
(a) The Trustee will, from time to time on demand of the Master Servicer
or the Securities Administrator, make or cause to be made such withdrawals or
transfers from the Distribution Account as the Master Servicer has designated
for such transfer or withdrawal pursuant to this Agreement or any Servicing
Agreement or as the Securities Administrator has instructed hereunder for the
following purposes (limited in the case of amounts due the Master Servicer to
those not withdrawn from the Master Servicer Collection Account in accordance
with the terms of this Agreement; provided that the Trustee shall not be
responsible for such determination and may rely on the Master Servicer's or the
Securities Administrator's instructions under this Section 5.08):
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(i) to reimburse the Master Servicer, the Company or the related
Servicer for any Advance or Servicing Advance of its own funds, the right
of the Master Servicer, the Company or the related Servicer to
reimbursement pursuant to this subclause (i) being limited to amounts
received on a particular Mortgage Loan (including, for this purpose, the
Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds)
which represent late payments or recoveries of the principal of or
interest on such Mortgage Loan respecting which such Advance or Servicing
Advance was made;
(ii) to reimburse the Master Servicer, the Company or the related
Servicer from Insurance Proceeds or Liquidation Proceeds relating to a
particular Mortgage Loan for amounts expended by the Master Servicer, the
Company or the related Servicer in good faith in connection with the
restoration of the related Mortgaged Property which was damaged by an
uninsured cause or in connection with the liquidation of such Mortgage
Loan;
(iii) to reimburse the Master Servicer, the Company or the related
Servicer from Insurance Proceeds relating to a particular Mortgage Loan
for insured expenses incurred with respect to such Mortgage Loan and to
reimburse the Master Servicer, the Company or the related Servicer from
Liquidation Proceeds from a particular Mortgage Loan for Liquidation
Expenses incurred with respect to such Mortgage Loan; provided that the
Master Servicer shall not be entitled to reimbursement for Liquidation
Expenses with respect to a Mortgage Loan to the extent that (i) any
amounts with respect to such Mortgage Loan were paid as Excess Liquidation
Proceeds pursuant to clause (x) of this Subsection (a) to the Master
Servicer; and (ii) such Liquidation Expenses were not included in the
computation of such Excess Liquidation Proceeds;
(iv) [reserved];
(v) [reserved];
(vi) to reimburse the Master Servicer, the Company or a Servicer for
advances of funds pursuant to this Agreement or the related Servicing
Agreement, and the right to reimbursement pursuant to this subclause being
limited to amounts received on the related Mortgage Loan (including, for
this purpose, the Repurchase Price therefor, Insurance Proceeds and
Liquidation Proceeds) which represent late recoveries of the payments for
which such advances were made;
(vii) to reimburse the Master Servicer, the Company or a Servicer
for any Advance or advance, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Advance or advance has not
been reimbursed pursuant to clauses (i) and (vi);
(viii) to pay the Master Servicer as set forth in Section 4.14;
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(ix) to reimburse the Master Servicer for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to Sections 4.03,
8.04(c) and (d) and 12.02 or otherwise reimbursable to it pursuant to this
Agreement;
(x) to pay to the Master Servicer, as additional servicing
compensation, any Excess Liquidation Proceeds to the extent not retained
by the Company or the related Servicer;
(xi) to reimburse or pay the Company or the related Servicer any
such amounts as are due thereto under this Agreement or the related
Servicing Agreement and have not been retained by or paid to the Company
or the related Servicer, to the extent provided herein and in the related
Servicing Agreement;
(xii) to reimburse the Trustee, the Custodian or the Securities
Administrator for expenses, costs and liabilities incurred by or
reimbursable to it pursuant to this Agreement (to the extent not
reimbursed from the Master Servicer Collection Account in accordance with
Section 5.06);
(xiii) to remove amounts deposited in error; and
(xiv) to clear and terminate the Distribution Account pursuant to
Section 11.01.
(b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (i) through
(vi), inclusive, and (viii) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the Master
Servicer without being deposited in the Distribution Account under Section 5.06.
(c) On each Distribution Date, the Trustee shall distribute the Available
Funds to the extent of funds on deposit in the Distribution Account to the
holders of the Certificates in accordance with the Remittance Report upon which
the Trustee may conclusively rely.
ARTICLE VI
DISTRIBUTIONS AND ADVANCES
Section 6.01 Advances.
(a) The Company shall make an Advance with respect to any Company Mortgage
Loan and deposit such Advance in the Master Servicer Collection Account no later
than 1:00 p.m. Eastern time on the Remittance Date in immediately available
funds. The Master Servicer shall cause the related Servicer to remit any such
Advance required pursuant to the terms of the related Servicing Agreement. The
Company or the related Servicer, as applicable, shall be obligated to make any
such Advance only to the extent that such advance would not be a Nonrecoverable
Advance. If the Company or the related Servicer shall have determined that it
has made a Nonrecoverable Advance or that a proposed Advance or a lesser portion
of such Advance would constitute a Nonrecoverable Advance, the Company or the
related Servicer, as the case may be, shall deliver (i) to the Trustee for the
benefit of the Certificateholders funds constituting the remaining portion of
such Advance, if applicable, and (ii) to the Depositor, the Master Servicer,
each Rating Agency and the Trustee an Officer's Certificate setting forth the
basis for such determination.
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In lieu of making all or a portion of such Advance from its own funds, the
Company may (i) cause to be made an appropriate entry in its records relating to
the Protected Account that any Amounts Held for Future Distribution has been
used by the Company in discharge of its obligation to make any such Advance and
(ii) transfer such funds from the Protected Account to the Distribution Account.
Any funds so applied and transferred shall be replaced by the Company by deposit
in the Distribution Account, no later than the close of business on the
Remittance Date immediately preceding the Distribution Date on which such funds
are required to be distributed pursuant to this Agreement.
The Company shall be entitled to be reimbursed from the Protected Account
for all Advances of its own funds made pursuant to this Section as provided in
Section 5.02. The obligation to make Advances with respect to any Mortgage Loan
shall continue until such Mortgage Loan is paid in full or the related Mortgaged
Property or related REO Property has been liquidated or until the purchase or
repurchase thereof (or substitution therefor) from the Trust Fund pursuant to
any applicable provision of this Agreement, except as otherwise provided in this
Section 6.01.
(b) If the Scheduled Payment on a Mortgage Loan that was due on a related
Due Date and is delinquent other than as a result of application of the Relief
Act and for which the Company or the related Servicer was required to make an
Advance pursuant to this Agreement or the related Servicing Agreement exceeds
the amount deposited in the Master Servicer Collection Account which will be
used for an Advance with respect to such Mortgage Loan, the Master Servicer will
deposit in the Master Servicer Collection Account not later than the
Distribution Account Deposit Date immediately preceding the related Distribution
Date an amount equal to such deficiency, net of the Master Servicing Fee and
Servicing Fee for such Mortgage Loan except to the extent the Master Servicer
determines any such Advance to be nonrecoverable from Liquidation Proceeds,
Insurance Proceeds or future payments on the Mortgage Loan for which such
Advance was made. Subject to the foregoing, the Master Servicer shall continue
to make such Advances through the date that the Company or the related Servicer
is required to do so under this Agreement or the related Servicing Agreement, as
applicable. If applicable, on the Distribution Account Deposit Date, the Master
Servicer shall present an Officer's Certificate to the Trustee (i) stating that
the Master Servicer elects not to make an Advance in a stated amount and (ii)
detailing the reason it deems the advance to be nonrecoverable.
Subject to and in accordance with the provisions of Article IX hereof, in
the event the Master Servicer fails to make such Advance, then the Trustee, as
Successor Master Servicer, shall be obligated to make such Advance, subject to
the provisions of this Section 6.01.
Section 6.02 Compensating Interest Payments.
(a) In the event that there is a Prepayment Interest Shortfall arising
from a voluntary Principal Prepayment in part or in full by the Mortgagor with
respect to any Company Mortgage Loan, the Company shall, to the extent of the
Servicing Fee for such Distribution Date, deposit into the Master Servicer
Collection Account, as a reduction of the Servicing Fee for such Distribution
Date, no later than the close of business on the Remittance Date immediately
preceding such Distribution Date, an amount equal to the Prepayment Interest
Shortfall; and in case of such deposit, the Company shall not be entitled to any
recovery or reimbursement from the Depositor, the Trustee, the Seller, the
Securities Administrator, the Trust Fund or the Certificateholders.
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(b) The Master Servicer shall cause each Servicer under the related
Servicing Agreement to remit any required Compensating Interest Payments to the
Master Servicer Collection Account on the Remittance Date.
(c) The Master Servicer shall be required to remit the amount of any such
Prepayment Interest Shortfalls, to the extent of the Master Servicing Fee for
such Distribution Date, in the event the Company or the related Servicer is
required to make such payment but fails to do so.
Section 6.03 [Reserved.]
Section 6.04 Distributions.
(a) On each Distribution Date, the Available Funds for such Distribution
Date shall be withdrawn by the Trustee to the extent of funds on deposit in the
Distribution Account and distributed as directed in accordance with the
Remittance Report for such Distribution Date, in the following order of
priority:
first, to pay accrued and unpaid interest on the Offered
Certificates as follows:
1. To the holders of the Class [A-1] Certificates, the Monthly
Interest Distributable Amount for such Class for such Distribution
Date;
2. To the holders of the Class [M-1] Certificates, the Monthly
Interest Distributable Amount for such Class for such Distribution
Date;
3. To the holders of the Class [M-2] Certificates, the Monthly
Interest Distributable Amount for such Class for such Distribution
Date; and
4. To the holders of the Class [B-1] Certificates, the Monthly
Interest Distributable Amount for such Class for such Distribution
Date.
second, (a) on each Distribution Date other than the Distribution
Date in _____, 200__, the Principal Distribution Amount for such Distribution
Date shall be paid to the holders of the Offered Certificates, allocated on a
pro rata basis, based on the Certificate Principal Balance of each such Class,
until the Certificate Principal Balance of each such Class has been reduced to
zero; and (b) on the Distribution Date in _____, 200__, the Principal
Distribution Amount for such Distribution Date shall be paid (i) first, to the
holders of the Class P Certificates, until the Certificate Principal Balance
thereof has been reduced to zero and (ii) second, to the holders of the Offered
Certificates, allocated on a pro rata basis, based on the Certificate Principal
Balance of each such Class, until the Certificate Principal Balance of each such
Class has been reduced to zero.
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third, after the payment of interest and principal to the
Certificates as described in clauses first and second above, any Net Monthly
Excess Cashflow for such Distribution Date will be distributed as follows:
1. After the Distribution Date in _____, 200__, to the holders
of the Offered Certificates, in an amount equal to any Extra
Principal Distribution Amount, payable to such holders as part of
the Principal Distribution Amount pursuant to clause second above;
2. To the holders of the Class [A-1] Certificates, then to the
holders of the Class [M-1] Certificates, then to the holders of the
Class [M-2] Certificates, and then to the holders of the Class [B-1]
Certificates, any Unpaid Interest Shortfall for such Classes of
Certificates on such Distribution Date, to the extent not previously
reimbursed;
3. To the holders of the Class [M-1] Certificates, in an
amount equal to the Applied Realized Loss Amount for the Class [M-1]
Certificates;
4. To the holders of the Class [M-2] Certificates, in an
amount equal to the Applied Realized Loss Amount for the Class [M-2]
Certificates;
5. To the holders of the Class [B-1] Certificates, in an
amount equal to the Applied Realized Loss Amount for the Class [B-1]
Certificates; and
6. To the holders of the Class R Certificate, any amount of
Net Monthly Excess Cashflow remaining after distributions pursuant
to items 1 through 5 of this clause third.
(b) [Reserved.]
(c) Subject to Section 11.02 hereof respecting the final distribution, on
each Distribution Date the Trustee shall make distributions to each
Certificateholder of record on the preceding Record Date either by wire transfer
in immediately available funds to the account of such holder at a bank or other
entity having appropriate facilities therefor, if (i) such Holder has so
notified the Trustee at least 5 Business Days prior to the related Record Date
and (ii) such Holder shall hold Regular Certificates with aggregate principal
denominations of not less than $1,000,000 or evidencing a Percentage Interest
aggregating 10% or more with respect to such Class or, if not, by check mailed
by first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register. Notwithstanding the foregoing, but
subject to Section 11.02 hereof respecting the final distribution, distributions
with respect to Certificates registered in the name of a Depository shall be
made to such Depository in immediately available funds.
(d) On or before 5:00 p.m. Eastern time on the fifth Business Day
immediately preceding each Distribution Date, the Master Servicer shall deliver
a report to the Securities Administrator in the form of a computer readable
magnetic tape (or by such other means as the Master Servicer and the Securities
Administrator may agree from time to time) containing such data and information,
as agreed to by the Master Servicer and the Securities Administrator such as to
permit the Securities Administrator to prepare the Monthly Statement to
Certificateholders and to direct the Trustee in writing to make the required
distributions for the related Distribution Date (the "Remittance Report"). The
Securities Administrator shall deliver a Remittance Report to the Trustee on or
before 5:00 p.m. Eastern time on the Business Day immediately preceding each
Distribution Date.
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Section 6.04A Allocation of Realized Losses.
(a) On or prior to each Determination Date, the Master Servicer shall
determine the amount of any Realized Loss in respect of each Mortgage Loan that
occurred during the immediately preceding calendar month.
(b) The interest portion of Realized Losses shall be allocated to the
Certificates as described in Section 1.02 hereof.
