FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2005-3, as Issuer
FIELDSTONE MORTGAGE INVESTMENT CORPORATION, as Depositor
XXXXX FARGO BANK, N.A., as Trust Administrator and Master Servicer
FIELDSTONE SERVICING CORP., as Servicer
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as Subservicer
FIELDSTONE INVESTMENT CORPORATION, as Seller
and
HSBC BANK USA, NATIONAL ASSOCIATION, as Indenture Trustee
----------
TRANSFER AND SERVICING AGREEMENT
Dated as of November 1, 2005
----------
FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2005-3
MORTGAGE-BACKED NOTES
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.............................................. 6
Section 1.02. Calculations With Respect to the Mortgage Loans.......... 42
Section 1.03. Calculations With Respect to Accrued Interest............ 42
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
Section 2.01. Creation and Declaration of Trust Estate; Conveyance of
Initial Mortgage Loans................................... 42
Section 2.02. Acceptance of Trust Estate; Review of Documentation...... 45
Section 2.03. Xxxxx Xxxxxx............................................. 47
Section 2.04. Subsequent Transfers..................................... 49
Section 2.05. Option to Contribute Derivative Instrument............... 51
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of the Depositor and the
Seller................................................... 51
Section 3.02. Discovery of Breach...................................... 53
Section 3.03. Repurchase, Purchase or Substitution of Mortgage Loans... 54
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS BY THE SERVICER
Section 4.01. Seller's Engagement of Servicer to Perform Servicing
Responsibilities......................................... 55
Section 4.02. Servicing of the Mortgage Loans.......................... 56
Section 4.03. Payments To the Master Servicer.......................... 69
Section 4.04. General Servicing Procedures............................. 71
Section 4.05. Representations, Warranties and Agreements............... 74
Section 4.06. The Servicer and the Subservicer......................... 79
Section 4.07. Termination for Cause.................................... 82
Section 4.08. Successor to Servicer and Subservicer, Miscellaneous
Provisions............................................... 85
Section 4.09. Miscellaneous Servicing Provisions....................... 88
ARTICLE V
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY THE MASTER
SERVICER AND THE TRUST ADMINISTRATOR
Section 5.01. Duties of the Master Servicer; Representations and
Warranties............................................... 89
i
Section 5.02. Master Servicer Fidelity Bond and Master Servicer Error s
and Omissions Insurance Policy........................... 91
Section 5.03. Master Servicer's Financial Statements and Related
Information.............................................. 91
Section 5.04. Power to Act; Procedures................................. 92
Section 5.05. Enforcement of Servicer's and Master Servicer's
Obligations.............................................. 93
Section 5.06. [Reserved]............................................... 93
Section 5.07. Collection Account....................................... 94
Section 5.08. Application of Funds in the Collection Account........... 95
Section 5.09. Reports to Indenture Trustee and Noteholders............. 97
Section 5.10. Termination of Servicer or Subservicer; Successor
Servicers................................................ 100
Section 5.11. Master Servicer Liable for Enforcement................... 101
Section 5.12. Assumption of Master Servicing by Indenture Trustee...... 101
Section 5.13. [Reserved]............................................... 101
Section 5.14. Release of Mortgage Files................................ 101
Section 5.15. Documents, Records and Funds in Possession of Master
Servicer To Be Held for Indenture Trustee................ 102
Section 5.16. Opinion.................................................. 104
Section 5.17. [Reserved]............................................... 104
Section 5.18. [Reserved]............................................... 104
Section 5.19. [Reserved]............................................... 104
Section 5.20. Indenture Trustee To Retain Possession of Certain
Insurance Policies and Documents......................... 104
Section 5.21. Compensation to the Master Servicer...................... 104
Section 5.22. [Reserved]............................................... 104
Section 5.23. Reports to the Indenture Trustee......................... 104
Section 5.24. Annual Officer's Certificate as to Compliance............ 105
Section 5.25. Annual Independent Accountants' Servicing Report......... 106
Section 5.26. Merger or Consolidation.................................. 106
Section 5.27. Resignation of Master Servicer........................... 106
Section 5.28. Assignment or Delegation of Duties by the Master
Servicer................................................. 107
Section 5.29. Limitation on Liability of the Master Servicer and
Others................................................... 107
Section 5.30. Indemnification; Third-Party Claims...................... 108
Section 5.31. Alternative Index........................................ 108
Section 5.32. Transfer of Servicing.................................... 108
ARTICLE VI
DEPOSITS AND PAYMENTS TO HOLDERS
Section 6.01. The Collection Account................................... 110
Section 6.02. Payments from the Collection Account..................... 110
Section 6.03. Net Swap Payments and Net Swap Receipts.................. 123
Section 6.04. Control of the Trust Account and Deferred Interest....... 123
Section 6.05. Advances by Master Servicer and Servicer................. 127
Section 6.06. Pre-Funding Account...................................... 127
Section 6.07. Establishment of Basis Risk Reserve Account.............. 128
ii
ARTICLE VII
ADMINISTRATION OF THE AGREEMENTS
Section 7.01. Duties of the Trust Administrator........................ 128
Section 7.02. Duties of the Trust Administrator With Respect to the
Indenture, the Trust Agreement and this Agreement........ 131
Section 7.03. Records.................................................. 131
Section 7.04. Compensation............................................. 132
Section 7.05. Additional Information to be Furnished to the Issuer..... 132
Section 7.06. Independence of the Trust Administrator.................. 132
Section 7.07. No Joint Venture......................................... 132
Section 7.08. Other Activities of Trust Administrator and the
Depositor................................................ 132
Section 7.09. Resignation and Removal of Trust Administrator........... 132
Section 7.10. Action upon Termination, Resignation or Removal of the
Trust Administrator...................................... 133
ARTICLE VIII
MASTER SERVICER EVENTS OF DEFAULT
Section 8.01. Master Servicer Events of Default; Indenture Trustee To
Act; Appointment of Successor............................ 134
Section 8.02. Additional Remedies of Indenture Trustee Upon Event of
Default.................................................. 138
Section 8.03. Waiver of Defaults....................................... 138
Section 8.04. Notification to Holders.................................. 138
Section 8.05. Directions by Noteholders and Duties of Indenture
Trustee During Master Servicer Event of Default.......... 138
Section 8.06. Action Upon Certain Failures of the Master Servicer and
Upon Master Servicer Event of Default.................... 139
Section 8.07. Preparation of Reports................................... 139
ARTICLE IX
TERMINATION
Section 9.01. Termination.............................................. 140
Section 9.02. Termination Prior to Maturity Date; and Optional
Redemption............................................... 140
Section 9.03. Certain Notices upon Final Payment....................... 141
Section 9.04. Beneficiaries............................................ 141
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Binding Nature of Agreement; Assignment.................. 141
Section 10.02. Entire Agreement......................................... 141
Section 10.03. Amendment................................................ 141
Section 10.04. Acts of Noteholders...................................... 143
Section 10.05. Recordation of Agreement................................. 143
iii
Section 10.06. Governing Law............................................ 143
Section 10.07. Notices.................................................. 143
Section 10.08. Severability of Provisions............................... 145
Section 10.09. Indulgences; No Waivers.................................. 146
Section 10.10. Headings Not To Affect Interpretation.................... 146
Section 10.11. Benefits of Agreement.................................... 146
Section 10.12. Special Notices to the Rating Agencies................... 146
Section 10.13. Counterparts............................................. 147
Section 10.14. Execution by the Issuer.................................. 147
iv
ATTACHMENTS
Exhibit A- 1 Form of Initial Certification
Exhibit A-2 Form of Interim Certification
Exhibit A-3 Form of Final Certification
Exhibit A-4 Form of Endorsement
Exhibit B-1 Form of Swap Agreement
Exhibit B-2 [RESERVED]
Exhibit C Form of Lost Note Affidavit
Exhibit D Custodial Agreement
Exhibit E Custodial Account Letter Agreement
Exhibit F Escrow Account Letter Agreement
Exhibit G-1 Form of Monthly Remittance Advice
Exhibit G-2 Standard Layout For Monthly Defaulted Loan Report
Exhibit G-3 Form 332 Realized Loss Report
Exhibit H JPM Form of Sarbanes Back-up Certification
Exhibit I Form of Subsequent Transfer Agreement
Exhibit J Subsequent Mortgage Loan Criteria
Exhibit K Xxxxxx Xxx Guide Announcement 95-19
Schedule A Mortgage Loan Schedule
v
This TRANSFER AND SERVICING AGREEMENT, dated as of November 1, 2005 (the
"Agreement" or the "Transfer and Servicing Agreement"), is by and among
FIELDSTONE MORTGAGE INVESTMENT TRUST, SERIES 2005-3, a Delaware statutory trust,
as issuer (the "Issuer"), FIELDSTONE MORTGAGE INVESTMENT CORPORATION, a Maryland
corporation, as depositor (the "Depositor"), HSBC BANK USA, NATIONAL
ASSOCIATION, as indenture trustee (the "Indenture Trustee"), XXXXX FARGO BANK,
N.A., as trust administrator (the "Trust Administrator") and master servicer
(the "Master Servicer"), FIELDSTONE SERVICING CORP., as servicer (the
"Servicer"), JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, as subservicer (the
"Subservicer") and FIELDSTONE INVESTMENT CORPORATION, as seller (the "Seller").
PRELIMINARY STATEMENT
WHEREAS, the Depositor has acquired all of the rights, title and interest
of the Seller in certain conventional, adjustable rate and fixed rate,
residential mortgage loans identified in Schedule A hereto (the "Mortgage
Loans") on a servicing-retained basis from the Seller pursuant to the Mortgage
Loan Purchase Agreement, and at the Closing Date is the owner of the Mortgage
Loans and the other property being conveyed by it to the Issuer hereunder for
inclusion in the Trust Estate;
WHEREAS, the Depositor has duly authorized the execution and delivery of
this Agreement to provide for the conveyance to the Issuer of the Mortgage Loans
and the other property constituting the Trust Estate;
WHEREAS, on the Closing Date, the Depositor will acquire the Notes from the
Issuer as consideration for its transfer to the Issuer of the Mortgage Loans and
the other property constituting the Trust Estate;
WHEREAS, pursuant to the Indenture, the Issuer will pledge the Mortgage
Loans and the other property constituting the Trust Estate to the Indenture
Trustee as security for the Notes and each Swap Agreement;
WHEREAS, the Seller desires that the Servicer service the Mortgage Loans
upon such transfer to the Issuer pursuant to this Agreement, and the Servicer
has agreed to do so;
WHEREAS, the Servicer, the Subservicer, the Indenture Trustee, the Master
Servicer and the Trust Administrator have agreed pursuant to this Agreement that
the Subservicer shall service the Mortgage Loans beginning on the Closing Date
pursuant to this Agreement but that the Servicer will have ultimate
responsibility for the servicing of the Mortgage Loans;
WHEREAS, the Master Servicer shall be obligated under this Agreement, among
other things, to supervise the servicing of the Mortgage Loans on behalf of the
Indenture Trustee, and shall have the right, under certain circumstances, to
terminate the rights and obligations of the Servicer and the Subservicer under
this Agreement upon the occurrence and continuance of a Servicing Event of
Default as provided herein;
WHEREAS, the parties hereto acknowledge and agree that, at the
direction of the Depositor, the Seller will assign all of its rights with
respect to the Mortgage Loans (other than
the servicing rights) to the Indenture Trustee, and that each reference herein
to the Seller is intended, unless otherwise specified, to mean the Seller or the
Indenture Trustee, as assignee of the Seller.
WHEREAS, the Issuer has entered into certain agreements in connection with
the issuance of the Notes, including (i) the Depository Agreement and (ii) the
Indenture (the Depository Agreement, the Indenture and the Trust Agreement being
hereinafter referred to collectively as the "Related Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer is required to
perform certain duties in connection with (a) the Notes and the collateral
therefor pledged pursuant to the Indenture (the "Collateral") and (b) the
undivided subordinate beneficial ownership interest in the Issuer represented by
the Ownership Certificate;
WHEREAS, the Issuer desires to have the Trust Administrator perform certain
of the duties of the Issuer referred to in the preceding clause, and to provide
such additional services consistent with the terms of this Agreement and the
Related Agreements as the Issuer or the Owner Trustee may from time to time
reasonably request; and
WHEREAS, the Trust Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer or the
Owner Trustee on the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
The following table sets forth (or describes) the Class designation,
Interest Rate, initial Class Principal Amount and minimum denomination for each
Class of Notes issued pursuant to the Indenture.
Initial
Class Security Principal Minimum
Designation Interest Rate Amount Denominations
----------- ------------- ------------------ -------------
Class 1-A (1) $316,989,000 $100,000
Class 2-A1 (2) $294,358,000 $100,000
Class 2-A2 (3) $262,801,000 $100,000
Class 2-A3 (4) $ 15,000,000 $100,000
Class M1 (5) $ 44,283,000 $100,000
Class M2 (6) $ 41,369,000 $100,000
Class M3 (7) $ 27,968,000 $100,000
Class M4 (8) $ 19,811,000 $100,000
Class M5 (9) $ 19,228,000 $100,000
Class M6 (10) $ 18,645,000 $100,000
Class M7 (11) $ 18,645,000 $100,000
Class M8 (12) $ 15,149,000 $100,000
2
Class M9 (13) $12,819,000 $100,000
Class M10 (14) $20,976,000 $100,000
Class M11 (15) $11,653,000 $100,000
Class M12 (16) $ 8,740,000 $100,000
Class M13 (17) $ 7,575,000 $100,000
(1) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class 1-A Notes is the per annum rate equal to the least of
(i) LIBOR plus 0.245% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to the Class 1-A Notes
will be equal to LIBOR plus 0.490% per annum beginning on the Stepup Date
and each Payment Date thereafter.
(2) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class 2-A1 Notes is the per annum rate equal to the least
of (i) LIBOR plus 0.120% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to the Class 2-A1
Notes will be equal to LIBOR plus 0.240% per annum beginning on the Stepup
Date and each Payment Date thereafter.
(3) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class 2-A2 Notes is the per annum rate equal to the least
of (i) LIBOR plus 0.260% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to the Class 2-A2
Notes will be equal to LIBOR plus 0.520% per annum beginning on the Stepup
Date and each Payment Date thereafter.
(4) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class 2-A3 Notes is the per annum rate equal to the least
of (i) LIBOR plus 0.340% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to the Class 2-A3
Notes will be equal to LIBOR plus 0.680% per annum beginning on the Stepup
Date and each Payment Date thereafter.
(5) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M1 Notes is the per annum rate equal to the least of
(i) LIBOR plus 0.430% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to the Class M1 Notes
will be equal to LIBOR plus 0.645% per annum beginning on the Stepup Date
and each Payment Date thereafter.
(6) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M2 Notes is the per annum rate equal to the least of
(i) LIBOR plus 0.450% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to the Class M2 Notes
will be equal to LIBOR plus 0.675% per annum beginning on the Stepup Date
and each Payment Date thereafter.
