Exhibit 99.1
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NEW CENTURY MORTGAGE CORPORATION,
as Master Servicer,
NEW CENTURY HOME EQUITY LOAN TRUST 2004-2,
as Issuer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Indenture Trustee,
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SERVICING AGREEMENT
Dated as of June 29, 2004
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Mortgage Loans
New Century Home Equity Loan Trust 2004-2
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS....................................................2
Section 1.02. OTHER DEFINITIONAL PROVISIONS..................................2
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01. REPRESENTATIONS AND WARRANTIES REGARDING THE MASTER SERVICER...3
Section 2.02. EXISTENCE......................................................5
Section 2.03. ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES..................5
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. MASTER SERVICER TO ACT AS MASTER SERVICER......................8
Section 3.02. SUB-SERVICING AGREEMENTS BETWEEN MASTER SERVICER AND
SUB-SERVICERS.................................................10
Section 3.03. SUCCESSOR SUB-SERVICERS.......................................11
Section 3.04. LIABILITY OF THE MASTER SERVICER..............................11
Section 3.05. NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICERS, THE
INDENTURE TRUSTEE OR THE NOTEHOLDERS..........................12
Section 3.06. ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENTS BY
THE INDENTURE TRUSTEE.........................................12
Section 3.07. COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS..................13
Section 3.08. SUB-SERVICING ACCOUNTS........................................13
Section 3.09. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
SERVICING ACCOUNTS............................................13
Section 3.10. COLLECTION ACCOUNT AND PAYMENT ACCOUNT........................14
Section 3.11. WITHDRAWALS FROM THE COLLECTION ACCOUNT AND PAYMENT ACCOUNT...17
Section 3.12. INVESTMENT OF FUNDS IN THE COLLECTION ACCOUNT AND THE
PAYMENT ACCOUNT...............................................18
Section 3.13. [RESERVED]....................................................19
Section 3.14. MAINTENANCE OF HAZARD INSURANCE AND ERRORS AND
OMISSIONS AND FIDELITY COVERAGE...............................20
Section 3.15. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.....21
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Section 3.16. REALIZATION UPON DEFAULTED MORTGAGE LOANS.....................22
Section 3.17. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES...............24
Section 3.18. SERVICING COMPENSATION........................................25
Section 3.19. REPORTS TO THE INDENTURE TRUSTEE AND OTHERS; COLLECTION
ACCOUNT STATEMENTS............................................26
Section 3.20. STATEMENT AS TO COMPLIANCE....................................26
Section 3.21. INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT..............27
Section 3.22. ACCESS TO CERTAIN DOCUMENTATION...............................27
Section 3.23. TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.............27
Section 3.24. OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF PREPAYMENT
INTEREST SHORTFALLS...........................................30
Section 3.25. OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF
MORTGAGE RATES AND MONTHLY PAYMENTS...........................30
Section 3.26. ADVANCE FACILITY..............................................30
ARTICLE IV
SERVICING CERTIFICATE
Section 4.01. REMITTANCE REPORTS AND P&I ADVANCES...........................32
Section 4.02. EXCHANGE ACT REPORTING........................................33
ARTICLE V
THE MASTER SERVICER
Section 5.01. LIABILITY OF THE MASTER SERVICER..............................36
Section 5.02. MERGER OR CONSOLIDATION OF OR ASSUMPTION OF THE
OBLIGATIONS OF THE MASTER SERVICER............................36
Section 5.03. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS.....36
Section 5.04. MASTER SERVICER NOT TO RESIGN.................................37
Section 5.05. DELEGATION OF DUTIES..........................................37
Section 5.06. RIGHTS OF THE ISSUER IN RESPECT OF THE MASTER SERVICER........37
Section 5.07. INDEMNIFICATION...............................................38
ARTICLE VI
DEFAULT
Section 6.01. MASTER SERVICER EVENTS OF DEFAULT.............................40
Section 6.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR............42
Section 6.03. NOTIFICATION TO NOTEHOLDERS...................................43
Section 6.04. WAIVER OF MASTER SERVICER EVENTS OF DEFAULT...................43
ARTICLE VII
MISCELLANEOUS PROVISIONS
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Section 7.01. AMENDMENT.....................................................44
Section 7.02. GOVERNING LAW.................................................44
Section 7.03. NOTICES.......................................................44
Section 7.04. SEVERABILITY OF PROVISIONS....................................45
Section 7.05. THIRD-PARTY BENEFICIARIES.....................................45
Section 7.06. COUNTERPARTS..................................................45
Section 7.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS......................45
Section 7.09. NO PETITION...................................................46
Section 7.10. NO RECOURSE...................................................46
Section 7.11. INDENTURE TRUSTEE RIGHTS......................................46
ARTICLE VIII
DUTIES OF THE MASTER SERVICER AS ADMINISTRATOR
Section 8.01. ADMINISTRATIVE DUTIES.........................................47
Section 8.02. RECORDS.......................................................48
Section 8.03. ADDITIONAL INFORMATION TO BE FURNISHED........................48
Section 8.04. NO RECOURSE TO OWNER TRUSTEE..................................49
EXHIBITS
Exhibit A Mortgage Loan Schedule
Exhibit B Form of Request for Release
Exhibit C-1 Form of Certification to Be Provided by the Depositor with
Form 10-K
Exhibit C-2 Form of Certification to Be Provided to the Depositor by the
Indenture Trustee
Exhibit D Form of Officer's Certificate Regarding Annual Statement of
Compliance
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This Servicing Agreement, dated as of June 29, 2004, among New Century
Mortgage Corporation, as Master Servicer (the "Master Servicer" ), New Century
Home Equity Loan Trust 2004-2, as Issuer (the "Issuer") and Deutsche Bank
National Trust Company, as Indenture Trustee (the "Indenture Trustee").
W I T N E S S E T H T H A T :
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WHEREAS, pursuant to the terms of the Mortgage Loan Sale and Contribution
Agreement, New Century Mortgage Securities, Inc. (the "Depositor") will acquire
the Mortgage Loans;
WHEREAS, the Depositor will create New Century Home Equity Loan Trust
2004-2, a Delaware statutory trust, and will transfer the Mortgage Loans and all
of its rights under the Mortgage Loan Sale and Contribution Agreement to the
Issuer;
WHEREAS, pursuant to the terms of an Amended and Restated Trust Agreement
dated as of June 29, 2004 (the "Trust Agreement") among the Depositor, as
depositor, Wilmington Trust Company, as owner trustee (the "Owner Trustee") and
Deutsche Bank National Trust Company, as certificate registrar and certificate
paying agent, the Depositor will convey the Mortgage Loans to the Issuer in
exchange for the Certificates (as defined below);
WHEREAS, pursuant to the terms of the Trust Agreement, the Issuer will
issue and transfer to or at the direction of the Depositor, the Trust
Certificates, Series 2004-2 (the "Certificates");
WHEREAS, pursuant to the terms of an Indenture dated as of June 29, 2004
(the "Indenture") between the Issuer and Deutsche Bank National Trust Company
(the "Indenture Trustee"), the Issuer will pledge the Mortgage Loans and issue
and transfer to or at the direction of the Purchaser the Asset-Backed Notes,
Series 2004-2, Class A-1, Class X-0, Xxxxx X-0, Class A-4, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Notes (collectively, the "Notes"); and
WHEREAS, pursuant to the terms of this Servicing Agreement, the Master
Servicer will service the Mortgage Loans set forth on the Mortgage Loan Schedule
attached hereto as Exhibit A directly or through one or more Sub-Servicers;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. For all purposes of this Servicing Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in the Definitions contained in Appendix A to the
Indenture which is incorporated by reference herein. All other capitalized terms
used herein shall have the meanings specified herein.
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Servicing Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Servicing Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Servicing Agreement or in any such certificate or other
document, and accounting terms partly defined in this Servicing Agreement or in
any such certificate or other document, to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this
Servicing Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Servicing Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Servicing Agreement shall refer to this Servicing Agreement as
a whole and not to any particular provision of this Servicing Agreement; Section
and Exhibit references contained in this Servicing Agreement are references to
Sections and Exhibits in or to this Servicing Agreement unless otherwise
specified; and the term "including" shall mean "including without limitation".
(d) The definitions contained in this Servicing Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
Section 1.03. INTEREST CALCULATIONS. All calculations of interest
hereunder that are made in respect of the Stated Principal Balance of a Mortgage
Loan shall be made on the basis of a 360-day year consisting of twelve 30-day
months, notwithstanding the terms of the related Mortgage Note and Mortgage.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01. REPRESENTATIONS AND WARRANTIES REGARDING THE MASTER
SERVICER. The Master Servicer hereby represents, warrants and covenants to the
Issuer and for the benefit of the Indenture Trustee, as pledgee of the Mortgage
Loans, and the Noteholders that as of the Closing Date or as of such date
specifically provided herein:
(i) The Master Servicer is a corporation duly organized and validly
existing under the laws of the State of California and is duly authorized
and qualified to transact any and all business contemplated by this
Servicing Agreement to be conducted by the Master Servicer 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 and to
service the Mortgage Loans in accordance with the terms of this Servicing
Agreement;
(ii) The Master Servicer has the full power and authority to conduct
its business as presently conducted by it and to execute, deliver and
perform, and to enter into and consummate, all transactions contemplated
by this Servicing Agreement. The Master Servicer has duly authorized the
execution, delivery and performance of this Servicing Agreement, has duly
executed and delivered this Servicing Agreement, and this Servicing
Agreement, assuming due authorization, execution and delivery by the
Depositor and the Indenture Trustee, constitutes a legal, valid and
binding obligation of the Master Servicer, enforceable against it in
accordance with its terms except as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity;
(iii) The execution and delivery of this Servicing Agreement by the
Master Servicer, the servicing of the Mortgage Loans by the Master
Servicer hereunder, the consummation by the Master Servicer of any other
of the transactions herein contemplated, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business of
the Master Servicer and will not (A) result in a breach of any term or
provision of the charter or by-laws of the Master Servicer or (B) conflict
with, result in a breach, violation or acceleration of, or result in a
default under, the terms of any other material agreement or instrument to
which the Master Servicer is a party or by which it may be bound, or any
statute, order or regulation applicable to the Master Servicer of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master Servicer is not a
party to, bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency
or governmental body having jurisdiction over it, which materially and
adversely affects or, to the Master Servicer's knowledge, would in the
future materially and adversely affect, (x) the ability of the Master
Servicer to perform its obligations under this Servicing Agreement or (y)
the business, operations, financial condition, properties or assets of the
Master Servicer taken as a whole;
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(iv) The Master Servicer is a HUD approved servicer. No event has
occurred, including but not limited to a change in insurance coverage,
that would make the Master Servicer unable to comply with HUD eligibility
requirements or that would require notification to HUD;
(v) The Master Servicer does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
made by it and contained in this Servicing Agreement;
(vi) [Reserved];
(vii) No litigation is pending against the Master Servicer that
would materially and adversely affect the execution, delivery or
enforceability of this Servicing Agreement or the ability of the Master
Servicer to service the Mortgage Loans or to perform any of its other
obligations hereunder in accordance with the terms hereof;
(viii) There are no actions or proceedings against, or
investigations known to it of, the Master Servicer before any court,
administrative or other tribunal (A) that might prohibit its entering into
this Servicing Agreement, (B) seeking to prevent the consummation of the
transactions contemplated by this Servicing Agreement or (C) that might
prohibit or materially and adversely affect the performance by the Master
Servicer of its obligations under, or validity or enforceability of, this
Servicing Agreement;
(ix) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Master Servicer of, or compliance by the Master
Servicer with, this Servicing Agreement or the consummation by it of the
transactions contemplated by this Servicing Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date;
(x) The Master Servicer will not waive any Prepayment Charge unless
it is waived in accordance with the standard set forth in Section 3.01;
and
(xii) The Master Servicer has fully furnished and will continue to
fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian and Trans Union Credit Information Company or their successors on
a monthly basis.
The foregoing representations and warranties shall survive any termination
of the Master Servicer hereunder.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.01 shall survive delivery of the Mortgage
Files to the Indenture Trustee and shall inure to the benefit of the Indenture
Trustee, the Depositor and the Noteholders. Upon discovery by any of the
Depositor, the Master Servicer or the Indenture Trustee of a breach of any of
the foregoing
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representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan or the interests therein of the Noteholders, the
party discovering such breach shall give prompt written notice (but in no event
later than two Business Days following such discovery) to the Indenture Trustee.
Subject to Section 6.01, unless such breach shall not be susceptible of cure
within 90 days, the obligation of the Master Servicer set forth in this Section
2.01 to cure breaches shall constitute the sole remedy against the Master
Servicer available to the Noteholders, the Depositor and the Indenture Trustee
on behalf of the Noteholders respecting a breach of the representations,
warranties and covenants contained in this Section 2.01. Notwithstanding the
foregoing, within 90 days of the earlier of discovery by the Master Servicer or
receipt of notice by the Master Servicer of the breach of the representation or
covenant of the Master Servicer set forth in Section 2.01(x) above, which breach
materially and adversely affects the interests of the Holders of the
Certificates in any Prepayment Charge, the Master Servicer must pay the amount
of such waived Prepayment Charge, for the benefit of the holders of the Notes,
by depositing such amount into the Collection Account.
Section 2.02. EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect its existence, rights
and franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Servicing Agreement.
Section 2.03. ENFORCEMENT OF REPRESENTATIONS AND WARRANTIES. (a) The
Master Servicer (to the extent it is not NC Capital or an Affiliate of NC
Capital, and otherwise the Indenture Trustee) shall enforce the representations
and warranties and related obligations for breaches thereof of NC Capital
pursuant to the Mortgage Loan Sale and Contribution Agreement. Upon the
discovery or receipt of notice of any materially defective document in, or that
a document is missing from, a Mortgage File or of a breach by NC Capital of any
of the representations and warranties made in the Mortgage Loan Sale and
Contribution Agreement in respect of any Mortgage Loan that materially and
adversely affects the value of the value of such Mortgage Loan or the interests
therein of the Noteholders, the Indenture Trustee shall give prompt written
notice to NC Capital and the Master Servicer of such defect, missing document or
breach and request that NC Capital deliver such missing document or cure such
defect or breach within 60 days from the date NC Capital was notified of such
missing document, defect or breach, and if NC Capital does not deliver such
missing document or cure such defect or breach in all material respects during
such period, the Master Servicer, to the extent it is not NC Capital or an
Affiliate of NC Capital, and otherwise the Indenture Trustee, shall enforce the
obligations of NC Capital under the Mortgage Loan Sale and Contribution
Agreement to repurchase such Mortgage Loan from the Issuer at the Purchase Price
within 90 days after the date on which NC Capital was notified of such missing
document, defect or breach, if and to the extent that NC Capital is obligated to
do so under the Mortgage Loan Sale and Contribution Agreement. The Purchase
Price for the repurchased Mortgage Loan shall be remitted to the Master Servicer
for deposit in the Collection Account and the Indenture Trustee, upon receipt of
written certification from the Master Servicer of such deposit, shall release to
NC Capital the related Mortgage File and the Indenture Trustee shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, as NC Capital shall furnish to it and as shall be necessary
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to vest in NC Capital any Mortgage Loan released pursuant hereto. The Indenture
Trustee shall not have any further responsibility with regard to such Mortgage
File. In lieu of repurchasing any such Mortgage Loan as provided above, if so
provided in the Mortgage Loan Sale and Contribution Agreement, NC Capital may
cause such Mortgage Loan to be removed from the Trust Estate (in which case it
shall become a Deleted Mortgage Loan) and substitute one or more Qualified
Substitute Mortgage Loans in the manner and subject to the limitations set forth
in Section 2.03(b); provided, however, NC Capital may not substitute a Qualified
Substitute Mortgage Loan for any Deleted Mortgage Loan that violates any
predatory or abusive lending law. It is understood and agreed that the
obligation of NC Capital to cure or to repurchase (or to substitute for) any
Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy respecting such omission, defect or
breach available to the Indenture Trustee and the Noteholders. The Indenture
Trustee will be reimbursed for reasonable expenses incurred in connection with
any breach or defect giving rise to the purchase obligation under this Section
2.03 pursuant to Section 3.11(a)(viii).