(c) The principal portion of all Realized Losses on the Mortgage Loans
allocated to any REMIC Regular Interest pursuant to Section 6.04(A)(d) shall be
allocated on each Distribution Date as follows: first, to Net Monthly Excess
Cashflow; second, to the Class B-1 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class M-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; and
fourth, to the Class M-1 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero. All such Realized Losses to be allocated to
the Certificate Principal Balances of all Classes on any Distribution Date shall
be so allocated after the actual distributions to be made on such date as
provided above. All references above to the Certificate Principal Balance of any
Class of Certificates shall be to the Certificate Principal Balance of such
Class immediately prior to the relevant Distribution Date, before reduction
thereof by any Realized Losses, in each case to be allocated to such Class of
Certificates, on such Distribution Date.
Any allocation of the principal portion of Realized Losses to a
Subordinate Certificate on any Distribution Date shall be made by reducing the
Certificate Principal Balance thereof by the amount so allocated. No allocations
of any Realized Losses shall be made to the Certificate Principal Balances of
the Class A-1 Certificates.
All such Realized Losses and all other losses allocated to a Class of
Certificates hereunder will be allocated among the, Certificates of such Class
in proportion to the Percentage Interests evidenced thereby.
Section 6.05 Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Securities Administrator
shall prepare and make available to each Holder of Certificates, the Trustee,
the Master Servicer and the Depositor a statement setting forth for the
Certificates:
(i) the applicable record dates, accrual periods, determination
dates for calculating distributions and general distribution dates;
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(ii) the total cash flows received and the general sources thereof;
(iii) the related amount of the Servicing Fees paid to or retained
by the Master Servicer for the related Due Period;
(iv) the amount of the related distribution to Holders of each Class
allocable to principal, separately identifying (A) the aggregate amount of
any Principal Prepayments included therein, (B) the aggregate of all
scheduled payments of principal included therein and (C) the Extra
Principal Distribution Amount (if any);
(v) the amount of such distribution to Holders of each Class
allocable to interest;
(vi) the amount of such distribution to Holders of each Class of
Class A Certificates and Class M Certificates allocable to interest and
the portion thereof, if any, provided by the Derivative Administration
Agreement;
(vii) the Interest Carry Forward Amount and any Basis Risk Shortfall
Carry Forward Amount for each Class of Certificates;
(viii) the Pass-Through Rate for each Class of Class A Certificates
and Class M Certificates with respect to the current Accrual Period, and,
if applicable, whether such Pass-Through Rate was limited by the Net Rate
Cap;
(ix) the aggregate of the Stated Principal Balance of (A) all of the
Mortgage Loans and (B) the Adjustable Rate Mortgage Loans, for the
following Distribution Date;
(x) the Certificate Principal Balance or Certificate Notional
Amount, as applicable, of each Class after giving effect (i) to all
distributions allocable to principal on such Distribution Date and (ii)
the allocation of any Applied Realized Loss Amounts for such Distribution
Date;
(xi) the number and Stated Principal Balance of the Mortgage Loans
in each Loan Group in respect of which (A) one Scheduled Payment is
Delinquent, (B) two Scheduled Payments are Delinquent, (C) three or more
Scheduled Payments are Delinquent and (D) foreclosure proceedings have
been commenced, in each case as of the close of business on the last day
of the calendar month preceding such Distribution Date and separately
identifying such information for the (1) first lien Mortgage Loans, (2)
second lien Mortgage Loans, and (3) Adjustable Rate Mortgage Loans, in
each such Loan Group;
(xii) the amount of Advances included in the distribution on such
Distribution Date (including the general purpose of such Advances), the
aggregate amount of unreimbursed Advances at the close of business on the
Distribution Date, and the general source of funds for reimbursements;
(xiii) the cumulative amount of Applied Realized Loss Amounts to
date;
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(xiv) if applicable, material modifications, extensions or waivers
to Mortgage Loan terms, fees, penalties or payments during the preceding
calendar month or that have become material over time;
(xv) with respect to any Mortgage Loan that was liquidated during
the preceding calendar month, the loan number and Stated Principal Balance
of, and Realized Loss on, such Mortgage Loan as of the close of business
on the Determination Date preceding such Distribution Date;
(xvi) the total number and principal balance of any real estate
owned or REO Properties as of the close of business on the Determination
Date preceding such Distribution Date;
(xvii) the three month rolling average of the percent equivalent of
a fraction, the numerator of which is the aggregate Stated Principal
Balance of the Mortgage Loans that are 60 days or more delinquent or are
in bankruptcy or foreclosure or are REO Properties, and the denominator of
which is the aggregate Stated Principal Balance of all of the Mortgage
Loans in each case as of the close of business on the last day of the
calendar month preceding such Distribution Date and separately identifying
such information for the (1) first lien Mortgage Loans, and (2) Adjustable
Rate Mortgage Loans;
(xviii) the Realized Losses during the related Prepayment Period and
the cumulative Realized Losses through the end of the preceding month;
(xix) whether a Trigger Event exists;
(xx) the amount of the distribution made on such Distribution Date
to the Holders of the Class P Certificates allocable to Prepayment
Charges;
(xxi) updated pool composition data including the following with
respect to each Loan Group: average loan balance, weighted average
mortgage rate, weighted average loan-to-value ratio at origination,
weighted average FICO at origination weighted average remaining term; and
[NOTE - Item 1121(a)(8) requires updated pool composition information, the
foregoing is a suggestion of what to provide]
(xxii) information about any additions of, substitutions for or
removal of any Mortgage Loans from the Trust Fund, and any changes in the
underwriting, acquisition or selection criteria as to any Mortgage Loans
added to the Trust Fund
The Securities Administrator may make the foregoing Monthly Statement
(and, at its option, any additional files containing the same information in an
alternative format) available each month to Certificateholders via the
Securities Administrator's internet website. The Securities Administrator's
internet website shall initially be located at "www.[___].com". Assistance in
using the website can be obtained by calling the Securities Administrator's
customer service desk at (___) ___-____. Parties that are unable to use the
above distribution options are entitled to have a paper copy mailed to them via
first class mail by calling the customer service desk and indicating such. The
Securities Administrator may change the way Monthly Statements are distributed
in order to make such distributions more convenient or more accessible to the
above parties.
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To the extent timely received from the Securities Administrator, the
Trustee will also make the related Monthly Statements available to
Certificateholders via the Trustee's internet website. The Trustee's internet
website will initially be located at "www.[ ]/[ ]". Assistance in using the
Trustee's internet website can be obtained by calling the Trustee's customer
service desk at (___) ___-____.
(b) The Securities Administrator's responsibility for making the above
information available to the Certificateholders is limited to the availability,
timeliness and accuracy of the information derived from the Master Servicer, the
Company and the Servicers. The Securities Administrator will make available a
copy of each statement provided pursuant to this Section 6.05 to each Rating
Agency.
(c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished upon request to each Person who at
any time during the calendar year was a Certificateholder, based on information
provided by the Securities Administrator containing the information set forth in
clauses (a)(i) and (a)(ii) of this Section 6.05 aggregated for such calendar
year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee or the Securities Administrator pursuant to any
requirements of the Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the Securities
Administrator shall furnish to the Holders of the Residual Certificates the
applicable Form 1066 and each applicable Form 1066Q and shall respond promptly
to written requests made not more frequently than quarterly by any Holder of a
Residual Certificate with respect to the following matters:
(i) The original projected principal and interest cash flows on the
Closing Date on each Class of regular and residual interests created
hereunder and on the Mortgage Loans, based on the Prepayment Assumption;
(ii) The projected remaining principal and interest cash flows as of
the end of any calendar quarter with respect to each Class of regular and
residual interests created hereunder and the Mortgage Loans, based on the
Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest rate
assumptions used in determining the projected principal and interest cash
flows described above;
(iv) The original issue discount (or, in the case of the Mortgage
Loans, market discount) or premium accrued or amortized through the end of
such calendar quarter with respect to each Class of regular or residual
interests created hereunder and to the Mortgage Loans, together with each
constant yield to maturity used in computing the same;
(v) The treatment of losses realized with respect to the Mortgage
Loans or the regular interests created hereunder, including the timing and
amount of any cancellation of indebtedness income of a REMIC with respect
to such regular interests or bad debt deductions claimed with respect to
the Mortgage Loans;
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(vi) The amount and timing of any non-interest expenses of a REMIC;
and
(vii) Any taxes (including penalties and interest) imposed on the
REMIC, including, without limitation, taxes on "prohibited transactions,"
"contributions" or "net income from foreclosure property" or state or
local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv) above shall
be provided by the Depositor pursuant to Section 10.12.
Section 6.06 REMIC Designation.
(a) The Trustee shall elect that the Trust Fund shall be treated as a
REMIC under Section 860D of the Code. Any inconsistencies or ambiguities in this
Agreement or in the administration of this Agreement shall be resolved in a
manner that preserves the validity of such REMIC election. The assets of the
REMIC Trust shall include the Mortgage Loans and all interest owing in respect
of and principal due thereon, the Distribution Account, the Master Servicer
Collection Account, the Reserve Account, the Protected Accounts maintained by
the Company and the Servicers, any REO Property, any proceeds of the foregoing
and any other assets subject to this Agreement.
ARTICLE VII
THE CERTIFICATES
Section 7.01 The Certificates.
The Certificates shall be substantially in the forms attached hereto as
Exhibits A-1 through A-7. The Certificates shall be issuable in registered form,
in the minimum dollar denominations, integral dollar multiples in excess thereof
(except that one Certificate of each Class may be issued in a different amount
which must be in excess of the applicable minimum dollar denomination) and
aggregate dollar denominations as set forth in the following table:
Minimum Integral Multiple in Original Certificate
Principal
Class Denomination Excess of Minimum Balance Pass-Through Rate
----- ------------ ----------------- --------- ---------------------------
[A-1] $25,000 $1,000 $ Class A-1 Pass-Through Rate
[M-1] $25,000 $1,000 $ Class M-1 Pass-Through Rate
[M-2] $25,000 $1,000 $ Class M-2 Pass-Through Rate
[B-1] $25,000 $1,000 $ Class B-1 Pass-Through Rate
[R] 100% N/A N/A N/A
The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such authentication and delivery. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate the countersignature
of the Trustee by manual signature, and such countersignature upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly countersigned and delivered hereunder. All
Certificates shall be dated the date of their countersignature. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
written direction of the Depositor, or any affiliate thereof.
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The Depositor shall provide, or cause to be provided, to the Trustee on a
continuous basis, an adequate inventory of Certificates to facilitate transfers.
Section 7.02 Certificate Register; Registration of Transfer and Exchange
of Certificates.
(a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 7.09 hereof, a Certificate Register for the Trust
Fund in which, subject to the provisions of subsections (b) and (c) below and to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of Transfers and exchanges of Certificates
as herein provided. Upon surrender for registration of Transfer of any
Certificate, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class and of like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of Transfer or exchange shall be accompanied by a written instrument of Transfer
in form satisfactory to the Trustee duly executed by the holder thereof or his
attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or exchange
shall be canceled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.
(b) No Transfer of a Private Certificate shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under the Securities Act and such state securities
laws. In the event that a Transfer is to be made in reliance upon an exemption
from the Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
Transfer and such Certificateholder's prospective transferee shall each certify
to the Trustee and the Securities Administrator in writing the facts surrounding
the Transfer in substantially the forms set forth in Exhibit E (the "Transferor
Certificate") and (x) deliver a letter in substantially the form of either
Exhibit F (the "Investment Letter") or Exhibit G (the "Rule 144A Letter") or (y)
there shall be delivered to the Trustee and the Securities Administrator an
Opinion of Counsel addressed to the Trustee and the Securities Administrator
that such Transfer may be made pursuant to an exemption from the Securities Act,
which Opinion of Counsel shall not be an expense of the Depositor, the Seller,
the Master Servicer, the Securities Administrator or the Trustee. The Depositor
shall provide to any Holder of a Private Certificate and any prospective
transferee designated by any such Holder, information regarding the related
Certificates and the Mortgage Loans and such other information as shall be
necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4)
for Transfer of any such Certificate without registration thereof under the
Securities Act pursuant to the registration exemption provided by Rule 144A. The
Trustee, the Securities Administrator and the Master Servicer shall cooperate
with the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such Transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Seller, the Securities Administrator and the Master Servicer
against any liability that may result if the Transfer is not so exempt or is not
made in accordance with such federal and state laws.
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No Transfer of an ERISA Restricted Certificate shall be made unless either
(i) the Trustee, the Master Servicer and the Securities Administrator shall have
received a representation from the transferee of such Certificate acceptable to
and in form and substance satisfactory to the Trustee, the Master Servicer and
the Securities Administrator, to the effect that such transferee is not an
employee benefit plan subject to Section 406 of ERISA and/or a plan subject to
Section 4975 of the Code, or a Person acting on behalf of any such plan or using
the assets of any such plan, or (ii) in the case of any such ERISA Restricted
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or a plan subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a trustee of any such plan or any
other person acting on behalf of any such plan, the Trustee shall have received
an Opinion of Counsel for the benefit of the Trustee, the Master Servicer and
the Securities Administrator and on which they may rely, satisfactory to the
Trustee, to the effect that the purchase or holding of such ERISA Restricted
Certificate will not result in any prohibited transactions under ERISA or
Section 4975 of the Code and will not subject the Trustee, the Master Servicer,
the Depositor or the Securities Administrator to any obligation in addition to
those expressly undertaken in this Agreement, which Opinion of Counsel shall not
be an expense of the Trustee, the Master Servicer, the Depositor or the
Securities Administrator. Notwithstanding anything else to the contrary herein,
any purported transfer of an ERISA Restricted Certificate to or on behalf of an
employee benefit plan subject to Section 406 of ERISA and/or a plan subject to
Section 4975 of the Code without the delivery of the Opinion of Counsel as
described above shall be void and of no effect; provided that the restriction
set forth in this sentence shall not be applicable if there has been delivered
to the Trustee an Opinion of Counsel meeting the requirements of clause (ii) of
the first sentence of this paragraph. None of the Trustee, the Securities
Administrator or the Master Servicer shall be under any liability to any Person
for any registration of transfer of any ERISA Restricted Certificate that is in
fact not permitted by this Section 7.02(b) or for making any payments due on
such Certificate to the Holder thereof or taking any other action with respect
to such Holder under the provisions of this Agreement. The Trustee and the
Securities Administrator shall each be entitled, but not obligated, to recover
from any Holder of any ERISA Restricted Certificate that was in fact an employee
benefit plan subject to Section 406 of ERISA or a plan subject to Section 4975
of the Code or a Person acting on behalf of any such plan at the time it became
a Holder or, at such subsequent time as it became such a plan or Person acting
on behalf of such a plan, all payments made on such ERISA Restricted Certificate
at and after either such time. Any such payments so recovered by the Trustee or
the Securities Administrator shall be paid and delivered by the Trustee or the
Securities Administrator to the last preceding Holder of such Certificate that
is not such a plan or Person acting on behalf of a plan.