3
(7) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M3 Notes is the per annum rate equal to the least of
(i) LIBOR plus 0.480% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to the Class M3 Notes
will be equal to LIBOR plus 0.720% per annum beginning on the Stepup Date
and each Payment Date thereafter.
(8) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M4 Notes is the per annum rate equal to the least of
(i) LIBOR plus 0.600% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to the Class M4 Notes
will be equal to LIBOR plus 0.900% per annum beginning on the Stepup Date
and each Payment Date thereafter.
(9) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M5 Notes is the per annum rate equal to the least of
(i) LIBOR plus 0.630% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to the Class M5 Notes
will be equal to LIBOR plus 0.945% per annum beginning on the Stepup Date
and each Payment Date thereafter.
(10) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M6 Notes is the per annum rate equal to the least of
(i) LIBOR plus 0.690% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to the Class M6 Notes
will be equal to LIBOR plus 1.035% per annum beginning on the Stepup Date
and each Payment Date thereafter.
(11) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M7 Notes is the per annum rate equal to the least of
(i) LIBOR plus 1.200% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to the Class M7 Notes
will be equal to LIBOR plus 1.800% per annum beginning on the Stepup Date
and each Payment Date thereafter.
(12) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M8 Notes is the per annum rate equal to the least of
(i) LIBOR plus 1.450% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to the Class M8 Notes
will be equal to LIBOR plus 2.175% per annum beginning on the Stepup Date
and each Payment Date thereafter.
(13) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M9 Notes is the per annum rate equal to the least of
(i) LIBOR plus 2.000% per annum, (ii) the Available Funds Rate and (iii)
the Fixed Rate Cap for such Payment Date; provided, that the per annum rate
calculated pursuant to clause (i) above with respect to
4
the Class M9 Notes will be equal to LIBOR plus 3.000% per annum beginning
on the Stepup Date and each Payment Date thereafter.
(14) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M10 Notes is the per annum rate equal to the least of
(i) 5.000% and (ii) the Available Funds Rate for such Payment Date;
provided, that the per annum rate set forth in clause (i) above will
increase to 5.500% beginning on the Stepup Date and each Payment Date
thereafter.
(15) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M11 Notes is the per annum rate equal to the least of
(i) 5.000% and (ii) the Available Funds Rate for such Payment Date;
provided, that the per annum rate set forth in clause (i) above will
increase to 5.500% beginning on the Stepup Date and each Payment Date
thereafter.
(16) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M12 Notes is the per annum rate equal to the least of
(i) 5.000% and (ii) the Available Funds Rate for such Payment Date;
provided, that the per annum rate set forth in clause (i) above will
increase to 5.500% beginning on the Stepup Date and each Payment Date
thereafter.
(17) The Interest Rate with respect to any Payment Date (and the related Accrual
Period) for the Class M13 Notes is the per annum rate equal to the least of
(i) 5.000% and (ii) the Available Funds Rate for such Payment Date;
provided, that the per annum rate set forth in clause (i) above will
increase to 5.500% beginning on the Stepup Date and each Payment Date
thereafter.
5
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. The following words and phrases, unless the
context otherwise requires, shall have the following meanings:
Accounts. Any or all of the Custodial Accounts, Escrow Accounts, Collection
Account, Basis Risk Reserve Account, Pre-Funding Account and any other accounts
created or maintained by the Trust Administrator, the Servicer or the
Subservicer pursuant to this Agreement.
Accountant: A Person engaged in the practice of accounting who (except when
this Agreement provides that an Accountant must be Independent) may be employed
by or affiliated with the Depositor or an Affiliate of the Depositor.
Accrual Period: With respect to any Payment Date and any Class of Notes
(other than the Class M10, Class M11, Class M12 and Class M13 Notes), the period
beginning on the Payment Date in the calendar month immediately preceding the
month in which the related Payment Date occurs (or, in the case of the first
Payment Date, beginning on the Closing Date) and ending on the day immediately
preceding the related Payment Date, and in the case of the Class M10, Class M11,
Class M12 and Class M13 Notes, the calendar month preceding the month in which
such Payment Date occurs.
Addition Notice: The notice given pursuant to Section 2.04 with respect to
the transfer of Subsequent Mortgage Loans to the Trust pursuant to such Section.
Advance: With respect to each Servicer Remittance Date and each Mortgage
Loan, an amount equal to the Scheduled Payment (with the interest portion of
such Scheduled Payment adjusted to the Net Mortgage Rate) that was due on the
Mortgage Loan on the Due Date in the related Due Period, and that (i) was
delinquent at the close of business on the related Determination Date and (ii)
was not the subject of a previous Monthly Advance, but only to the extent that
such amount is expected, in the reasonable judgment of the Servicer, the
Subservicer or Master Servicer, as applicable, to be recoverable from
collections or other recoveries in respect of such Mortgage Loan.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Expense Rate: With respect to any Mortgage Loan, the sum of the
applicable Servicing Administration Fee Rate and the applicable Master Servicing
Fee Rate.
Aggregate Collateral Balance: As of any date of determination (other than
the Closing Date), an amount equal to the Aggregate Loan Balance plus the
amount, if any, then on deposit in the Pre-Funding Account exclusive of
investment income. As of the Closing Date, an amount
6
equal to the sum of the Aggregate Loan Balance as of the Initial Cut-off Date
and the amount on deposit in the Pre-Funding Account as of the Closing Date.
Aggregate Loan Balance: As of any date of determination, an amount equal to
the aggregate of the Stated Principal Balances of the Mortgage Loans as of such
date.
Aggregate Overcollateralization Release Amount: With respect to any Payment
Date, the lesser of (x) the sum of the Principal Funds of each Mortgage Group
for such Payment Date and (y) the amount, if any, by which (1) the
Overcollateralization Amount for such Payment Date (calculated for this purpose
on the basis of the assumption that 100% of the aggregate of the Principal Funds
of both Mortgage Groups for such date is applied on such Payment Date in
reduction of the aggregate of the Note Principal Amounts of the related Notes)
exceeds (2) the Targeted Overcollateralization Amount for such Payment Date.
Agreement: This Agreement and all amendments and supplements hereto.
Ancillary Income: All income derived from the Mortgage Loans, excluding
Servicing Administration Fees and Master Servicing Fees attributable to the
Mortgage Loans and other amounts treated as payment proceeds of the Mortgage
Loans, including but not limited to, late charges, fees received with respect to
checks or bank drafts returned by the related bank for non-sufficient funds,
assumption fees, optional insurance administrative fees, Prepayment Premiums and
all other incidental fees and charges.
Appraised Value: With respect to any Mortgage Loan, the amount set forth in
an appraisal made in connection with the origination of such Mortgage Loan as
the value of the related Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of transfer
or equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect the
assignment of the Mortgage to the Indenture Trustee for the benefit of
Noteholders and the Swap Counterparty, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction, if permitted by law; provided, however, that neither the Issuer
nor the Indenture Trustee shall be responsible for determining whether any such
assignment is in recordable form.
Authorized Officer: Any Person who may execute an Officer's Certificate on
behalf of the Issuer.
Available Funds Rate: With respect to any Payment Date and for any Class of
Notes, a per annum rate equal to the quotient of (a) the excess, if any, of (1)
the sum of (A) Interest Funds for Group 1 and (B) Interest Funds for Group 2,
over (2) any Net Swap Payments payable to the Swap Counterparty for such Payment
Date pursuant to Section 6.02(b)(i) or Section 6.02(c)(i) hereof, as applicable,
divided by (b) the product of (i) the sum of the Class Principal Amounts of the
Class 1-A, Class 2-A1, Class 2-A2, Class 2-A3, Class M1, Class M2, Class M3,
Class M4, Class M5, Class M6, Class M7, Class M8, Class M9, Class M10, Class
M11, Class M12 and Class M13 Notes before taking into account any payments of
principal on such Payment Date, and (ii) a fraction, the numerator of which is
the actual number of days in the related Accrual
7
Period (or, in the case of the Class M10, Class M11, Class M12 and Class M13
Notes, the numerator of which is 30), and the denominator of which is 360.
Available Funds Shortfall: With respect to any Class of Notes and any
Payment Date, the sum of (a) the excess, if any, of (i) the amount that would
have been the Current Interest for such Class had the Interest Rate for such
Class been determined without regard to the Available Funds Rate over (ii) the
actual amount of Current Interest for such Class, plus (b) any excess described
in clause (a) above and interest described in clause (c) below for any prior
Payment Date that remains unpaid, plus (c) interest accrued during the Accrual
Period related to such Payment Date on the amount described in clause (b) above
at the Interest Rate applicable to such Class, determined without regard to the
Available Funds Rate.
Bankruptcy: As to any Person, the making of an assignment for the benefit
of creditors, the filing of a voluntary petition in bankruptcy, adjudication as
a bankrupt or insolvent, the entry of an order for relief in a bankruptcy or
insolvency proceeding, the seeking of reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief, or seeking, consenting
to or acquiescing in the appointment of a trustee, receiver or liquidator,
dissolution, or termination, as the case may be, of such Person pursuant to the
provisions of either the United States Bankruptcy Code of 1986, as amended, or
any other similar state laws.
Bankruptcy Code: The United States Bankruptcy Code of 1986, as amended.
Basis Risk Reserve Account: A separate account established and maintained
by the Trust Administrator for the benefit of the Noteholders pursuant to
Section 6.07.
Benefit Plan Opinion: An Opinion of Counsel satisfactory to the Owner
Trustee and the Certificate Registrar to the effect that any proposed transfer
of Certificates will not (i) cause the assets of the Trust Estate to be regarded
as plan assets for purposes of the Plan Asset Regulations or (ii) give rise to
any fiduciary duty on the part of the Depositor or the Indenture Trustee.
Book-Entry Notes: As defined in the Indenture.
Business Day: Except with respect to the Swap Agreement, any day other than
(i) a Saturday or a Sunday or (ii) a day on which banking institutions in New
York, New York or, if other than New York, the city in which the Corporate Trust
Office of the Indenture Trustee is located, or the States of Arizona,
California, Delaware, Maryland or Minnesota are authorized or obligated by law
or executive order to be closed. With respect to the Swap Agreement, "Business
Day" means any day other than (a) a Saturday or Sunday or (b) a day on which
banking institutions in the City of New York, New York or London, England are
authorized or obligated by law or executive order to be closed.
Calculation Period End Date With respect to the Swap Agreement, the 25th
calendar day of each month commencing in December 2005, regardless of whether
such day is a Business Day.
Certificate Registrar: As defined in the Trust Agreement, the initial
Certificate Registrar shall be the Trust Administrator.
8
Certificate: The Ownership Certificate.
Certificateholder: Any registered holder of the Ownership Certificate.
Civil Relief Act: The Servicemembers Civil Relief Act, as such may be
amended from time to time, and any similar state laws.
Class: All Notes bearing the same class designation.
Class A Notes: Collectively, the Class 1-A, Class 2-A1, Class 2-A2 and
Class 2-A3 Notes.
Class M Notes: Collectively, the Class M1, Class M2, Class M3, Class M4,
Class M5, Class M6, Class M7, Class M8, Class M9, Class M10, Class M11, Class
M12 and Class M13 Notes.
Class Principal Amount: With respect to each Class of Notes, the aggregate
of the Note Principal Amounts of all Notes of such Class at the date of
determination.
Clearing Agency: An organization registered as a "clearing agency" pursuant
to Section 17A of the Exchange Act, as amended. As of the Closing Date, the
Clearing Agency shall be The Depository Trust Company.
Closing Date: November 23, 2005.
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Collateral: As defined in the Indenture.
Collection Account: A separate account established and maintained by the
Trust Administrator pursuant to Section 5.07.
Compensating Interest Payment: With respect to any Payment Date, an amount
equal to the lesser of (x) the aggregate Prepayment Interest Shortfall Amount
with respect to such Payment Date and (y) the Servicing Administration Fee
payable to the Servicer, with respect to the Servicer, or the portion of the
Servicing Administration Fee payable to the Subservicer, with respect to the
Subservicer, or, to the extent provided in Section 5.21, the aggregate Master
Servicing Fee payable to the Master Servicer, with respect to the Master
Servicer, each in respect of such Payment Date.
Condemnation Proceeds: All awards of settlements in respect of a Mortgaged
Property, whether permanent or temporary, partial or entire, by exercise of the
power of eminent domain or condemnation, to the extent not required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan documents.
Control: The meaning specified in Section 8-106 of the New York UCC.
9
Conventional Loan: A Mortgage Loan that is not insured by the United States
Federal Housing Administration or guaranteed by the United States Department of
Veterans Affairs.
Corporate Trust Office: With respect to (i) the Trust Administrator, the
principal corporate trust office of the Trust Administrator at which, at any
particular time, its corporate trust business shall be administered, which
office at the date of execution of this Agreement for purposes of transfers and
exchanges and for presentment and surrender of the Notes and for payment thereof
is located at Xxxxx Fargo Bank, N.A., Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust Group (Fieldstone
2005-3), and for all other purposes is located at Xxxxx Fargo Bank, N.A., P.O.
Box 98, Columbia, Maryland 21046, Attention: Corporate Trust Group (FIELDSTONE
2005-3) (or for overnight deliveries, at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Trust Group (FIELDSTONE 2005-3)); (ii) the
Certificate Registrar, the principal office of the Certificate Registrar at
which at any particular time its corporate trust business shall be administered,
which office at the date of execution of this Agreement is located at the
Corporate Trust Office of the Trust Administrator, or at such other address as
the Certificate Registrar may designate from time to time by notice to the
Noteholder, the Trust and the Swap Counterparty, or the principal corporate
trust office of any successor Certificate Registrar at the address designated by
such successor Certificate Registrar by notice to the Noteholders, the Trust and
the Swap Counterparty; and (iii) the Indenture Trustee, the principal office of
the Indenture Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of execution of this
Agreement is located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Trust, or at such other address as the Indenture Trustee may designate
from time to time by notice to the Noteholders, the Trust and the Swap
Counterparty, or the principal corporate trust office of any successor Indenture
Trustee at the address designated by such successor Indenture Trustee by notice
to the Noteholders, the Trust and the Swap Counterparty.
Current Interest: With respect to any Class of Notes and any Payment Date,
will equal the aggregate amount of interest accrued at the applicable Interest
Rate during the related Accrual Period on the Class Principal Amount of such
Class immediately prior to such Payment Date, provided, however, that for any
Class of Class M Notes and for any Payment Date, Current Interest shall be
reduced by the amount specified in clause (a) of the definition of Deferred
Interest (calculated for purposes of this definition with the imposition of the
Available Funds Rate), if any, for such Class and Payment Date.
Custodial Account: The separate custodial account (other than an Escrow
Account) established and maintained by the Servicer pursuant to Section 4.02(d)
of this Agreement.