With respect to the representations and warranties made by NC Capital in
the Mortgage Loan Sale and Contribution Agreement, the Indenture Trustee shall
not be charged with knowledge of any breach of any such representation or
warranty by NC Capital unless a Responsible Officer of the Indenture Trustee at
the Corporate Trust Office obtains actual knowledge of such breach or a
Responsible Officer of the Indenture Trustee receives written notice of such
breach from the Depositor, the Master Servicer or the Noteholders.
(b) As to any Deleted Mortgage Loan for which NC Capital substitutes a
Qualified Substitute Mortgage Loan or Loans, such substitution shall be effected
by NC Capital delivering to the Indenture Trustee, for such Qualified Substitute
Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the
Indenture Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2.1(b) of the Mortgage Loan
Sale and Contribution Agreement, together with an Officers' Certificate
providing that each such Qualified Substitute Mortgage Loan satisfies the
definition thereof and specifying the Substitution Shortfall Amount (as
described below), if any, in connection with such substitution. The Indenture
Trustee shall acknowledge receipt for such Qualified Substitute Mortgage Loan or
Loans and, within ten Business Days thereafter, shall review such documents as
specified in Section 2.1(b) of the Mortgage Loan Sale and Contribution Agreement
and deliver to the Depositor and the Master Servicer, with respect to such
Qualified Substitute Mortgage Loan or Loans, a certification substantially in
the form attached as Exhibit C-1 to the Indenture, with any applicable
exceptions noted thereon. Within one year of the date of substitution, the
Indenture Trustee shall deliver to the Depositor and the Master Servicer a
certification substantially in the form of Exhibit C-2 to the Indenture with
respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable
exceptions noted thereon. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution are not part of the Trust
Estate and will be retained by NC Capital. For the month of substitution,
payments to Noteholders will reflect the Monthly Payment due on such Deleted
Mortgage Loan on or before the Due Date in the month of substitution, and NC
Capital shall thereafter be entitled to retain all amounts subsequently received
in respect of such Deleted Mortgage Loan. The Master Servicer shall give or
cause to be given written notice to the Noteholders that such substitution has
taken place, shall amend the Mortgage Loan Schedule to reflect the removal of
such Deleted Mortgage Loan from the terms of this Servicing Agreement and
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the substitution of the Qualified Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Indenture Trustee
and the Owner Trustee. Upon such substitution, such Qualified Substitute
Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be
subject in all respects to the terms of this Servicing Agreement and the
Mortgage Loan Sale and Contribution Agreement, including, all applicable
representations and warranties thereof included in the Mortgage Loan Sale and
Contribution Agreement.
For any month in which NC Capital substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the amount (the "Substitution Shortfall Amount"), if
any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans
exceeds the aggregate of, as to each such Qualified Substitute Mortgage Loan,
the Stated Principal Balance thereof as of the date of substitution, together
with one month's interest on such Stated Principal Balance at the applicable Net
Mortgage Rate, plus all outstanding P&I Advances and Servicing Advances
(including Nonrecoverable P&I Advances and Nonrecoverable Servicing Advances)
related thereto. On the date of such substitution, NC Capital will deliver or
cause to be delivered to the Master Servicer for deposit in the Collection
Account an amount equal to the Substitution Shortfall Amount, if any, and the
Indenture Trustee, upon receipt of the related Qualified Substitute Mortgage
Loan or Loans and certification by the Master Servicer of such deposit, shall
release to NC Capital the related Mortgage File or Files and the Indenture
Trustee shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, NC Capital shall deliver to it and as shall be
necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.
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ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. MASTER SERVICER TO ACT AS MASTER SERVICER.
The Master Servicer shall service and administer the Mortgage Loans on
behalf of the Trust Estate and in the best interests of and for the benefit of
the Noteholders (as determined by the Master Servicer in its reasonable
judgment) in accordance with the terms of this Servicing Agreement and the
respective Mortgage Loans and, to the extent consistent with such terms, in the
same manner in which it services and administers similar mortgage loans for its
own portfolio, giving due consideration to customary and usual standards of
practice of mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that the Master Servicer, any Sub-Servicer or
any Affiliate of the Master Servicer or any Sub-Servicer may have with the
related Mortgagor;
(ii) the ownership or non-ownership of any Note by the Master
Servicer or any Affiliate of the Master Servicer;
(iii) the Master Servicer's obligation to make P&I Advances or
Servicing Advances; or
(iv) the Master Servicer's or any Sub-Servicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Master Servicer (a) shall
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes and (b) shall waive (or permit a Sub-Servicer to waive) a
Prepayment Charge only under the following circumstances: (i) such waiver is
standard and customary in servicing similar Mortgage Loans and (ii) either (A)
such waiver would, in the reasonable judgement of the Master Servicer, maximize
recovery of total proceeds taking into account the value of such Prepayment
Charge and the related Mortgage Loan and, if such waiver is made in connection
with a refinancing of the related Mortgage Loan, such refinancing is related to
a default or a reasonably foreseeable default or (B) such waiver is made in
connection with a refinancing of the related Mortgage Loan unrelated to a
default or a reasonably foreseeable default where (x) the related mortgagor has
stated to the Master Servicer or an applicable Sub-Servicer an intention to
refinance the related Mortgage Loan and (y) the Master Servicer has concluded in
its reasonable judgement that the waiver of such Prepayment Charge would induce
such mortgagor to refinance with the Master Servicer or (iii) collection of the
related Prepayment Charge would violate applicable law. If a Prepayment Charge
is waived as permitted by meeting both of the standards described in clauses (i)
and (ii)(B) above, then the Master Servicer is required to pay the amount of
such waived Prepayment Charge, for the benefit of the Holders of the Notes, by
depositing such amount into the Collection Account together with and at the time
that the amount prepaid on the related Mortgage Loan is required to be deposited
into the Collection Account.
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Subject only to the above-described servicing standards and the terms of
this Servicing Agreement and of the respective Mortgage Loans, the Master
Servicer shall have full power and authority, acting alone or through
Sub-Servicers as provided in Section 3.02, to do or cause to be done any and all
things in connection with such servicing and administration which it may deem
necessary or desirable. Without limiting the generality of the foregoing, the
Master Servicer in its own name or in the name of a Sub-Servicer is hereby
authorized and empowered by the Indenture Trustee when the Master Servicer
believes it appropriate in its best judgment in accordance with the servicing
standards set forth above, to execute and deliver, on behalf of the Trust
Estate, the Issuer, the Noteholders and the Indenture Trustee or any of them,
and upon written notice to the Indenture Trustee, 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 Mortgage Loans and the
Mortgaged Properties and to institute foreclosure proceedings or obtain a
deed-in-lieu of foreclosure so as to convert the ownership of such properties,
and to hold or cause to be held title to such properties, on behalf of the
Indenture Trustee and Noteholders. The Master Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. The Master Servicer shall also comply in the performance of this
Servicing Agreement with all reasonable rules and requirements of each insurer
under any standard hazard insurance policy. Subject to Section 3.17, the Issuer
and the Indenture Trustee shall execute, at the written request of the Master
Servicer, and furnish to the Master Servicer and any Sub-Servicer any special or
limited powers of attorney and other documents necessary or appropriate to
enable the Master Servicer or any Sub-Servicer to carry out their servicing and
administrative duties hereunder and the Issuer and the Indenture Trustee shall
not be liable for the actions of the Master Servicer or any Sub-Servicers under
such powers of attorney.
Subject to Section 3.09 hereof, in accordance with the standards of the
preceding paragraph, the Master Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties in a manner and at a time that avoids
the loss of the Mortgaged Property due to a tax sale or the foreclosure as a
result of a tax lien, which advances shall be Servicing Advances reimbursable in
the first instance from related collections from the Mortgagors pursuant to
Section 3.09, and further as provided in Section 3.11. Any cost incurred by the
Master Servicer or by Sub-Servicers in effecting the timely payment of taxes and
assessments on a Mortgaged Property shall not, for the purpose of calculating
payments to Noteholders, be added to the unpaid Stated Principal Balance of the
related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so
permit.
Notwithstanding anything in this Servicing Agreement to the contrary, the
Master Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and the Master Servicer shall not permit
any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Master Servicer, reasonably foreseeable).
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The Master Servicer may delegate its responsibilities under this Servicing
Agreement; provided, however, that no such delegation shall release the Master
Servicer from the responsibilities or liabilities arising under this Servicing
Agreement.
Section 3.02. SUB-SERVICING AGREEMENTS BETWEEN MASTER SERVICER AND SUB-
SERVICERS.
(a) The Master Servicer may enter into Sub-Servicing Agreements with Sub-
Servicers for the servicing and administration of the Mortgage Loans; provided,
however, that such agreements would not result in a withdrawal or a downgrading
by any Rating Agency of the rating on any Class of Notes. The Indenture Trustee
is hereby authorized to acknowledge, at the request of the Master Servicer, any
Sub-Servicing Agreement that, based on an Officers' Certificate of the Master
Servicer delivered to the Indenture Trustee (upon which the Indenture Trustee
can conclusively rely), meets the requirements applicable to Sub-Servicing
Agreements set forth in this Servicing Agreement and that is otherwise permitted
under this Servicing Agreement.
Each Sub-Servicer shall be (i) authorized to transact business in the
state or states where the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub- Servicing
Agreement and (ii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage servicer. Each
Sub- Servicing Agreement must impose on the Sub-Servicer requirements conforming
to the provisions set forth in Section 3.08 and provide for servicing of the
Mortgage Loans consistent with the terms of this Servicing Agreement. The Master
Servicer will examine each Sub-Servicing Agreement and will be familiar with the
terms thereof. The terms of any Sub-Servicing Agreement will not be inconsistent
with any of the provisions of this Servicing Agreement. The Master Servicer and
the Sub-Servicers may enter into and make amendments to the Sub-Servicing
Agreements or enter into different forms of Sub-Servicing Agreements; provided,
however, that any such amendments or different forms shall be consistent with
and not violate the provisions of this Servicing Agreement, and that no such
amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the Noteholders
without the consent of the Holders of Notes entitled to at least 66% of the
Voting Rights; provided, further, that the consent of the Holders of Notes
entitled to at least 66% of the Voting Rights shall not be required (i) to cure
any ambiguity or defect in a Sub-Servicing Agreement, (ii) to correct, modify or
supplement any provisions of a Sub-Servicing Agreement, or (iii) to make any
other provisions with respect to matters or questions arising under a
Sub-Servicing Agreement, which, in each case, shall not be inconsistent with the
provisions of this Servicing Agreement. Any variation without the consent of the
Holders of Notes entitled to at least 66% of the Voting Rights from the
provisions set forth in Section 3.08 relating to insurance or priority
requirements of Sub-Servicing Accounts, or credits and charges to the
Sub-Servicing Accounts or the timing and amount of remittances by the
Sub-Servicers to the Master Servicer, are conclusively deemed to be inconsistent
with this Servicing Agreement and therefore prohibited. The Master Servicer
shall deliver to the Indenture Trustee, upon its request, copies of all
Sub-Servicing Agreements, and any amendments or modifications thereof, promptly
upon the Master Servicer's execution and delivery of such instruments.
(b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Indenture Trustee and the Noteholders, shall enforce the
obligations of each Sub-
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Servicer under the related Sub-Servicing Agreement, including, without
limitation, any obligation of a Sub-Servicer to make advances in respect of
delinquent payments as required by a Sub- Servicing Agreement. Such enforcement,
including, without limitation, the legal prosecution of claims, termination of
Sub-Servicing Agreements, 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
enforcing the obligations of a Sub-Servicer at its own expense, and shall be
reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans, or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
Section 3.03. SUCCESSOR SUB-SERVICERS.
The Master Servicer shall be entitled to terminate any Sub-Servicing
Agreement and the rights and obligations of any Sub-Servicer pursuant to any
Sub-Servicing Agreement in accordance with the terms and conditions of such
Sub-Servicing Agreement. In the event of termination of any Sub-Servicer, all
servicing obligations of such Sub-Servicer shall be assumed simultaneously by
the Master Servicer without any act or deed on the part of such Sub-Servicer or
the Master Servicer, and the Master Servicer either shall service directly the
related Mortgage Loans or shall enter into a Sub-Servicing Agreement with a
successor Sub-Servicer which qualifies under Section 3.02.
Any Sub-Servicing Agreement shall include the provision that such
agreement may be immediately terminated by the Indenture Trustee (if the
Indenture Trustee is acting as Master Servicer) without fee, in accordance with
the terms of this Servicing Agreement, in the event that the Master Servicer (or
the Indenture Trustee, if it is then acting as Master Servicer) shall, for any
reason, no longer be the Master Servicer (including termination due to a Master
Servicer Event of Default).
Section 3.04. LIABILITY OF THE MASTER SERVICER.
Notwithstanding any Sub-Servicing Agreement or the provisions of this
Servicing Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall remain obligated and primarily liable to
the Indenture Trustee and the Noteholders for the servicing and administering of
the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Sub-Servicing
Agreements or arrangements or by virtue of indemnification from the Sub-Servicer
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Sub- Servicer for
indemnification of the Master Servicer by such Sub-Servicer and nothing
contained in this Servicing Agreement shall be deemed to limit or modify such
indemnification.
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Section 3.05. NO CONTRACTUAL RELATIONSHIP BETWEEN SUB-SERVICERS, THE
INDENTURE TRUSTEE OR THE NOTEHOLDERS.
Any Sub-Servicing Agreement that may be entered into and any transactions
or services relating to the Mortgage Loans involving a Sub-Servicer in its
capacity as such shall be deemed to be between the Sub-Servicer and the Master
Servicer alone, and the Indenture Trustee and the Noteholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Sub-Servicer except as set forth in Section
3.06. The Master Servicer shall be solely liable for all fees owed by it to any
Sub-Servicer, irrespective of whether the Master Servicer's compensation
pursuant to this Servicing Agreement is sufficient to pay such fees.
Section 3.06. ASSUMPTION OR TERMINATION OF SUB-SERVICING AGREEMENTS BY THE
INDENTURE TRUSTEE.
In the event the Master Servicer shall for any reason no longer be the
master servicer (including by reason of the occurrence of a Master Servicer
Event of Default), the Indenture Trustee, its designee or other successor master
servicer shall thereupon assume all of the rights and obligations of the Master
Servicer under each Sub-Servicing Agreement that the Master Servicer may have
entered into, unless the Indenture Trustee, such designee or other successor
master servicer elects to terminate any Sub-Servicing Agreement in accordance
with its terms as provided in Section 3.03. Upon such assumption, the Indenture
Trustee, its designee or the successor master servicer appointed pursuant to
Section 6.02 shall be deemed, subject to Section 3.03, to have assumed all of
the Master Servicer's interest therein and to have replaced the Master Servicer
as a party to each Sub-Servicing Agreement to the same extent as if each
Sub-Servicing Agreement had been assigned to the assuming party, except that (i)
the Master Servicer shall not thereby be relieved of any liability or
obligations under any Sub-Servicing Agreement that arose before it ceased to be
the Master Servicer and (ii) none of the Indenture Trustee, its designee or any
successor Master Servicer shall be deemed to have assumed any liability or
obligation of the Master Servicer that arose before it ceased to be the Master
Servicer.