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Each beneficial owner of a Class M-1, Class M-2 or Class B-1 Certificate
or any interest therein shall be deemed to have represented, by virtue of its
acquisition or holding of that certificate or interest therein, that either (i)
it is not a Plan or investing with "Plan Assets", (ii) it has acquired and is
holding such certificate in reliance on the Exemption, and that it understands
that there are certain conditions to the availability of the Exemption,
including that the certificate must be rated, at the time of purchase, not lower
than "BBB-" (or its equivalent) by S&P, Fitch or Xxxxx'x Investors Service,
Inc., and the certificate is so rated or (iii) (1) it is an insurance company,
(2) the source of funds used to acquire or hold the certificate or interest
therein is an "insurance company general account," as such term is defined in
Prohibited Transaction Class Exemption ("PTCE") 95-60, and (3) the conditions in
Sections I and III of PTCE 95-60 have been satisfied.
(c) Each Person who has or who acquires any Ownership Interest in the
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in the Class R
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in the
Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in the Class R Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of the Class R Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit D.
(iii) Each Person holding or acquiring any Ownership Interest in the
Class R Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in the Class R Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of the Class R Certificate and (C)
not to Transfer its Ownership Interest in the Class R Certificate or to
cause the Transfer of an Ownership Interest in the Class R Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee.
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(iv) Any attempted or purported Transfer of any Ownership Interest
in the Class R Certificate in violation of the provisions of this Section
7.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
the Class R Certificate in violation of the provisions of this Section
6.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of the Class R Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of the Class R
Certificate that is in fact not permitted by Section 7.02(b) and this
Section 7.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit. The Trustee
shall be entitled but not obligated to recover from any Holder of the
Class R Certificate that was in fact not a Permitted Transferee at the
time it became a Holder or, at such subsequent time as it became other
than a Permitted Transferee, all payments made on the Class R Certificate
at and after either such time. Any such payments so recovered by the
Trustee shall be paid and delivered by the Trustee to the last preceding
Permitted Transferee of such Certificate.
(v) The Master Servicer shall make available within 60 days of
written request from the Trustee, all information necessary to compute any
tax imposed under Section 860E(e) of the Code as a result of a Transfer of
an Ownership Interest in the Class R Certificate to any Holder who is not
a Permitted Transferee.
The restrictions on Transfers of the Class R Certificate set forth in this
Section 7.02(c) shall cease to apply (and the applicable portions of the legend
on the Class R Certificate may be deleted) with respect to Transfers occurring
after delivery to the Trustee of an Opinion of Counsel addressed to the Trustee,
which Opinion of Counsel shall not be an expense of the Trustee, the Securities
Administrator, the Seller or the Master Servicer to the effect that the
elimination of such restrictions will not cause the REMIC Trust to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any ownership Interest in the Class R
Certificate hereby consents to any amendment of this Agreement that, based on an
Opinion of Counsel addressed to the Trustee and furnished to the Trustee, is
reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, the Class R Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of the Class R Certificate that is held by a
Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates and opinions referred
to above in this Section 7.02 shall not be an expense of the Trust Fund, the
Trustee, the Depositor, the Seller, the Securities Administrator or the Master
Servicer.
Section 7.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and of the ownership thereof and (b) there is delivered to
the Securities Administrator and the Trustee such security or indemnity as may
be required by them to save each of them harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like Class, tenor and Percentage Interest. In connection with the
issuance of any new Certificate under this Section 7.03, the Trustee may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith. Any replacement
Certificate issued pursuant to this Section 7.03 shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time. All Certificates surrendered to the Trustee under the terms of this
Section 7.03 shall be canceled and destroyed by the Trustee in accordance with
its standard procedures without liability on its part.
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Section 7.04 Persons Deemed Owners.
The Securities Administrator, the Trustee and any agent of the Securities
Administrator or the Trustee may treat the person in whose name any Certificate
is registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other purposes
whatsoever, and neither the Securities Administrator, the Trustee nor any agent
of the Securities Administrator or the Trustee shall be affected by any notice
to the contrary.
Section 7.05 Access to List of Certificateholders' Names and Addresses.
If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor or the Master Servicer shall request such information in writing from
the Trustee, then the Trustee shall, within ten Business Days after the receipt
of such request, provide the Depositor, the Master Servicer or such
Certificateholders at such recipients' expense the most recent list of the
Certificateholders of the Trust Fund held by the Trustee, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree that
the Trustee shall not be held accountable by reason of the disclosure of any
such information as to the list of the Certificateholders hereunder, regardless
of the source from which such information was derived.
Section 7.06 Book-Entry Certificates.
The Regular Certificates, upon original issuance, shall be issued in the
form of one or more typewritten Certificates representing the Book- Entry
Certificates, to be delivered to the Depository by or on behalf of the
Depositor. Such Certificates shall initially be registered on the Certificate
Register in the name of the Depository or its nominee, and no Certificate Owner
of such Certificates will receive a definitive certificate representing such
Certificate Owner's interest in such Certificates, except as provided in Section
7.08. Unless and until definitive, fully registered Certificates ("Definitive
Certificates") have been issued to the Certificate Owners of such Certificates
pursuant to Section 7.08:
(a) the provisions of this Section shall be in full force and effect;
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(b) the Depositor, the Securities Administrator and the Trustee may deal
with the Depository and the Depository Participants for all purposes (including
the making of distributions) as the authorized representative of the respective
Certificate Owners of such Certificates;
(c) registration of the Book-Entry Certificates may not be transferred by
the Trustee except to another Depository;
(d) the rights of the respective Certificate Owners of such Certificates
shall be exercised only through the Depository and the Depository Participants
and shall be limited to those established by law and agreements between the
Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 7.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants;
(f) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants; and
(g) to the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control.
For purposes of any provision of this Agreement requiring or permitting
actions with the consent of, or at the direction of, Certificateholders
evidencing a specified percentage of the aggregate unpaid principal amount of
any Class of Certificates, such direction or consent may be given by Certificate
Owners (acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
Section 7.07 Notices to Depository.
Whenever any notice or other communication is required to be given to
Certificateholders of a Class with respect to which Book-Entry Certificates have
been issued, unless and until Definitive Certificates shall have been issued to
the related Certificate Owners, the Trustee shall give all such notices and
communications to the Depository.
Section 7.08 Definitive Certificates.
If, after Book-Entry Certificates have been issued with respect to any
Certificates, (a) the Depositor or the Depository advises the Trustee that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Depositor is unable to locate a qualified successor, (b)
the Depositor, at its sole option, advises the Trustee that it elects to
terminate the book-entry system with respect to such Certificates through the
Depository or (c) after the occurrence and continuation of an Event of Default,
Certificate Owners of such Book-Entry Certificates having not less than 51% of
the Voting Rights evidenced by any Class of Book-Entry Certificates advise the
Trustee and the Depository in writing through the Depository Participants that
the continuation of a book-entry system with respect to Certificates of such
Class through the Depository (or its successor) is no longer in the best
interests of the Certificate Owners of such Class, then the Trustee shall notify
all Certificate Owners of such Certificates, through the Depository, of the
occurrence of any such event and of the availability of Definitive Certificates
to applicable Certificate Owners requesting the same. The Depositor shall
provide the Trustee with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the Trustee
of any such Certificates by the Depository, accompanied by registration
instructions from the Depository for registration, the Trustee shall countersign
and deliver such Definitive Certificates. Neither the Depositor nor the Trustee
shall be liable for any delay in delivery of such instructions and each may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of such Definitive Certificates, all references herein to
obligations imposed upon or to be performed by the Depository shall be deemed to
be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.
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Section 7.09 Maintenance of Office or Agency.
The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies at
__________________________________________________________ where Certificates
may be surrendered for registration of transfer or exchange. The Trustee will
give prompt written notice to the Certificateholders of any change in such
location of any such office or agency.
ARTICLE VIII
THE COMPANY AND THE MASTER SERVICER
Section 8.01 Liabilities of the Depositor, the Company and the Master
Servicer.
Each of the Depositor, the Company and the Master Servicer shall be liable
in accordance herewith only to the extent of the obligations specifically
imposed upon and undertaken by it herein.
Section 8.02 Merger or Consolidation of the Depositor, the Company or the
Master Servicer.
(a) Each of the Depositor, the Company and the Master Servicer will keep
in full force and effect its existence, rights and franchises as a corporation
under the laws of the state of its incorporation, and will obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its duties under this Agreement.
(b) Any Person into which the Depositor, the Company or the Master
Servicer may be merged or consolidated, or any corporation resulting from any
merger or consolidation to which the Depositor, the Company or the Master
Servicer shall be a party, or any Person succeeding to the business of the
Depositor, the Company or the Master Servicer, shall be the successor of the
Depositor, the Company or the Master Servicer hereunder, without the execution
or filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
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Section 8.03 Indemnification of the Trustee, the Master Servicer and the
Securities Administrator.
(a) The Master Servicer agrees to indemnify the Indemnified Persons for,
and to hold them harmless against, any loss, liability or expense (including
reasonable legal fees and disbursements of counsel) incurred on their part that
may be sustained in connection with, arising out of, or relating to, any claim
or legal action (including any pending or threatened claim or legal action)
relating to this Agreement, including the powers of attorney delivered pursuant
to Sections 4.01 and 4.05 hereof, the Assignment Agreements, the Custodial
Agreement or the Certificates (i) related to the Master Servicer's failure to
perform its duties in compliance with this Agreement (except as any such loss,
liability or expense shall be otherwise reimbursable pursuant to this Agreement)
or (ii) incurred by reason of the Master Servicer's willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder, provided, in each case,
that with respect to any such claim or legal action (or pending or threatened
claim or legal action), the Trustee shall have given the Master Servicer and the
Seller written notice thereof promptly after the Trustee shall have with respect
to such claim or legal action knowledge thereof; provided, however that the
failure to give such notice shall not relieve the Master Servicer of its
indemnification obligations hereunder. This indemnity shall survive the
resignation or removal of the Trustee, Master Servicer or the Securities
Administrator and the termination of this Agreement.
(b) The Company agrees to indemnify the Indemnified Persons and to hold
them harmless from and against any and all claims, losses, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and any other
costs, fees and expenses that the Indemnified Persons may sustain in any way
related to the failure of the Company to perform in any way its duties and
service the Company Mortgage Loans in strict compliance with the terms of this
Agreement and for breach of any representation or warranty of the Company
contained herein. The Company shall immediately notify the Master Servicer and
the Trustee if a claim is made by a third party with respect to this Agreement
or the Company Mortgage Loans, assume (with the consent of the Master Servicer
and the Trustee and with counsel reasonably satisfactory to the Master Servicer
and the Trustee) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or any
Indemnified Person in respect of such claim but failure to so notify the Company
shall not limit its obligations hereunder. The Company agrees that it will not
enter into any settlement of any such claim without the consent of the
Indemnified Persons unless such settlement includes an unconditional release of
such Indemnified Persons from all liability that is the subject matter of such
claim. The provisions of this Section 8.03(b) shall survive termination of this
Agreement.
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(c) The Seller will indemnify any Indemnified Person for any loss,
liability or expense of any Indemnified Person not otherwise paid or covered
pursuant to Subsections (a) or (b) above.
Section 8.04 Limitations on Liability of the Depositor, the Company, the
Master Servicer and Others.
Subject to the obligation of the Depositor, the Company and the Master
Servicer to indemnify the Indemnified Persons pursuant to Section 8.03:
(a) Neither the Depositor, the Company, the Master Servicer nor any of the
directors, officers, employees or agents of the Depositor, the Company and the
Master Servicer shall be under any liability to the Indemnified Persons, the
Trust Fund or the Certificateholders for taking any action or for refraining
from taking any action in good faith pursuant to this Agreement, or for errors
in judgment; provided, however, that this provision shall not protect the
Depositor, the Company, the Master Servicer or any such Person against any
breach of warranties or representations made herein or any liability which would
otherwise be imposed by reason of such Person's willful misfeasance, bad faith
or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder.
(b) The Depositor, the Company, the Master Servicer and any director,
officer, employee or agent of the Depositor, the Company and the Master Servicer
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder.