Custodial Agreement: The custodial agreement relating to the custody of
certain of the Mortgage Loans, substantially in the form attached as Exhibit D
hereto, between the Custodian, the Issuer and the Indenture Trustee, as
acknowledged by the Seller, the Depositor, the Master Servicer, the Trust
Administrator, the Servicer and the Subservicer, dated as of November 1, 2005.
Custodian: The custodian appointed by the Indenture Trustee pursuant to the
Custodial Agreement, and any successor thereto. The initial Custodian is Xxxxx
Fargo Bank, N.A.
10
Cut-off Date: With respect to the Initial Mortgage Loans, the Initial
Cut-off Date, and with respect to the Subsequent Mortgage Loans, the Subsequent
Cut-off Date.
Cut-off Date Balance: With respect to the Initial Mortgage Loans, the
Aggregate Loan Balance as of the Initial Cut-off Date.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction of
the Scheduled Payment that the related Mortgagor is obligated to pay on any Due
Date as a result of any proceeding under Bankruptcy law or any similar
proceeding.
Deferred Interest: For any Class of Class M Notes and any Payment Date, the
sum of (a) the aggregate amount of interest accrued at the applicable Interest
Rate (determined without regard to the Available Funds Rate) during the related
Accrual Period on the Principal Deficiency Amount for the Class, (b) any amounts
due pursuant to clause (a) and interest described in clause (c) below for such
Class for prior Payment Dates that remain unpaid and (c) interest accrued during
the Accrual Period related to such Payment Date on the amount in clause (b) at
the Interest Rate applicable to such Class determined without regard to the
Available Funds Rate.
Definitive Note: A Note of any Class issued in definitive, fully
registered, certificated form.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased from the Trust
Estate pursuant to the terms hereof or as to which one or more Qualifying
Substitute Mortgage Loans are substituted therefor.
Depositor: Fieldstone Mortgage Investment Corporation, a Maryland
corporation having its principal place of business in Columbia, Maryland, or its
successors in interest.
Depository Agreement: The agreement dated November 23, 2005, among the
Issuer, the Indenture Trustee and The Depository Trust Company, as the initial
Clearing Agency, relating to the Book-Entry Notes.
Determination Date: With respect to each Payment Date, the 15th day of the
month in which such Payment Date occurs, or, if such 15th day is not a Business
Day, the next succeeding Business Day.
Due Date: The day of the calendar month on which the Scheduled Payment is
due on a Mortgage Loan, exclusive of any days of grace. Pursuant to Section
4.02(d), with respect to any Mortgage Loans for which payment from the Mortgagor
is due on a day other than the first day of the month, such Mortgage Loans will
be treated as if the Scheduled Payment is due on the first day of the
immediately succeeding month.
Due Period: With respect to any Payment Date and Mortgage Loan, the period
commencing on the second day of the month immediately preceding the month in
which such Payment Date occurs and ending on the first day of the month in which
such Payment Date occurs.
11
Eligible Account: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company that complies
with the definition of Eligible Institution or (ii) an account or accounts the
deposits in which are insured by the FDIC to the limits established by such
corporation, provided that any such deposits not so insured shall be maintained
in an account at a depository institution or trust company whose commercial
paper or other short term debt obligations (or, in the case of a depository
institution or trust company which is the principal subsidiary of a holding
company, the commercial paper or other short term debt or deposit obligations of
such holding company or depository institution, as the case may be) have been
rated by each Rating Agency in its highest short-term rating category, or (iii)
a segregated trust account or accounts (which shall be a "special deposit
account") maintained with the Indenture Trustee, the Trust Administrator or any
other federal or state chartered depository institution or trust company, acting
in its fiduciary capacity, in a manner acceptable to the Indenture Trustee and
the Rating Agencies. Eligible Accounts may bear interest.
Eligible Institution: Any of the following:
(i) An institution whose:
(1) commercial paper, short-term debt obligations, or other
short-term deposits are rated at least "A-1+" or long-term unsecured
debt obligations are rated at least "Aa-" by S&P (or assigned
comparable ratings by the other Rating Agencies), if the amounts on
deposit are to be held in the account for no more than 365 days; or
(2) commercial paper, short-term debt obligations, demand
deposits, or other short-term deposits are rated at least "A-2" by S&P
(or assigned comparable ratings by the other Rating Agencies), if the
amounts on deposit are to be held in the account for no more than 30
days and are not intended to be used as credit enhancement. Upon the
loss of the required rating set forth in this clause (ii), the
accounts shall be transferred immediately to accounts which have the
required rating. Furthermore, commingling by the Servicer is
acceptable at the A-2 rating level if the Servicer is a bank, thrift
or depository and provided the Servicer has the capability to
immediately segregate funds and commence remittance to an Eligible
Deposit Account upon a downgrade; or
(ii) the corporate trust department of a federal depositor institution
or state-chartered depositor institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity.
Eligible Investments: Any one or more of the following obligations or
securities:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America or any
agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America
("Direct Obligations");
12
(iii) federal funds, or demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution or
trust company (including U.S. subsidiaries of foreign depositories and the
Indenture Trustee or any agent of the Indenture Trustee, acting in its
respective commercial capacity) incorporated or organized under the laws of the
United States of America or any state thereof and subject to supervision and
examination by federal or state banking authorities, so long as at the time of
investment or the contractual commitment providing for such investment the
commercial paper or other short-term debt obligations of such depository
institution or trust company (or, in the case of a depository institution or
trust company which is the principal subsidiary of a holding company, the
commercial paper or other short-term debt or deposit obligations of such holding
company or deposit institution, as the case may be) have been rated by each
Rating Agency in its highest short-term rating category or one of its two
highest long-term rating categories;
(iv) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by GNMA, Xxxxxx Xxx or FHLMC with any registered
broker/dealer subject to Notes Investors' Protection Corporation jurisdiction or
any commercial bank insured by the FDIC, if such broker/dealer or bank has an
uninsured, unsecured and unguaranteed obligation rated by each Rating Agency in
its highest short-term rating category;
(v) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof which have a credit rating from each Rating Agency, at the time of
investment or the contractual commitment providing for such investment, at least
equal to one of the two highest long-term credit rating categories of each
Rating Agency; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that investment
therein will cause the then outstanding principal amount of securities issued by
such corporation and held as part of the Trust Estate to exceed 20% of the sum
of the Aggregate Loan Balance and the aggregate principal amount of all Eligible
Investments in the Collection Account; provided, further, that such securities
will not be Eligible Investments if they are published as being under review
with negative implications from any Rating Agency;
(vi) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than 180 days after the date of issuance thereof) rated by each
Rating Agency in its highest short-term rating category;
(vii) a Qualified GIC;
(viii) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the United
States of America or its agencies or instrumentalities (which obligations are
backed by the full faith and credit of the United States of America) held by a
custodian in safekeeping on behalf of the holders of such receipts; and
(ix) any other demand, money market, common trust fund or time deposit
or obligation, or interest-bearing or other security or investment (including
those managed or advised by the Indenture Trustee, the Master Servicer, the
Trust Administrator, or any Affiliate thereof), (A) rated in the highest rating
category by each Rating Agency or (B) that would not
13
adversely affect the then current rating assigned by each Rating Agency of any
of the Notes. Such investments in this subsection (viii) may include money
market mutual funds or common Trust Estates, including any fund for which Xxxxx
Fargo Bank, N.A. (the "Bank") in its capacity other than as the Master Servicer,
the Trust Administrator or an affiliate thereof serves as an investment advisor,
administrator, shareholder servicing agent, and/or custodian or subcustodian,
notwithstanding that (x) the Bank, the Indenture Trustee, the Master Servicer or
any affiliate thereof charges and collects fees and expenses from such funds for
services rendered, (y) the Bank, the Indenture Trustee, the Trust Administrator,
the Master Servicer or any affiliate thereof charges and collects fees and
expenses for services rendered pursuant to this Agreement, and (z) services
performed for such funds and pursuant to this Agreement may converge at any
time. The Indenture Trustee specifically authorizes the Bank or an affiliate
thereof to charge and collect from the Indenture Trustee such fees as are
collected from all investors in such funds for services rendered to such funds
(but not to exceed investment earnings thereon);
provided, however, that no such instrument shall be an Eligible Investment
if such instrument evidences either (i) a right to receive only interest
payments with respect to the obligations underlying such instrument, or (ii)
both principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Entitlement Holder: The meaning specified in Section 8-102(a)(7) of the New
York UCC.
Entitlement Order: The meaning specified in Section 8-102(a)(8) of the New
York UCC (i.e., generally, orders directing the transfer or redemption of any
Financial Asset).
Environmental Problem Property: A Mortgaged Property or REO Property that
is in violation of any environmental law, rule or regulation.
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Errors and Omissions Insurance: Errors and Omissions Insurance to be
maintained by the Servicer in accordance with Section 4.02(m).
Errors and Omission Insurance Policy: Any Errors and Omission Insurance
policy required to be obtained by the Servicer satisfying the requirements of
this Agreement.
Escrow Account: The separate escrow account (other than a Custodial
Account) established and maintained by the Servicer pursuant to Section 4.02(f)
of this Agreement.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Event of Default: A Servicer Event of Default or a Subservicer Event of
Default.
14
Excess Funding Amount: The amount remaining on deposit in the Pre-Funding
Account at the end of the Pre-Funding Period, exclusive of investment income.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx or FNMA: Xxxxxx Xxx, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
FIC: Fieldstone Investment Corporation.
Fidelity Bond: Any fidelity bond to be maintained by the Servicer in
accordance with Section 4.02(m).
Financial Asset: The meaning specified in Section 8-102(a) of the New York
UCC.
Fitch: Fitch Ratings, or any successor in interest.
Fixed Rate Cap: With respect to a Payment Date, the per annum rate equal to
12.250%.
FMC: Fieldstone Mortgage Company.
Freddie Mac or FHLMC: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under Title
III of the Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
FSC: Fieldstone Servicing Corp.
GNMA: The Government National Mortgage Association, a wholly owned
corporate instrumentality of the United States within HUD.
Group 1: The portion of the Mortgage Pool identified as Group 1.
Group 1 Percentage: With respect to Group 1 and any Payment Date, the
fraction, expressed as a percentage, the numerator of which is the Group Balance
for Group 1 for such date and the denominator of which is the Aggregate
Collateral Balance for such date.
Group 2: The portion of the Mortgage Pool identified as Group 2.
Group 2 Percentage: With respect to Group 2 and any Payment Date, the
fraction, expressed as a percentage, the numerator of which is the Group Balance
for Group 2 for such date and the denominator of which is the Aggregate
Collateral Balance for such date.
Group Balance: With respect to each Mortgage Group and any Payment Date,
the aggregate of the Stated Principal Balances of the Mortgage Loans in such
Mortgage Group.
Guidelines: As defined in Section 4.02(t).
15
Holder or Noteholder: The registered holder of any Note or Ownership
Certificate as recorded on the books of the Note Registrar or the Certificate
Registrar except that, solely for the purposes of taking any action or giving
any consent pursuant to this Agreement, any Note registered in the name of the
Depositor, the Master Servicer, the Servicer, the Subservicer, the Trust
Administrator or the Indenture Trustee or any Affiliate thereof (unless any such
Person owns 100% of a Class) shall be deemed not to be outstanding in
determining whether the requisite percentage necessary to effect any such
consent has been obtained, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such consent, only Notes and an
Ownership Certificate which a Responsible Officer of the Indenture Trustee knows
to be so held shall be disregarded. The Indenture Trustee may request and
conclusively rely on certifications by the Depositor in determining whether any
Note, or Ownership Certificate are registered to an Affiliate of the Depositor.
HUD: The United States Department of Housing and Urban Development, or any
successor thereto.
Indenture: The Indenture dated as of November 1, 2005, among the Issuer,
the Trust Administrator and the Indenture Trustee, as such may be amended or
supplemented from time to time.
Indenture Events of Default: As defined in Section 5.01 of the Indenture.
Indenture Trustee: HSBC Bank USA, National Association, not in its
individual capacity but solely as Indenture Trustee, or any successor in
interest.
Independent: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and Exchange
Commission's Regulation S-X. When used with respect to any other Person, a
Person who (a) is in fact independent of another specified Person and any
Affiliate of such other Person, (b) does not have any material direct financial
interest in such other Person or any Affiliate of such other Person, and (c) is
not connected with such other Person or any Affiliate of such other Person as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
Index: The index specified in the related Mortgage Note for calculation of
the Mortgage Rate thereof.
Initial Cut-off Date: November 1, 2005.
Initial Mortgage Loans: The Mortgage Loans included in the Trust as of the
Closing Date.
Initial Mortgage Loan Schedule: The schedule of Initial Mortgage Loans
included in the Trust as of the Closing Date.
Insurance Policy: Any primary mortgage insurance policy, any standard
hazard insurance policy, flood insurance policy, earthquake insurance policy or
title insurance policy
16
relating to the Mortgage Loans or the Mortgaged Properties, to be in effect as
of the Closing Date or thereafter during the term of this Agreement.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property,
if applicable, including the proceeds of any hazard or flood insurance policy
reduced by expenses incurred by the Servicer or the Subservicer in connection
with procuring such proceeds, applied to the restoration and repair of the
related Mortgaged Property or to be paid to the related Mortgagor pursuant to
the Mortgage Note or applicable state law.
Interest Funds: With respect to each Mortgage Group and any Payment Date,
(a) the sum of, without duplication, (1) all interest collected (other than the
interest portion of Payaheads and Prepayment Premiums) or advanced in respect of
Scheduled Payments on the Mortgage Loans in such Mortgage Group during the
related Due Period by the Servicer, the Subservicer, the Master Servicer or the
Indenture Trustee (solely in its capacity as successor Master Servicer), minus,
(x) to the extent provided under Sections 4.02(e)(3) and (4) and Sections
5.08(i) and (ii) herein, previously unreimbursed Advances and Nonrecoverable
Advances due to the Servicer, the Subservicer, the Master Servicer or the
Indenture Trustee (solely in its capacity as successor master servicer) to the
extent allocable to interest and the allocable portion of previously
unreimbursed Servicing Advances with respect to the Mortgage Loans in such
Mortgage Group, (y) the Servicing Administration Fee and Master Servicing Fee
with respect to such Mortgage Loans in such Mortgage Group and (z) any fees and
expenses of any Custodian with respect to the Mortgage Loans in such Mortgage
Group to the extent not paid by the Seller or its Affiliates, (2) any
Compensating Interest Payments or payments in respect of Prepayment Interest
Shortfalls paid by the Master Servicer pursuant to Section 5.21 with respect to
the related Prepayment Period with respect to the Mortgage Loans in such
Mortgage Group, (3) the portion of any Purchase Price or Substitution Amount
paid with respect to the Mortgage Loans in such Mortgage Group during the
related Prepayment Period allocable to interest, (4) all Net Liquidation
Proceeds, Insurance Proceeds and any other recoveries collected with respect to
the Mortgage Loans in such Mortgage Group during the related Prepayment Period,
to the extent allocable to interest and (5) such Mortgage Group's pro rata share
of any Net Swap Receipts paid by the Swap Counterparty in respect of the Swap
Agreement, as reduced by (a) such Mortgage Group's pro rata share of: (i) the
Owner Trustee Fee, (ii) any costs, expenses or liabilities reimbursable or
otherwise due to the Master Servicer, Servicer, the Subservicer, the Indenture
Trustee, any Custodian, the Owner Trustee or the Trust Administrator to the
extent provided in this Agreement, the Trust Agreement, the Indenture and any
Custodial Agreement and (iii) any other fees and expenses payable from amounts
on deposit in the Collection Account and any of the Custodial Accounts and (b)
the Group 1 Percentage or Group 2 Percentage, as applicable, of any Net Swap
Payment for such Payment Date and any swap termination amounts paid to the Swap
Counterparty in the event that the Issuer is a defaulting party or affected
party under the terms of the Swap Agreement, in each case, to the extent paid
from amounts on deposit in the Collection Account.