The Master Servicer at its expense shall, upon request of the Indenture
Trustee, deliver to the assuming party all documents and records relating to
each Sub-Servicing Agreement and the Mortgage Loans then being serviced and an
accounting of amounts collected and held by or on behalf of it, and otherwise
use its best efforts to effect the orderly and efficient transfer of the
Sub-Servicing Agreements to the assuming party.
The Servicing Fee payable to the Indenture Trustee or other successor
master servicer shall be payable from payments received on the Mortgage Loans in
the amount and in the manner set forth in this Servicing Agreement.
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Section 3.07. COLLECTION OF CERTAIN MORTGAGE LOAN PAYMENTS.
The Master Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Servicing Agreement and
the terms and provisions of any applicable insurance policies, follow such
collection procedures as it would follow with respect to mortgage loans
comparable to the Mortgage Loans and held for its own account. Consistent with
the foregoing, the Master Servicer may in its discretion (i) waive any late
payment charge or, if applicable, any penalty interest, or (ii) extend the due
dates for the Monthly Payments due on a Mortgage Note for a period of not
greater than 180 days; provided, however, that any extension pursuant to clause
(ii) above shall not affect the amortization schedule of any Mortgage Loan for
purposes of any computation hereunder, except as provided below. In the event of
any such arrangement pursuant to clause (ii) above, the Master Servicer shall
make timely advances on such Mortgage Loan during such extension pursuant to
Section 4.01 and in accordance with the amortization schedule of such Mortgage
Loan without modification thereof by reason of such arrangement. Notwithstanding
the foregoing, in the event that any Mortgage Loan is in default or, in the
judgment of the Master Servicer, such default is reasonably foreseeable, the
Master Servicer, consistent with the standards set forth in Section 3.01, may
also waive, modify or vary any term of such Mortgage Loan (including
modifications that would change the Mortgage Rate, forgive the payment of
principal or interest or extend the final maturity date of such Mortgage Loan),
accept payment from the related Mortgagor of an amount less than the Stated
Principal Balance in final satisfaction of such Mortgage Loan (such payment, a
"Short Pay-off"), or consent to the postponement of strict compliance with any
such term or otherwise grant indulgence to any Mortgagor.
Section 3.08. SUB-SERVICING ACCOUNTS.
In those cases where a Sub-Servicer is servicing a Mortgage Loan pursuant
to a Sub- Servicing Agreement, the Sub-Servicer will be required to establish
and maintain one or more accounts (collectively, the "Sub-Servicing Account").
The Sub-Servicing Account shall be an Eligible Account and shall comply with all
requirements of this Servicing Agreement relating to the Collection Account. The
Sub-Servicer shall deposit in the clearing account in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Sub-Servicer's receipt thereof, all proceeds of
Mortgage Loans received by the Sub-Servicer less its servicing compensation to
the extent permitted by the Sub-Servicing Agreement, and shall thereafter
deposit such amounts in the Sub-Servicing Account, in no event more than two
Business Days after the receipt of such amounts. The Sub-Servicer shall
thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Master Servicer for deposit in the Collection Account not later
than two Business Days after the deposit of such amounts in the Sub-Servicing
Account. For purposes of this Servicing Agreement, the Master Servicer shall be
deemed to have received payments on the Mortgage Loans when the Sub-Servicer
receives such payments.
Section 3.09. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
SERVICING ACCOUNTS.
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The Master Servicer shall establish and maintain, or cause to be
established and maintained, one or more accounts (the "Servicing Accounts"),
into which all collections from the Mortgagors (or related advances from
Sub-Servicers) for the payment of taxes, assessments, hazard insurance premiums
and comparable items for the account of the Mortgagors ("Escrow Payments") shall
be deposited and retained. Servicing Accounts shall be Eligible Accounts. The
Master Servicer shall deposit in the clearing account in which it customarily
deposits payments and collections on mortgage loans in connection with its
mortgage loan servicing activities on a daily basis, and in no event more than
one Business Day after the Master Servicer's receipt thereof, all Escrow
Payments collected on account of the Mortgage Loans and shall thereafter deposit
such Escrow Payments in the Servicing Accounts, in no event more than two
Business Days after the receipt of such Escrow Payments, all Escrow Payments
collected on account of the Mortgage Loans for the purpose of effecting the
timely payment of any such items as required under the terms of this Servicing
Agreement. Withdrawals of amounts from a Servicing Account may be made only to
(i) effect payment of taxes, assessments, hazard insurance premiums, and
comparable items in a manner and at a time that assures that the lien priority
of the Mortgage is not jeopardized (or, with respect to the payment of taxes, in
a manner and at a time that avoids the loss of the Mortgaged Property due to a
tax sale or the foreclosure as a result of a tax lien); (ii) reimburse the
Master Servicer (or a Sub- Servicer to the extent provided in the related
Sub-Servicing Agreement) out of related collections for any advances made
pursuant to Section 3.01 (with respect to taxes and assessments) and Section
3.14 (with respect to hazard insurance); (iii) refund to Mortgagors any sums as
may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Servicing Account; or (v)
clear and terminate the Servicing Account at the termination of the Master
Servicer's obligations and responsibilities in respect of the Mortgage Loans
under this Servicing Agreement in accordance with Section 7.08. As part of its
servicing duties, the Master Servicer or Sub-Servicers shall pay to the
Mortgagors interest on funds in the Servicing Accounts, to the extent required
by law and, to the extent that interest earned on funds in the Servicing
Accounts is insufficient, to pay such interest from its or their own funds,
without any reimbursement therefor.
Section 3.10. COLLECTION ACCOUNT AND PAYMENT ACCOUNT.
(a) On behalf of the Trust Estate, the Master Servicer shall establish and
maintain, or cause to be established and maintained, one or more accounts (such
account or accounts, the "Collection Account"), held in trust for the benefit of
the Owner Trustee, the Indenture Trustee and the Noteholders. On behalf of the
Trust, the Master Servicer shall deposit or cause to be deposited in the
clearing account in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Master
Servicer's receipt thereof, and shall thereafter deposit in the Collection
Account, in no event more than two Business Days after the Master Servicer's
receipt thereof, as and when received or as otherwise required hereunder, the
following payments and collections received or made by it subsequent to the
Cut-off Date (other than in respect of principal or interest on the related
Mortgage Loans due on or before the Cut-off Date), or payments (other than
Principal Prepayments) received by it on or prior to the Cut-off Date but
allocable to a Due Period subsequent thereto:
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(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds, Liquidation Proceeds (other than
proceeds collected in respect of any particular REO Property and amounts
paid in connection with the redemption of the Notes pursuant to Section
8.07 of the Indenture) and Subsequent Recoveries;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Master Servicer
pursuant to the second paragraph of Section 3.14(a) in respect of any
blanket policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with Section 3.1 of the Mortgage Loan Sale and Contribution
Agreement or Section 3.16;
(vii) all amounts required to be deposited in connection with
shortfalls in principal amount of Qualified Substitute Mortgage Loans
pursuant to Section 2.03(b) hereof; and
(viii) all Prepayment Charges collected by the Master Servicer in
connection with the Principal Prepayment of any of the Mortgage Loans.
The foregoing requirements for deposit in the Collection 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, modification
or assumption fees, or insufficient funds charges need not be deposited by the
Master Servicer in the Collection Account and may be retained by the Master
Servicer as additional compensation. In the event the Master Servicer shall
deposit in the Collection Account any amount not required to be deposited
therein, it may at any time withdraw such amount from the Collection Account,
any provision herein to the contrary notwithstanding.
(b) On behalf of the Trust Estate, the Master Servicer shall deliver to
the Indenture Trustee in immediately available funds for deposit in the Payment
Account by 1:00 p.m. New York time (i) on the Master Servicer Remittance Date,
that portion of the Available Payment Amount (calculated without regard to the
references in clause (2) of the definition thereof to amounts that may be
withdrawn from the Payment Account) for the related Payment Date then on deposit
in the Collection Account and the amount of all Prepayment Charges collected by
the Master Servicer in connection with the Principal Prepayment of any of the
Mortgage Loans then on deposit in the Collection Account and the amount of any
funds reimbursable to an Advancing Person pursuant to Section 3.26 and (ii) on
each Business Day as of the commencement of which the balance on deposit in the
Collection Account exceeds $75,000 following any withdrawals pursuant to the
next succeeding sentence, the amount of such excess, but only if the Collection
Account constitutes an
15
Eligible Account solely pursuant to clause (ii) of the definition of "Eligible
Account." If the balance on deposit in the Collection Account exceeds $75,000 as
of the commencement of business on any Business Day and the Collection Account
constitutes an Eligible Account solely pursuant to clause (ii) of the definition
of "Eligible Account," the Master Servicer shall, by 1:00 p.m. New York time on
such Business Day, withdraw from the Collection Account any and all amounts
payable or reimbursable to the Depositor, the Master Servicer, the Owner
Trustee, the Indenture Trustee, the Originator, the Seller or any Sub-Servicer
pursuant to Section 3.11 and shall pay such amounts to the Persons entitled
thereto.
(c) Funds in the Collection Account and the Payment Account may be
invested in Permitted Investments in accordance with the provisions set forth in
Section 3.12. The Master Servicer shall give notice to the Indenture Trustee of
the location of the Collection Account maintained by it when established and
prior to any change thereof. The Indenture Trustee shall give notice to the
Master Servicer and the Depositor of the location of the Payment Account when
established and prior to any change thereof.
(d) Funds held in the Collection Account at any time may be delivered by
the Master Servicer to the Indenture Trustee for deposit in an account (which
may be the Payment Account and must satisfy the standards for the Payment
Account as set forth in the definition thereof) and for all purposes of this
Servicing Agreement shall be deemed to be a part of the Collection Account (and
in such event, the Master Servicer shall provide the Indenture Trustee with
written instructions regarding the investment of such funds); provided, however,
that the Indenture Trustee shall have the sole authority to withdraw any funds
held pursuant to this subsection (d). In the event the Master Servicer shall
deliver to the Indenture Trustee for deposit in the Payment Account any amount
not required to be deposited therein, it may at any time request in writing that
the Indenture Trustee withdraw such amount from the Payment Account and remit to
it any such amount, any provision herein to the contrary notwithstanding. In
addition, the Master Servicer shall deliver to the Indenture Trustee from time
to time for deposit, and the Indenture Trustee shall so deposit, in the Payment
Account:
(i) any P&I Advances, as required pursuant to Section 4.01;
(ii) any amounts required to be deposited pursuant to Section
3.23(d) or (f) in connection with any REO Property; and
(iii) any amounts required to be deposited pursuant to Section 3.24
in connection with any Prepayment Interest Shortfall.
(e) The Master Servicer shall deposit in the Collection Account any
amounts required to be deposited pursuant to Section 3.12(b) in connection with
losses realized on Permitted Investments with respect to funds held in the
Collection Account (and the Payment Account to the extent that funds therein are
deemed to be part of the Collection Account).
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Section 3.11. WITHDRAWALS FROM THE COLLECTION ACCOUNT AND PAYMENT ACCOUNT.
(a) The Master Servicer shall, from time to time, make withdrawals from
the Collection Account for any of the following purposes or as described in
Section 4.01:
(i) to remit to the Indenture Trustee for deposit in the Payment
Account the amounts required to be so remitted pursuant to Section 3.10(b)
or permitted to be so remitted pursuant to the first sentence of Section
3.10(d);
(ii) subject to Section 3.16(d), to reimburse the Master Servicer
for P&I Advances, but only to the extent of amounts received which
represent Late Collections (net of the related Servicing Fees) of Monthly
Payments on Mortgage Loans with respect to which such P&I Advances were
made in accordance with the provisions of Section 4.01;
(iii) subject to Section 3.16(d), to pay the Master Servicer or any
Sub-Servicer, as applicable, (a) any unpaid Servicing Fees, (b) any
unreimbursed Servicing Advances with respect to each Mortgage Loan, but
only to the extent of any Late Collections, Liquidation Proceeds,
Insurance Proceeds and Subsequent Recoveries received with respect to such
Mortgage Loan and (c) any Nonrecoverable Servicing Advances with respect
to the final liquidation of a Mortgage Loan, but only to the extent that
Late Collections, Liquidation Proceeds and Insurance Proceeds received
with respect to such Mortgage Loan are insufficient to reimburse the
Master Servicer or any Sub-Servicer for Servicing Advances;
(iv) to pay to the Master Servicer as servicing compensation (in
addition to the Servicing Fee) on the Master Servicer Remittance Date any
interest or investment income earned on funds deposited in the Collection
Account;
(v) to pay to the Master Servicer, the Depositor, the Originator or
the Seller, as the case may be, with respect to each Mortgage Loan that
has previously been purchased or replaced pursuant to Section 3.1 of the
Mortgage loan Sale and Contribution Agreement or Section 3.16(c) all
amounts received thereon subsequent to the date of purchase or
substitution, as the case may be;
(vi) to reimburse the Master Servicer for any P&I Advance previously
made which the Master Servicer has determined to be a Nonrecoverable P&I
Advance in accordance with the provisions of Section 4.01;
(vii) to reimburse the Master Servicer or the Depositor for expenses
incurred by or reimbursable to the Master Servicer or the Depositor, as
the case may be, pursuant to Section 3.02(b) and Section 5.03;
(viii) to reimburse the Master Servicer or Indenture Trustee for
expenses reasonably incurred in connection with any breach or defect
giving rise to the purchase obligation under Section 3.1 of the Mortgage
Loan Sale and Contribution Agreement and Section 2.03 hereof, including
any expenses arising out of the enforcement of the purchase obligation;
17
(ix) to pay, or to reimburse the Master Servicer for Servicing
Advances in respect of, expenses incurred in connection with any Mortgage
Loan pursuant to Section 3.16(b); and
(x) to clear and terminate the Collection Account pursuant to
Section 7.08.
The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (ii), (iii), (iv), (v), (vi), (viii) and (ix) above.
The Master Servicer shall provide written notification to the Indenture Trustee,
on or prior to the next succeeding Master Servicer Remittance Date, upon making
any withdrawals from the Collection Account pursuant to subclauses (vi) and
(vii) above; provided that an Officers' Certificate in the form described under
Section 4.01(d) shall suffice for such written notification to the Indenture
Trustee in respect of clause (vi) hereof.
(b) The Indenture Trustee shall, from time to time, make withdrawals from
the Payment Account, for any of the following purposes, without priority:
(i) to make payments to Noteholders in accordance with Section 4.01;
(ii) to pay and reimburse itself and the Owner Trustee amounts to
which it or the Owner Trustee is entitled pursuant to Section 6.07 of the
Indenture;
(iii) to reimburse itself pursuant to Section 6.02;
(iv) to pay to an Advancing Person reimbursements for P&I Advances
and/or Servicing Advances pursuant to Section 3.26; and
(vi) to clear and terminate the Payment Account pursuant to Section
4.10 of the Indenture.
Section 3.12. INVESTMENT OF FUNDS IN THE COLLECTION ACCOUNT AND THE
PAYMENT ACCOUNT.