(c) The Depositor, the Company, the Master Servicer, the Trustee, the
Custodian and any director, officer, employee or agent of the Depositor, the
Company, the Master Servicer, the Trustee or the Custodian shall be indemnified
by the Trust and held harmless thereby against any loss, liability or expense
(including reasonable legal fees and disbursements of counsel) incurred on their
part that may be sustained in connection with, arising out of, or related to,
any claim or legal action (including any pending or threatened claim or legal
action) relating to this Agreement, the Assignment Agreements, the Custodial
Agreement, the Certificates or the Servicing Agreements (except with respect to
the Master Servicer only, to the extent that the Master Servicer is indemnified
by the Company under this Agreement or by the related Servicer under the related
Servicing Agreement), other than (i) any such loss, liability or expense related
to the Company's or the Master Servicer's failure to perform its respective
duties in compliance with this Agreement (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement), or to the
Custodian's failure to perform its duties under the Custodial Agreement, or (ii)
any such loss, liability or expense incurred by reason of the Company's, the
Master Servicer's or the Custodian's willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or under the Custodial
Agreement, as applicable, or by reason of reckless disregard of obligations and
duties hereunder or under the Custodial Agreement, as applicable.
(d) Neither the Depositor, the Company nor the Master Servicer shall be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its duties under this Agreement and that in its opinion may
involve it in any expense or liability; provided, however, the Master Servicer
may in its discretion, with the consent of the Trustee (which consent shall not
be unreasonably withheld), undertake any such action which it may deem necessary
or desirable with respect to this Agreement and the rights and duties of the
parties hereto and the interests of the Certificateholders hereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Master Servicer shall be entitled to be reimbursed therefor out of the Master
Servicer Collection Account as provided by Section 5.05. Nothing in this
Subsection 8.04(d) shall affect the Master Servicer's obligation to supervise,
or to take such actions as are necessary to ensure, the servicing and
administration of the Mortgage Loans pursuant to Subsection 4.01(a).
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(e) In taking or recommending any course of action pursuant to this
Agreement, unless specifically required to do so pursuant to this Agreement, the
Master Servicer shall not be required to investigate or make recommendations
concerning potential liabilities which the Trust might incur as a result of such
course of action by reason of the condition of the Mortgaged Properties but
shall give notice to the Trustee if it has notice of such potential liabilities.
(f) The Master Servicer shall not be liable for any acts or omissions of
the Company or the Servicers, except as otherwise expressly provided herein.
Section 8.05 Master Servicer and Company Not to Resign.
(a) Except as provided in Section 8.07, the Master Servicer shall not
resign from the obligations and duties hereby imposed on it except (i) with the
prior written consent of the Trustee (which consent shall not be unreasonably
withheld) or (ii) upon a determination that any such duties hereunder are no
longer permissible under applicable law and such impermissibility cannot be
cured. Any such determination permitting the resignation of the Master Servicer
shall be evidenced by an Opinion of Counsel to such effect, addressed to and
delivered to, the Trustee. No such resignation by the Master Servicer shall
become effective until the Company or the Trustee or a successor to the Master
Servicer reasonably satisfactory to the Trustee shall have assumed the
responsibilities and obligations of the Master Servicer in accordance with
Section 9.02 hereof. The Trustee shall notify the Rating Agencies of the
resignation of the Master Servicer.
(b) The Company shall not resign from the obligations and duties hereby
imposed on it except (i) upon the assignment of its servicing duties with
respect to all or a portion of the Company Mortgage Loans to an institution that
is a Xxxxxx Xxx and Freddie Mac approved seller/servicer in good standing that
has a net worth of not less than $10,000,000 and with the prior written consent
of the Master Servicer (which consent shall not be unreasonably withheld) or
(ii) upon the determination that its duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Company. Any
determination permitting the resignation of the Company shall be evidenced by an
Opinion of Counsel to such effect addressed to and delivered, to the Master
Servicer and the Trustee which Opinion of Counsel shall be in form and substance
acceptable to the Master Servicer and the Trustee. No appointment of a successor
to the Company shall be effective hereunder unless (a) the Rating Agencies have
confirmed in writing that such appointment will not result in a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Certificates, (b) such successor shall have represented that it is meets the
eligibility criteria set forth in clause (i) above and (c) such successor has
agreed to assume the obligations of the Company hereunder to the extent of the
Company Mortgage Loans to be serviced by such successor. The Company shall
provide a copy of the written confirmation of the Rating Agencies and the
agreement executed by such successor to the Master Servicer and the Trustee. No
such resignation shall become effective until a Qualified Successor or the
Master Servicer shall have assumed the Company's responsibilities and
obligations hereunder. The Company shall notify the Master Servicer, the Trustee
and the Rating Agencies of the resignation of the Company or the assignment of
all or a portion of its servicing duties hereunder in accordance with this
Section 8.05.
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Section 8.06 Successor Master Servicer.
In connection with the appointment of any successor Master Servicer or the
assumption of the duties of the Master Servicer, the Company or the Trustee may
make such arrangements for the compensation of such successor master servicer
out of payments on the Mortgage Loans as the Company or the Trustee and such
successor master servicer shall agree. If the successor master servicer does not
agree that such market value is a fair price, such successor master servicer
shall obtain two quotations of market value from third parties actively engaged
in the servicing of single-family mortgage loans. In no event shall the
compensation of any successor master servicer exceed that permitted the Master
Servicer without the consent of all of the Certificateholders.
Section 8.07 Sale and Assignment of Master Servicing.
The Master Servicer may sell and assign its rights and delegate its duties
and obligations in its entirety as Master Servicer under this Agreement and the
Company may terminate the Master Servicer without cause and select a new Master
Servicer; provided, however, that: (i) the purchaser or transferee accepting
such assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for Xxxxxx Xxx or Freddie Mac; (b) shall have a net worth
of not less than $10,000,000 (unless otherwise approved by each Rating Agency
pursuant to clause (ii) below); (c) shall be reasonably satisfactory to the
Trustee (as evidenced in a writing signed by the Trustee); and (d) shall execute
and deliver to the Trustee an agreement, in form and substance reasonably
satisfactory to the Trustee, which contains an assumption by such Person of the
due and punctual performance and observance of each covenant and condition to be
performed or observed by it as master servicer under this Agreement, any
custodial agreement from and after the effective date of such agreement; (ii)
each Rating Agency shall be given prior written notice of the identity of the
proposed successor to the Master Servicer and each Rating Agency's rating of the
Certificates in effect immediately prior to such assignment, sale and delegation
will not be downgraded, qualified or withdrawn as a result of such assignment,
sale and delegation, as evidenced by a letter to such effect delivered to the
Master Servicer and the Trustee; (iii) the Master Servicer assigning and selling
the master servicing shall deliver to the Trustee an Officer's Certificate and
an Opinion of Counsel addressed to the Trustee, each stating that all conditions
precedent to such action under this Agreement have been completed and such
action is permitted by and complies with the terms of this Agreement; and (iv)
in the event the Master Servicer is terminated without cause by the Company, the
Company shall pay, from its own funds and without any right of reimbursement,
the terminated Master Servicer a termination fee equal to ___% of the aggregate
Stated Principal Balance of the Mortgage Loans at the time the master servicing
of the Mortgage Loans is transferred to the successor Master Servicer. No such
assignment or delegation shall affect any liability of the Master Servicer
arising prior to the effective date thereof.
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ARTICLE IX
DEFAULT; TERMINATION OF MASTER SERVICER;
TERMINATION OF COMPANY
Section 9.01 Events of Default.
"Event of Default," wherever used herein, means any one of the following
events:
(i) any failure by the Master Servicer to remit to the Trustee any
amounts received or collected by the Master Servicer in respect of the
Mortgage Loans and required to be remitted by it hereunder or any Advance
required to be made by it pursuant to this Agreement, which failure shall
continue unremedied for [one Business Day] after the date on which written
notice of such failure shall have been given to the Master Servicer by the
Trustee or the Depositor, or to the Trustee and the Master Servicer by the
Holders of Certificates evidencing not less than [25]% of the Voting
Rights evidenced by the Certificates; or
(ii) any failure by the Master Servicer to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Master Servicer contained in this Agreement or any breach of a
representation or warranty by the Master Servicer, which failure or breach
shall continue unremedied for a period of [60] days after the date on
which written notice of such failure shall have been given to Master
Servicer by the Trustee or the Depositor, or to the Trustee and the Master
Servicer by the Holders of Certificates evidencing not less than [25]% of
the Voting Rights evidenced by the Certificates; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Master Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
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
property of the Master Servicer; or
(v) 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, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) the Master Servicer assigns or delegates its duties or rights
under this Agreement in contravention of the provisions permitting such
assignment or delegation under Sections 8.05 or 8.07.
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If an Event of Default shall occur, then, and in each and every such case,
so long as such Event of Default shall not have been remedied, the Trustee may,
and at the direction of the Holders of Certificates evidencing not less than 25%
of the Voting Rights evidenced by the Certificates, the Trustee shall, by notice
in writing to the Master Servicer (with a copy to each Rating Agency), terminate
all of the rights and obligations of the Master Servicer (and the Securities
Administrator if the Master Servicer and the Securities Administrator are the
same entity) under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder. On or
after the receipt by the Master Servicer of such written notice, all authority
and power of the Master Servicer (and, if applicable, the Securities
Administrator) hereunder, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee, or any successor
appointed pursuant to Section 9.02 (a "Successor Master Servicer" and, if
applicable, "Successor Securities Administrator"). Such Successor Master
Servicer shall thereupon if such Successor Master Servicer is a successor to the
Master Servicer, make any Advance required by Article VI, subject, in the case
of the Trustee, to Section 9.02. The Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the terminated Master Servicer and, if
applicable, the terminated Securities Administrator, as attorney- in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of any Mortgage Loans and related documents, or otherwise. Unless
expressly provided in such written notice, no such termination shall affect any
obligation of the Master Servicer to pay amounts owed pursuant to Article VIII
or Article X. The Master Servicer and, if applicable, the Securities
Administrator agrees to cooperate with the Trustee in effecting the termination
of the Master Servicer's and, if applicable, the Securities Administrator's
responsibilities and rights hereunder, including, without limitation, the
transfer to the applicable Successor Master Servicer of all cash amounts which
shall at the time be credited to the Master Servicer Collection Account
maintained pursuant to Section 5.05, or thereafter be received with respect to
the applicable Mortgage Loans. The Trustee shall promptly notify the Rating
Agencies of the occurrence of an Event of Default known to the Trustee.
Notwithstanding any termination of the activities of the Master Servicer
hereunder, the Master Servicer shall be entitled to receive, out of any late
collection of a Scheduled Payment on a Mortgage Loan that was due prior to the
notice terminating the Master Servicer's rights and obligations as Master
Servicer hereunder and received after such notice, that portion thereof to which
the Master Servicer would have been entitled pursuant to Sections 5.05 and to
receive any other amounts payable to the Master Servicer hereunder the
entitlement to which arose prior to the termination of its activities hereunder.
Section 9.02 Trustee to Act; Appointment of Successor.
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On and after the time the Master Servicer receives a notice of termination
pursuant to Section 9.01 hereof the Trustee shall automatically become the
successor to the Master Servicer with respect to the transactions set forth or
provided for herein and after a transition period (not to exceed 90 days), shall
be subject to all the responsibilities, duties and liabilities relating thereto
placed on the Master Servicer by the terms and provisions hereof; provided,
however that, pursuant to Article VI hereof, the Trustee in its capacity as
successor Master Servicer shall be responsible for making any Advances required
to be made by the Master Servicer immediately upon the termination of the Master
Servicer and any such Advance shall be made on the Distribution Date on which
such Advance was required to be made by the predecessor Master Servicer.
Effective on the date of such notice of termination, as compensation therefor,
the Trustee shall be entitled to all compensation, reimbursement of expenses and
indemnifications that the Master Servicer would have been entitled to if it had
continued to act hereunder, provided, however, that the Trustee shall not be (i)
liable for any acts or omissions of the Master Servicer, (ii) obligated to make
Advances if it is prohibited from doing so under applicable law, (iii)
responsible for expenses of the Master Servicer pursuant to Section 2.03 or (iv)
obligated to deposit losses on any Permitted Investment directed by the Master
Servicer. Notwithstanding the foregoing, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
Advances pursuant to Article VI or if it is otherwise unable to so act, appoint,
or petition a court of competent jurisdiction to appoint, any established
mortgage loan servicing institution the appointment of which does not adversely
affect the then current rating of the Certificates by each Rating Agency as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder.
Any Successor Master Servicer shall (i) be an institution that is a Xxxxxx Xxx
and Freddie Mac approved seller/servicer in good standing, that has a net worth
of at least $15,000,000 and (ii) be willing to act as successor servicer of any
Mortgage Loans under this Agreement or the related Servicing Agreement with
respect to which the Company or the original Servicer has been terminated as
servicer, and shall have executed and delivered to the Depositor and the Trustee
an agreement accepting such delegation and assignment, that contains an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer (other than any liabilities
of the Master Servicer hereof incurred prior to termination of the Master
Servicer under Section 9.01 or as otherwise set forth herein), with like effect
as if originally named as a party to this Agreement, provided that each Rating
Agency shall have acknowledged in writing that its rating of the Certificates in
effect immediately prior to such assignment and delegation will not be qualified
or reduced as a result of such assignment and delegation. If the Trustee assumes
the duties and responsibilities of the Master Servicer in accordance with this
Section 9.02, the Trustee shall not resign as Master Servicer until a Successor
Master Servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the Master Servicer hereunder, the Trustee, unless
the Trustee is prohibited by law from so acting, shall, subject to Section 4.04
hereof, act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans or otherwise as
it and such successor shall agree; provided that no such compensation unless
agreed to by the Certificateholders shall be in excess of that permitted the
Master Servicer hereunder. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other Successor Master Servicer
shall be deemed to be in default hereunder by reason of any failure to make, or
any delay in making, any distribution hereunder or any portion thereof or any
failure to perform, or any delay in performing, any duties or responsibilities
hereunder, in either case caused by the failure of the Master Servicer and the
Securities Administrator to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
The costs and expenses of the Trustee in connection with the
termination of the Master Servicer, appointment of a Successor Master Servicer
and, if applicable, any transfer of servicing, including, without limitation,
all costs and expenses associated with the complete transfer of all servicing
data and the completion, correction or manipulation of such servicing data as
may be required by the Trustee to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Trustee or the Successor Master
Servicer to service the related Mortgage Loans properly and effectively, to the
extent not paid by the terminated Master Servicer, shall be payable to the
Trustee pursuant to Section 10.05. Any successor to the Master Servicer as
successor servicer under any Subservicing Agreement shall give notice to the
applicable Mortgagors of such change of servicer and shall, during the term of
its service as successor servicer maintain in force the policy or policies that
the Master Servicer is required to maintain pursuant to Section 4.04.