Interest Margin: For each Class of Notes (other than the Class M10, Class
M11, Class M12 and Class M13 Notes), for any Payment Date prior to the Stepup
Date, the following per annum rate: for any Payment Date prior to the Stepup
Date the following per annum rate: Class 1-A, 0.245%; Class 2-A1, 0.120%; Class
2-A2, 0.260%; Class 2-A3, 0.340%; Class M1,
17
0.430%; Class M2, 0.450%; Class M3, 0.480%; Class M4, 0.600%; Class M5, 0.630%;
Class M6, 0.690%; Class M7, 1.200%; Class M8, 1.450%; and Class M9, 2.000%; and
on any Payment Date following the Stepup Date: Class 1-A, 0.490%; Class 2-A1,
0.240%; Class 2-A2, 0.520%; Class 2-A3, 0.680%; Class M1, 0.645%; Class M2,
0.675%; Class M3, 0.720%; Class M4, 0.900%; Class M5, 0.945%; Class M6, 1.035%;
Class M7, 1.800%; Class M8, 2.175%; and Class M9, 3.000%.
Interest Rate: With respect to (a) each Class of Notes (other than the
Class M10, Class M11, Class M12 and Class M13 Notes) on any Payment Date, the
least of (1) LIBOR plus the Interest Margin for such Class, (2) the Available
Funds Rate and (3) the Fixed Rate Cap and (b) the Class M10, Class M11, Class
M12 and Class M13 Notes, the lesser of (1) a per annum rate of 5.000% and (2)
the Available Funds Rate, provided that the per annum rate in clause (c)(1)
above will increase to 5.500% beginning on the Stepup Date and each Payment Date
thereafter.
Intervening Assignments: The original intervening assignments of the
Mortgage, notices of transfer or equivalent instrument.
Issuer: The Delaware statutory trust known as the "Fieldstone Mortgage
Investment Trust, Series 2005-3."
Issuer Order or Issuer Request: A written order or request signed in the
name of the Issuer by any one of its Authorized Officers and delivered to the
Indenture Trustee.
LIBOR: (a) With respect to the first Accrual Period, the per annum rate of
4.170%. With respect to each subsequent Accrual Period, a per annum rate
determined on the LIBOR Determination Date in the following manner by the Trust
Administrator on the basis of the "Interest Settlement Rate" set by the British
Bankers' Association (the "BBA") for one-month United States dollar deposits, as
such rates appear on the Telerate Page 3750, as of 11:00 a.m. (London time) on
such LIBOR Determination Date.
(b) If on such a LIBOR Determination Date, the BBA's Interest Settlement
Rate does not appear on the Telerate Page 3750 as of 11:00 a.m. (London time),
or if the Telerate Page 3750 is not available on such date, the Trust
Administrator will determine such rate on the basis of the offered rates of the
Reference Banks for one-month United States dollar deposits, as such rates
appear on the Reuters Screen LIBO Page, as of 11:00 a.m. (London time) on such
LIBOR Determination Date.
(c) If LIBOR is determined under clause (b) above, on each LIBOR
Determination Date, LIBOR for the related Accrual Period for the Notes will be
established by the Trust Administrator as follows:
(1) If on such LIBOR Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the related Accrual
Period for the Notes shall be the arithmetic mean of such offered
quotations (rounded upwards if necessary to the nearest whole multiple
of 0.03125%).
(2) If on such LIBOR Determination Date fewer than two Reference
Banks provide such offered quotations, LIBOR for the related Accrual
Period
18
shall be the higher of (x) LIBOR as determined on the previous LIBOR
Determination Date and (y) the Reserve Interest Rate.
(d) The establishment of LIBOR by the Trust Administrator and the Trust
Administrator's subsequent calculation of the Interest Rate applicable to the
LIBOR Notes for the relevant Accrual Period, in the absence of manifest error,
will be final and binding.
LIBOR Business Day: Any day on which banks in London, England and The City
of New York are open and conducting transactions in foreign currency and
exchange.
LIBOR Determination Date: The second LIBOR Business Day immediately
preceding the commencement of each Accrual Period for any LIBOR Notes.
LIBOR Note: Any Class 1-A, Class 2-A1, Class 2-A2, Class 2-A3, Class M1,
Class M2, Class M3, Class M4, Class M5, Class M6, Class M7, Class M8 or Class M9
Note.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Master Servicer, the Servicer or the Subservicer, as applicable, has determined
that all amounts that it expects to recover from or on account of such Mortgage
Loan have been recovered.
Liquidation Expenses: Expenses that are incurred by the Master Servicer,
the Servicer or the Subservicer, as applicable, in connection with the
liquidation of any defaulted Mortgage Loan and are not recoverable under the
applicable primary mortgage insurance policy, if any, including, without
limitation, foreclosure and rehabilitation expenses, legal expenses and
unreimbursed amounts, if any, expended pursuant to Sections 4.18 or 4.23.
Liquidation Proceeds: Cash received in connection with the liquidation of a
defaulted Mortgage Loan, whether through the sale or assignment of such Mortgage
Loan, trustee's sale, foreclosure sale, payment in full, discounted payoff or
otherwise, or the sale of the related REO Property, if the Mortgaged Property is
acquired in satisfaction of the Mortgage Loan.
M1 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the excess, if any, of (1) the Total Principal Deficiency Amount
over (2) the sum of (i) the M2 Principal Deficiency Amount, (ii) the M3
Principal Deficiency Amount, (iii) the M4 Principal Deficiency Amount, (iv) the
M5 Principal Deficiency Amount, (v) the M6 Principal Deficiency Amount, (vi) the
M7 Principal Deficiency Amount, (vii) the M8 Principal Deficiency Amount, (viii)
the M9 Principal Deficiency Amount, (ix) the M10 Principal Deficiency Amount,
(x) the M11 Principal Deficiency Amount, (xi) the M12 Principal Deficiency
Amount and (xii) the M13 Principal Deficiency Amount, in each case for that
Payment Date and (b) the Class Principal Amount of the Class M1 Notes
immediately prior to such Payment Date.
M1 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes, in each case after giving effect to
payments on such Payment Date and (ii) the Class Principal Amount of the Class
M1 Notes immediately prior to such Payment Date over (y) the M1 Target Amount.
19
M1 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 60.20% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.
M2 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the excess, if any, of (1) the Total Principal Deficiency Amount
over (2) the sum of (i) the M3 Principal Deficiency Amount, (ii) the M4
Principal Deficiency Amount, (iii) the M5 Principal Deficiency Amount, (iv) the
M6 Principal Deficiency Amount, (v) the M7 Principal Deficiency Amount, (vi) the
M8 Principal Deficiency Amount, (vii) the M9 Principal Deficiency Amount, (viii)
the M10 Principal Deficiency Amount, (ix) the M11 Principal Deficiency Amount,
(x) the M12 Principal Deficiency Amount and (xi) the M13 Principal Deficiency
Amount, in each case for that Payment Date and (b) the Class Principal Amount of
the Class M2 Notes immediately prior to such Payment Date.
M2 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1 Notes, in each case after
giving effect to payments on such Payment Date and (ii) the Class Principal
Amount of the Class M2 Notes immediately prior to such Payment Date over (y) the
M2 Target Amount.
M2 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 67.30% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.
M3 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the excess, if any, of (1) the Total Principal Deficiency Amount
over (2) the sum of (i) the M4 Principal Deficiency Amount, (ii) the M5
Principal Deficiency Amount, (iii) the M6 Principal Deficiency Amount, (iv) the
M7 Principal Deficiency Amount, (v) the M8 Principal Deficiency Amount, (vi) the
M9 Principal Deficiency Amount, (vii) the M10 Principal Deficiency Amount (viii)
the M11 Principal Deficiency Amount, (ix) the M12 Principal Deficiency Amount
and (x) the M13 Principal Deficiency Amount, in each case for that Payment Date
and (b) the Class Principal Amount of the Class M3 Notes immediately prior to
such Payment Date.
M3 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1 and Class M2 Notes, in
each case after giving effect to payments on such Payment Date and (ii) the
Class Principal Amount of the Class M3 Notes immediately prior to such Payment
Date over (y) the M3 Target Amount.
M3 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 72.10% and (ii) the Aggregate Collateral
Balance for such Payment Date
20
determined as of the last day of the related Due Period and (b) the excess of
(i) the Aggregate Collateral Balance for such Payment Date determined as of the
last day of the related Due Period over (ii) 0.50% of the Aggregate Collateral
Balance as of the Closing Date.
M4 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the excess, if any, of (1) the Total Principal Deficiency Amount
over (2) the sum of (i) the M5 Principal Deficiency Amount, (ii) the M6
Principal Deficiency Amount, (iii) the M7 Principal Deficiency Amount, (iv) the
M8 Principal Deficiency Amount, (v) the M9 Principal Deficiency Amount, (vi) the
M10 Principal Deficiency Amount, (vii) the M11 Principal Deficiency Amount,
(viii) the M12 Principal Deficiency Amount and (ix) the M13 Principal Deficiency
Amount, in each case for that Payment Date, and (b) the Class Principal Amount
of the Class M4 Notes immediately prior to such Payment Date.
M4 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2 and Class M3
Notes, in each case after giving effect to payments on such Payment Date and
(ii) the Class Principal Amount of the Class M4 Notes immediately prior to such
Payment Date over (y) the M4 Target Amount.
M4 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 75.50% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.
M5 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the excess, if any, of (1) the Total Principal Deficiency Amount
over (2) the sum of (i) the M6 Principal Deficiency Amount (ii) the M7 Principal
Deficiency Amount, (iii) the M8 Principal Deficiency Amount, (iv) the M9
Principal Deficiency Amount, (v) the M10 Principal Deficiency Amount, (vi) the
M11 Principal Deficiency Amount, (vii) the M12 Principal Deficiency Amount and
(viii) the M13 Principal Deficiency Amount, in each case for that Payment Date
and (b) the Class Principal Amount of the Class M5 Notes immediately prior to
such Payment Date.
M5 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3 and
Class M4 Notes, in each case after giving effect to payments on such Payment
Date and (ii) the Class Principal Amount of the Class M5 Notes immediately prior
to such Payment Date over (y) the M5 Target Amount.
M5 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 78.80% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.
21
M6 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the excess, if any, of (1) the Total Principal Deficiency Amount
over (2) the sum of (i) the M7 Principal Deficiency Amount, (ii) the M8
Principal Deficiency Amount, (iii) the M9 Principal Deficiency Amount, (iv) the
M10 Principal Deficiency Amount, (v) the M11 Principal Deficiency Amount, (vi)
the M12 Principal Deficiency Amount and (vii) the M13 Principal Deficiency
Amount, in each case for that Payment Date and (b) the Class Principal Amount of
the Class M6 Notes immediately prior to such Payment Date.
M6 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3, Class
M4 and Class M5 Notes, in each case after giving effect to payments on such
Payment Date and (ii) the Class Principal Amount of the Class M6 Notes
immediately prior to such Payment Date over (y) the M6 Target Amount.
M6 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 82.00% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.
M7 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the excess, if any, of (1) the Total Principal Deficiency Amount
over (2) the sum of (i) the M8 Principal Deficiency Amount, (ii) the M9
Principal Deficiency Amount, (iii) the M10 Principal Deficiency Amount, (iv) the
M11 Principal Deficiency Amount, (v) the M12 Principal Deficiency Amount and
(vi) the M13 Principal Deficiency Amount, in each case for that Payment Date,
and (b) the Class Principal Amount of the Class M7 Notes immediately prior to
such Payment Date.
M7 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3, Class
M4, Class M5 and Class M6 Notes, in each case after giving effect to payments on
such Payment Date and (ii) the Class Principal Amount of the Class M7 Notes
immediately prior to such Payment Date over (y) the M7 Target Amount.
M7 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 85.20% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.
M8 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the excess, if any, of (1) the Total Principal Deficiency Amount
over (2) the sum of (i) the M9 Principal Deficiency Amount, (ii) the M10
Principal Deficiency Amount, (iii) the M11 Principal Deficiency Amount, (iv) the
M12 Principal Deficiency Amount and (v) the M13 Principal
22
Deficiency Amount, in each case for that Payment Date and (b) the Class
Principal Amount of the Class M8 Notes immediately prior to such Payment Date.
M8 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3, Class
M4, Class M5, Class M6 and Class M7 Notes, in each case after giving effect to
payments on such Payment Date and (ii) the Class Principal Amount of the Class
M8 Notes immediately prior to such Payment Date over (y) the M8 Target Amount.
M8 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 87.80% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.
M9 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the excess, if any, of (1) the Total Principal Deficiency Amount
over (2) the sum of (i) the M10 Principal Deficiency Amount, (ii) the M11
Principal Deficiency Amount, (iii) the M12 Principal Deficiency Amount and (iv)
the M13 Principal Deficiency Amount, in each case for that Payment Date and (b)
the Class Principal Amount of the Class M9 Notes immediately prior to such
Payment Date.
M9 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3, Class
M4, Class M5, Class M6, Class M7 and Class M8 Notes, in each case after giving
effect to payments on such Payment Date and (ii) the Class Principal Amount of
the Class M9 Notes immediately prior to such Payment Date over (y) the M9 Target
Amount.
M9 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 90.00% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.
M10 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the excess, if any, of (1) the Total Principal Deficiency Amount
over (2) the sum of (i) the M11 Principal Deficiency Amount, (ii) the M12
Principal Deficiency Amount and (iii) the M13 Principal Deficiency Amount, in
each case for that Payment Date and (b) the Class Principal Amount of the Class
M10 Notes immediately prior to such Payment Date.
M10 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3, Class
M4, Class M5, Class M6, Class M7, Class M8 and Class
23
M9 Notes, in each case after giving effect to payments on such Payment Date and
(ii) the Class Principal Amount of the Class M10 Notes immediately prior to such
Payment Date over (y) the M10 Target Amount.
M10 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 93.60% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.
M11 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the excess, if any, of (1) the Total Principal Deficiency Amount
for that Payment Date over (2) the sum of (i) the M12 Principal Deficiency
Amount and (ii) the M13 Principal Deficiency Amount, in each case for that
Payment Date and (b) the Class Principal Amount of the Class M11 Notes
immediately prior to such Payment Date.