(a) The Master Servicer may direct any depository institution maintaining
the Collection Account or any REO Account (for purposes of this Section 3.12, an
"Investment Account") to invest the funds in such Investment Account in one or
more Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand, (i) no later than the Business Day immediately
preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Servicing Agreement, if a Person other than the
Indenture Trustee is the obligor thereon, and (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Servicing Agreement, if the Indenture Trustee is the obligor thereon. Amounts in
the Payment Account shall be held uninvested unless directed otherwise pursuant
to Section 3.10(d) of the Servicing Agreement. All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account shall be made in the name of the Indenture Trustee for the
benefit of the Noteholders. The Indenture Trustee shall be entitled to sole
possession (except with respect to investment direction of funds held
18
in the Collection Account and any income and gain realized thereon) over each
such investment, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the Indenture Trustee or its agent,
together with any document of transfer necessary to transfer title to such
investment to the Indenture Trustee or its nominee. In the event amounts on
deposit in an Investment Account are at any time invested in a Permitted
Investment payable on demand, the party with investment discretion over such
Investment Account shall:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such Permitted
Investment may otherwise mature hereunder in an amount equal to the lesser
of (1) all amounts then payable thereunder and (2) the amount required to
be withdrawn on such date; and
(y) demand payment of all amounts due thereunder promptly upon
determination by a Responsible Officer of the Indenture Trustee that such
Permitted Investment would not constitute a Permitted Investment in
respect of funds thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds deposited in
the Collection Account and Payment Account, solely to the extent that the Master
Servicer gives the Indenture Trustee investment directions with respect to the
funds in the Payment Account pursuant to Section 3.10(d), and any REO Account
held by or on behalf of the Master Servicer, shall be for the benefit of the
Master Servicer and shall be subject to its withdrawal in accordance with
Section 3.11 or Section 3.23, as applicable. The Master Servicer shall deposit
in the Collection Account or any REO Account, as applicable, the amount of any
loss of principal incurred in respect of any such Permitted Investment made with
funds in such accounts immediately upon realization of such loss.
(c) Except as otherwise expressly provided in this Servicing Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment (of which a Responsible Officer of the Indenture Trustee
obtains actual knowledge), the Indenture Trustee may and, subject to Section
6.01 of the Indenture, upon the request of the Holders of Notes representing
more than 50% of the Voting Rights allocated to any Class of Notes, shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
(d) The Indenture Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Indenture Trustee's
economic self-interest for (i) serving as investment adviser, administrator,
shareholder, servicing agent, custodian or sub-custodian with respect to certain
of the Permitted Investments, (ii) using Affiliates to effect transactions in
certain Permitted Investments and (iii) effecting transactions in certain
Permitted Investments. Such compensation shall not be considered an amount that
is reimbursable or payable to the Indenture Trustee pursuant to Section 3.11 or
3.12.
Section 3.13. [RESERVED].
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Section 3.14. MAINTENANCE OF HAZARD INSURANCE AND ERRORS AND OMISSIONS AND
FIDELITY COVERAGE.
(a) The Master Servicer shall cause to be maintained for each Mortgage
Loan fire insurance with extended coverage on the related Mortgaged Property in
an amount which is at least equal to the lesser of the current principal balance
of such Mortgage Loan and the amount necessary to fully compensate for any
damage or loss to the improvements that are a part of such property on a
replacement cost basis, in each case in an amount not less than such amount as
is necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. The Master Servicer shall also cause to be
maintained fire insurance with extended coverage on each REO Property in an
amount which is at least equal to the lesser of (i) the maximum insurable value
of the improvements which are a part of such property and (ii) the outstanding
principal balance of the related Mortgage Loan at the time it became an REO
Property, plus accrued interest at the Mortgage Rate and related Servicing
Advances. The Master Servicer will comply in the performance of this Servicing
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Master Servicer under
any such policies (other than amounts to be applied to the restoration or repair
of the property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing loans held for its own account, subject to the terms and
conditions of the related Mortgage and Mortgage Note) shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.11, if received
in respect of a Mortgage Loan, or in the REO Account, subject to withdrawal
pursuant to Section 3.23, if received in respect of an REO Property. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating payments to Noteholders, be added to the unpaid
Stated Principal Balance of the related Mortgage Loan, notwithstanding that the
terms of such Mortgage Loan so permit. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor
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 or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards and flood insurance has been made available, the Master Servicer will
cause to be maintained a flood insurance policy in respect thereof. Such flood
insurance shall be in an amount equal to the lesser of (i) the unpaid principal
balance of the related Mortgage Loan and (ii) the maximum amount of such
insurance available for the related Mortgaged Property under the national flood
insurance program (assuming that the area in which such Mortgaged Property is
located is participating in such program).
In the event that the Master Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of A:X or better in Best's
Key Rating Guide (or such other rating that is comparable to such rating)
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 two sentences of this Section 3.14, it being understood and agreed that
such policy may contain a deductible clause, in which case the Master Servicer
shall, in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with the first two
sentences of this Section 3.14, and there shall have been one or more losses
which would have been covered by such policy, deposit to the Collection Account
from its own funds the amount not otherwise payable under the blanket policy
because of such deductible clause. In connection with its activities as
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administrator and servicer of the Mortgage Loans, the Master Servicer agrees to
prepare and present, on behalf of itself, the Indenture Trustee and Noteholders,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.
(b) The Master Servicer shall keep in force during the term of this
Servicing Agreement a policy or policies of insurance covering errors and
omissions for failure in the performance of the Master Servicer's obligations
under this Servicing Agreement, which policy or policies shall be in such form
and amount that would meet the requirements of Xxxxxx Xxx or Xxxxxxx Mac if it
were the purchaser of the Mortgage Loans, unless the Master Servicer has
obtained a waiver of such requirements from Xxxxxx Mae or Xxxxxxx Mac. The
Master Servicer shall also maintain a fidelity bond in the form and amount that
would meet the requirements of Xxxxxx Mae or Xxxxxxx Mac, unless the Master
Servicer has obtained a waiver of such requirements from Xxxxxx Mae or Xxxxxxx
Mac. The Master Servicer shall be deemed to have complied with this provision if
an Affiliate of the Master Servicer has such errors and omissions and fidelity
bond coverage and, by the terms of such insurance policy or fidelity bond, the
coverage afforded thereunder extends to the Master Servicer. Any such errors and
omissions policy and fidelity bond shall by its terms not be cancelable without
thirty days prior written notice to the Indenture Trustee. The Master Servicer
shall also cause each Sub-Servicer to maintain a policy of insurance covering
errors and omissions and a fidelity bond which would meet such requirements.
Section 3.15. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.
The Master Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Master Servicer shall not be required to take such action if in its sole
business judgment the Master Servicer believes it is not in the best interests
of the Trust Estate and shall not exercise any such rights if prohibited by law
from doing so. If the Master Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, or if any of the other
conditions set forth in the proviso to the preceding sentence apply, the Master
Servicer will enter into an assumption and modification agreement from or with
the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Master Servicer is also authorized 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
the Mortgagor and becomes liable under the Mortgage Note, provided that no such
substitution shall be effective unless such person satisfies the underwriting
criteria of the Originator and has a credit risk rating at least equal to that
of the original Mortgagor. In connection with any assumption or substitution,
the Master Servicer shall apply the Originator's underwriting standards and
follow such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Master Servicer shall not take or enter into any assumption
and modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy. Any fee collected by
the Master Servicer in respect of an
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assumption, modification or substitution of liability agreement shall be
retained by the Master Servicer as additional servicing compensation. In
connection with any such assumption, no material term of the Mortgage Note
(including but not limited to the related Mortgage Rate and the amount of the
Monthly Payment) may be amended or modified, except as otherwise required
pursuant to the terms thereof. The Master Servicer shall notify the Indenture
Trustee that any such substitution, modification or assumption agreement has
been completed by forwarding to the Indenture Trustee the executed original of
such substitution, modification or assumption agreement, which document 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.
Notwithstanding the foregoing paragraph or any other provision of this
Servicing Agreement, the Master Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or by the terms of the
Mortgage Note or any assumption which the Master Servicer may be restricted by
law from preventing, for any reason whatever. For purposes of this Section 3.15,
the term "assumption" is deemed to also include a sale (of the Mortgaged
Property) subject to the Mortgage that is not accompanied by an assumption or
substitution of liability agreement.
Section 3.16. REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) The Master Servicer shall exercise its discretion, consistent with
customary servicing procedures and the terms of this Servicing Agreement, with
respect to the enforcement and servicing of defaulted Mortgage Loans in such
manner as will maximize the receipt of principal and interest with respect
thereto, including but not limited to the modification of such Mortgage Loan, or
foreclosure upon the related Mortgaged Property and disposition thereof.
In furtherance of the foregoing, the Master Servicer shall use its best
efforts, consistent with Accepted Servicing Practices, to foreclose upon or
otherwise comparably convert the ownership of 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
pursuant to Section 3.07. The Master Servicer shall be responsible for all costs
and expenses incurred by it in any such proceedings; provided, however, that
such costs and expenses will be recoverable as Servicing Advances by the Master
Servicer as contemplated in Section 3.11 and Section 3.23. The foregoing is
subject to the provision that, in any case in which Mortgaged Property shall
have suffered damage from an Uninsured Cause, the Master Servicer shall not be
required to expend its own funds toward the restoration of such property unless
it shall determine in its discretion that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan after reimbursement to
itself for such expenses.
(b) Notwithstanding the foregoing provisions of this Section 3.16 or any
other provision of this Servicing Agreement, with respect to any Mortgage Loan
as to which the Master Servicer has received actual notice of, or has actual
knowledge of, the presence of any toxic or hazardous substance on the related
Mortgaged Property, the Master Servicer shall not, on behalf of the Issuer
either (i) obtain title to such Mortgaged Property as a result of or in lieu of
foreclosure or otherwise, or (ii) otherwise acquire possession of, or take any
other action with respect to, such Mortgaged Property, if, as a result of any
such action, the Indenture Trustee, the Trust Estate or the
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Noteholders would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Master Servicer has also previously
determined, based on its reasonable judgment and a report prepared by an
Independent Person who regularly conducts environmental audits using customary
industry standards, that:
(1) such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Trust Estate to take such actions as are necessary to
bring the Mortgaged Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for
which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such
action could be required, that it would be in the best economic interest
of the Trust Estate to take such actions with respect to the affected
Mortgaged Property.
The cost of the environmental audit report contemplated by this Section
3.16 shall be advanced by the Master Servicer, subject to the Master Servicer's
right to be reimbursed therefor from the Collection Account as provided in
Section 3.11(a)(ix), such right of reimbursement being prior to the rights of
Noteholders to receive any amount in the Collection Account received in respect
of the affected Mortgage Loan or other Mortgage Loans.
If the Master Servicer determines, as described above, that it is in the
best economic interest of the Trust Estate to take such actions as are necessary
to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Estate; provided that any amounts disbursed by
the Master Servicer pursuant to this Section 3.16(b) shall constitute Servicing
Advances, subject to Section 4.01(d). The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Master Servicer,
subject to the Master Servicer's right to be reimbursed therefor from the
Collection Account as provided in Section 3.11(a)(iii) and (a)(ix), such right
of reimbursement being prior to the rights of Noteholders to receive any amount
in the Collection Account received in respect of the affected Mortgage Loan or
other Mortgage Loans.
(c) The Master Servicer may at its option, on behalf of the Issuer,
purchase from the Issuer any Mortgage Loan or related REO Property that is 90
days or more delinquent, which the Master Servicer determines in good faith will
otherwise become subject to foreclosure proceedings (evidence of such
determination to be delivered in writing to the Indenture Trustee, in form and
substance satisfactory to the Indenture Trustee prior to purchase), at a price
equal to the Purchase Price; provided, however, that the Master Servicer shall
purchase any such Mortgage Loans or related REO Properties on the basis of
delinquency, purchasing the most delinquent Mortgage Loans
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or related REO Properties first. The Purchase Price for any Mortgage Loan or
related REO Property purchased hereunder shall be deposited in the Collection
Account, and the Indenture Trustee, upon receipt of written certification from
the Master Servicer of such deposit, shall release or cause to be released to
the Master Servicer the related Mortgage File and the Indenture Trustee shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as the Master Servicer shall furnish and as shall be necessary
to vest in the Master Servicer title to any Mortgage Loan or related REO
Property released pursuant hereto.
(d) Proceeds received in connection with any Final Recovery Determination,
as well as any recovery resulting from a partial collection of Insurance
Proceeds, Liquidation Proceeds or Subsequent Recoveries, in respect of any
Mortgage Loan, will be applied in the following order of priority: first, to
reimburse the Master Servicer or any Sub-Servicer for any related unreimbursed
Servicing Advances and P&I Advances, pursuant to Section 3.11(a)(ii) or
(a)(iii); second, to accrued and unpaid interest on the Mortgage Loan, to the
date of the Final Recovery Determination, or to the Due Date prior to the
Payment Date on which such amounts are to be distributed if not in connection
with a Final Recovery Determination; and third, as a recovery of principal of
the Mortgage Loan. If the amount of the recovery so allocated to interest is
less than the full amount of accrued and unpaid interest due on such Mortgage
Loan, the amount of such recovery will be allocated by the Master Servicer as
follows: first, to unpaid Servicing Fees; and second, to the balance of the
interest then due and owing. The portion of the recovery so allocated to unpaid
Servicing Fees shall be reimbursed to the Master Servicer or any Sub-Servicer
pursuant to Section 3.11(a)(iii).
(e) Furthermore, the Holder of the Certificates will have the option to
purchase, at any one time, 1.0% (and in any case, at least 5 Mortgage Loans) of
the Mortgage Loans, by aggregate Stated Principal Balance of the Mortgage Loans
as of such date, at a purchase price equal to the greater of (A) the aggregate
Purchase Price of such Mortgage Loans and (B) the aggregate fair market value of
such Mortgage Loans. The Mortgage Loans that may be purchased by the Holder of
the Trust Certificates pursuant to this paragraph will be selected by the Master
Servicer in its sole discretion. If at any time the Holder of the Certificates
exercises such option, it shall immediately notify or cause to be notified the
Indenture Trustee by a certification in the form of Exhibit B (which
certification shall include a statement to the effect that all amounts required
to be deposited in the Collection Account pursuant to Section 3.10 have been or
will be so deposited) of a Servicing Officer and shall request delivery to it of
the Mortgage File. Upon receipt of such certification and request, the Indenture
Trustee shall promptly release the related Mortgage Files to the Holder of the
Trust Certificates.
Section 3.17. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.
(a) Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
or cause to be notified the Indenture Trustee by a certification in the form of
Exhibit B (which certification shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the Collection Account pursuant to Section 3.10 have
been or will be so deposited) of a Servicing Officer and shall request delivery
to it of the Mortgage File. Upon receipt of such certification and request, the
Indenture Trustee shall promptly release the related Mortgage File to
24
the Master Servicer at no cost to the Indenture Trustee or the Trust Estate. No
expenses incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account or the Payment
Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, including, for this purpose, collection under any
insurance policy relating to the Mortgage Loans, the Indenture Trustee shall,
upon any request made by or on behalf of the Master Servicer and delivery to the
Indenture Trustee of a Request for Release in the form of Exhibit B, release the
related Mortgage File to the Master Servicer, and the Indenture Trustee shall,
at the direction of the Master Servicer, execute such documents as shall be
necessary to the prosecution of any such proceedings. Such Request for Release
shall obligate the Master Servicer to return each and every document previously
requested from the Mortgage File to the Indenture Trustee when the need therefor
by the Master Servicer no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Collection Account or the Mortgage File or such document has
been delivered to an attorney, or to a public trustee or other public official
as required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Master Servicer has delivered, or caused to be
delivered, to the Indenture Trustee an additional Request for Release certifying
as to such liquidation or action or proceedings. Upon the request of the
Indenture Trustee, the Master Servicer shall provide notice to the Indenture
Trustee of the name and address of the Person to which such Mortgage File or
such document was delivered and the purpose or purposes of such delivery. Upon
receipt of a certificate of a Servicing Officer stating that such Mortgage Loan
was liquidated and that all amounts received or to be received in connection
with such liquidation that are required to be deposited into the Collection
Account have been so deposited, or that such Mortgage Loan has become an REO
Property, any outstanding Requests for Release with respect to such Mortgage
Loan shall be released by the Indenture Trustee to the Master Servicer or its
designee.