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Section 9.03 Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders notice of each such
Event of Default hereunder actually known to a Responsible Officer of the
Trustee, unless such Event of Default shall have been cured or waived.
Section 9.04 Waiver of Defaults.
The Trustee shall transmit by mail to all Certificateholders, within 60
days after the occurrence of any Event of Default actually known to a
Responsible Officer of the Trustee, unless such Event of Default shall have been
cured, notice of each such Event of Default hereunder known to the Trustee. The
Holders of Certificates evidencing not less than 51% of the Voting Rights may,
on behalf of all Certificateholders, waive any default by the Master Servicer in
the performance of its obligations hereunder and the consequences thereof,
except a default in the making of or the causing to be made of any required
distribution on the Certificates. Upon any such waiver of a past default, such
default shall be deemed to cease to exist, and any Event of Default arising
therefrom shall be deemed to have been timely remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
The Trustee shall give notice of any such waiver to the Rating Agencies.
Section 9.05 Company Default.
In case one or more of the following events of default by the Company
(each, a "Company Default") shall occur and be continuing, that is to say:
(i) any failure by the Company to remit to the Master Servicer any
payment required to be made under the terms of this Agreement on any
Remittance Date; or
(ii) failure on the part of the Company duly to observe or perform
in any material respect any other of the covenants or agreements on the
part of the Company set forth in this Agreement, the breach of which has a
material adverse effect and which continue unremedied for a period of
sixty days (except that such number of days shall be fifteen in the case
of a failure to pay any premium for any insurance policy required to be
maintained under this Agreement and such failure shall be deemed to have a
material adverse effect) after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Company by the Master Servicer; or
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(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of
debt, marshaling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Company and such decree or order shall have remained in force
undischarged or unstayed for a period of sixty days; or
(iv) the Company shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of
debt, marshaling of assets and liabilities or similar proceedings of or
relating to the Company or of or relating to all or substantially all of
its property; or
(v) the Company 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
(vi) the Company attempts to assign its right to servicing
compensation hereunder or the Company attempts to sell or otherwise
dispose of all or substantially all of its property or assets or to assign
this Agreement or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof except as otherwise permitted
herein; or
(vii) the Company ceases to be qualified to transact business in any
jurisdiction where it is currently so qualified, but only to the extent
such non-qualification materially and adversely affects the Company's
ability to perform its obligations hereunder; then, and in each and every
such case, so long as a Company Default shall not have been remedied, the
Master Servicer, by notice in writing to the Company may, in addition to
whatever rights the Master Servicer and the Trustee on behalf of the
Certificateholders may have under Section 8.03 and at law or equity to
damages, including injunctive relief and specific performance, terminate
all the rights and obligations of the Company under this Agreement and in
and to the Company Mortgage Loans and the proceeds thereof without
compensating the Company for the same. On or after the receipt by the
Company of such written notice, all authority and power of Company under
this Agreement, whether with respect to the Company Mortgage Loans or
otherwise, shall pass to and be vested in the Master Servicer. Upon
written request from the Master Servicer, the Company shall prepare,
execute and deliver, any and all documents and other instruments, place in
the Master Servicer's possession all Mortgage Files relating to the
Company Mortgage Loans, and do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or
assignment of the Company Mortgage Loans and related documents, or
otherwise, at the Company's sole expense. The Company agrees to cooperate
with the Master Servicer in effecting the termination of the Company's
responsibilities and rights hereunder, including, without limitation, the
transfer to such successor for administration by it of all cash amounts
which shall at the time be credited by the Company to its Protected
Account or Escrow Account or thereafter received with respect to the
Company Mortgage Loans or any related REO Property.
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Section 9.06 Waiver of Company Defaults.
The Master Servicer, with the consent of the Trustee, may waive only by
written notice any default by the Company in the performance of its obligations
hereunder and its consequences. Upon any such waiver of a past default, such
default shall cease to exist, and any Company Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived in writing.
ARTICLE X
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of Trustee and Securities Administrator.
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default which may have occurred, and the
Securities Administrator each undertake to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the Trustee
and the Securities Administrator, respectively. If an Event of Default has
occurred and has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and the same degree of
care and skill in their exercise, as a prudent person would exercise under the
circumstances in the conduct of such Person's own affairs.
(b) Upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments which are specifically required
to be furnished to the Trustee or the Securities Administrator pursuant to any
provision of this Agreement, the Trustee or the Securities Administrator,
respectively, shall examine them to determine whether they are, on their face,
in the form required by this Agreement; provided, however, that neither the
Trustee nor the Securities Administrator shall be responsible for the accuracy
or content of any resolution, certificate, statement, opinion, report, document,
order or other instrument furnished by the Master Servicer; provided, further,
that neither the Trustee nor the Securities Administrator shall be responsible
for the accuracy or verification of any calculation provided to it pursuant to
this Agreement.
(c) On each Distribution Date, the Trustee shall make monthly
distributions and the final distribution to the Certificateholders from funds in
the Distribution Account as provided in Sections 6.04 and 11.01 herein based
solely on the applicable Remittance Report.
(d) No provision of this Agreement shall be construed to relieve the
Trustee or the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct;
provided, however, that:
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(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred
with respect to the Trustee and at all times with respect to the
Securities Administrator, the duties and obligations of the Trustee and
the Securities Administrator shall be determined solely by the express
provisions of this Agreement, neither the Trustee nor the Securities
Administrator shall be liable except for the performance of their
respective duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee or the Securities Administrator and, in the
absence of bad faith on the part of the Trustee or the Securities
Administrator, respectively, the Trustee or the Securities Administrator,
respectively, may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustee or the Securities Administrator,
respectively, and conforming to the requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator shall be
liable in its individual capacity for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the Trustee or
an officer or officers of the Securities Administrator, respectively,
unless it shall be proved that the Trustee or the Securities
Administrator, respectively, was negligent in ascertaining the pertinent
facts;
(iii) Neither the Trustee nor the Securities Administrator shall be
liable with respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the directions of the Holders of
Certificates evidencing not less than 25% of the aggregate Voting Rights
of the Certificates, if such action or non-action relates to the time,
method and place of conducting any proceeding for any remedy available to
the Trustee or the Securities Administrator, respectively, or exercising
any trust or other power conferred upon the Trustee or the Securities
Administrator, respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or be deemed
to have notice or knowledge of any default or Event of Default unless a
Responsible Officer of the Trustee shall have actual knowledge thereof. In
the absence of such notice, the Trustee may conclusively assume there is
no such default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of any
insufficiency in any Account held by or in the name of Trustee unless it
is determined by a court of competent jurisdiction in a non-appealable
judgment that the Trustee's gross negligence or willful misconduct was the
primary cause of such insufficiency (except to the extent that the Trustee
is obligor and has defaulted thereon);
(vi) Anything in this Agreement to the contrary notwithstanding, in
no event shall the Trustee or the Securities Administrator be liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Trustee or the
Securities Administrator, respectively, has been advised of the likelihood
of such loss or damage and regardless of the form of action; and
(vii) None of the Securities Administrator, the Master Servicer, the
Seller, the Depositor or the Trustee shall be responsible for the acts or
omissions of the other, it being understood that this Agreement shall not
be construed to render them partners, joint venturers or agents of one
another. Neither the Trustee nor the Securities Administrator shall be
required to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it, and none of the
provisions contained in this Agreement shall in any event require the
Trustee or the Securities Administrator to perform, or be responsible for
the manner of performance of, any of the obligations of the Master
Servicer or the Company hereunder or any Servicer under the related
Servicing Agreement.
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(e) All funds received by the Trustee and required to be deposited in the
Distribution Account pursuant to this Agreement will be promptly so deposited by
the Trustee.
Section 10.02 Certain Matters Affecting the Trustee and the Securities
Administrator.
(a) Except as otherwise provided in Section 10.01:
(i) The Trustee and the Securities Administrator may rely and shall
be protected in acting or refraining from acting in reliance on any
resolution or certificate of the Seller, the Company, the Master Servicer
or the related Servicer, any certificates of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(ii) The Trustee and the Securities Administrator may consult with
counsel and any advice of such counsel or any Opinion of Counsel shall be
full and complete authorization and protection with respect to any action
taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Securities Administrator shall be
under any obligation to exercise any of the trusts or powers vested in it
by this Agreement, other than its obligation to give notices pursuant to
this Agreement, or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or direction of any
of the Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee or the
Securities Administrator, as applicable, reasonable security or indemnity
against the costs, expenses and liabilities which may be incurred therein
or thereby.
Nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default of which a Responsible
Officer of the Trustee has actual knowledge (which has not been cured or
waived), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their exercise, as a
prudent person would exercise under the circumstances in the conduct of his own
affairs;
(iv) Prior to the occurrence of an Event of Default hereunder and
after the curing or waiver of all Events of Default which may have
occurred with respect to the Trustee and at all times with respect to the
Securities Administrator, neither the Trustee nor the Securities
Administrator shall be liable in its individual capacity for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
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(v) Neither the Trustee nor the Securities Administrator shall be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document, unless
requested in writing to do so by Holders of Certificates evidencing not
less than 25% of the aggregate Voting Rights of the Certificates and
provided that the payment within a reasonable time to the Trustee or the
Securities Administrator, as applicable, of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee or the Securities
Administrator, as applicable, reasonably assured to the Trustee or the
Securities Administrator, as applicable, by the security afforded to it by
the terms of this Agreement. The Trustee or the Securities Administrator
may require reasonable indemnity against such expense or liability as a
condition to taking any such action. The reasonable expense of every such
examination shall be paid by the Certificateholders requesting the
investigation;
(vi) The Trustee and the Securities Administrator may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or through Affiliates, agents or attorneys; provided, however,
that the Trustee may not appoint any paying agent other than the
Securities Administrator to perform any paying agent functions under this
Agreement without the express written consent of the Master Servicer,
which consent will not be unreasonably withheld. Neither the Trustee nor
the Securities Administrator shall be liable or responsible for the
misconduct or negligence of any of the Trustee's or the Securities
Administrator's agents or attorneys or paying agent appointed hereunder by
the Trustee or the Securities Administrator with due care and, when
required, with the consent of the Master Servicer;
(vii) Should the Trustee or the Securities Administrator deem the
nature of any action required on its part to be unclear, the Trustee or
the Securities Administrator, respectively, may require prior to such
action that it be provided by the Depositor with reasonable further
instructions; the right of the Trustee or the Securities Administrator to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and neither the Trustee nor the Securities
Administrator shall be accountable for other than its negligence or
willful misconduct in the performance of any such act;
(viii) Neither the Trustee nor the Securities Administrator shall be
required to give any bond or surety with respect to the execution of the
trust created hereby or the powers granted hereunder, except as provided
in Subsection 10.07; and
(ix) Neither the Trustee nor the Securities Administrator shall have
any duty to conduct any affirmative investigation as to the occurrence of
any condition requiring the repurchase of any Mortgage Loan by any Person
pursuant to this Agreement, or the eligibility of any Mortgage Loan for
purposes of this Agreement.
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Section 10.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Trustee on the Certificates) shall be
taken as the statements of the Depositor, and neither the Trustee nor the
Securities Administrator shall have any responsibility for their correctness.
Neither the Trustee nor the Securities Administrator makes any representation as
to the validity or sufficiency of the Certificates (other than the signature and
countersignature of the Trustee on the Certificates) or of any Mortgage Loan
except as expressly provided in Sections 2.02 and 2.06 hereof; provided,
however, that the foregoing shall not relieve the Trustee of the obligation to
review the Mortgage Files pursuant to Sections 2.02 and 2.05 of this Agreement.
The Trustee's signature and countersignature (or countersignature of its agent)
on the Certificates shall be solely in its capacity as Trustee and shall not
constitute the Certificates an obligation of the Trustee in any other capacity.
Neither the Trustee or the Securities Administrator shall be accountable for the
use or application by the Depositor of any of the Certificates or of the
proceeds of such Certificates, or for the use or application of any funds paid
to the Depositor with respect to the Mortgage Loans. Subject to the provisions
of Section 2.06, neither the Trustee nor the Securities Administrator shall be
responsible for the legality or validity of this Agreement or any document or
instrument relating to this Agreement, the validity of the execution of this
Agreement or of any supplement hereto or instrument of further assurance, or the
validity, priority, perfection or sufficiency of the security for the
Certificates issued hereunder or intended to be issued hereunder. Neither the
Trustee nor the Securities Administrator shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage or any Mortgage Loan, or the perfection and
priority of any Mortgage or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Fund or its ability to
generate the payments to be distributed to Certificateholders, under this
Agreement. Neither the Trustee nor the Securities Administrator shall have any
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to record this Agreement.