M11 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3, Class
M4, Class M5, Class M6, Class M7, Class M8, Class M9 and Class M10 Notes, in
each case after giving effect to payments on such Payment Date and (ii) the
Class Principal Amount of the Class M11 Notes immediately prior to such Payment
Date over (y) the M11 Target Amount.
M11 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 95.60% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.
M12 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the excess, if any, of (1) the Total Principal Deficiency Amount
for that Payment Date over (2) the M13 Principal Deficiency Amount, in each case
for that Payment Date and (b) the Class Principal Amount of the Class M12 Notes
immediately prior to such Payment Date.
M12 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3, Class
M4, Class M5, Class M6, Class M7, Class M8, Class M9, Class M10 and Class M11
Notes, in each case after giving effect to payments on such Payment Date and
(ii) the Class Principal Amount of the Class M12 Notes immediately prior to such
Payment Date over (y) the M12 Target Amount.
M12 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 97.10% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate
24
Collateral Balance for such Payment Date determined as of the last day of the
related Due Period over (ii) 0.50% of the Aggregate Collateral Balance as of the
Closing Date.
M13 Principal Deficiency Amount: With respect to any Payment Date, the
lesser of (a) the Total Principal Deficiency Amount for that Payment Date and
(b) the Class Principal Amount of the Class M13 Notes immediately prior to such
Payment Date.
M13 Principal Payment Amount: With respect to any Payment Date on or after
the Stepdown Date and as long as a Trigger Event is not in effect with respect
to such Payment Date, the excess of (x) the sum of (i) the aggregate Class
Principal Amount of the Senior Notes and the Class M1, Class M2, Class M3, Class
M4, Class M5, Class M6, Class M7, Class M8, Class M9, Class M10, Class M11 and
Class M12 Notes, in each case after giving effect to payments on such Payment
Date and (ii) the Class Principal Amount of the Class M13 Notes immediately
prior to such Payment Date over (y) the M13 Target Amount.
M13 Target Amount: With respect to any Payment Date, an amount equal to the
lesser of (a) the product of (i) 98.40% and (ii) the Aggregate Collateral
Balance for such Payment Date determined as of the last day of the related Due
Period and (b) the excess of (i) the Aggregate Collateral Balance for such
Payment Date determined as of the last day of the related Due Period over (ii)
0.50% of the Aggregate Collateral Balance as of the Closing Date.
Majority Noteholders: Until such time as the sum of the Class Principal
Amounts of all Classes of Notes has been reduced to zero, the holder or holders
of in excess of 50% of the aggregate Class Principal Amount of all Classes of
Notes (accordingly, the holder of the Ownership Certificate shall be excluded
from any rights or actions of the Majority Noteholders during such period); and
thereafter, the holder of the Ownership Certificate.
Master Servicer: Xxxxx Fargo Bank, N.A., or any successor in interest, or
if any successor master servicer shall be appointed as herein provided, then
such successor master servicer.
Master Servicer Event of Default: Any one of the conditions or
circumstances enumerated in Section 8.01(a).
Master Servicing Fee: As to any Payment Date, an amount equal to the
product of (i) one-twelfth of the Master Servicing Fee Rate and (ii) the
Aggregate Collateral Balance as of the first day of the related Due Period.
Master Servicing Fee Rate: With respect to each Mortgage Loan, 0.0030% per
annum.
Material Defect: With respect to any Mortgage Loan, as defined in Section
2.02(c) hereof.
Maturity Date: With respect to any Class of Notes, the Payment Date in
February 2036.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
25
MERS Mortgage Loan: Any Mortgage Loan as to which the related Mortgage, or
an Assignment of Mortgage, has been or will be recorded in the name of MERS, as
nominee for the holder from time to time of the Mortgage Note.
Monthly Excess Cashflow: For any Payment Date, the sum of (i) Monthly
Excess Interest, (ii) any Principal Payment Amount for Group 1 and Group 2
pursuant to Section 6.02(e)(i)(1)(R) and 6.02(e)(i)(2)(R), respectively, or
6.02(e)(ii)(17), as applicable, and (iii) the Aggregate Overcollateralization
Release Amount for such Payment Date.
Monthly Excess Interest: For any Payment Date, an amount equal any Interest
Funds for Group 1 and Group 2 remaining after application pursuant to subclauses
(i) through (xiv) of Section 6.02(d).
Moody's: Xxxxx'x Investors Service, Inc., or any successor in interest.
Mortgage: A mortgage, deed of trust or other instrument encumbering a fee
simple interest in real property securing a Mortgage Note, together with
improvements thereto.
Mortgage File: The mortgage documents listed in Section 2.01(b) pertaining
to a particular Mortgage Loan required to be delivered to the Indenture Trustee
pursuant to this Agreement.
Mortgage Group: Any of Group 1 or Group 2.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy to be maintained by the Servicer in accordance with
Section 5.02(l).
Mortgage Index: The Six-Month LIBOR Index and the Treasury Mortgage Index,
as specified for any Mortgage Loan in the Mortgage Loan Schedule.
Mortgage Loan: A mortgage loan that is conveyed to the Issuer pursuant to
this Agreement on the Closing Date, with respect to the Initial Mortgage Loans,
and on each Subsequent Transfer Date, with respect to the Subsequent Mortgage
Loans, which mortgage loan includes, without limitation, the mortgage loan
documents, the Scheduled Payments, Principal Prepayments, Liquidation Proceeds,
Condemnation Proceeds, Insurance Proceeds, any related REO Property, REO
Disposition Proceeds, and all other rights, benefits, proceeds and obligations
arising from or in connection with such mortgage loan. The Initial Mortgage
Loans subject to this Agreement are identified on the Initial Mortgage Loan
Schedule annexed hereto as Schedule A and have an aggregate Stated Principal
Balance as of the Initial Cut-off Date of $875,337,689.43. The Subsequent
Mortgage Loans subject to this Agreement will be identified on each Subsequent
Mortgage Loan Schedule to be annexed hereto as Schedule A on each Subsequent
Transfer Date.
Mortgage Loan Purchase Agreement: The mortgage loan purchase agreement
dated as of November 1, 2005, for the sale of the Mortgage Loans by the Seller
to the Depositor.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
Mortgage Rate minus the Servicing Administration Fee Rate.
26
Mortgage Loan Schedule: Each Initial Mortgage Loan Schedule and any
Subsequent Mortgage Loan Schedule attached hereto as Schedule A, which shall
identify each Mortgage Loan, as such schedule may be amended from time to time
to reflect the addition of Mortgage Loans to, or the deletion of Mortgage Loans
from, the Trust Estate. Such schedule shall set forth, among other things, the
following information with respect to each Mortgage Loan: (i) the Mortgage Loan
identifying number; (ii) the original principal balance of the Mortgage Loan;
(iii) the Mortgage Rate at origination; (iv) the Mortgage Index; (v) the first
Mortgage Rate adjustment date; (vi) the monthly payment of principal and
interest at origination; (vii) the Servicing Administration Fee Rate; (viii) the
Master Servicer Fee Rate and (ix) whether such Mortgage Loan is subject to a
Prepayment Premium for voluntary prepayments by the Mortgagor, the term during
which such Prepayment Premiums are imposed and the method of calculation of the
Prepayment Premium. The Servicer shall be responsible for providing the
Indenture Trustee and the Master Servicer with all amendments to the Mortgage
Loan Schedule.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage under a Mortgage Loan.
Mortgage Pool: The aggregate of all the Mortgage Loans.
Mortgage Rate: As to any Mortgage Loan, the per annum rate at which
interest accrues on such Mortgage Loan, as determined under the related Mortgage
Note as reduced by the applications of the Civil Relief Act.
Mortgaged Property: The fee simple interest in real property, together with
improvements thereto including any exterior improvements to be completed within
120 days of disbursement of the related Mortgage Loan proceeds.
Mortgagor: The obligor on a Mortgage Note.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan, the
related Liquidation Proceeds received and retained in connection with the
liquidation of such Mortgage Loan net of (i) Liquidation Expenses and (ii) any
related unreimbursed Advances and Servicing Advances, if any.
Net Mortgage Rate: With respect to any Mortgage Loan, the Mortgage Rate
thereof reduced by the Aggregate Expense Rate for such Mortgage Loan.
Net Swap Payment: With respect to the second Business Day prior to any
Calculation Period End Date, the amount paid by the Trust under the Swap
Agreement to the Swap Counterparty in excess of the amounts received by the
Trust from the Swap Counterparty, as calculated by the Swap Counterparty and
reported to the Trust Administrator.
Net Swap Receipt: With respect to the second Business Day prior to any
Calculation Period End Date, the amount received by the Trust under the Swap
Agreement from the Swap Counterparty in excess of the amount paid by the Trust
to the Swap Counterparty, as calculated by the Swap Counterparty and reported to
the Trust Administrator.
New York UCC: The Uniform Commercial Code as in effect in the State of New
York.
27
Non-MERS Mortgage Loan: Any Mortgage Loan other than a MERS Mortgage Loan.
Nonrecoverable Advance: Any Servicing Advance or Monthly Advance previously
made or proposed to be made in respect of a Mortgage Loan by the Servicer or the
Master Servicer as successor servicer which, in the reasonable discretion of the
Servicer will not or, in the case of a proposed Servicing Advance or Monthly
Advance, would not, ultimately be recoverable by the Servicer from the related
Mortgagor, related Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds, REO Disposition Proceeds or otherwise. The determination by the
Servicer that all or a portion of a Servicing Advance or Monthly Advance would
be a Nonrecoverable Advance shall be evidenced by an Officer's Certificate
delivered to the Master Servicer setting forth such determination and a
reasonable explanation thereof.
Note: As defined in the Indenture.
Note Principal Amount: With respect to any Note, the initial principal
amount thereof on the Closing Date, less the amount of all principal payments
previously paid with respect to such Note.
Note Register and Note Registrar: As defined in the Indenture.
Offering Document: The Prospectus.
Officer's Certificate: A certificate signed by the Chairman of the Board,
any Vice Chairman, the President, any Senior Vice President, any Vice President
or any Assistant Vice President of a Person.
Operative Agreements: The Trust Agreement, the Certificate of Trust of the
Issuer, this Agreement, the Mortgage Loan Purchase Agreement, the Indenture, the
Custodial Agreement and each other document contemplated by any of the foregoing
to which the Depositor, the Seller, the Master Servicer, the Servicer, the
Subservicer, the Owner Trustee, the Trust Administrator, the Indenture Trustee
or the Issuer is a party.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable in
form and substance to the Seller, the Trust Administrator, the Swap
Counterparty, the Indenture Trustee and/or the Master Servicer, as applicable
(each such opinion letter to include such Swap Counterparty as an addressee
thereof), and who may be in-house or outside counsel to the Seller, the
Servicer, the Subservicer, the Depositor, the Master Servicer, the Trust
Administrator or the Indenture Trustee but which must be Independent outside
counsel with respect to any such opinion of counsel concerning federal income
tax or ERISA matters.
Original Loan-to-Value Ratio: With respect to any Mortgage Loan, the ratio
of the principal balance of such Mortgage Loan at origination, or such other
date as is specified, to the Original Value of the related Mortgaged Property.
Original Value: The lesser of (a) the Appraised Value of a Mortgaged
Property at the time the related Mortgage Loan was originated and (b) if the
Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price paid for the Mortgaged Property by the Mortgagor at
the time the related Mortgage Loan was originated.
28
Overcollateralization Amount: With respect to any Payment Date will be
equal to the amount, if any, by which (x) the Aggregate Collateral Balance for
such Payment Date exceeds (y) the aggregate Class Principal Amount of the Notes,
in each case after giving effect to payments on such Payment Date.
Overcollateralization Deficiency Amount: With respect to any Payment Date,
the excess, if any, of the Targeted Overcollateralization Amount for that
Payment Date over the Overcollateralization Amount for that Payment Date.
Ownership Certificate: An equity certificate representing a 100% undivided
beneficial ownership interest in the Trust, substantially in the form attached
as part of Exhibit A to the Trust Agreement.
Ownership Certificate Holder: The holder of the Ownership Certificate.
Owner Trustee: U.S. Bank Trust National Association, a Delaware banking
corporation, and any successor in interest, not in its individual capacity, but
solely as owner trustee under the Trust Agreement.
Owner Trustee Fee: The annual fee of $3,000, payable to the Owner Trustee
pursuant to the Fee Letter Agreement specified in Section 7.03 of the Trust
Agreement on a monthly basis on each Payment Date during the term of this
Agreement; provided that the Owner Trustee Fee for the first year shall be
payable on the Closing Date by the Seller.
Payahead: With respect to any Mortgage Loan and any Due Date therefor, any
Scheduled Payment received by the Servicer during any Due Period in addition to
the Scheduled Payment due on such Due Date, intended by the related Mortgagor to
be applied on a subsequent Due Date or Due Dates.
Paying Agent: As defined in the Indenture. The initial Paying Agent shall
be the Trust Administrator.
Payment Date: The 25th day of each month or, if such 25th day is not a
Business Day, the next succeeding Business Day, commencing in December 2005. The
initial Payment Date is December 27, 2005.
Percentage Interest: With respect to any Note and the Ownership
Certificate, the Percentage Interest evidenced thereby shall equal (i) with
respect to the Ownership Certificate, the Percentage Interest on the face of
such certificate or (ii) with respect to any Note, the initial Note Principal
Amount thereof, divided by the initial Class Principal Amount of all Notes of
the same Class.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
29
Plan: An employee benefit plan or other retirement arrangement which is
subject to Section 406 of ERISA and/or Section 4975 of the Code or any entity
whose underlying assets include such plan's or arrangement's assets by reason of
their investment in the entity.
Plan Asset Regulations: The Department of Labor regulations set forth in 29
C.F.R. 2510.3-101.
Pool 1 Subaccount: A subaccount of the Pre-Funding Account that contains
funds to be used to purchase Subsequent Mortgage Loans for Group 1.
Pool 2 Subaccount: A subaccount of the Pre-Funding Account that contains
funds to be used to purchase Subsequent Mortgage Loans for Group 2.
Pre-Funding Account: The account established by the Trust Administrator for
the benefit of Noteholders, which consists of the Pool 1 Subaccount and the Pool
2 Subaccount, into which the Seller is required to deposit or cause to be
deposited an amount equal to $103,386,623.06 and $186,607,633.51, respectively,
on the Closing Date.
Pre-Funding Period: The period from Closing Date through and including
February 22, 2006, during which the Seller may transfer Subsequent Mortgage
Loans to the Trust.
Prepayment Interest Excess Amount: For any Servicer Remittance Date and any
Principal Prepayment in full received during the portion of the related
Prepayment Period occurring from and including the first day through the
fifteenth day of the calendar month in which such Servicer Remittance Date
occurs, an amount equal to interest (to the extent received) due in connection
with such Principal Prepayment.