(c) Upon written certification of a Servicing Officer, the Indenture
Trustee shall execute and deliver to the Master Servicer or the Sub-Servicer, as
the case may be, any court pleadings, requests for trustee's sale or other
documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such certification
shall include a request that such pleadings or documents be executed by the
Indenture Trustee and a statement as to the reason such documents or pleadings
are required and that the execution and delivery thereof by the Indenture
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.18. SERVICING COMPENSATION.
As compensation for the activities of the Master Servicer hereunder, the
Master Servicer shall be entitled to the Servicing Fee with respect to each
Mortgage Loan payable solely from payments of interest in respect of such
Mortgage Loan, subject to Section 3.24. In addition, the Master Servicer shall
be entitled to recover unpaid Servicing Fees out of Insurance Proceeds,
25
Liquidation Proceeds or Subsequent Recoveries to the extent permitted by Section
3.11(a)(iii) and out of amounts derived from the operation and sale of an REO
Property to the extent permitted by Section 3.23. Except as provided in Sections
3.26, the right to receive the Servicing Fee may not be transferred in whole or
in part except in connection with the transfer of all of the Master Servicer's
responsibilities and obligations under this Servicing Agreement; provided,
however, that the Master Servicer may pay from the Servicing Fee any amounts due
to a Sub-Servicer pursuant to a Sub-Servicing Agreement entered into under
Section 3.02.
Additional servicing compensation in the form of assumption or
modification fees, late payment charges, insufficient funds charges or otherwise
(subject to Section 3.24 and other than Prepayment Charges) shall be retained by
the Master Servicer only to the extent such fees or charges are received by the
Master Servicer. The Master Servicer shall also be entitled pursuant to Section
3.11(a)(iv) to withdraw from the Collection Account and pursuant to Section
3.23(b) to withdraw from any REO Account, as additional servicing compensation,
interest or other income earned on deposits therein, subject to Section 3.12 and
Section 3.24. The Master Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder (including premiums
for the insurance required by Section 3.14, to the extent such premiums are not
paid by the related Mortgagors or by a Sub-Servicer, servicing compensation of
each Sub-Servicer, and to the extent provided herein in Section 8.05, the
expenses of the Indenture Trustee) and shall not be entitled to reimbursement
therefor except as specifically provided herein.
Section 3.19. REPORTS TO THE INDENTURE TRUSTEE AND OTHERS; COLLECTION
ACCOUNT STATEMENTS.
Not later than twenty days after each Payment Date, the Master Servicer
shall forward to the Indenture Trustee (upon the Indenture Trustee's request)
and the Depositor the most current available bank statement for the Collection
Account. Copies of such statement shall be provided by the Indenture Trustee to
any Noteholder and to any Person identified to the Indenture Trustee as a
prospective transferee of a Note, upon request at the expense of the requesting
party, provided such statement is delivered by the Master Servicer to the
Indenture Trustee.
In addition, on each Payment Date, the Master Servicer shall forward to
the Rating Agencies and the Indenture Trustee a report setting forth the
percentage of Mortgage Loans that are 30 or more days delinquent, in
foreclosure, have been converted to REO Properties or have been discharged by
reason of bankruptcy.
Section 3.20. STATEMENT AS TO COMPLIANCE.
Not later than March 15th of each calendar year commencing in 2005, the
Master Servicer will deliver to the Indenture Trustee and the Depositor an
Officers' Certificate (upon which the Indenture Trustee can conclusively rely in
connection with its obligations under Section 7.05 of the Indenture)
substantially in the form of Exhibit D attached hereto 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 Servicing
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Master Servicer has
fulfilled all of its obligations under this Servicing Agreement throughout such
year, or, if there has
26
been a default in the fulfillment of any such obligation, specifying each such
default known to such officer and the nature and status thereof. Copies of any
such statement shall be provided by the Indenture Trustee to any Noteholder and
to any Person identified to the Indenture Trustee as a prospective transferee of
a Note, upon request at the expense of the requesting party, provided such
statement is delivered by the Master Servicer to the Indenture Trustee.
Section 3.21. INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING REPORT.
Not later than March 15th of each calendar year commencing in 2005, the
Master Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Master Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer which includes an
assertion that the Master Servicer has complied with certain minimum residential
mortgage loan servicing standards, identified in the Uniform Single Attestation
Program for Mortgage Bankers established by the Mortgage Bankers Association of
America, with respect to the servicing of residential mortgage loans during the
most recently completed calendar year and (ii) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that may be appropriate. In rendering its report such firm may rely, as to
matters relating to the direct servicing of residential mortgage loans by Sub-
Servicers, upon comparable reports of firms of independent certified public
accountants rendered on the basis of examinations conducted in accordance with
the same standards (rendered within one year of such report) with respect to
those Sub-Servicers. Immediately upon receipt of such report, the Master
Servicer shall, at its own expense, furnish a copy of such report to the
Indenture Trustee and each Rating Agency. Copies of such statement shall be
provided by the Indenture Trustee to any Noteholder upon request, provided that
such statement is delivered by the Master Servicer to the Indenture Trustee.
Section 3.22. ACCESS TO CERTAIN DOCUMENTATION.
The Master Servicer shall provide to the Office of Thrift Supervision, the
FDIC, and any other federal or state banking or insurance regulatory authority
that may exercise authority over any Noteholder or Note Owner, access to the
documentation in the Master Servicer's possession regarding the Mortgage Loans
required by applicable laws and regulations. Such access shall be afforded
without charge, but only upon reasonable request and during normal business
hours at the offices of the Master Servicer designated by it. In addition,
access to the documentation in the Master Servicer's possession regarding the
Mortgage Loans will be provided to any Noteholder or Note Owner, the Indenture
Trustee, the Owner Trustee and to any Person identified to the Master Servicer
as a prospective transferee of a Note; provided, however, that providing access
to such Person will not violate any applicable laws, upon reasonable request
during normal business hours at the offices of the Master Servicer designated by
it at the expense of the Person requesting such access.
Section 3.23. TITLE, MANAGEMENT AND DISPOSITION OF REO PROPERTY.
(a) The deed or certificate of sale of any REO Property shall be taken in
the name of the Indenture Trustee, or its nominee, in trust for the benefit of
the Noteholders.
27
(b) The Master Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall establish and maintain, or cause
to be established and maintained, with respect to REO Properties, an account
held in trust for the Indenture Trustee for the benefit of the Noteholders (the
"REO Account"), which shall be an Eligible Account. The Master Servicer shall be
permitted to allow the Collection Account to serve as the REO Account, subject
to separate ledgers for each REO Property. The Master Servicer shall be entitled
to retain or withdraw any interest income paid on funds deposited in the REO
Account.
(c) The Master Servicer shall have the sole discretion to determine
whether an immediate sale of an REO Property or continued management of such REO
Property is in the best interests of the Noteholders. In furtherance of the
foregoing, the Master Servicer shall have full power and authority, subject only
to the specific requirements and prohibitions of this Servicing Agreement, to do
any and all things in connection with any REO Property as are consistent with
the manner in which the Master Servicer manages and operates similar property
owned by the Master Servicer or any of its Affiliates, all on such terms and for
such period as the Master Servicer deems to be in the best interests of
Noteholders. In connection therewith, the Master Servicer shall deposit, or
cause to be deposited in the clearing account in which it customarily deposits
payments and collections on mortgage loans in connection with its mortgage loan
servicing activities on a daily basis, and in no event more than one Business
Day after the Master Servicer's receipt thereof, and shall thereafter deposit in
the REO Account, in no event more than two Business Days after the Master
Servicer's receipt thereof, all revenues received by it with respect to an REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of such REO Property including, without limitation:
(i) all insurance premiums due and payable in respect of such REO
Property;
(ii) all real estate taxes and assessments in respect of such REO
Property that may result in the imposition of a lien thereon; and
(iii) all costs and expenses necessary to maintain such REO
Property.
To the extent that amounts on deposit in the REO Account with respect to
an REO Property are insufficient for the purposes set forth in clauses (i)
through (iii) above with respect to such REO Property, the Master Servicer shall
advance from its own funds such amount as is necessary for such purposes if, but
only if, the Master Servicer would make such advances if the Master Servicer
owned the REO Property and if in the Master Servicer's judgment, the payment of
such amounts will be recoverable from the rental or sale of the REO Property.
The Master Servicer may contract with any Independent for the operation
and management of any REO Property, provided that:
(i) the terms and conditions of any such contract shall not be
inconsistent herewith;
28
(ii) any such contract shall require, or shall be administered to
require, that the Independent contractor pay all costs and expenses
incurred in connection with the operation and management of such REO
Property, including those listed above and remit all related revenues (net
of such costs and expenses) to the Master Servicer as soon as practicable,
but in no event later than thirty days following the receipt thereof by
such Independent contractor;
(iii) none of the provisions of this Section 3.23(c) relating to any
such contract or to actions taken through any such Independent contractor
shall be deemed to relieve the Master Servicer of any of its duties and
obligations to the Indenture Trustee on behalf of the Noteholders with
respect to the operation and management of any such REO Property; and
(iv) the Master Servicer shall be obligated with respect thereto to
the same extent as if it alone were performing all duties and obligations
in connection with the operation and management of such REO Property.
The Master Servicer shall be entitled to enter into any agreement with any
Independent contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Master Servicer by such
Independent contractor, and nothing in this Servicing Agreement shall be deemed
to limit or modify such indemnification. The Master Servicer shall be solely
liable for all fees owed by it to any such Independent contractor, irrespective
of whether the Master Servicer's compensation pursuant to Section 3.18 is
sufficient to pay such fees; provided, however, that to the extent that any
payments made by such Independent contractor would constitute Servicing Advances
if made by the Master Servicer, such amounts shall be reimbursable as Servicing
Advances made by the Master Servicer.
(d) In addition to the withdrawals permitted under Section 3.23(c), the
Master Servicer may from time to time make withdrawals from the REO Account for
any REO Property: (i) to pay itself or any Sub-Servicer unpaid Servicing Fees in
respect of the related Mortgage Loan; and (ii) to reimburse itself or any
Sub-Servicer for unreimbursed Servicing Advances and P&I Advances made in
respect of such REO Property or the related Mortgage Loan. On the Master
Servicer Remittance Date, the Master Servicer shall withdraw from each REO
Account maintained by it and deposit into the Payment Account in accordance with
Section 3.10(d)(ii), for payment on the related Payment Date in accordance with
Section 3.05 of the Indenture, the income from the related REO Property received
during the prior calendar month, net of any withdrawals made pursuant to Section
3.23(c) or this Section 3.23(d).
(e) Subject to the time constraints set forth in Section 3.23(a), each REO
Disposition shall be carried out by the Master Servicer at such price and upon
such terms and conditions as the Master Servicer shall deem necessary or
advisable, as shall be normal and usual in its Accepted Servicing Practices.
(f) The proceeds from the REO Disposition, net of any amount required by
law to be remitted to the Mortgagor under the related Mortgage Loan and net of
any payment or reimbursement to the Master Servicer or any Sub-Servicer as
provided above, shall be deposited in the Payment Account in accordance with
Section 3.10(d)(ii) on the Master Servicer Remittance Date
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in the month following the receipt thereof for payment on the related Payment
Date in accordance with Section 3.05 of the Indenture. Any REO Disposition shall
be for cash only.
Section 3.24. OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF PREPAYMENT
INTEREST SHORTFALLS.
The Master Servicer shall deliver to the Indenture Trustee for deposit
into the Payment Account by 1:00 p.m. New York time on the Master Servicer
Remittance Date from its own funds an amount equal to the lesser of (i) the
aggregate of the Prepayment Interest Shortfalls for the related Payment Date
resulting from full or partial Principal Prepayments during the related
Prepayment Period and (ii) the aggregate Servicing Fee for the related
Prepayment Period. Any amounts paid by the Master Servicer pursuant to this
Section 3.24 shall not be reimbursed by the Trust Estate.
Section 3.25. OBLIGATIONS OF THE MASTER SERVICER IN RESPECT OF MORTGAGE
RATES AND MONTHLY PAYMENTS.
In the event that a shortfall in any collection on or liability with
respect to any Mortgage Loan results from or is attributable to adjustments to
Mortgage Rates, Monthly Payments or Stated Principal Balances that were made by
the Master Servicer in a manner not consistent with the terms of the related
Mortgage Note and this Servicing Agreement, the Master Servicer, upon discovery
or receipt of notice thereof, immediately shall deliver to the Indenture Trustee
for deposit in the Payment Account from its own funds the amount of any such
shortfall and shall indemnify and hold harmless the Trust Estate, the Indenture
Trustee, the Depositor and any successor master servicer in respect of any such
liability. Such indemnities shall survive the termination or discharge of this
Servicing Agreement. Notwithstanding the foregoing, this Section 3.25 shall not
limit the ability of the Master Servicer to seek recovery of any such amounts
from the related Mortgagor under the terms of the related Mortgage Note, as
permitted by law.
Section 3.26. ADVANCE FACILITY.
(a) Either (i) the Master Servicer or (ii) the Indenture Trustee, on
behalf of the Trust Estate, with the consent of the Master Servicer, is hereby
authorized to enter into a facility with any Person which provides that such
Person (an "Advancing Person") may fund P&I Advances and/or Servicing Advances
to the Trust Estate under this Servicing Agreement, although no such facility
shall reduce or otherwise affect the Master Servicer's obligation to fund such
P&I Advances and/or Servicing Advances. If the Master Servicer enters into such
an Advance Facility pursuant to this Section 3.26, upon reasonable request of
the Advancing Person, the Indenture Trustee shall execute a letter of
acknowledgment, confirming its receipt of notice of the existence of such
Advance Facility. If the Indenture Trustee enters into such an Advance Facility
pursuant to this Section 3.26, the Master Servicer shall also be a party to such
Advance Facility. To the extent that an Advancing Person funds any P&I Advance
or any Servicing Advance and the Master Servicer provides the Indenture Trustee
with an Officers' Certificate that such Advancing Person is entitled to
reimbursement, such Advancing Person shall be entitled to receive reimbursement
pursuant to this Servicing Agreement for such amount to the extent provided in
Section 3.26(b). Such Officers' Certificate must specify the amount of the
reimbursement, the Section of this Servicing Agreement
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that permits the applicable P&I Advance or Servicing Advance to be reimbursed
and the section(s) of the Advance Facility that entitle the Advancing Person to
request reimbursement from the Indenture Trustee, rather than the Master
Servicer or proof of an Event of Default under the Advance Facility. The
Indenture Trustee shall have no duty or liability with respect to any
calculation of any reimbursement to be paid to an Advancing Person and shall be
entitled to rely without independent investigation on the Advancing Person's
notice provided pursuant to this Section 3.26. An Advancing Person whose
obligations hereunder are limited to the funding of P&I Advances and/or
Servicing Advances shall not be required to meet the qualifications of the
Master Servicer or a Sub- Servicer pursuant to Section 3.02 hereof and will not
be deemed to be a Sub-Servicer under this Servicing Agreement.