Section 10.04 Trustee and Securities Administrator May Own Certificates.
Each of the Trustee and the Securities Administrator in its individual
capacity or in any capacity other than as Trustee or Securities Administrator
hereunder may become the owner or pledgee of any Certificates with the same
rights it would have if it were not the Trustee or the Securities Administrator,
as applicable, and may otherwise deal with the parties hereto.
Section 10.05 Trustee's and Securities Administrator's Fees and Expenses.
The fees and expenses of the Trustee and the Securities Administrator
shall be paid in accordance with a side letter agreement with the Master
Servicer and at the expense of the Master Servicer. In addition, the Trustee and
the Securities Administrator will be entitled to recover from the Master
Servicer Collection Account pursuant to Section 5.06 all reasonable
out-of-pocket expenses, disbursements and advances and the expenses of the
Trustee and the Securities Administrator, respectively, in connection with any
Event of Default, any breach of this Agreement or any claim or legal action
(including any pending or threatened claim or legal action) incurred or made by
the Trustee or the Securities Administrator, respectively, in the administration
of the trusts hereunder (including the reasonable compensation, expenses and
disbursements of its counsel) except any such expense, disbursement or advance
as may arise from its negligence or intentional misconduct or which is the
responsibility of the Certificateholders or the Trust Fund hereunder. If funds
in the Master Servicer Collection Account are insufficient therefor, the Trustee
and the Securities Administrator shall recover such expenses from the Depositor.
Such compensation and reimbursement obligation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust.
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Section 10.06 Eligibility Requirements for Trustee and Securities
Administrator.
The Trustee and any successor Trustee and the Securities Administrator and
any successor Securities Administrator shall during the entire duration of this
Agreement be a state bank or trust company or a national banking association
organized and doing business under the laws of a state or the United States of
America, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus and undivided profits of at least $40,000,000 or,
in the case of a successor Trustee, $50,000,000, subject to supervision or
examination by federal or state authority and, in the case of the Trustee, rated
"BBB" or higher by Fitch with respect to their long-term rating and rated "BBB"
or higher by Standard & Poor's and "Baa2" or higher by Xxxxx'x with respect to
any outstanding long-term unsecured unsubordinated debt, and, in the case of a
successor Trustee or successor Securities Administrator other than pursuant to
Section 10.10, rated in one of the two highest long-term debt categories of, or
otherwise acceptable to, each of the Rating Agencies. The Trustee shall not be
an Affiliate of the Master Servicer. If the Trustee publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 10.06 the combined capital and surplus of such corporation shall be
deemed to be its total equity capital (combined capital and surplus) as set
forth in its most recent report of condition so published. In case at any time
the Trustee or the Securities Administrator, as applicable, shall cease to be
eligible in accordance with the provisions of this Section 10.06, the Trustee or
the Securities Administrator shall resign immediately in the manner and with the
effect specified in Section 10.08.
Section 10.07 Insurance.
The Trustee and the Securities Administrator, at their own expense, shall
at all times maintain and keep in full force and effect: (i) fidelity insurance,
(ii) theft of documents insurance and (iii) forgery insurance (which may be
collectively satisfied by a "Financial Institution Bond" and/or a "Bankers'
Blanket Bond"). All such insurance shall be in amounts, with standard coverage
and subject to deductibles, as are customary for insurance typically maintained
by banks or their affiliates which act as custodians for investor-owned mortgage
pools. A certificate of an officer of the Trustee or the Securities
Administrator as to the Trustee's or the Securities Administrator's,
respectively, compliance with this Section 10.07 shall be furnished to any
Certificateholder upon reasonable written request.
Section 10.08 Resignation and Removal of Trustee and Securities
Administrator.
The Trustee and the Securities Administrator may at any time resign
(including, in the case of the Securities Administrator, in connection with the
resignation or termination of the Master Servicer) and be discharged from the
Trust hereby created by giving written notice thereof to the Depositor, the
Seller, the Securities Administrator (or the Trustee, if the Securities
Administrator resigns) and the Master Servicer, with a copy to the Rating
Agencies. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor trustee or successor securities administrator, as
applicable, by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning trustee or securities administrator,
as applicable, and the successor trustee or securities administrator, as
applicable. If no successor trustee or successor securities administrator shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee or Securities
Administrator may petition any court of competent jurisdiction for the
appointment of a successor trustee or securities administrator.
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If at any time (i) the Trustee or the Securities Administrator shall cease
to be eligible in accordance with the provisions of Section 10.06 hereof and
shall fail to resign after written request thereto by the Depositor, (ii) the
Trustee or the Securities Administrator shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, or (iii)(A) a tax is imposed with respect to the
Trust Fund by any state in which the Trustee or the Securities Administrator or
the Trust Fund is located, (B) the imposition of such tax would be avoided by
the appointment of a different trustee or securities administrator and (C) the
Trustee or the Securities Administrator, as applicable fails to indemnify the
Trust Fund against such tax, then the Depositor or the Master Servicer may
remove the Trustee or the Securities Administrator, as applicable, and appoint a
successor trustee or successor securities administrator, as applicable, by
written instrument, in multiple copies, a copy of which instrument shall be
delivered to the Trustee, the Securities Administrator, each Master Servicer and
the successor trustee or successor securities administrator, as applicable.
The Holders evidencing at least 51% of the Voting Rights of each Class of
Certificates may at any time remove the Trustee or Securities Administrator and
appoint a successor trustee or securities administrator by written instrument or
instruments, in multiple copies, signed by such Holders or their
attorneys-in-fact duly authorized, one complete set of which instruments shall
be delivered by the successor trustee or successor securities administrator to
each of the Master Servicer, the Trustee or Securities Administrator so removed
and the successor trustee or securities administrator so appointed. Notice of
any removal of the Trustee or Securities Administrator shall be given to each
Rating Agency by the Trustee or successor trustee.
Any resignation or removal of the Trustee or Securities Administrator and
appointment of a successor trustee or securities administrator pursuant to any
of the provisions of this Section 10.08 shall become effective upon acceptance
of appointment by the successor trustee or securities administrator as provided
in Section 10.09 hereof.
Section 10.09 Successor Trustee or Securities Administrator.
Any successor trustee or securities administrator appointed as provided in
Section 10.08 hereof shall execute, acknowledge and deliver to the Depositor and
to its predecessor trustee or predecessor securities administrator, as
applicable, and the Master Servicer an instrument accepting such appointment
hereunder and thereupon the resignation or removal of the predecessor trustee or
securities administrator shall become effective and such successor trustee or
securities administrator, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee or
securities administrator herein.
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No successor trustee or securities administrator shall accept appointment
as provided in this Section 10.09 unless at the time of such acceptance such
successor trustee or securities administrator shall be eligible under the
provisions of Section 10.07 hereof and its appointment shall not adversely
affect the then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee or securities
administrator as provided in this Section 10.09, the successor trustee or
securities administrator shall mail notice of the succession of such trustee or
securities administrator hereunder to all Holders of Certificates. If the
successor trustee or securities administrator fails to mail such notice within
ten days after acceptance of appointment, the Depositor shall cause such notice
to be mailed at the expense of the Trust Fund.
Section 10.10 Merger or Consolidation of Trustee or Securities
Administrator.
Any corporation, state bank or national banking association into which the
Trustee or the Securities Administrator may be merged or converted or with which
it may be consolidated or any corporation, state bank or national banking
association resulting from any merger, conversion or consolidation to which the
Trustee or the Securities Administrator shall be a party, or any corporation,
state bank or national banking association succeeding to substantially all of
the corporate trust business of the Trustee or of the business of the Securities
Administrator, shall be the successor of the Trustee or the Securities
Administrator hereunder, provided that such corporation shall be eligible under
the provisions of Section 10.06 hereof without the execution or filing of any
paper or further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding.
Section 10.11 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Master Servicer and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 10.11, such powers, duties, obligations, rights and trusts as the Master
Servicer and the Trustee may consider necessary or desirable. If the Master
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request to do so, or in the case an Event of Default shall
have occurred and be continuing, the Trustee alone shall have the power to make
such appointment. No co-trustee or separate trustee hereunder shall be required
to meet the terms of eligibility as a successor trustee under Section 10.06 and
no notice to Certificateholders of the appointment of any co-trustee or separate
trustee shall be required under Section 10.09.
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Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) All rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this
Agreement to advance funds on behalf of the Master Servicer, shall be
conferred or imposed upon and exercised or performed by the Trustee and
such separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately without
the Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed (whether a Trustee hereunder or as a Successor Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction
of the Trustee;
(ii) No trustee hereunder shall be held personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article X. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to the
Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co- trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 10.12 Tax Matters.
It is intended that the Trust Fund shall constitute, and that the affairs
of the Trust Fund shall be conducted so that it qualifies as, a "real estate
mortgage investment conduit" as defined in and in accordance with the REMIC
Provisions. In furtherance of such intention, the Securities Administrator
covenants and agrees that it shall act as agent for so long as it is also Master
Servicer (and the Securities Administrator is hereby appointed to act as agent)
on behalf of the Trust Fund. The Trustee and/or the Securities Administrator, as
agent on behalf of the Trust Fund, shall do or refrain from doing, as
applicable, the following: (a) the Securities Administrator shall prepare and
file, or cause to be prepared and filed, in a timely manner, U.S.
109
Real Estate Mortgage Investment Conduit Income Tax Returns (Form 1066 or
any successor form adopted by the Internal Revenue Service) and prepare and file
or cause to be prepared and filed with the Internal Revenue Service and
applicable state or local tax authorities income tax or information returns for
each taxable year with respect to the REMIC Trust containing such information
and at the times and in the manner as may be required by the Code or state or
local tax laws, regulations, or rules, and furnish or cause to be furnished to
Certificateholders the schedules, statements or information at such times and in
such manner as may be required thereby; (b) the Securities Administrator shall
apply for an employer identification number with the Internal Revenue Service
via a Form SS-4 or other comparable method for the REMIC Trust that is or
becomes a taxable entity, and within thirty days of the Closing Date, furnish or
cause to be furnished to the Internal Revenue Service, on Forms 8811 or as
otherwise may be required by the Code, the name, title, address, and telephone
number of the person that the holders of the Certificates may contact for tax
information relating thereto, together with such additional information as may
be required by such Form, and update such information at the time or times in
the manner required by the Code for the Trust Fund; (c) the Trustee shall make
or cause to be made elections, on behalf of the REMIC Trust formed hereunder to
be treated as a REMIC on the federal tax return of the REMIC Trust for its first
taxable year (and, if necessary, under applicable state law); (d) the Securities
Administrator shall prepare and forward, or cause to be prepared and forwarded,
to the Certificateholders and to the Internal Revenue Service and, if necessary,
state tax authorities, all information returns and reports as and when required
to be provided to them in accordance with the REMIC Provisions, including
without limitation, the calculation of any original issue discount using the
Prepayment Assumption; (e) the Securities Administrator shall provide
information necessary for the computation of tax imposed on the transfer of the
Class R Certificate to a Person that is not a Permitted Transferee, or an agent
(including a broker, nominee or other middleman) of a Person that is not a
Permitted Transferee, or a pass-through entity in which a Person that is not a
Permitted Transferee is the record holder of an interest (the reasonable cost of
computing and furnishing such information may be charged to the Person liable
for such tax); (f) each of the Securities Administrator and the Trustee shall,
to the extent under its control, conduct the affairs of the Trust Fund at all
times that any Certificates are outstanding so as to maintain the status of the
REMIC Trust as a REMIC under the REMIC Provisions; (g) neither the Trustee nor
the Securities Administrator shall knowingly or intentionally take any action or
omit to take any action that would cause the termination of the REMIC status of
the REMIC Trust; (h) the Trustee shall pay, from the sources specified in the
penultimate paragraph of this Section 10.12, as directed by the Securities
Administrator in its Remittance Report, the amount of any federal, state and
local taxes, including prohibited transaction taxes as described below, imposed
on the REMIC Trust formed hereunder prior to the termination of the Trust Fund
when and as the same shall be due and payable (but such obligation shall not
prevent the Trustee, the Securities Administrator at the written request of the
Trustee, or any other appropriate Person from contesting any such tax in
appropriate proceedings and shall not prevent the Securities Administrator from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings); (i) the Trustee shall sign or cause to be signed federal,
state or local income tax or information returns or any other document prepared
by the Securities Administrator pursuant to this Section 10.12 requiring a
signature thereon by the Trustee; (j) the Securities Administrator shall
maintain records relating to the REMIC Trust including but not limited to the
income, expenses, assets and liabilities of the REMIC Trust and adjusted basis
of the Trust Fund property determined at such intervals as may be required by
the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; (k) the Securities Administrator shall, for federal
income tax purposes, maintain books and records with respect to the REMIC Trust
on a calendar year and on an accrual basis; (l) neither the Trustee nor the
Master Servicer shall enter into any arrangement not otherwise provided for in
this Agreement by which the REMIC Trust will receive a fee or other compensation
for services nor permit the REMIC Trust to receive any income from assets other
than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code; and (m) as
and when necessary and appropriate, the Trustee, or at the written request of
the Trustee, the Securities Administrator, shall represent the Trust Fund in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any REMIC formed hereunder, enter into settlement agreements
with any governmental taxing agency, extend any statute of limitations relating
to any tax item of the Trust Fund, and otherwise act on behalf of each REMIC
formed hereunder in relation to any tax matter involving the REMIC Trust.