Prepayment Interest Shortfall Amount: With respect to any Payment Date and
(x) any Principal Prepayment in part during the preceding calendar month or (y)
any Principal Prepayment in full from the sixteenth day of the preceding
calendar month through the end of such calendar month, the amount, if any, by
which one month's interest at the Net Mortgage Rate for such Mortgage Loan on
the amount of such Principal Prepayment exceeds the amount of interest received
from such Mortgagor in respect of such Principal Prepayment.
Prepayment Period: With respect to any Payment Date and any Principal
Prepayment other than Principal Prepayment in part by a Mortgagor, the period
beginning from and including the sixteenth day of the month preceding the month
in which such Payment Date occurs to and including the fifteenth day of the
month in which such Payment Date occurs. With respect to any Payment Date and
any Principal Prepayment in part by a Mortgagor, the calendar month immediately
preceding the month in which such Payment Date occurs.
Prepayment Premiums: Any prepayment fees and penalties to be paid by the
Mortgagor on a Mortgage Loan in the case of a full or partial voluntary
prepayment of such Mortgage Loan during the related Prepayment Period.
Prime Rate: The prime rate of the United States money center commercial
banks as published in The Wall Street Journal, Northeast Edition.
30
Principal Deficiency Amount: Any of the M1 Principal Deficiency Amount, the
M2 Principal Deficiency Amount, the M3 Principal Deficiency Amount, the M4
Principal Deficiency Amount, the M5 Principal Deficiency Amount, the M6
Principal Deficiency Amount, the M7 Principal Deficiency Amount, the M8
Principal Deficiency Amount, the M9 Principal Deficiency Amount, the M10
Principal Deficiency Amount, the M11 Principal Deficiency Amount, the M12
Principal Deficiency Amount and the M13 Principal Deficiency Amount, as
applicable.
Principal Funds: With respect to any Payment Date and for each Mortgage
Group, (a) the sum of (i) all principal collected (other than the principal
portion of Payaheads) or advanced in respect of Scheduled Payments on the
Mortgage Loans in such Mortgage Group during the related Due Period whether by
the Servicer, the Master Servicer or the Indenture Trustee (less unreimbursed
Advances and Nonrecoverable Advances due to the Master Servicer, the Servicer,
the Subservicer or the Indenture Trustee, solely in its capacity as successor
Master Servicer, with respect to such Mortgage Group) and any unreimbursed
Servicing Advances, in each case, to the extent allocable to principal and to
the extent provided under Sections 4.02(e)(3) and (4) and Sections 5.08(i) and
(ii)), (ii) all Principal Prepayments in full or in part received during the
related Prepayment Period on the Mortgage Loans in such Mortgage Group, (iii)
the Stated Principal Balance of each Mortgage Loan in such Mortgage Group that
was purchased from the Trust Estate, during the related Prepayment Period, (iv)
the portion of any Substitution Amount paid with respect to any Deleted Mortgage
Loan relating to a Mortgage Loan in such Mortgage Group during the related
Prepayment Period allocable to principal, (v) all Net Liquidation Proceeds,
Insurance Proceeds, REO Disposition Proceeds and other Recoveries collected with
respect to such Mortgage Loans in such Mortgage Group during the related
Prepayment Period, to the extent allocable to principal, as reduced by (b) such
Mortgage Group's pro rata share of: other costs, expenses or liabilities
reimbursable to the Indenture Trustee, the Owner Trustee, the Custodian, the
Trust Administrator, the Master Servicer and the Servicer to the extent provided
in this Agreement, the Trust Agreement, the Indenture and the Custodial
Agreement and to the extent not reimbursed from Interest Funds, or otherwise and
(vi) with respect to the October 2005 Payment Date, the amount remaining in such
Mortgage Group's Subaccount of the Pre-Funding Account at the end of the Pre-
Funding Period in respect of that Mortgage Group, exclusive of investment
income.
Principal Payment Amount: With respect to each Mortgage Group and for any
Payment Date, an amount equal to the Principal Funds for such Mortgage Group for
such date minus the Aggregate Overcollateralization Release Amount attributable
to such Mortgage Group, if any, and such Payment Date.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan including any payment or other recovery of principal in connection
with the repurchase of a Mortgage Loan by the Seller, the Servicer or any other
Person received in advance of such Mortgage Loan's scheduled Due Date.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Property Changes: As defined in Section 4.02(i).
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Prospectus: The prospectus supplement dated November 15, 2005, together
with the accompanying prospectus dated July 1, 2005, relating to the Class 1-A,
Class 2-A1, Class 2-A2, Class 2-A3, Class M1, Class M2, Class M3, Class M4,
Class M5, Class M6, Class M7, Class M8, Class M9, Class M10, Class M11, Class
M12 and Class M13 Notes.
Purchase Price: With respect to the purchase of a Mortgage Loan or related
REO Property pursuant to this Agreement, an amount equal to the sum of (a) 100%
of the unpaid principal balance of such Mortgage Loan, (b) accrued interest
thereon at the applicable Mortgage Rate, from the date as to which interest was
last paid to (but not including) the Due Date in the Due Period during which
such Mortgage Loan or REO Property is being so purchased; (c) the fair market
value of the REO Property and all other property being purchased; (d) .any
unreimbursed Servicing Advances with respect to such Mortgage Loan; and (e) any
costs and damages incurred by the Trust Estate associated with any violation of
applicable federal, state or local anti-predatory or anti-abusive lending laws
with respect to the related Mortgage Loan. The Master Servicer and the Servicer
shall be reimbursed from the Purchase Price for any Mortgage Loan or related REO
Property for any Advances made or other amounts advanced with respect to such
Mortgage Loan that are reimbursable to the Master Servicer or the Servicer under
this Agreement, together with any accrued and unpaid Servicing Administration
Fee and Master Servicing Fee with respect to such Mortgage Loan.
Qualified GIC: A guaranteed investment contract or surety bond providing
for the investment of funds in the Collection Account and insuring a minimum,
fixed or floating rate of return on investments of such funds, which contract or
surety bond shall:
(i) be an obligation of an insurance company or other corporation
whose long-term debt is rated by each Rating Agency in one of its two
highest rating categories or, if such insurance company has no long term
debt, whose claims paying ability is rated by each Rating Agency in one of
its two highest rating categories, and whose short-term debt is rated by
each Rating Agency in its highest rating category;
(ii) provide that the Indenture Trustee may exercise all of the rights
under such contract or surety bond without the necessity of taking any
action by any other Person;
(iii) provide that if at any time the then current credit standing of
the obligor under such guaranteed investment contract is such that
continued investment pursuant to such contract of funds would result in a
downgrading of any rating of the Notes, the Indenture Trustee shall
terminate such contract without penalty and be entitled to the return of
all funds previously invested thereunder, together with accrued interest
thereon at the interest rate provided under such contract to the date of
delivery of such funds to the Indenture Trustee;
(iv) provide that the Indenture Trustee's interest therein shall be
transferable to any successor trustee hereunder; and
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(v) provide that the funds reinvested thereunder and accrued interest
thereon be returnable to the Collection Account not later than the Business
Day prior to any Payment Date.
Qualified Insurer: An insurance company duly qualified as such under the
laws of the states in which the related Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided and whose claims paying ability is
rated by each Rating Agency in its highest rating category or whose selection as
an insurer will not adversely affect the rating of the Notes.
Qualified REIT Subsidiary: A direct or indirect 100% owned subsidiary of a
REIT that satisfies the requirements of Section 856(i) of the Code.
Qualifying Substitute Mortgage Loan: In the case of a Mortgage Loan
substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement,
a Mortgage Loan that, on the date of such substitution, (i) has an outstanding
Stated Principal Balance (or in the case of a substitution of more than one
mortgage loan for a Deleted Mortgage Loan, an aggregate Stated Principal
Balance), after application of all Scheduled Payments due during or prior to the
month of substitution, not in excess of, and not more than 5% less than, the
outstanding Stated Principal Balance of the Deleted Mortgage Loan as of the Due
Date in the calendar month during which the substitution occurs, (ii) has a
Mortgage Rate not less than, and not more than 0.50% higher than, the Mortgage
Rate on the Deleted Mortgage Loan, (iii) if applicable, has a maximum Mortgage
Rate not less than the maximum Mortgage Rate on the Deleted Mortgage Loan, (iv)
has a minimum Mortgage Rate not less than the minimum Mortgage Rate of the
Deleted Mortgage Loan, (v) has a gross margin equal to or greater than the gross
margin of the Deleted Mortgage Loan, (vi) has a next adjustment date not later
than the next adjustment date on the Deleted Mortgage Loan, (vii) has the same
Due Date as the Deleted Mortgage Loan, (viii) has a remaining stated term to
maturity not longer than 18 months and not more than 18 months shorter than the
remaining stated term to maturity of the related Deleted Mortgage Loan, (ix) is
current as of the date of substitution, (x) has a Loan-to-Value Ratio as of the
date of substitution equal to or lower than the Loan-to-Value Ratio of the
Deleted Mortgage Loan as of such date, (xi) has been underwritten by the Seller
in accordance with the same underwriting criteria and guidelines as the Deleted
Mortgage Loan, (xii) has a risk grading determined by the Seller at least equal
to the risk grading assigned on the Deleted Mortgage Loan, (xiii) is secured by
the same property type as the Deleted Mortgage Loan, (xiv) conforms to each
representation and warranty applicable to the Deleted Mortgage Loan made in the
Mortgage Loan Purchase Agreement, (xv) has the same first lien position as the
Deleted Mortgage Loan, (xvi) is covered by a primary mortgage insurance policy
if the Deleted Mortgage Loan was so covered, (xvii) contains provisions covering
the payment of Prepayment Premium by the Mortgager for early prepayment of the
Mortgage Loan at least as favorable to the Trust as the Deleted Mortgage Loan,
(xviii) has a maturity date not later than the maturity date of the latest
maturing Mortgage Loan in the Mortgage Pool as of the Closing Date, (xix) has
the same Mortgage Index as the Deleted Mortgage Loan, (xx) if originated on or
after November 27, 2003, is not a "high cost" loan subject to the New Jersey
Home Ownership Security Act of 2003 and (xxi) if originated on or after January
1, 2004 is not a "high-cost" loan subject to the New Mexico Home Loan Protection
Act. In the event that one or more mortgage loans are substituted for one or
more Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the
33
basis of aggregate Stated Principal Balances, the Mortgage Rates described in
clause (ii) hereof shall be determined on the basis of weighted average Mortgage
Rates, the risk gradings described in clause (xii) hereof shall be satisfied as
to each such mortgage loan, the terms described in clause (viii) hereof shall be
determined on the basis of weighted average remaining term to maturity, the
Loan-to-Value Ratios described in clause (x) hereof shall be satisfied as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties described in clause (xiv) hereof
must be satisfied as to each Qualified Substitute Mortgage Loan or in the
aggregate, as the case may be.
Rating Agency: Each of Xxxxx'x, S&P and Fitch.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
equal to (i) the unpaid principal balance of such Mortgage Loan as of the date
of liquidation, minus (ii) Liquidation Proceeds received, to the extent
allocable to principal, net of amounts that are reimbursable therefrom to the
Master Servicer or the Servicer with respect to such Mortgage Loan (other than
Advances of principal) including Liquidation Expenses. In determining whether a
Realized Loss is a Realized Loss of principal, Liquidation Proceeds shall be
allocated, first, to payment of Liquidation Expenses, then to accrued unpaid
interest and finally to reduce the principal balance of the Mortgage Loan.
Record Date: With respect to each Payment Date and each Class of Notes
(other than the Class M10, Class M11, Class M12 and Class M13 Notes), the
Business Day prior to the related Payment Date, and with respect to the Class
M10, Class M11, Class M12 and Class M13 Notes, and any Class of Definitive
Notes, the last Business Day of the month immediately preceding the month in
which the Payment Date occurs (or, in the case of the first Payment Date, the
Closing Date).
Recovery: With respect to any Liquidated Mortgage Loan, an amount received
in respect of principal on such Mortgage Loan which has previously been
allocated as a Realized Loss to a Class or Classes of Notes net of reimbursable
expenses.
Redemption Date: The first Payment Date on which the Servicer is permitted
to exercise its right to purchase the assets of the Trust pursuant to Section
9.02 hereof.
Redemption Price: The sum of (a) 100% of the aggregate outstanding
principal balance of the Mortgage Loans, plus accrued interest thereon at the
applicable Mortgage Rate, (b) the fair market value of all other property being
purchased, (c) any unreimbursed Servicing Advances, (d) the amount of any swap
breakage costs resulting from the termination of the Swap Agreement as a result
of redemption (as reported to the Trust Administrator by the Swap Counterparty),
(e) any Deferred Interest and Available Funds Shortfalls and (f) all other
amounts to be paid or reimbursed to the Master Servicer, the Trust
Administrator, the Indenture Trustee, the Owner Trustee and the Custodian.
Reference Banks: Leading banks selected by the Trust Administrator and
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market (1) with an established place of business in London, (2) whose quotations
appear on the Reuters Screen LIBO Page on the Determination Date in question,
(3) which have been designated as such by
34
the Trust Administrator and (4) not controlling, controlled by, or under common
control with, the Depositor, the Indenture Trustee, the Trust Administrator, the
Master Servicer, the Servicer, the Seller or any successor servicer.
REIT: A real estate investment trust within the meaning of section 856 of
the Code.
Related Senior Principal Payment Amount: With respect to each Mortgage
Group and for any Payment Date, an amount equal to the lesser of (x) the
aggregate Class Principal Amounts of the Class 1-A Notes (with respect to Group
1) or of the Class 2-A1, Class 2-A2 and Class 2-A3 Notes (with respect to Group
2) immediately prior to that Payment Date and (y) the product of (a) the Senior
Principal Payment Amount and (b) the related Senior Proportionate Percentage in
each case for such date.
Relevant UCC: The Uniform Commercial Code as in effect in the applicable
jurisdiction.
REO Disposition: The final sale by the Servicer or the Subservicer of any
REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.02(p).
REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Representing Party: Each of the Servicer and the Subservicer making the
representations and warranties under Sections 4.05(a) and 4.05(b), respectively.
Required Loss Percentage: With respect to any Payment Date, the applicable
percentage for such Payment Date as set forth in the following table:
Payment Date Required Loss Percentage
------------------------------ -----------------------------------------------
December 2007 to November 2008 1.60% with respect to December 2007, plus an
additional 1/12th of 1.95% for each month
thereafter
December 2008 to November 2009 3.55% with respect to December 2008, plus an
additional 1/12th of 1.45% for each month
thereafter
December 2009 to November 2010 5.00% with respect to December 2009, plus an
additional 1/12th of 1.00% for each month
thereafter
December 2010 to November 2011 6.00% with respect to December 2010, plus an
additional 1/12th of 0.25% for each month
thereafter
December 2011 and thereafter 6.25%
35
Reserve Interest Rate: The rate per annum that the Trust Administrator
determines to be either (1) the arithmetic mean (rounded upwards if necessary to
the nearest whole multiple of 0.03125%) of the one-month United States dollar
lending rates which New York City banks selected by the Trust Administrator are
quoting on the relevant Interest Determination Date to the principal London
offices of leading banks in the London interbank market or, (2) in the event
that the Trust Administrator can determine no such arithmetic mean, the lowest
one-month United States dollar lending rate which New York City banks selected
by the Trust Administrator are quoting on such Determination Date to leading
European banks.