(b) If an advancing facility is entered into, then the Master Servicer
shall not be permitted to reimburse itself therefor under Section 3.11(a)(ii),
Section 3.11(a)(iii) and Section 3.11(a)(vi) prior to the remittance to the
Trust Estate, but instead the Master Servicer shall remit such amounts in
accordance with the documentation establishing the Advance Facility to such
Advancing Person or to a trustee, agent or custodian (an "Advance Facility
Trustee") designated by such Advancing Person. The Indenture Trustee is hereby
authorized to pay to the Advancing Person, reimbursements for P&I Advances and
Servicing Advances from the Payment Account to the same extent the Master
Servicer would have been permitted to reimburse itself for such P&I Advances
and/or Servicing Advances in accordance with 3.11(a)(ii), Section 3.11(a)(iii)
and Section 3.11(a)(vi), as the case may be, had the Master Servicer itself
funded such P&I Advance or Servicing Advance. The Indenture Trustee is hereby
authorized to pay directly to the Advancing Person such portion of the Servicing
Fee as the parties to any advancing facility agree in writing.
(c) All P&I Advances and Servicing Advances made pursuant to the terms of
this Servicing Agreement shall be deemed made and shall be reimbursed on a
"first in-first out" (FIFO) basis.
(d) Any amendment to this Section 3.26 or to any other provision of this
Servicing Agreement that may be necessary or appropriate to effect the terms of
an Advance Facility as described generally in this Section 3.26, including
amendments to add provisions relating to a successor Master Servicer, may be
entered into by the Indenture Trustee and the Master Servicer without the
consent of any Noteholder, notwithstanding anything to the contrary in this
Servicing Agreement.
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ARTICLE IV
SERVICING CERTIFICATE
Section 4.01. REMITTANCE REPORTS AND P&I ADVANCES. (a) On the Business Day
following each Determination Date, the Master Servicer shall deliver to the
Indenture Trustee by telecopy (or by such other means as the Master Servicer or
the Indenture Trustee, as the case may be, may agree from time to time) a
Remittance Report with respect to the related Payment Date. On the same date,
the Master Servicer shall electronically transmit (in a format acceptable to the
Indenture Trustee), a data file containing the information set forth in such
Remittance Report with respect to the related Payment Date or if electronic
transmission is not available, the Master Servicer shall forward to the
Indenture Trustee by overnight mail a computer readable magnetic tape. Such
Remittance Report will include (i) the amount of P&I Advances to be made by the
Master Servicer in respect of the related Payment Date, the aggregate amount of
P&I Advances outstanding after giving effect to such P&I Advances, and the
aggregate amount of Nonrecoverable P&I Advances in respect of such Payment Date
and (ii) such other information with respect to the Mortgage Loans as the
Indenture Trustee may reasonably require to perform the calculations necessary
to make the payments contemplated by Section 3.05 of the Indenture and to
prepare the statements to Noteholders contemplated by Section 3.26 of the
Indenture. The Indenture Trustee shall not be responsible to recompute,
recalculate or verify any information provided to it by the Master Servicer.
(b) The amount of P&I Advances to be made by the Master Servicer for any
Payment Date shall equal, subject to Section 4.01(d), the sum of, (i) the
aggregate amount of Monthly Payments (with each interest portion thereof net of
the related Servicing Fee), due on the related Due Date in respect of the
Mortgage Loans, which Monthly Payments were delinquent as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Prepayment Period and as to which REO Property an REO Disposition did not occur
during the related Prepayment Period, an amount equal to the excess, if any, of
the REO Imputed Interest on such REO Property for the most recently ended
calendar month, over the net income from such REO Property transferred to the
Payment Account pursuant to Section 3.23 for payment on such Payment Date;
provided, however, that the Master Servicer shall not be required to make P&I
Advances with respect to Relief Act Interest Shortfalls or Prepayment Interest
Shortfalls in excess of their respective obligations under Section 3.24.
By 1:00 p.m. New York time on the Master Servicer Remittance Date, the
Master Servicer shall remit in immediately available funds to the Indenture
Trustee for deposit in the Payment Account an amount equal to the aggregate
amount of P&I Advances, if any, to be made in respect of the Mortgage Loans and
REO Properties for the related Payment Date either (i) from its own funds or
(ii) from the Collection Account, to the extent of funds held therein for future
payment (in which case it will cause to be made an appropriate entry in the
records of the Collection Account that amounts held for future payment have
been, as permitted by this Section 4.01, used by the Master Servicer in
discharge of any such P&I Advance) or (iii) in the form of any combination of
(i) and (ii) aggregating the total amount of P&I Advances to be made by the
Master Servicer with respect to the Mortgage Loans and REO Properties. Any
amounts held for future payment and so used shall be appropriately reflected in
the Master Servicer's records and replaced by the Master
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Servicer by deposit in the Collection Account on or before any future Master
Servicer Remittance Date to the extent that the Available Payment Amount for the
related Payment Date (determined without regard to P&I Advances to be made on
the Master Servicer Remittance Date) shall be less than the total amount that
would be paid to the Classes of Noteholders pursuant to Section 3.26 of the
Indenture on such Payment Date if such amounts held for future payments had not
been so used to make P&I Advances. The Indenture Trustee will provide notice to
the Master Servicer by telecopy by the close of business on the Business Day
prior to the Payment Date (so long as the Indenture Trustee receives the
required remittance from the Master Servicer) in the event that the amount
remitted by the Master Servicer to the Indenture Trustee on such date is less
than the amount required to be remitted by the Master Servicer as set forth in
the Remittance Report for the related Payment Date.
(c) The obligation of the Master Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Servicing Agreement but
subject to (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from the Trust Estate pursuant to any applicable provision
of this Servicing Agreement, except as otherwise provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance or
Servicing Advance shall be required to be made hereunder by the Master Servicer
if such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance, respectively.
The determination by the Master Servicer that it has made a Nonrecoverable P&I
Advance or a Nonrecoverable Servicing Advance or that any proposed P&I Advance
or Servicing Advance, if made, would constitute a Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officers' Certificate of the Master Servicer delivered to the Depositor and the
Indenture Trustee.
Section 4.02. EXCHANGE ACT REPORTING.
(a) The Indenture Trustee and the Master Servicer shall reasonably
cooperate with the Issuer and the Depositor in connection with the Trust's
satisfying the reporting requirements under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). The Indenture Trustee shall prepare on behalf
of the Trust any Forms 8-K and 10-K customary for similar securities as required
by the Exchange Act and the Rules and Regulations of the Securities and Exchange
Commission thereunder, and the Depositor shall sign (or shall cause another
entity acceptable to the Securities and Exchange Commission to sign) and the
Indenture Trustee shall file (via the Securities and Exchange Commission's
Electronic Data Gathering and Retrieval System) such forms on behalf of the
Depositor or the Issuer (or such other entity). The Depositor and the Issuer
hereby grant to the Indenture Trustee a limited power of attorney to execute any
Form 8-K and file each such document on behalf of the Depositor and the Issuer.
Such power of attorney shall continue until the earlier of (i) receipt by the
Indenture Trustee from the Depositor and the Issuer of written termination of
such power of attorney and (ii) the termination of the Trust. Notwithstanding
anything herein to the contrary, the Depositor, and not the Indenture Trustee,
shall be responsible for executing each Form 10-K filed on behalf of the Trust.
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(b) Each Form 8-K shall be filed by the Indenture Trustee within 15 days
after each Payment Date, with a copy of the statement to the Noteholders for
such Payment Date as an exhibit thereto. Prior to March 30th of each year (or
such earlier date as may be required by the Exchange Act and the Rules and
Regulations of the Securities and Exchange Commission), the Indenture Trustee
shall file a Form 10-K, in substance as required by applicable law or applicable
Securities and Exchange Commission staff's interpretations. Such Form 10-K shall
include as exhibits the Master Servicer's annual statement of compliance
described under Section 3.20 and the accountant's report described under Section
3.21, in each case to the extent they have been timely delivered to the
Indenture Trustee. If they are not so timely delivered, the Indenture Trustee
shall file an amended Form 10-K including such documents as exhibits reasonably
promptly after they are delivered to the Indenture Trustee. The Indenture
Trustee shall have no liability with respect to any failure to properly prepare
or file such periodic reports resulting from or relating to the Indenture
Trustee's inability or failure to obtain any information not resulting from its
own negligence or willful misconduct. The Form 10-K shall also include a
certification in the form attached hereto as Exhibit C-1 (the "Certification"),
which shall be signed by the senior officer of the Depositor in charge of
securitization.
(c) In addition, the Indenture Trustee shall sign a certification (in the
form attached hereto as Exhibit C-2) for the benefit of the Depositor and its
officers, directors and Affiliates regarding certain aspects of the
Certification (provided, however, that the Indenture Trustee shall not undertake
an analysis of the accountant's report attached as an exhibit to the Form 10-K).
The Indenture Trustee's certification shall be delivered to the Depositor by no
later than March 19th of each year (or if such day is not a Business Day, the
immediately preceding Business Day) and the Depositor shall deliver the
Certification to the Indenture Trustee for filing no later than March 20th of
each year (or if such day is not a Business Day, the immediately preceding
Business Day).
In addition, the Indenture 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 Indenture Trustee's obligations under this Section
4.02(c) or the Indenture Trustee's negligence, bad faith or willful misconduct
in connection therewith. The Depositor shall indemnify and hold harmless the
Indenture 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 Depositor's obligations under this Section 4.02
or the Depositor'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 Indenture Trustee, as
applicable, then the other party, in connection with a breach of its respective
obligations under this Section 4.02 with respect to the Depositor or Section
4.02(c) with respect to the Indenture Trustee 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 party 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 Indenture Trustee on the other.
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(d) Upon any filing with the Securities and Exchange Commission, the
Indenture Trustee shall promptly deliver to the Depositor a copy of any executed
report, statement or information.
(e) Prior to January 30 of the first year in which the Indenture Trustee
is able to do so under applicable law, the Indenture Trustee shall file a Form
15 Suspension Notification with respect to the Trust.
(f) To the extent that, following the Closing Date, the Depositor
certifies to the Indenture Trustee that reports and certifications differing
from those required under this Section 4.06 comply with the reporting
requirements under the Exchange Act, the Indenture Trustee hereby agrees that it
will reasonably cooperate to amend the provisions of this Section 4.02 (in
accordance with Section 7.01) in order to comply with such amended reporting
requirements and such amendment of this Section 4.02. Any such amendment may
result in the reduction of the reports filed by the Depositor under the Exchange
Act. Notwithstanding the foregoing, the Indenture Trustee shall not be obligated
to enter into any amendment pursuant to this Section that adversely affects its
rights, protections, obligations and immunities under this Servicing Agreement.
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ARTICLE V
THE MASTER SERVICER
Section 5.01. LIABILITY OF THE MASTER SERVICER. The Master Servicer shall
be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Master Servicer herein.
Section 5.02. MERGER OR CONSOLIDATION OF OR ASSUMPTION OF THE OBLIGATIONS
OF THE MASTER SERVICER. Subject to the following paragraph, the Master Servicer
will keep in full effect its existence, rights and franchises as a corporation
under the laws of the jurisdiction of its incorporation. The Master Servicer
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 Servicing
Agreement, the Certificates or any of the Mortgage Loans and to perform its
respective duties under this Servicing Agreement.
The Master Servicer may be merged or consolidated with or into any Person,
or transfer all or substantially all of its assets to any Person, in which case
any Person resulting from any merger or consolidation to which the Master
Servicer shall be a party, or any Person succeeding to the business of the
Master Servicer, shall be the successor of the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person to the Master Servicer
shall be qualified to service mortgage loans on behalf of Xxxxxx Xxx or Xxxxxxx
Mac; and PROVIDED, FURTHER, that each Rating Agency's rating of the Notes in
effect immediately prior to such merger or consolidation will not be qualified,
reduced, or withdrawn as a result thereof (as evidenced by a letter to such
effect from each Rating Agency).
Section 5.03. LIMITATION ON LIABILITY OF THE MASTER SERVICER AND OTHERS.
None of the Master Servicer or any of the directors, officers, employees or
agents of the Master Servicer shall be under any liability to the Issuer, the
Depositor, the Owner Trustee, the Indenture Trustee or the Noteholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Servicing Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Master Servicer or any such
person against any breach of warranties, representations or covenants made
herein, or against any specific liability imposed on the Master Servicer
pursuant hereto, or against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or negligence in the performance of
duties or by reason of reckless disregard of obligations and duties hereunder.
The Master Servicer and any director, officer, employee or agent of the Master
Servicer may rely in good faith on any document of any kind which, PRIMA FACIE,
is properly executed and submitted by any Person respecting any matters arising
hereunder. The Master Servicer and any director, officer, employee or agent of
the Master Servicer shall be indemnified and held harmless by the Trust against
any loss, liability or expense incurred in connection with any legal action
relating to this Servicing Agreement or the Notes, other than any loss,
liability or expense relating to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Servicing Agreement) or any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
36
hereunder. The Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action unless such action is related to its
respective duties under this Servicing Agreement; provided, however, that the
Master Servicer may in its discretion undertake any such action which it may
deem necessary or desirable with respect to this Servicing Agreement and the
rights and duties of the parties hereto and the interests of the Noteholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom (except any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or negligence in the performance of
duties hereunder or by reason of reckless disregard of obligations and duties
hereunder) shall be expenses, costs and liabilities of the Trust, and the Master
Servicer shall be entitled to be reimbursed therefor from the Collection Account
as and to the extent provided in Section 3.11, any such right of reimbursement
being prior to the rights of the Noteholders to receive any amount in the
Collection Account.
Section 5.04. MASTER SERVICER NOT TO RESIGN. The Master Servicer shall not
resign from the obligations and duties hereby imposed on it except upon
determination that its duties hereunder are no longer permissible under
applicable law. Any such determination pursuant to the preceding sentence
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect obtained at the expense of the Master Servicer
and delivered to the Indenture Trustee. No resignation of the Master Servicer
shall become effective until the Indenture Trustee or a successor servicer shall
have assumed the Master Servicer's responsibilities, duties, liabilities (other
than those liabilities arising prior to the appointment of such successor) and
obligations under this Servicing Agreement.
Except as expressly provided herein, the Master Servicer shall not assign
or transfer any of its rights, benefits or privileges hereunder to any other
Person, or delegate to or subcontract with, or authorize or appoint any other
Person to perform any of the duties, covenants or obligations to be performed by
the Master Servicer hereunder. The foregoing prohibition on assignment shall not
prohibit the Master Servicer from designating a Sub-Servicer as payee of any
indemnification amount payable to the Master Servicer hereunder; provided,
however, that as provided in Section 3.06 hereof, no Sub-Servicer shall be a
third-party beneficiary hereunder and the parties hereto shall not be required
to recognize any Sub-Servicer as an indemnitee under this Servicing Agreement.
If, pursuant to any provision hereof, the duties of the Master Servicer are
transferred to a successor master servicer, the entire amount of the Servicing
Fee and other compensation payable to the Master Servicer pursuant hereto shall
thereafter be payable to such successor master servicer.
Section 5.05. DELEGATION OF DUTIES. In the ordinary course of business,
the Master Servicer at any time may delegate any of its duties hereunder to any
Person, including any of its Affiliates, who agrees to conduct such duties in
accordance with standards comparable to those with which the Master Servicer
complies pursuant to Section 3.01. Such delegation shall not relieve the Master
Servicer of its liabilities and responsibilities with respect to such duties and
shall not constitute a resignation within the meaning of Section 5.04.