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In order to enable each of the Trustee and the Securities Administrator to
perform its duties as set forth herein, the Depositor shall provide, or cause to
be provided, to the Trustee or the Securities Administrator within 10 days after
the Closing Date all information or data that the Trustee or the Securities
Administrator requests in writing and determines to be relevant for tax purposes
to the valuations and offering prices of the Certificates, including, without
limitation, the price, yield, Prepayment Assumption and projected cash flows of
the Certificates and the Mortgage Loans. Thereafter, the Depositor shall provide
to the Trustee or the Securities Administrator promptly upon written request
therefor, any such additional information or data that the Trustee or the
Securities Administrator may, from time to time, request in order to enable the
Trustee or the Securities Administrator to perform its duties as set forth
herein. The Depositor hereby indemnifies each of Trustee and the Securities
Administrator for any losses, liabilities, damages, claims or expenses of the
Trustee or the Securities Administrator arising from any errors or
miscalculations of the Trustee or the Securities Administrator, as applicable,
that result from any failure of the Depositor to provide, or to cause to be
provided, accurate information or data to the Trustee or the Securities
Administrator, as applicable, on a timely basis.
In the event that any tax is imposed on "prohibited transactions" of the
REMIC Trust as defined in Section 860F(a)(2) of the Code, on the "net income
from foreclosure property" of the Trust Fund as defined in Section 860G(c) of
the Code, on any contribution to any of the REMIC Trust after the startup day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including,
without limitation, any federal, state or local tax or minimum tax imposed upon
any of the REMIC Trust created hereunder, and is not paid as otherwise provided
for herein, such tax shall be paid by (i) the Trustee or the Securities
Administrator, if any such other tax arises out of or results from a breach by
the Trustee or the Securities Administrator, respectively, of any of its
obligations under this Agreement, (ii) any party hereto (other than the Trustee
or the Securities Administrator) to the extent any such other tax arises out of
or results from a breach by such other party of any of its obligations under
this Agreement or (iii) in all other cases, or in the event that any liable
party hereto fails to honor its obligations under the preceding clauses (i) or
(ii), any such tax will be paid first with amounts otherwise to be distributed
to the Class R-1 Certificateholders, and second with amounts otherwise to be
distributed to all other Certificateholders in the following order of priority:
first, to the Class B-1 Certificates, second, to the Class M-2 Certificates,
third, to the Class M-1 Certificates and fourth to the Class A-1 Certificates.
Notwithstanding anything to the contrary contained herein, to the extent that
such tax is payable by the Holder of any Certificates, the Trustee is hereby
authorized to retain on any Distribution Date, from the Holder of the Class R
Certificates (and, if necessary, second, from the Holders of the other
Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such tax.
Following written notification to the Securities Administrator by the Trustee of
any amount payable out of distributions to the Certificateholders pursuant to
the preceding two sentences, the Securities Administrator shall include in its
Remittance Report instructions as to distributions to such parties taking into
account the priorities described in the second preceding sentence. The
Securities Administrator, on written request by the Trustee, agrees to promptly
notify in writing the party liable for any such tax of the amount thereof and
the due date for the payment thereof.
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The Trustee and the Securities Administrator each agree that, in the event
it should obtain any information necessary for the other party to perform its
obligations pursuant to this Section 10.12, it will promptly notify and provide
such information to such other party. Notwithstanding anything in this Agreement
to the contrary, the Trustee agrees that, in the event that the Trustee obtains
actual knowledge that the Securities Administrator has breached any of its
obligations pursuant to this Section 10.12, the Trustee shall perform such
obligations on its behalf to the extent that the Trustee possesses all documents
necessary to so perform and receives reasonable compensation therefor, provided,
however, that the Trustee shall not be liable for any losses resulting from any
such breach.
Section 10.13 Reports Filed with Securities and Exchange Commission.
(a) (i) Within 15 days after each Distribution Date, the Trustee shall, in
accordance with industry standards, file with the Commission via the Electronic
Data Gathering and Retrieval System ("XXXXX"), a Distribution Report on Form
10-D, signed by the Master Servicer, with a copy of the monthly statement to be
furnished by the Trustee to the Certificateholders for such Distribution Date
and detailing all data elements specified in Item 1121(a) of Regulation AB as
part of the monthly statement; provided that the Trustee shall have received no
later than 2 days prior to the date such Distribution Report on Form 10-D is
required to be filed, all information required to be provided to the Trustee as
described in clause (a)(iv) below.
(ii) The Trustee will prepare and file Current Reports on Form 8-K
in respect of the Trust, signed by the Master Servicer, as and when required;
provided, that, the Trustee shall have received no later than one Business Day
prior to the filing deadline for such Current Report, all information, data, and
exhibits required to be provided or filed with such Current Report and required
to be provided to the Trustee as described in clause (a)(iv) below.
(iii) Prior to January 30 in each year commencing in 2007, the
Trustee shall, in accordance with industry standards, file a Form 15 Suspension
Notice with respect to the Trust Fund, if applicable. Prior to (x) March 15,
2007 and (y) unless and until a Form 15 Suspension Notice shall have been filed,
prior to March 15 of each year thereafter, the Master Servicer shall provide the
Trustee with an Annual Compliance Statement, together with a copy of the
Assessment of Compliance and Attestation Report to be delivered by the Master
Servicer pursuant to Section 4.16 and Section 4.17 (including with respect to
any subservicer or subcontractor, if required to be filed) and the Company shall
provide the Trustee with an Annual Compliance Statement, together with a copy of
the Company Assessment of Compliance and Company Attestation Report to be
delivered by the Company pursuant to Section 3.13. and Section 3.14 (including
with respect to any subservicer or subcontractor, if required to be filed).
Prior to (x) March 31, 2007 and (y) unless and until a Form 15 Suspension Notice
shall have been filed, March 31 of each year thereafter, the Trustee shall,
subject to subsection (d) below, file a Form 10-K, in substance conforming to
industry standards, with respect to the Trust Fund. Such Form 10-K shall include
the Assessment of Compliance, Attestation Report, Annual Compliance Statements
and other documentation provided by the Master Servicer and the Company pursuant
to Sections 3.13. 3.14, 4.16 and 4.17, as applicable, (including with respect to
any subservicer or subcontractor, if required to be filed) and with respect to
the Trustee and the Custodian, and the Form 10-K certification signed by the
Master Servicer; provided that the Trustee shall have received no later than
March 15 of each calendar year prior to the filing deadline for the Form 10-K
all information, data and exhibits required to be provided or filed with such
Form 10-K and required to be provided to the Trustee as described in clause
(a)(iv) below.
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(iv) As to each item of information required to be included in any
Form 10-D, Form 8-K or Form 10-K, the Trustee's obligation to include the
information in the applicable report is subject to receipt from the entity that
is indicated in Exhibit __ as the responsible party for providing that
information, if other than the Trustee, as and when required as described above.
Each of the Master Servicer, Company, Seller and Depositor hereby agree to
notify and provide to the Trustee all information that is required to be
included in any Form 10-D, Form 8-K or Form 10-K, with respect to which that
entity is indicated in Exhibit __ as the responsible party for providing that
information. The Master Servicer shall be responsible for determining the pool
concentration applicable to any subservicer or originator at any time, for
purposes of disclosure as required by Items 1117 and 1119 of Regulation AB.
The Depositor hereby grants to the Master Servicer a limited power of attorney
to sign each Form 10-D, Form 8-K and Form 10-K on behalf of the Depositor. Such
power of attorney shall continue until either the earlier of (x) receipt by the
Master Servicer from the Depositor of written termination of such power of
attorney and (y) the termination of the Trust Fund. The Depositor agrees to
promptly furnish to the Securities Administrator, from time to time upon
request, such further information, reports and financial statements within its
control related to this Agreement, the Mortgage Loans as the Trustee reasonably
deems appropriate to prepare and file all necessary reports with the Commission.
The Trustee shall have no responsibility to file any items other than those
specified in this Section 10.13; provided, however, the Trustee will cooperate
with the Depositor in connection with any additional filings with respect to the
Trust Fund as the Depositor deems necessary under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Copies of all reports filed by the
Trustee under the Exchange Act shall be sent to: the Depositor c/o Bear, Xxxxxxx
& Co. Inc., Attn: Managing Director-Analysis and Control, One Metrotech Center
North, Brooklyn, New York 11202 3859. Fees and expenses incurred by the Trustee
in connection with this Section 10.13 shall not be reimbursable from the Trust
Fund.
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(b) In connection with the filing of any 10-K hereunder, the Trustee shall
sign a certification (a "Form of Back-Up Certification for Form 10-K
Certificate," substantially in the form attached hereto as Exhibit L) for the
Depositor regarding certain aspects of the Form 10-K certification signed by the
Depositor, provided, however, that the Trustee shall not be required to
undertake an analysis of any accountant's report attached as an exhibit to the
Form 10-K.
(c) The Trustee shall indemnify and hold harmless the Depositor and its
officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach of the Trustee's obligations under this Section 10.13 or the Trustee's
negligence, bad faith or willful misconduct in connection therewith.
The Depositor shall indemnify and hold harmless the Trustee and its
officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach of the obligations of the Depositor under this Section 10.13 or the
Depositor's negligence, bad faith or willful misconduct in connection therewith.
The Master Servicer shall indemnify and hold harmless the Trustee and the
Depositor and their respective officers, directors and affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon a breach of the obligations of the Master Servicer
under this Section 10.13 or the Master Servicer's negligence, bad faith or
willful misconduct in connection therewith.
If the indemnification provided for herein is unavailable or insufficient
to hold harmless the Depositor or the Trustee, as applicable, then the
defaulting party, in connection with a breach of its respective obligations
under this Section 10.13 or its respective negligence, bad faith or willful
misconduct in connection therewith, agrees that it shall contribute to the
amount paid or payable by the other parties as a result of the losses, claims,
damages or liabilities of the other party in such proportion as is appropriate
to reflect the relative fault and the relative benefit of the Depositor on the
one hand and the Trustee on the other.
(d) Nothing shall be construed from the foregoing subsections (a), (b) and
(c) to require the Trustee or any officer, director or Affiliate thereof to sign
any Form 10-K or any certification contained therein. Furthermore, the inability
of the Trustee to file a Form 10-K as a result of the lack of required
information as set forth in Section 10.13(a) or required signatures on such Form
10-K or any certification contained therein shall not be regarded as a breach by
the Trustee of any obligation under this Agreement.
Notwithstanding the provisions of Section 12.01, this Section 10.13 may be
amended without the consent of the Certificateholders.
Section 10.14 Intention of the Parties and Interpretation.
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Each of the parties acknowledges and agrees that the purpose of Sections
3.13, 3.14, 4.16, 4.17 and 10.13 of this Agreement is to facilitate compliance
by the Seller and the Depositor with the provisions of Regulation AB promulgated
by the SEC under the 1934 Act (17 C.F.R. xx.xx. 229.1100 - 229.1123), as such
may be amended from time to time and subject to clarification and interpretive
advice as may be issued by the staff of the SEC from time to time. Therefore,
each of the parties agrees that (a) the obligations of the parties hereunder
shall be interpreted in such a manner as to accomplish that purpose, (b) the
parties' obligations hereunder will be supplemented and modified as necessary to
be consistent with any such amendments, interpretive advice or guidance,
convention or consensus among active participants in the asset-backed securities
markets, advice of counsel, or otherwise in respect of the requirements of
Regulation AB, (c) the parties shall comply with requests made by the Seller or
the Depositor for delivery of additional or different information as the Seller
or the Depositor may determine in good faith is necessary to comply with the
provisions of Regulation AB, and (d) no amendment of this Agreement shall be
required to effect any such changes in the parties' obligations as are necessary
to accommodate evolving interpretations of the provisions of Regulation AB.
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Repurchase of all Mortgage
Loans.
Subject to Section 11.03, the obligations and responsibilities of the
Depositor, the Master Servicer, the Securities Administrator, the Seller and the
Trustee created hereby with respect to the Trust Fund shall terminate upon the
earlier of (a) the purchase by [Master Servicer] of all of the Mortgage Loans
(and REO Properties) remaining in the Trust Fund at a price (the "Mortgage Loan
Purchase Price") equal to the sum of (i) 100% of the Stated Principal Balance of
each Mortgage Loan (other than in respect of REO Property), (ii) accrued
interest thereon at the applicable Mortgage Rate to, but not including, the
first day of the month of such purchase, (iii) the appraised value of any REO
Property in the Trust Fund (up to the Stated Principal Balance of the related
Mortgage Loan), such appraisal to be conducted by an appraiser mutually agreed
upon by the Master Servicer and the Trustee and (iv) unreimbursed out-of pocket
costs of the Company, the Servicers or the Master Servicer, including
unreimbursed servicing advances and the principal portion of any unreimbursed
Advances, made on the Mortgage Loans prior to the exercise of such repurchase
right and (v) any unreimbursed costs and expenses of the Trustee and the
Securities Administrator payable pursuant to Section 10.05 and (b) the later of
(i) the maturity or other liquidation (or any Advance with respect thereto) of
the last Mortgage Loan remaining in the Trust Fund and the disposition of all
REO Property and (ii) the distribution to Certificateholders of all amounts
required to be distributed to them pursuant to this Agreement, as applicable. In
no event shall the trusts created hereby continue beyond the earlier of (i) the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
Xxxxx, living on the date hereof and (ii) the Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties pursuant to
clause (a) in the preceding paragraph shall be exercisable on or after the
earlier of (i) the [10%] Clean-Up Call Date and (ii) the Distribution Date in
_________, 20__.
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Section 11.02 Final Distribution on the Certificates.