Responsible Officer: Any Vice President, any Assistant Vice President, any
Assistant Secretary, any Assistant Treasurer, any Corporate Trust officer or any
other officer of the Indenture Trustee or the Trust Administrator, as
applicable, customarily performing functions similar to those performed by any
of the above-designated officers and, in each case, having direct responsibility
for the administration of the Operative Agreements and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
Reuters Screen LIBO Page: The display designated as page "LIBO" on the
Reuters Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service for the purpose of displaying London interbank offered
rates of major banks).
S&P: Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc., or any successor in interest.
Sarbanes Certifying Party: Any person who provides a certification pursuant
to the Xxxxxxxx-Xxxxx Act of 2002 on behalf of the Trust.
Scheduled Payment: Each scheduled payment of principal and interest (or of
interest only, if applicable) to be paid by the Mortgagor on a Mortgage Loan, as
reduced (except where otherwise specified herein) by the amount of any related
Debt Service Reduction or pursuant to the Civil Relief Act (excluding all
amounts of principal and interest that were due on or before the Cut-off Date
whenever received) and, in the case of an REO Property, an amount equivalent to
the Scheduled Payment that would have been due on the related Mortgage Loan if
such Mortgage Loan had remained in existence.
Securities Intermediary: The Person acting as Securities Intermediary under
this Agreement (which is Xxxxx Fargo Bank, N.A.), its successor in interest, and
any successor Securities Intermediary appointed pursuant to Section 6.04.
Security Entitlement: The meaning specified in Section 8-102(a)(17) of the
New York UCC.
Seller: FIC.
Senior Enhancement Percentage: With respect to a Payment Date on or after
the Stepdown Date, the quotient of (a) the Aggregate Collateral Balance, less
the aggregate Class Principal Amount of the Senior Notes outstanding as of such
Payment Date, prior to giving effect to payments to be made on such Payment
Date, divided by (b) the Aggregate Collateral Balance.
36
Senior Note: Any Class 1-A, Class 2-A1, Class 2-A2 or Class 2-A3 Note.
Senior Principal Payment Amount: With respect to the Senior Notes and any
Payment Date on or after the Stepdown Date and as long as a Trigger Event is not
in effect, with respect to such Payment Date, an amount equal to the lesser of
(x) the Principal Payment Amount for both Mortgage Groups and (y) the amount, if
any, by which (A) the aggregate Class Principal Amounts of the Senior Notes
immediately prior to that Payment Date exceeds (B) the Senior Target Amount.
Senior Priorities: The priority of payments to the Class A Notes described
in clauses (i)(1)(B) and (C) and (i)(2)(B) and (C), as applicable, in Section
6.02(e) herein for the related Mortgage Group.
Senior Proportionate Percentage: With respect to Group 1 and any Payment
Date, the fraction, expressed as a percentage, the numerator of which is the
Principal Funds for Group 1 for such Payment Date and the denominator of which
is the aggregate of the Principal Funds for Group 1 and Group 2 for such date.
With respect to Group 2 and any Payment Date, the fraction, expressed as a
percentage, the numerator of which is the Principal Funds for Group 2 for such
Payment Date and the denominator of which is the aggregate of the Principal
Funds for Group 1 and Group 2 for such date.
Senior Target Amount: With respect to any Payment Date, an amount equal to
the lesser of (a) the product of (i) approximately 52.60% and (ii) the Aggregate
Collateral Balance for such Payment Date determined as of the last day of the
related Due Period and (b) the amount, if any, by which (i) the Aggregate
Collateral Balance for such Payment Date determined as of the last day of the
related Due Period exceeds (ii) approximately 0.50% of the Aggregate Collateral
Balance as of the Closing Date.
Servicer: FSC or its successor in interest or assigns or any successor to
the Servicer under this Agreement as herein provided.
Servicer Event of Default: Any one of the conditions or circumstances
enumerated in Section 4.07 with respect to the Servicer.
Servicer Remittance Date: The day in each calendar month on which the
Servicer is required to remit payments to the Collection Account, which is the
21st day of each calendar month (or, if such day is not a Business Day, the next
Business Day), commencing in December 2005.
Servicing Administration Fee: As to any Payment Date and each Mortgage
Loan, an amount equal to the product of (a) one-twelfth of the Servicing
Administration Fee Rate and (b) the outstanding principal balance of such
Mortgage Loan as of the first day of the related Due Period.
Servicing Administration Fee Rate: With respect to each Mortgage Loan,
0.50% per annum.
37
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses other than Advances (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Servicer of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
inspection, restoration and protection of the Mortgaged Property, (b) any
enforcement or administrative or judicial proceedings, including foreclosures,
(c) the management and liquidation of the Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage, (d) taxes, assessments,
water rates, sewer rents and other charges which are or may become a lien upon
the Mortgaged Property and fire and hazard insurance coverage and (e) any losses
sustained by the Servicer with respect to the liquidation of the Mortgaged
Property. Notwithstanding anything to the contrary herein, in the event the
Servicer determines in its reasonable judgment that a Servicing Advance is a
Nonrecoverable Advance, the Servicer shall be under no obligation to make such
Servicing Advance.
Servicing File: The items pertaining to a particular Mortgage Loan
including, but not limited to, the computer files, data disks, books, records,
data tapes, notes, and all additional documents generated as a result of or
utilized in originating and/or servicing each Mortgage Loan, which are held in
trust for the Indenture Trustee by the Servicer initially, and beginning on or
about November 1, 2005, by the Subservicer.
Servicing Officer: Any officer of the Servicer or the Subservicer involved
in or responsible for, the administration and servicing of the Mortgage Loans
whose name appears on a list of servicing officers furnished by the Servicer and
the Subservicer to the Master Servicer upon request, as such list may from time
to time be amended.
Servicing Standard: The servicing and administration of the Mortgage Loans
for which the Servicer or the Subservicer is responsible hereunder (a) in the
same manner in which, and with the same care, skill, prudence and diligence with
which, the Servicer or the Subservicer, as applicable, generally services and
administers similar mortgage loans with similar mortgagors (i) for other third
parties, giving due consideration to customary and usual standards of practice
of prudent institutional residential mortgage lenders servicing their own loans
or (ii) held in the Servicer's or the Subservicer's own portfolio, as
applicable, whichever standard is higher, (b) with a view to the maximization of
the recovery on such Mortgage Loans on a net present value basis and the best
interests of the Trust or any Person to which the Mortgage Loans may be
transferred by the Trust, (c) without regard to (i) any relationship that the
Servicer or the Subservicer or any affiliate thereof may have with the related
Mortgagor or any other party to the transactions; (ii) the right of the Servicer
or the Subservicer to receive compensation or other fees for its services
rendered pursuant to this Agreement; (iii) the obligation of the Servicer or the
Subservicer to make Servicing Advances; (iv) the ownership, servicing or
management by the Servicer or the Subservicer or any affiliate thereof for
others of any other mortgage loans or mortgaged properties; and (v) any debt the
Servicer or any affiliate of the Servicer or the Subservicer has extended to any
mortgagor or any affiliate of such mortgagor, and (d) in accordance with the
applicable state, local and federal laws, rules and regulations.
Stated Principal Balance: With respect to any Payment Date, either (a) in
the case of any Mortgage Loan, the principal balance of such Mortgage Loan at
the close of business on the Cut-off Date after giving effect to principal
payments due on or before the Cut-off Date, whether or not received, less an
amount equal to principal payments due after the Cut-off Date and on or
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before the Due Date in the related Due Period, whether or not received from the
Mortgagor or advanced by the Servicer or the Master Servicer, and all amounts
allocable to unscheduled principal payments (including Principal Prepayments,
Liquidation Proceeds, Insurance Proceeds and condemnation proceeds, in each case
to the extent identified and applied prior to or during the related Prepayment
Period), provided that the Stated Principal Balance of any Liquidated Mortgage
Loan shall be zero and (b) in the case of any REO Property, the Stated Principal
Balance of the related Mortgage Loan on the Due Date immediately preceding the
date of acquisition of such REO Property by or on behalf of the Indenture
Trustee (reduced by any amount applied as a reduction of principal on the
related Mortgage Loan).
Stepdown Date: The earlier of (a) the first Payment Date on which the
aggregate Class Principal Amount of the Class A Notes (after giving effect to
payment of the Principal Funds for such Payment Date) has been reduced to zero
and (b) the later to occur of (1) the Payment Date in December 2008 or (2) the
first Payment Date on which the aggregate Class Principal Amount of the Class A
Notes (after giving effect to payments of the Principal Funds for such Payment
Date) is less than or equal to 52.60% of the Aggregate Collateral Balance as of
the end of the immediately preceding Due Period.
Stepup Date: The first Payment Date after the Payment Date on which the
Aggregate Collateral Balance at the beginning of the Due Period related to that
Payment Date is less than 10% of the Aggregate Collateral Balance as of the
Closing Date.
Subaccount: Any of the Pool 1 Subaccount or the Pool 2 Subaccount.
Subordinate Note: Any Class M1, Class M2, Class M3, Class M4, Class M5,
Class M6, Class M7, Class M8, Class M9, Class M10, Class M11, Class M12 or Class
M13 Note.
Subsequent Cut-off Date: With respect to any Subsequent Mortgage Loan, the
date specified in the related Subsequent Transfer Agreement.
Subsequent Mortgage Loans: The Mortgage Loans transferred to the Trust
during the Pre-Funding Period.
Subsequent Transfer Agreement: A Subsequent Transfer Agreement entered into
between the Seller, the Issuer, the Depositor, the Indenture Trustee and the
Trust Administrator, substantially in the form attached as Exhibit I.
Subservicer: JPMorgan Chase Bank, National Association or any successor in
interest.
Subservicer Event of Default: Any one of the conditions or circumstances
enumerated in Section 4.07 with respect to the Subservicer.
Substitution Amount: The amount, if any, by which the Stated Principal
Balance of a Deleted Mortgage Loan exceeds the Stated Principal Balance of the
related Qualifying Substitute Mortgage Loan, or aggregate Stated Principal
Balance, if applicable, plus unpaid interest thereon, any related unpaid
Advances or Servicing Advances or unpaid Servicing Administration Fees or unpaid
Master Servicing Fees and the amount of any costs and damages incurred by the
39
Trust Fund associated with a violation of any applicable federal, state or local
predatory or abusive lending law in connection with the origination of such
Deleted Mortgage Loan.
Swap Agreement: The swap agreement dated October 27, 2005, by and between
the Swap Counterparty and the Issuer, specifically the ISDA Master Agreement
dated as of October 27, 2005 between the Swap Counterparty and the Issuer, the
schedule thereto and the related confirmation (Ref.: 13459025 ), substantially
in the form of Exhibit B hereto.
Swap Counterparty: Bank of America, N.A.
Targeted Overcollateralization Amount: With respect to any Payment Date
prior to the Stepdown Date, an amount equal to 0.80% of the Aggregate Collateral
Balance as of the Closing Date, and with respect to any Payment Date on or after
the Stepdown Date, an amount equal to the lesser of (x) 0.80% of the Aggregate
Collateral Balance as of the Closing Date and (y) 1.60% of the Aggregate
Collateral Balance as of the end of the related Due Period, subject to a floor
equal to 0.50% of the Aggregate Collateral Balance as of the Closing Date;
provided, however, that on any Payment Date with respect to which a Trigger
Event has occurred and is continuing, the Targeted Overcollateralization Amount
will be an amount equal to the Targeted Overcollateralization Amount for the
Payment Date immediately preceding such Payment Date.
Telerate Page 3750: The display currently so designated as "Page 3750" on
the Moneyline Telerate Service (or such other page selected by the Master
Servicer as may replace Page 3750 on that service for the purpose of displaying
daily comparable rates on prices).
Title Insurance Policy: A title insurance policy maintained with respect to
a Mortgage Loan.
Total Remittance Amount: With respect to any Payment Date, the sum of (i)
the Interest Funds for both Mortgage Groups for such Payment Date and (ii) the
Principal Funds for both Mortgage Groups for such Payment Date.
Total Principal Deficiency Amount: With respect to any Payment Date, the
excess, if any, of the aggregate Class Principal Amount of the Notes immediately
prior to such Payment Date over the sum of the Aggregate Collateral Balance and
any Recoveries, each as of the last day of the related Due Period.
Trigger Event: A Trigger Event shall have occurred with respect to any
Payment Date on or after the Stepdown Date, if (a) the quotient of (1) the
aggregate Stated Principal Balance of all Mortgage Loans 60 or more days
delinquent, measured on a rolling three-month basis (including Mortgage Loans in
foreclosure, REO Properties and Mortgage Loans with respect to which the
applicable mortgagor is in bankruptcy) divided by (2) the Aggregate Collateral
Balance as of the preceding Servicer Remittance Date, equals or exceeds the
product of (i) 33.750% and (ii) the Senior Enhancement Percentage, (b) the
quotient (expressed as a percentage) of (1) the aggregate Realized Losses
incurred from the Initial Cut-off Date through the last day of the calendar
month preceding such Payment Date divided by (2) the Aggregate Collateral
Balance as of the Closing Date exceeds the Required Loss Percentage or (c) a
Principal Deficiency Amount exists for such Payment Date.
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Trust or Trust Fund: The Issuer.
Trust Account Property: The Trust Account, all amounts and investments held
from time to time in the Trust Account (whether in the form of deposit accounts,
physical property, book-entry securities, uncertificated securities, securities
entitlements, investment property or otherwise) and all proceeds of the
foregoing.
Trust Account: The Collection Account.
Trust Agreement: The trust agreement dated as of October 25, 2005, between
the Depositor and the Owner Trustee, as amended and restated on November 23,
2005, among the Depositor, the Trust Administrator and the Owner Trustee, as
such may be amended or supplemented from time to time.
Trust Estate: The assets of the Issuer and pledged by the Issuer to the
Indenture Trustee under the Indenture, which assets consist of all accounts,
accounts receivable, contract rights, general intangibles, chattel paper,
instruments, documents, money, deposit accounts, certificates of deposit, goods,
notes, drafts, letters of credit, advices of credit, investment property,
uncertificated securities and rights to payment of any and every kind consisting
of, arising from or relating to any of the following: (a) the Mortgage Loans
listed in the Mortgage Loan Schedule, and principal due and payable after the
Cut-off Date, but not including interest and principal due and payable on any
Mortgage Loans on or before the Cut-off Date, together with the Mortgage Files
relating to such Mortgage Loans; (b) any Insurance Proceeds, REO Property,
Liquidation Proceeds, REO Disposition Proceeds and other recoveries (in each
case, subject to clause (a) above), (c) the Collection Account, any Custodial
Account, any Escrow Account, the Pre-Funding Account and all amounts deposited
therein pursuant to the applicable provisions of this Agreement, (d) any
Insurance Policies, (e) the rights of the Depositor under the Mortgage Loan
Purchase Agreement, (f) all income, revenues, issues, products, revisions,
substitutions, replacements, profits, rents and all cash and non-cash proceeds
of the foregoing and (g) the rights of the Trust under the Swap Agreement.