Section 5.06. RIGHTS OF THE ISSUER IN RESPECT OF THE MASTER SERVICER. The
Master Servicer shall afford (and any Sub-Servicing Agreement shall provide that
each Sub-Servicer shall afford) the Issuer and the Indenture Trustee, upon
reasonable notice, during normal business hours, access to all records
maintained by the Master Servicer (and any such Sub-Servicer) in respect of the
37
Master Servicer's rights and obligations hereunder and access to officers of the
Master Servicer (and those of any such Sub-Servicer) responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Issuer and
the Indenture Trustee its (and any such Sub-Servicer's) most recent financial
statements and such other information relating to the Master Servicer's capacity
to perform its obligations under this Servicing Agreement as it possesses (and
that any such Sub-Servicer possesses). To the extent such information is not
otherwise available to the public, the Issuer and the Indenture Trustee shall
not disseminate any information obtained pursuant to the preceding two sentences
without the Master Servicer's written consent, except as required pursuant to
the Basic Documents or to the extent that it is appropriate to do so (i) in
working with legal counsel, auditors, taxing authorities or other governmental
agencies or (ii) pursuant to any law, rule, regulation, order, judgment, writ,
injunction or decree of any court or governmental authority having jurisdiction
over the Depositor, the Indenture Trustee or the Trust Estate, and in any case,
the Issuer or the Indenture Trustee as the case may be, (iii) disclosure of any
and all information that is or becomes publicly known, or information obtained
by the Indenture Trustee from sources other than the Issuer or the Master
Servicer, (iv) disclosure as required pursuant to this Servicing Agreement or
(v) disclosure of any and all information (A) in any preliminary or final
offering circular, registration statement or contract or other document
pertaining to the transactions contemplated by the Basic Documents approved in
advance by the Issuer or the Master Servicer or (B) to any affiliate,
independent or internal auditor, agent, employee or attorney of the Indenture
Trustee having a need to know the same, provided that the Indenture Trustee
advises such recipient of the confidential nature of the information being
disclosed, shall use its best efforts to assure the confidentiality of any such
disseminated non-public information. The Issuer may, but is not obligated to,
enforce the obligations of the Master Servicer under this Servicing Agreement
and may, but is not obligated to, perform, or cause a designee to perform, any
defaulted obligation of the Master Servicer under this Servicing Agreement or
exercise the rights of the Master Servicer under this Servicing Agreement;
provided that the Master Servicer shall not be relieved of any of its
obligations under this Servicing Agreement by virtue of such performance by the
Issuer or its designee. The Issuer shall not have any responsibility or
liability for any action or failure to act by the Master Servicer and is not
obligated to supervise the performance of the Master Servicer under this
Servicing Agreement or otherwise.
Section 5.07. INDEMNIFICATION. (a) The Master Servicer agrees to indemnify
the Indenture Trustee and the Owner Trustee for, and to hold the Indenture
Trustee and the Owner Trustee, as the case may be, harmless against, any claim,
tax, penalty, loss, liability or expense of any kind whatsoever, incurred
without negligence (gross negligence in the case of the Owner Trustee) or
willful misconduct on its part, arising out of, or in connection with, the
failure by the Master Servicer to perform its duties in compliance with this
Servicing Agreement, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against any claim in connection
with the exercise or performance of any of its powers or duties under any Basic
Document, provided that:
(i) with respect to any such claim, the Indenture Trustee or Owner
Trustee, as the case may be, shall have given the Master Servicer written
notice thereof as soon as practicable after a Responsible Officer of the
Indenture Trustee or Owner Trustee, as the case may be, shall have actual
knowledge thereof, it being understood that failure to give such notice
shall not relieve the Master Servicer of its indemnification obligations
hereunder;
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(ii) while maintaining control over its own defense, the Depositor,
the Indenture Trustee or Owner Trustee, as the case may be, shall
cooperate and consult fully with the Master Servicer in preparing such
defense; and
(iii) notwithstanding anything in this Servicing Agreement to the
contrary, the Master Servicer shall not be liable for settlement of any
claim by the Indenture Trustee or the Owner Trustee, as the case may be,
entered into without the prior consent of the Master Servicer, which
consent shall not be unreasonably withheld.
To the extent that the Indenture Trustee is not indemnified by the Master
Servicer hereunder, it shall be indemnified by the Issuer pursuant to Section
6.07 of the Indenture.
(b) The Master Servicer agrees to indemnify the Indemnified Parties for,
and to hold the Indemnified Parties, harmless against, any Expenses which may at
any time be imposed on, incurred by, or asserted against any Indemnified Party
in any way relating to or arising out of this Agreement, any other Basic
Document, the Trust Estate, the administration of the Trust Estate or the action
or inaction of such Indemnified Party, except to the extent such Expense is (i)
caused by such Indemnified Party's own willful misconduct, gross negligence or
bad faith or grossly negligent failure to act or (ii) incurred as a result of
the inaccuracy of any representation or warranty contained in Section 6.03 of
the Trust Agreement expressly made by the Owner Trustee, solely with respect to
the Owner Trustee.
(c) No termination of this Servicing Agreement or the resignation or
removal of the Owner Trustee or the Indenture Trustee shall affect the
obligations created by this Section 5.06 of the Master Servicer to indemnify the
Indenture Trustee and the Owner Trustee under the conditions and to the extent
set forth herein. This section shall survive the termination of this Servicing
Agreement and the resignation or removal of the Master Servicer. Any amounts to
be paid by the Master Servicer pursuant to this Subsection may not be paid from
the Trust Estate.
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ARTICLE VI
DEFAULT
Section 6.01. MASTER SERVICER EVENTS OF DEFAULT.
(a) "Master Servicer Event of Default," wherever used herein, means any
one of the following events:
(i) any failure by the Master Servicer to remit to the Indenture
Trustee for payment to the Noteholders any payment (other than a P&I
Advance required to be made from its own funds on any Master Servicer
Remittance Date pursuant to Section 4.03) required to be made under the
terms of the Notes and this Servicing Agreement which continues unremedied
for a period of one Business Day after the date upon which written notice
of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Depositor or the Indenture Trustee (in which
case notice shall be provided by telecopy), or to the Master Servicer, the
Depositor and the Indenture Trustee by the Holders of not less than 25% of
the aggregate Note Balances of the Notes; or
(ii) any failure on the part of the Master Servicer duly 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 Servicing
Agreement, or the breach by the Master Servicer of any representation and
warranty contained in Section 2.01, which continues unremedied for a
period of 30 days (or if such failure or breach cannot be remedied within
30 days, then such remedy shall have been commenced within 30 days and
diligently pursued thereafter; provided, however, that in no event shall
such failure or breach be allowed to exist for a period of greater than 90
days) after the earlier of (i) the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Master Servicer by the Depositor, the Indenture Trustee or to the Master
Servicer, the Depositor and the Indenture Trustee by the Holders of Notes
entitled to at least 25% of the Voting Rights and (ii) actual knowledge of
such failure by a Servicing Officer of the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under
any present or future federal or state bankruptcy, insolvency or similar
law or the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceeding, 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 90 days; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of or
relating to it or of or relating to all or substantially all of its
property; or
40
(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 any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(vi) any failure by the Master Servicer of the Master Servicer
Termination Test; or
(vii) any failure of the Master Servicer to make any P&I Advance on
any Master Servicer Remittance Date required to be made from its own funds
pursuant to Section 4.01 which continues unremedied until 3:00 p.m. New
York time on the Business Day immediately following the Master Servicer
Remittance Date.
If a Master Servicer Event of Default described in clauses (i) through
(vi) of this Section shall occur, then, and in each and every such case, so long
as a Master Servicer Event of Default shall not have been remedied, the
Depositor or the Indenture Trustee may, and at the written direction of the
Holders of Notes entitled to at least 51% of Voting Rights, the Indenture
Trustee shall, by notice in writing to the Master Servicer and the Depositor,
terminate all of the rights and obligations of the Master Servicer in its
capacity as Master Servicer under this Servicing Agreement, to the extent
permitted by law, and in and to the Mortgage Loans and the proceeds thereof. If
a Master Servicer Event of Default described in clause (vii) hereof shall occur,
the Indenture Trustee shall, by notice in writing to the Master Servicer and the
Depositor, terminate all of the rights and obligations of the Master Servicer in
its capacity as Master Servicer under this Servicing Agreement and in and to the
Mortgage Loans and the proceeds thereof and the Indenture Trustee or a successor
Master Servicer appointed in accordance with Section 6.02, shall immediately
make such P&I Advance and assume, pursuant to Section 6.02, the duties of a
successor Master Servicer. On or after the receipt by the Master Servicer of
such written notice, all authority and power of the Master Servicer under this
Servicing Agreement, whether with respect to the Notes (other than as a Holder
of any Note) or the Mortgage Loans or otherwise, shall pass to and be vested in
the Indenture Trustee pursuant to and under this Section, and, without
limitation, the Indenture Trustee is hereby authorized and empowered, as
attorney-in-fact or otherwise, to execute and deliver, on behalf of and at the
expense of the Master Servicer, 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 the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees promptly (and in any event no later than
ten Business Days subsequent to such notice) to provide the Indenture Trustee
with all documents and records requested by it to enable it to assume the Master
Servicer's functions under this Servicing Agreement, and to cooperate with the
Indenture Trustee in effecting the termination of the Master Servicer's
responsibilities and rights under this Servicing Agreement, including, without
limitation, the transfer within one Business Day to the Indenture Trustee for
administration by it of all cash amounts which at the time shall be or should
have been credited by the Master Servicer to the Collection Account held by or
on behalf of the Master Servicer, the Payment Account or any REO Account or
Servicing Account held by or on behalf of the Master Servicer or thereafter be
received with respect to the Mortgage Loans or any REO Property serviced by the
Master Servicer (provided, however, that the Master Servicer shall continue to
be entitled to receive all amounts accrued or owing to it under this Servicing
Agreement on or prior to the date of such termination,
41
whether in respect of P&I Advances, Servicing Advances or otherwise, and shall
continue to be entitled to the benefits of Section 5.03, notwithstanding any
such termination, with respect to events occurring prior to such termination).
For purposes of this Section 6.01, the Indenture Trustee shall not be deemed to
have knowledge of a Master Servicer Event of Default unless a Responsible
Officer of the Indenture Trustee assigned to and working in the Indenture
Trustee's Corporate Trust Office has actual knowledge thereof or unless written
notice of any event which is in fact such a Master Servicer Event of Default is
received by a Responsible Officer of the Indenture Trustee and such notice
references the Notes, the Trust Estate or this Servicing Agreement.
Section 6.02. INDENTURE TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a)(1) On and after the time the Master Servicer receives a notice of
termination, the Indenture Trustee shall be the successor in all respects to the
Master Servicer in its capacity as Master Servicer under this Servicing
Agreement and the transactions set forth or provided for herein, and all the
responsibilities, duties and liabilities relating thereto and arising thereafter
shall be assumed by the Indenture Trustee (except for any representations or
warranties of the Master Servicer under this Servicing Agreement, the
responsibilities, duties and liabilities contained in Section 2.01 and the
obligation to deposit amounts in respect of losses pursuant to Section 3.12) by
the terms and provisions hereof including, without limitation, the Master
Servicer's obligations to make P&I Advances pursuant to Section 4.01; provided,
however, that if the Indenture Trustee is prohibited by law or regulation from
obligating itself to make advances regarding delinquent mortgage loans, then the
Indenture Trustee shall not be obligated to make P&I Advances pursuant to
Section 4.01; and provided further, that any failure to perform such duties or
responsibilities caused by the Master Servicer's failure to provide information
required by Section 6.01 shall not be considered a default by the Indenture
Trustee as successor to the Master Servicer hereunder. As compensation therefor,
the Indenture Trustee shall be entitled to the Servicing Fee and all funds
relating to the Mortgage Loans to which the Master Servicer would have been
entitled if it had continued to act hereunder. Notwithstanding the above and
subject to Section 6.02(a)(2) below, the Indenture Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if it is prohibited
by law from making advances regarding delinquent mortgage loans or if the
Holders of Notes entitled to at least 51% of the Voting Rights so request in
writing to the Indenture Trustee, promptly appoint or petition a court of
competent jurisdiction to appoint, an established mortgage loan servicing
institution acceptable to each Rating Agency and having a net worth of not less
than $15,000,000, as the successor to the Master Servicer under this Servicing
Agreement in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer under this Servicing Agreement.
The Indenture Trustee or other successor master servicer shall be entitled
to be reimbursed by the Master Servicer (or by the Trust Estate if the Master
Servicer is unable to fulfill its obligations hereunder or if the Indenture
Trustee is acting as successor Master Servicer) for all reasonable out-of-pocket
costs (such expenses of the Indenture Trustee to be documented by the Indenture
Trustee to the extent possible) associated with the transfer of servicing from
the predecessor master servicer, including without limitation, any such costs or
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 Indenture Trustee to correct any errors or insufficiencies in
42
the servicing data or otherwise to enable the Indenture Trustee to service the
Mortgage Loans properly and effectively.
(2) No appointment of a successor to the Master Servicer under this
Servicing Agreement shall be effective until the assumption by the successor of
all of the Master Servicer's responsibilities, duties and liabilities hereunder.
In connection with such appointment and assumption described herein, the
Indenture Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted the Master Servicer as such hereunder. The Depositor, the Indenture
Trustee and such successor shall take such action, consistent with this
Servicing Agreement, as shall be necessary to effectuate any such succession.
Pending appointment of a successor to the Master Servicer under this Servicing
Agreement, the Indenture Trustee shall act in such capacity as hereinabove
provided.
Section 6.03. NOTIFICATION TO NOTEHOLDERS.
(a) Upon any termination of the Master Servicer pursuant to Section 6.01
above or any appointment of a successor to the Master Servicer pursuant to
Section 6.02 above, the Indenture Trustee shall give prompt written notice
thereof to the Owner Trustee, the Depositor and Noteholders at their respective
addresses appearing in the Note Register.
(b) Not later than the later of 60 days after the occurrence of any event,
which constitutes or which, with notice or lapse of time or both, would
constitute a Master Servicer Event of Default or five days after a Responsible
Officer of the Indenture Trustee becomes aware of the occurrence of such an
event, the Indenture Trustee shall transmit by mail to all Holders of Notes
notice of each such occurrence, unless such default or Master Servicer Event of
Default shall have been cured or waived.
Section 6.04. WAIVER OF MASTER SERVICER EVENTS OF DEFAULT.
The Holders representing at least 66% of the Voting Rights evidenced by
all Classes of Notes affected by any default or Master Servicer Event of Default
hereunder may waive such default or Master Servicer Event of Default; provided,
however, that a default or Master Servicer Event of Default under clause (i) or
(vii) of Section 6.01 may be waived only by all of the Holders of the Notes.
Upon any such waiver of a default or Master Servicer Event of Default, such
default or Master Servicer Event of Default shall cease to exist and shall be
deemed to have been remedied for every purpose hereunder. No such waiver shall
extend to any subsequent or other default or Master Servicer Event of Default or
impair any right consequent thereon except to the extent expressly so waived.
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ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. AMENDMENT. This Servicing Agreement may be amended from time
to time by the parties hereto, provided that any amendment be accompanied by a
letter from the Rating Agencies that the amendment will not result in the
downgrading or withdrawal of the rating then assigned to the Notes or the rating
then assigned to the Notes, and the consent of the Indenture Trustee.
Section 7.02. GOVERNING LAW. THIS SERVICING AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 7.03. NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if when
delivered to:
(a) in the case of the Master Servicer:
New Century Mortgage Corporation
00000 Xxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
(b) in the case of Rating Agencies:
Xxxxx'x Investors Service, Inc.
4th Floor
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgage Monitoring Unit
Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc.
00 Xxxxx Xxxxxx - 41st Floor
New York, New York 10041
Attention: Asset Backed Surveillance Group
Fitch Ratings
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
(c) in the case of the Owner Trustee, the Corporate Trust Office:
Wilmington Trust Company
00
Xxxxxx Xxxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
(d) in the case of the Issuer, to New Century Home Equity Loan Trust
2004-2:
c/o New Century Mortgage Securities, Inc.