If on any Determination Date, (i) the Master Servicer determines that
there are no Outstanding Mortgage Loans and no other funds or assets in the
Trust Fund other than the funds in the Master Servicer Collection Account, the
Master Servicer shall direct the Securities Administrator to send a final
distribution notice promptly to each Certificateholder or (ii) the Securities
Administrator determines that a Class of Certificates shall be retired after a
final distribution on such Class, the Securities Administrator shall notify the
Certificateholders within five (5) Business Days after such Determination Date
that the final distribution in retirement of such Class of Certificates is
scheduled to be made on the immediately following Distribution Date. Any final
distribution made pursuant to the immediately preceding sentence will be made
only upon presentation and surrender of the related Certificates at the office
of the Trustee specified in the final distribution notice to Certificateholders.
If [Master Servicer] elects to terminate the Trust Fund pursuant to Section
11.01, at least 20 days prior to the date notice is to be mailed to the
Certificateholders, the [Master Servicer] shall notify the Depositor, the
Securities Administrator, the Trustee of the date the [Master Servicer] intends
to terminate the Trust Fund. The Master Servicer shall remit the Mortgage Loan
Purchase Price to the Trustee on the Business Day prior to the Distribution Date
for such Optional Termination by the [Master Servicer].
Notice of any termination of the Trust Fund, specifying the Distribution
Date on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the
Securities Administrator by letter to Certificateholders mailed not earlier than
the 10th day and no later than the 15th day of the month immediately preceding
the month of such final distribution. Any such notice shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be made
upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Securities Administrator will
give such notice to each Rating Agency at the time such notice is given to
Certificateholders.
In the event such notice is given, the Master Servicer shall cause all
funds in the Master Servicer Collection Account to be remitted to the Trustee
for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee or the Custodian shall promptly release to the Master Servicer, as
applicable the Mortgage Files for the Mortgage Loans and the Trustee shall
execute and deliver any documents prepared and delivered to it which are
necessary to transfer any REO Property.
Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders of each Class in accordance with
the Remittance Report the amounts allocable to such Certificates held in the
Distribution Account in the order and priority set forth in Section 6.04 hereof
on the final Distribution Date and in proportion to their respective Percentage
Interests.
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In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Securities Administrator shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets that remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholder shall be entitled to all unclaimed
funds and other assets of the Trust Fund that remain subject hereto.
Section 11.03 Additional Termination Requirements.
(a) Upon exercise by [Majority Class B-1 Certificateholder] of its
purchase option as provided in Section 11.01, the Trust Fund shall be terminated
in accordance with the following additional requirements, unless each of the
Trustee and the Securities Administrator have been supplied with an Opinion of
Counsel addressed to the Trustee, at the expense of [Master Servicer], to the
effect that the failure of the Trust Fund to comply with the requirements of
this Section 11.03 will not (i) result in the imposition of taxes on "prohibited
transactions" of the REMIC Trust, or (ii) cause the REMIC Trust to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(1) The [Master Servicer] shall establish a 90-day liquidation
period and notify the Trustee and Securities Administrator thereof, and
the Securities Administrator shall in turn specify the first day of such
period in a statement attached to the tax return for the REMIC Trust
pursuant to Treasury Regulation Section 1.860F-1. [Master Servicer] shall
satisfy all the requirements of a qualified liquidation under Section 860F
of the Code and any regulations thereunder, as evidenced by an Opinion of
Counsel addressed to the Trustee obtained at the expense of [Master
Servicer];
(2) During such 90-day liquidation period, and at or prior to the
time of making the final payment on the Certificates, the Securities
Administrator as agent of the Trustee shall sell all of the assets of the
REMIC Trust for cash; and
(3) At the time of the making of the final payment on the
Certificates, the Securities Administrator as agent for the Trustee shall
distribute or credit, or cause to be distributed or credited, to the
Holder of the Class R Certificate all cash on hand (other than cash
retained to meet claims), and the REMIC Trust shall terminate at that
time.
(b) By their acceptance of the Certificates, the Holders thereof hereby
authorize the adoption of a 90-day liquidation period for the REMIC Trust, which
authorization shall be binding upon all successor Certificateholders.
(c) The Securities Administrator as agent for the REMIC Trust hereby
agrees to adopt and sign such a plan of complete liquidation upon the written
request of the [Master Servicer] and the receipt of the Opinion of Counsel
referred to in Section 11.03(a)(1) and to take such other action in connection
therewith as may be reasonably requested by the [Master Servicer].
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ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment.
This Agreement may be amended from time to time by parties hereto, without
the consent of any of the Certificateholders to cure any ambiguity, to correct
or supplement any provisions herein (including to give effect to the
expectations of investors), to change the manner in which the Master Servicer
Collection Account maintained by the Master Servicer or the Protected Account
maintained by the Company is maintained or to make such other provisions with
respect to matters or questions arising under this Agreement as shall not be
inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel addressed to the Trustee, adversely affect in
any material respect the interests of any Certificateholder; provided that any
such amendment shall be deemed not to adversely affect in any material respect
the interests of the Certificateholders and no such Opinion of Counsel shall be
required if the Person requesting such amendment obtains a letter from each
Rating Agency stating that such amendment would not result in the downgrading or
withdrawal of the respective ratings then assigned to the Certificates.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the parties hereto may at any time and from time to time
amend this Agreement to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of the REMIC Trust as a REMIC under the Code or to avoid or minimize the risk of
the imposition of any tax on the REMIC Trust pursuant to the Code that would be
a claim against the REMIC Trust at any time prior to the final redemption of the
Certificates, provided that the Trustee has been provided an Opinion of Counsel
addressed to the Trustee, which opinion shall be an expense of the party
requesting such opinion but in any case shall not be an expense of the Trustee,
the Securities Administrator or the Trust Fund, to the effect that such action
is necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the parties hereto
and the Holders of each Class of Certificates affected thereby evidencing over
50% of the Voting Rights of such Class or Classes for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments required to be distributed on any
Certificate without the consent of the Holder of such Certificate, (ii) cause
the REMIC Trust to cease to qualify as a REMIC or (iii) reduce the aforesaid
percentages of Certificates of each Class the Holders of which are required to
consent to any such amendment without the consent of the Holders of all
Certificates of such Class then outstanding.
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Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel addressed to the Trustee , which opinion shall be
an expense of the party requesting such amendment but in any case shall not be
an expense of the Trustee or the Securities Administrator, to the effect that
such amendment will not (other than an amendment pursuant to clause (ii) of, and
in accordance with, the preceding paragraph) cause the imposition of any tax on
the REMIC Trust or the Certificateholders or cause the REMIC Trust to cease to
qualify as a REMIC at any time that any Certificates are outstanding. Further,
nothing in this Agreement shall require the Trustee to enter into an amendment
without receiving an Opinion of Counsel, satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement (including any consent of the
applicable Certificateholders) have been complied with.
Promptly after the execution of any amendment to this Agreement requiring
the consent of Certificateholders, the Trustee shall furnish written
notification of the substance of such amendment to each Certificateholder and
each Rating Agency.
It shall not be necessary for the consent of Certificateholders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable regulations as
the Trustee may prescribe.
Section 12.02 Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
of the counties or other comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere. The Master Servicer shall effect such recordation at the
Trust's expense upon the request in writing of a Certificateholder, but only if
such direction is accompanied by an Opinion of Counsel (provided at the expense
of the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 12.03 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAWS).
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Section 12.04 Intention of Parties.
It is the express intent of the parties hereto that the conveyance of the
Mortgage Notes, Mortgages, assignments of Mortgages, title insurance policies
and any modifications, extensions and/or assumption agreements and private
mortgage insurance policies relating to the Mortgage Loans by the Seller to the
Depositor, and by the Depositor to the Trustee be, and be construed as, an
absolute sale thereof to the Depositor or the Trustee, as applicable. It is,
further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Seller to the Depositor, or by the Depositor to the
Trustee. However, in the event that, notwithstanding the intent of the parties,
such assets are held to be the property of the Seller or the Depositor, as
applicable, or if for any other reason this Agreement is held or deemed to
create a security interest in such assets, then (i) this Agreement shall be
deemed to be a security agreement within the meaning of the Uniform Commercial
Code of the State of New York and (ii) each conveyance provided for in this
Agreement shall be deemed to be an assignment and a grant by the Seller or the
Depositor, as applicable , for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired.
The Depositor for the benefit of the Certificateholders shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
assets of the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement.
Section 12.05 Notices.
(a) The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency with respect to each of the following of which a Responsible
Officer of the Trustee has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of the Master Servicer, the
Securities Administrator or the Trustee and the appointment of any
successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Sections 2.02, 2.03, 4.21 and 11.01; and
(v) The final payment to Certificateholders.
(b) All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered at or mailed by
registered mail, return receipt requested, postage prepaid, or by recognized
overnight courier, or by facsimile transmission to a number provided by the
appropriate party if receipt of such transmission is confirmed to (i) in the
case of the Depositor, Bear Xxxxxxx Asset Backed Securities I LLC, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Counsel; (ii) in the case of
the Seller or the Company,
______________________________________________________________ or such other
address as may be hereafter furnished to the other parties hereto by the Master
Servicer in writing; (iv) in the case of the Trustee, at each Corporate Trust
Office or such other address as the Trustee may hereafter furnish to the other
parties hereto; (v) in the case of the Master Servicer or the Securities
Administrator, ________________________________________ (or, for overnight
deliveries, _______________________________________ or such other address as may
be hereafter furnished to the other parties hereto by the Securities
Administrator in writing and (vi) in the case of the Rating Agencies, (x)
[Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Home Equity Monitoring] and (y) [Standard & Poor's, 00 Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Mortgage Surveillance Group].
Any notice delivered to the Seller, the Master Servicer, the Securities
Administrator or the Trustee under this Agreement shall be effective only upon
receipt. Any notice required or permitted to be mailed to a Certificateholder,
unless otherwise provided herein, shall be given by first-class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate
Register; any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
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Section 12.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 12.07 Assignment.
Notwithstanding anything to the contrary contained herein, except as
provided pursuant to Section 8.02, this Agreement may not be assigned by the
Master Servicer, the Seller or the Depositor.
Section 12.08 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
Fund, or otherwise affect the rights, obligations and liabilities of the parties
hereto or any of them.
No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.
121
No Certificateholder shall have any right by virtue or by availing itself
of any provisions of this Agreement to institute any suit, action or proceeding
in equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee or the Securities
Administrator, as appropriate, a written notice of an Event of Default and of
the continuance thereof, as hereinbefore provided, the Holders of Certificates
evidencing not less than 25% of the Voting Rights evidenced by the Certificates
shall also have made written request to the Trustee or the Securities
Administrator, as appropriate to institute such action, suit or proceeding in
its own name as Trustee or the Securities Administrator, as appropriate,
hereunder and shall have offered to the Trustee or the Securities Administrator,
as appropriate, such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee or
the Securities Administrator, as appropriate, for 60 days after its receipt of
such notice, request and offer of indemnity shall have neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 12.08, each and every Certificateholder, the
Trustee or the Securities Administrator shall be entitled to such relief as can
be given either at law or in equity.
Section 12.09 Inspection and Audit Rights.
The Master Servicer agrees that, on reasonable prior notice, it will
permit any representative of the Depositor or the Trustee during the Master
Servicer's normal business hours, to examine all the books of account, records,
reports and other papers of the Master Servicer relating to the Mortgage Loans,
to make copies and extracts therefrom, to cause such books to be audited by
independent certified public accountants selected by the Depositor or the
Trustee and to discuss its affairs, finances and accounts relating to such
Mortgage Loans with its officers, employees and independent public accountants
(and by this provision the Master Servicer hereby authorizes such accountants to
discuss with such representative such affairs, finances and accounts), all at
such reasonable times and as often as may be reasonably requested. Any
out-of-pocket expense incident to the exercise by the Depositor or the Trustee
of any right under this Section 12.09 shall be borne by the party requesting
such inspection, subject to such party's right to reimbursement hereunder (in
the case of the Trustee, pursuant to Section 10.05 hereof).
Section 12.10 Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders shall not be
personally liable for obligations of the Trust Fund, that the interests in the
Trust Fund represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
* * *
122
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the Seller, the
Company, the Securities Administrator and the Trustee have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
BEAR XXXXXXX ASSET BACKED
SECURITIES I LLC,
as Depositor
By:____________________________________
Name:__________________________________
Title:_________________________________
_______________________________________,
as Seller and Company
By:____________________________________
Name:__________________________________
Title:_________________________________
_______________________________________,
as Securities Administrator and Master
Servicer
By:____________________________________
Name:__________________________________
Title:_________________________________
_______________________________________,
as Trustee
By:____________________________________
Name:__________________________________
Title:_________________________________
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ___ day of ________ 200__, before me, a notary public in and for
said State, appeared ______________, personally known to me on the basis of
satisfactory evidence to be an authorized representative of Bear Xxxxxxx Asset
Backed Securities I LLC, one of the entities that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such corporation and acknowledged to me that such entity executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
___________________________________
Notary Public [Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ________ 200__, before me, a notary public in and for
said State, appeared _______________, personally known to me on the basis of
satisfactory evidence to be an authorized representative of
_________________________________ that executed the within instrument, and also
known to me to be the person who executed it on behalf of such corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
___________________________________
Notary Public [Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ________ 200__, before me, a notary public in and for
said State, appeared _________________, personally known to me on the basis of
satisfactory evidence to be an authorized representative of
________________________, one of the corporations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such corporation and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
___________________________________
Notary Public [Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of ________ 200__, before me, a notary public in and for
said State, appeared _______________, personally known to me on the basis of
satisfactory evidence to be an authorized representative of
_____________________ that executed the within instrument, and also known to me
to be the person who executed it on behalf of such corporation, and acknowledged
to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
___________________________________
Notary Public [Notarial Seal]