00000 Xxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
(e) in the case of the Indenture Trustee:
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Trust Administration/New Century Home Equity Trust Series
2004-2 (NC0402)
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party. Any notice required or permitted to be
mailed to a Noteholder shall be given by first class mail, postage prepaid, at
the address of such Noteholder as shown in the Note Register. Any notice so
mailed within the time prescribed in this Servicing Agreement shall be
conclusively presumed to have been duly given, whether or not the Noteholder
receives such notice. Any notice or other document required to be delivered or
mailed by the Indenture Trustee to any Rating Agency shall be given on a
reasonable efforts basis and only as a matter of courtesy and accommodation and
the Indenture Trustee shall have no liability for failure to deliver such notice
or document to any Rating Agency.
Section 7.04. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Servicing 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 Servicing Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Servicing
Agreement or of the Notes or the rights of the Noteholders thereof.
Section 7.05. THIRD-PARTY BENEFICIARIES. This Servicing Agreement will
inure to the benefit of and be binding upon the parties hereto, the Noteholders,
the Owner Trustee, the Indenture Trustee and their respective successors and
permitted assigns. Except as otherwise provided in this Servicing Agreement, no
other Person will have any right or obligation hereunder. The Indenture Trustee
shall have the right to exercise all rights of the Issuer under this Servicing
Agreement.
Section 7.06. COUNTERPARTS. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
45
Section 7.07. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 7.08. TERMINATION. The respective obligations and responsibilities
of the Master Servicer and the Issuer created hereby shall terminate upon the
satisfaction and discharge of the Indenture pursuant to Section 4.10 thereof.
Section 7.09. NO PETITION. The Master Servicer, by entering into this
Servicing Agreement, hereby covenants and agrees that it will not at any time
institute against the Issuer, or join in any institution against the Issuer, any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations of the Issuer. This section shall
survive the termination of this Servicing Agreement by one year.
Section 7.10. NO RECOURSE. The Master Servicer acknowledges that no
recourse may be had against the Issuer, except as may be expressly set forth in
this Servicing Agreement.
Section 7.11. INDENTURE TRUSTEE RIGHTS. The Indenture Trustee shall be
entitled to the same rights, protections, indemnities and immunities afforded to
it under the Indenture as if specifically set forth herein.
46
ARTICLE VIII
DUTIES OF THE MASTER SERVICER AS ADMINISTRATOR
Section 8.01. ADMINISTRATIVE DUTIES.
(a) DUTIES WITH RESPECT TO THE INDENTURE. The Administrator shall perform
all its duties and the duties of the Issuer under the Indenture. In addition,
the Administrator shall consult with the Owner Trustee as the Administrator
deems appropriate regarding the duties of the Issuer under the Indenture. The
Administrator shall monitor the performance of the Issuer and shall advise the
Owner Trustee when action is necessary to comply with the Issuer's duties under
the Indenture. The Administrator shall prepare for execution by the Issuer or
shall cause the preparation by other appropriate Persons of all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Issuer to prepare, file or deliver pursuant to the Indenture. In
furtherance of the foregoing, the Administrator shall take all necessary action
that is the duty of the Issuer to take pursuant to the Indenture.
(b) DUTIES WITH RESPECT TO THE ISSUER.
(i) In addition to the duties of the Administrator set forth in this
Servicing Agreement or any of the Basic Documents, the Administrator shall
perform such calculations and shall prepare for execution by the Issuer or
the Owner Trustee or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates
and opinions as it shall be the duty of the Issuer or the Owner Trustee to
prepare, file or deliver pursuant to this Servicing Agreement or any of
the Basic Documents or under state and federal tax and securities laws
(including, but not limited to, UCC filings in applicable jurisdictions
and annual compliance certificates, if any), and at the request of the
Owner Trustee or the Indenture Trustee shall take all appropriate action
that it is the duty of the Issuer to take pursuant to this Servicing
Agreement or any of the Basic Documents. In accordance with the directions
of the Issuer or the Owner Trustee, the Administrator shall administer,
perform or supervise the performance of such other activities in
connection with the Notes (including the Basic Documents) as are not
covered by any of the foregoing provisions and as are expressly requested
by the Issuer, the Indenture Trustee or the Owner Trustee.
(ii) Notwithstanding anything in this Servicing Agreement or any of
the Basic Documents to the contrary, the Administrator shall be
responsible for promptly notifying the Owner Trustee and Certificate
Paying Agent in the event that any withholding tax is imposed on the
Issuer's payments (or allocations of income) to an Owner (as defined in
the Trust Agreement) as contemplated in Section 5.03 of the Trust
Agreement. Any such notice shall be in writing and specify the amount of
any withholding tax required to be withheld by the Owner Trustee or the
Certificate Paying Agent pursuant to such provision.
(iii) In carrying out the foregoing duties or any of its other
obligations under this Servicing Agreement, the Administrator may enter
into transactions with or otherwise deal with any of its Affiliates;
PROVIDED, HOWEVER, that the terms of any such transactions or
47
dealings shall be in accordance with any directions received from the
Issuer and shall be, in the Administrator's opinion, no less favorable to
the Issuer in any material respect than with terms made available to
unrelated third parties.
(c) TAX MATTERS. The Administrator shall prepare, on behalf of the Owner
Trustee, financial statements and such annual or other reports of the Issuer as
are necessary for the preparation by the Indenture Trustee of tax returns and
information reports as provided in Section 5.03 of the Trust Agreement,
including, without limitation, Form 1099.
(d) NON-MINISTERIAL MATTERS. With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the Administrator
shall not take any action pursuant to this Article VIII unless within a
reasonable time before the taking of such action, the Administrator shall have
notified the Owner Trustee and the Indenture Trustee of the proposed action and
the Owner Trustee and, with respect to items (A), (B), (C) and (D) below, the
Indenture Trustee shall not have withheld consent or provided an alternative
direction. For the purpose of the preceding sentence, "non-ministerial matters"
shall include:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the
Issuer (other than in connection with the collection of the Mortgage
Loans);
(C) the amendment, change or modification of this Servicing
Agreement or any of the Basic Documents to which the Indenture Trustee or
the Owner Trustee, as applicable, is a party;
(D) the appointment of successor Certificate Paying Agents and
successor Indenture Trustees pursuant to the Indenture or the appointment
of successor Servicers or the consent to the assignment by the Certificate
Registrar, Paying Agent or Indenture Trustee of its obligations under the
Indenture; and
(E) the removal of the Indenture Trustee.
(e) MASTER SERVICER SHALL ACT AS ADMINISTRATOR. By execution of this
Agreement, the Master Servicer agrees to be bound as Administrator and shall
perform the obligations of the Administrator as described herein.
Section 8.02. RECORDS. The Administrator shall maintain appropriate books
of account and records relating to services performed under this Servicing
Agreement, which books of account and records shall be accessible for inspection
by the Issuer, the Indenture Trustee and the Owner Trustee at any time during
normal business hours.
Section 8.03. ADDITIONAL INFORMATION TO BE FURNISHED. The Administrator
shall furnish to the Issuer, the Indenture Trustee and the Owner Trustee from
time to time such additional
48
information regarding the Mortgage Loans and the Notes as the Issuer, the
Indenture Trustee or the Owner Trustee shall reasonably request.
Section 8.04. NO RECOURSE TO OWNER TRUSTEE. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by Wilmington Trust Company, not individually or personally, but solely as Owner
Trustee of New Century Home Equity Loan Trust 2004-2, in the exercise of the
powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company but is made and intended for the purpose
for binding only the Issuer, (c) nothing herein contained shall be construed as
creating any liability of Wilmington Trust Company, individually or personally,
to perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
Person claiming by, through or under the parties hereto and (d) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Issuer or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by the Issuer under this Agreement or any other related documents.
49
IN WITNESS WHEREOF, the Master Servicer, the Issuer and the Indenture
Trustee have caused this Servicing Agreement to be duly executed by their
respective officers or representatives all as of the day and year first above
written.
NEW CENTURY MORTGAGE CORPORATION,
as Master Servicer
By:
------------------------------------
Name:
Title:
NEW CENTURY HOME EQUITY LOAN TRUST
2004-2,
as Issuer
Wilmington Trust Company, not in its individual
capacity, but solely as Owner Trustee
By:
------------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Indenture Trustee
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
EXHIBIT A
MORTGAGE LOAN SCHEDULE
(Filed Manually)
(In accordance with Rule 202 of Regulation S-T, this Mortgage Loan Schedule is
being filed in paper pursuant to a continuing hardship exemption.)
A-1
EXHIBIT B
FORM OF REQUEST FOR RELEASE
(for Indenture Trustee)
LOAN INFORMATION
Name of Mortgagor: ______________________________
Master Servicer
Loan No.: ______________________________
INDENTURE TRUSTEE
Name: ______________________________
Address: ______________________________
______________________________
Trustee Mortgage
File No.: ______________________________
ISSUER
Name: NEW CENTURY HOME EQUITY LOAN TRUST 2004-2
Address: ______________________________
Certificates: Asset-Backed Notes, Series 2004-2.
The undersigned Master Servicer hereby acknowledges that it has received
from Deutsche Bank National Trust Company, as Indenture Trustee for the Holders
of Asset-Backed Notes, Series 2004-2, the documents referred to below (the
"Documents"). All capitalized terms not otherwise defined in this Request for
Release shall have the meanings given them in the Servicing Agreement, dated as
of June 29, 2004, among the Indenture Trustee, the Issuer and the Master
Servicer (the "Servicing Agreement").
( ) Promissory Note dated _______________, 20__, in the original principal sum
of $__________, made by _____________________, payable to, or endorsed to
the order of, the Indenture Trustee.
( ) Mortgage recorded on _________________________ as instrument no.
____________________ in the County Recorder's Office of the County of
_______________, State of __________________ in
book/reel/docket_________________ of official records at page/image
_____________.
B-1
( ) Deed of Trust recorded on ___________________ as instrument no.
________________ in the County Recorder's Office of the County of
_________________, State of ____________________ in book/reel/docket
_________________ of official records at page/image ______________.
( ) Assignment of Mortgage or Deed of Trust to the Indenture Trustee, recorded
on __________________ as instrument no. _________ in the County Recorder's
Office of the County of _______________, State of _______________________
in book/reel/docket ____________ of official records at page/image
____________.
( ) Other documents, including any amendments, assignments or other
assumptions of the Mortgage Note or Mortgage.
( ) _______________________________________
( ) _______________________________________
( ) _______________________________________
( ) _______________________________________
B-1
The undersigned Master Servicer hereby acknowledges and agrees as follows:
(1) The Master Servicer shall hold and retain possession of the Documents
in trust for the benefit of the Indenture Trustee, solely for the purposes
provided in the Servicing Agreement.
(2) The Master Servicer shall not cause or permit the Documents to become
subject to, or encumbered by, any claim, liens, security interest, charges,
writs of attachment or other impositions nor shall the Master Servicer assert or
seek to assert any claims or rights of setoff to or against the Documents or any
proceeds thereof.
(3) The Master Servicer shall return each and every Document previously
requested from the Mortgage File to the Indenture Trustee when the need therefor
no longer exists, unless the Mortgage Loan relating to the Documents has been
liquidated and the proceeds thereof have been remitted to the Collection Account
and except as expressly provided in the Servicing Agreement.
(4) The Documents and any proceeds thereof, including any proceeds of
proceeds, coming into the possession or control of the Master Servicer shall at
all times be earmarked for the account of the Indenture Trustee, and the Master
Servicer shall keep the Documents and any proceeds separate and distinct from
all other property in the Master Servicer's possession, custody or control.
Dated:
NEW CENTURY MORTGAGE
CORPORATION
By:______________________________
Name:
Title:
B-1
EXHIBIT C-1
FORM OF CERTIFICATION TO BE PROVIDED BY THE DEPOSITOR WITH FORM 10-K
Certification
1. I have reviewed this annual report on Form 10-K, and all reports on
Form 8-K containing distribution or servicing reports filed in respect of
periods included in the year covered by this annual report, of New Century Home
Equity Loan Trust 0000-0, Xxxxx Backed Notes, Series 2004-2;
2. Based on my knowledge, the information in these reports, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the distribution or servicing information
required to be provided to the trustee by the servicer under the pooling and
servicing, or similar, agreement, for inclusion in these reports is included in
these reports;
4. Based on my knowledge and upon the annual compliance statement included
in the report and required to be delivered to the trustee in accordance with the
terms of the pooling and servicing, or similar, agreement, and except as
disclosed in the reports, the servicer has fulfilled its obligations under the
servicing agreement; and
5. The reports disclose all significant deficiencies relating to the
servicer's compliance with the minimum servicing standards based upon the report
provided by an independent public accountant, after conducting a review in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
similar procedure, as set forth in the pooling and servicing, or similar,
agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: Deutsche Bank
National Trust Company.
NEW CENTURY MORTGAGE SECURITIES, INC.
By:____________________________________
Name:
Title:
Date:
C-1-1
EXHIBIT C-2
FORM OF CERTIFICATION TO BE
PROVIDED TO THE DEPOSITOR BY THE INDENTURE TRUSTEE
Re: New Century Home Equity Loan Trust 2004-2 (the "Trust" or the
"Issuer") Asset-Backed Notes, Series 2004-2
I, [identify the certifying individual], a [title] of Deutsche Bank
National Trust Company, as Indenture Trustee, hereby certify to New Century
Mortgage Securities, Inc. (the "Depositor"), and its officers, directors and
affiliates, and with the knowledge and intent that they will rely upon this
certification, that:
1. I have reviewed the annual report on Form 10-K for the fiscal year
2004, and all reports on Form 8-K containing distribution reports filed in
respect of periods included in the year covered by that annual report, of the
Depositor relating to the above-referenced trust;
2. Based on my knowledge, the information in these distribution reports
prepared by the Indenture Trustee, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading as of the last day of the period covered by that
annual report; and
3. Based on my knowledge, the distribution information required to be
provided by the Indenture Trustee under the Servicing Agreement is included in
these distribution reports.
Capitalized terms used but not defined herein have the meanings ascribed
to them in Appendix A to the Indenture, dated June 29, 2004 (the "Indenture"),
between New Century Home Equity Loan Trust 2004-2, as issuer, and Deutsche Bank
National Trust Company, as indenture trustee.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Indenture Trustee
By:__________________________________
Name:
Title:
Date:
C-2-1
EXHIBIT D
OFFICER'S CERTIFICATE
REGARDING ANNUAL STATEMENT OF COMPLIANCE
___________________ Trust, Series 200_-___
_______________ Asset-Backed Notes
I, _____________________, hereby certify that I am a duly appointed
__________________________ of _______________________________ (the "Master
Servicer"), and further certify as follows:
1. _______ This certification is being made pursuant to the terms of the
Servicing Agreement, dated as of ____________, _____ (the "Servicing
Agreement"), among _____________________, as issuer, the Master Servicer, as
master servicer and ________________, as indenture trustee.
2. _______ I have reviewed the activities of the Master Servicer during
the preceding year and the Master Servicer's performance under the Servicing
Agreement and to the best of my knowledge, based on such review, the Master
Servicer has fulfilled all of its obligations under the Servicing Agreement
throughout the year.
Capitalized terms not otherwise defined herein have the meanings set forth
in the Servicing Agreement.
Dated: _________________
D-1
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
______________.
By: _____________________________
Name:
Title:
I, _________________________, a (an) __________________ of the [Master
Servicer], hereby certify that _________________ is a duly elected, qualified,
and acting _______________________ of the [Master Servicer] and that the
signature appearing above is his/her genuine signature.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
______________.
By: _____________________________
Name:
Title:
E-1-2