UCC: The Uniform Commercial Code as enacted in the relevant jurisdiction.
Underwriters: Credit Suisse First Boston LLC, Bear, Xxxxxxx & Co. Inc.,
Xxxxxx Brothers Inc. and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
Voting Interests: The portion of the voting rights of all the Notes that is
allocated to any Note for purposes of the voting provisions of this Agreement.
At all times during the term of this Agreement, 98% of all voting rights will be
allocated among the holders of the Notes as provided below. The portion of such
voting rights allocated to such Notes will be based on the fraction, expressed
as a percentage, the numerator of which is the aggregate Class Principal Amount
then outstanding and the denominator of which is the aggregate outstanding
principal balance of the Notes. At all times during the term of the Indenture
and this Agreement, the holders of the Ownership Certificate will be allocated
2% of the voting rights. The voting rights allocation to any Class of Notes or
the Ownership Certificate will be allocated among all holders of each such Class
or Certificate in proportion to the outstanding Class Principal Amount of such
Notes or Percentage Interest of the Ownership Certificate.
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Section 1.02. Calculations With Respect to the Mortgage Loans. Calculations
required to be made pursuant to this Agreement with respect to any Mortgage Loan
in the Trust Estate shall be made based upon current information as to the terms
of the Mortgage Loans and reports of payments received from the Mortgagor on
such Mortgage Loans provided by the Servicer or the Subservicer to the Master
Servicer. Payments to be made by the Trust Administrator shall be based on
information provided by the Master Servicer. The Trust Administrator shall not
be required to recompute, verify or recalculate the information supplied to it
by the Master Servicer, the Servicer or the Subservicer.
Section 1.03. Calculations With Respect to Accrued Interest. Accrued
interest, if any, on any LIBOR Note shall be calculated based upon a 360-day
year and the actual number of days in each Accrual Period. Accrued interest, if
any, on any Class M10, Class M11, Class M12 and Class M13 Notes shall be
calculated based upon a 360-day year consisting of twelve 30-day months.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS
Section 2.01. Creation and Declaration of Trust Estate; Conveyance of
Initial Mortgage Loans.
(a) Mortgage Loans. As of the Closing Date, in consideration of the
Issuer's delivery of the Notes to the Depositor or its designee, and
concurrently with the execution and delivery of this Agreement, the Depositor
does hereby transfer, assign, set over, deposit with and otherwise convey to the
Issuer, without recourse, subject to Section 3.01, in trust, all the right,
title and interest of the Depositor in and to the Initial Mortgage Loans. Such
conveyance includes, without limitation, the right to all payments of principal
and interest received on or with respect to the Initial Mortgage Loans on and
after the Initial Cut-off Date (other than payments of principal and interest
due on or before such date), and all such payments due after such date but
received prior to such date and intended by the related Mortgagors to be applied
after such date together with all of the Depositor's right, title and interest
in any REO Property and the proceeds thereof, the Depositor's rights under any
Insurance Policies related to the Mortgage Loans, the Depositor's security
interest in any collateral pledged to secure the Mortgage Loans, including the
Mortgaged Properties and any proceeds of the foregoing, to have and to hold, in
trust; and the Indenture Trustee declares that, subject to the review provided
for in Section 2.02, it has received and shall hold the Trust Estate, as
Indenture Trustee, in trust, for the benefit and use of the Noteholders and the
Swap Counterparty and for the purposes and subject to the terms and conditions
set forth in this Agreement, and, concurrently with such receipt, the Issuer has
issued and delivered the Notes to or upon the order of the Depositor, in
exchange for the Mortgage Loans and the other property of the Trust Estate.
Concurrently with the execution and delivery of this Agreement, the
Depositor does hereby assign to the Issuer all of its rights and interest under
the Mortgage Loan Purchase Agreement but without delegation of any of its
obligations thereunder. The Issuer hereby accepts such assignment, and shall be
entitled to exercise all the rights of the Depositor under the Mortgage Loan
Purchase Agreement as if, for such purpose, it were the Depositor. Upon the
42
issuance of the Notes, ownership in the Trust Estate shall be vested in the
Issuer, subject to the lien created by the Indenture in favor of the Indenture
Trustee, for the benefit of the Noteholders and the Swap Counterparty. The
Issuer hereby accepts such assignment and shall be entitled to exercise all
rights of the Depositor under the Mortgage Loan Purchase Agreement as if, for
such purpose, it were the Depositor. The foregoing sale, transfer, assignment,
set-over, deposit and conveyance does not and is not intended to result in
creation or assumption by the Indenture Trustee of any obligation of the
Depositor, the Seller, or any other Person in connection with the Mortgage Loans
or any other agreement or instrument relating thereto except as specifically set
forth herein.
It is agreed and understood by the Depositor, the Issuer and the Indenture
Trustee that it is not intended that any Mortgage Loan to be included in the
Trust Fund be (i) a "High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act effective November 27, 2003, (ii) a "High-Cost Home Loan" as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004,
(iii) a "High-Cost Home Mortgage Loan" as defined in the Massachusetts Predatory
Home Loan Practices Act effective November 7, 2004 and (iv) a "High Cost Home
Loan" as defined in the Indiana Home Loan Practices Act effective January 1,
2005.
(b) In connection with such transfer and assignment, the Depositor does
hereby deliver to, and deposit with, or cause to be delivered to and deposited
with, the Indenture Trustee, and/or the Custodian acting on the Indenture
Trustee's behalf, the following documents or instruments with respect to each
Initial Mortgage Loan (each a "Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed either (A) in blank or (B) in
the form of the Form of Endorsement set forth in Exhibit A-4 hereto (or Exhibit
B-6 to the Custodial Agreement), or with respect to any lost Mortgage Note, an
original Lost Note Affidavit, in the form set forth in Exhibit C hereto (or
Exhibit B-5 to the Custodial Agreement), stating that the original Mortgage Note
was lost, misplaced or destroyed, together with a copy of the related Mortgage
Note;
(ii) the original of any guarantee executed in connection with the
Mortgage Note assigned to the Indenture Trustee;
(iii) the original Mortgage with evidence of recording thereon, and
the original recorded power of attorney, if the Mortgage was executed pursuant
to a power of attorney, with evidence of recording thereon or, if such Mortgage
or power of attorney has been submitted for recording but has not been returned
from the applicable public recording office, has been lost or is not otherwise
available, a copy of such Mortgage or power of attorney, as the case may be,
certified by an Officer's Certificate of the Seller to be a true and complete
copy of the original submitted for recording, together with a written Opinion of
Counsel acceptable to the Indenture Trustee and the Depositor that an original
recorded Mortgage is not required to enforce the Indenture Trustee's interest in
the Mortgage Loan;
(iv) with respect to each Non-MERS Mortgage Loan, an original
Assignment of Mortgage, in form and substance acceptable for recording. The
Mortgage shall be assigned either (A) in blank, without recourse, or (B) to
"HSBC Bank USA, National Association," as
43
Indenture Trustee of the Fieldstone Mortgage Investment Trust, Series 2005-3",
without recourse or (C) to the order of the Indenture Trustee;
(v) an original copy of any intervening assignment of Mortgage showing
a complete chain of assignments or, in the case of an intervening assignment
that has been lost, a written Opinion of Counsel for the Seller acceptable to
the Indenture Trustee that such original intervening assignment is not required
to enforce the Indenture Trustee's interest in the Mortgage Loans;
(vi) the original or a certified copy of lender's title insurance
policy (or, in lieu thereof, a commitment to issue such title insurance policy,
with an original or a certified copy of such title insurance policy to follow as
soon after the Closing Date as reasonably practicable);
(vii) the original or copies of each assumption, modification, written
assurance or substitution agreement, if any, or as to any such agreement which
cannot be delivered prior to the Closing Date because of a delay caused by the
public recording office where such assumption, modification or substitution
agreement has been delivered for recordation, a photocopy of such assumption,
modification or substitution agreement, pending delivery of the original
thereof, together with an Officer's Certificate of the Seller certifying that
the copy of such assumption, modification or substitution agreement delivered to
the Custodian is a true copy and that the original of such agreement has been
forwarded to the public recording office; and
(viii) the original of any security agreement or equivalent instrument
executed in connection with the Mortgage or as to any security agreement or
equivalent instrument that cannot be delivered on or prior to the Closing Date
because of a delay caused by the public recording office where such document has
been delivered for recordation, a photocopy of such document, pending delivery
of the original thereof, together with an Officer's Certificate of the Seller
certifying that the copy of such security agreement, chattel mortgage or their
equivalent delivered to the Custodian is a true copy and that the original of
such document has been forwarded to the public recording office.
The Depositor and the Seller acknowledge and agree that the form of
endorsement attached hereto as Exhibit A-4 is intended to effect the transfer to
the Indenture Trustee, for the benefit of the Noteholders and the Swap
Counterparty, of the Mortgage Notes and the Mortgages.
(c) MERS is the record owner of all of the Initial Mortgage Loans. The
Seller shall, or shall cause the Servicer or the Subservicer, at the expense of
the Seller, to take such actions as are necessary to cause the Indenture Trustee
to be clearly identified as the owner of each such Mortgage Loan on the records
of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS. With respect to each Cooperative
Loan, the Seller shall, or at its expense, shall cause the Servicer or the
Subservicer to, take such actions as are necessary under applicable law in order
to perfect the interest of the Indenture Trustee in the related Mortgaged
Property. Assignments of Mortgage with respect to each Non- MERS Mortgage Loan
shall be recorded; provided, however, that such Assignments need not be recorded
if, on or prior to the Closing Date, the Seller delivers an Opinion of Counsel
(which
44
must be Independent counsel) acceptable to the Indenture Trustee and the Rating
Agencies, to the effect that recording in such states is not required to protect
the Indenture Trustee's interest in the related Non-MERS Mortgage Loans;
provided, further, that notwithstanding the delivery of any Opinion of Counsel,
the Servicer shall submit each Assignment of Mortgage for recording upon the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor
under the related Mortgage. Subject to the preceding sentence, as soon as
practicable after the Closing Date (but in no event more than three months
thereafter except to the extent delays are caused by the applicable recording
office), the Servicer, at the expense of the Seller shall cause to be properly
recorded in each public recording office where the related Mortgages are
recorded each Assignment of Mortgage referred to in subsection (b)(iv) above
with respect to each Non-MERS Mortgage Loan.
(d) In instances where a Title Insurance Policy is required to be delivered
to the Indenture Trustee or the Custodian on behalf of the Indenture Trustee
under clause (b)(vii) above and is not so delivered, the Seller will provide a
copy of such Title Insurance Policy to the Indenture Trustee, or to the
Custodian on behalf of the Indenture Trustee, as promptly as practicable after
the execution and delivery hereof, but in any case within 180 days of the
Closing Date.
(e) For Initial Mortgage Loans (if any) that have been prepaid in full
after the Cut-off Date and prior to the Closing Date, the Depositor, in lieu of
delivering the above documents, herewith delivers to the Indenture Trustee, or
to the Custodian on behalf of the Indenture Trustee, an Officer's Certificate of
the Seller which shall include a statement to the effect that all amounts
received in connection with such prepayment that are required to be deposited in
the Collection Account pursuant to Section 5.07 have been so deposited. All
original documents that are not delivered to the Indenture Trustee or the
Custodian on behalf of the Indenture Trustee shall be held by the Servicer or
the Subservicer in trust for the benefit of the Indenture Trustee and the
Noteholders and the Swap Counterparty.
Section 2.02. Acceptance of Trust Estate; Review of Documentation.
(a) Subject to the provisions of Section 2.01, the Issuer acknowledges
receipt of the assets transferred by the Depositor of the assets included in the
Trust Estate and has directed that the documents referred to in Section 2.01 and
all other assets included in the definition of "Trust Estate" be delivered to
the Indenture Trustee (or the Custodian) on its behalf.
The Indenture Trustee, by execution and delivery hereof, acknowledges
receipt by it or by the applicable Custodian on its behalf of the Mortgage Files
pertaining to the Mortgage Loans listed on the Mortgage Loan Schedule, subject
to review thereof by the Indenture Trustee, or by the Custodian on behalf of the
Indenture Trustee, under this Section 2.02. The Indenture Trustee, or the
Custodian on behalf of the Indenture Trustee, will execute and deliver to the
Depositor, the Master Servicer, the Servicer, the Subservicer (and the Indenture
Trustee if delivered by the Custodian) on the Closing Date an Initial
Certification in the form annexed hereto as Exhibit A-1 (or in the form annexed
to the Custodial Agreement as Exhibit A-1, as applicable).
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(b) Within 45 days after the Closing Date, the Indenture Trustee or the
Custodian on behalf of the Indenture Trustee, will, for the benefit of
Noteholders and the Swap Counterparty, review each Mortgage File to ascertain
that all required documents set forth in Section 2.01 have been received and
appear on their face to contain the requisite signatures by or on behalf of the
respective parties thereto, and shall deliver to the Depositor, the Master
Servicer, the Servicer and the Subservicer (and the Indenture Trustee if
delivered by the Custodian) an Interim Certification in the form annexed hereto
as Exhibit A-2 (or in the form annexed to the Custodial Agreement as Exhibit
A-2, as applicable) to the effect that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan prepaid in full or any
specifically identified in such certification as not covered by such
certification), (i) all of the applicable documents specified in Section 2.01(b)
are in its possession and (ii) such documents have been reviewed by it and
appear to relate to such Mortgage Loan. The Indenture Trustee, or the Custodian
on behalf of the Indenture Trustee, shall determine whether such documents are
executed and endorsed, but shall be under no duty or obligation to inspect,
review or examine any such documents, instruments, certificates or other papers
to determine that the same are valid, binding, legally effective, properly
endorsed, genuine, enforceable or appropriate for the represented purpose or
that they have actually been recorded or are in recordable form or that they are
other than what they purport to be on their face. Neither the Indenture Trustee
nor the Custodian shall have any responsibility for verifying the genuineness or
the legal effectiveness of or authority for any signatures of or on behalf of
any party or endorser.
(c) If, in the course of the review described in paragraph (b) above or
paragraph (d) below, the Indenture Trustee or the Custodian discovers any
document or documents constituting a part of a Mortgage File that is missing,
does not appear regular on its face (i.e., is mutilated, damaged, defaced, torn
or otherwise physically altered) or appears to be unrelated to the Mortgage
Loans identified in the Mortgage Loan Schedule, as applicable (each, a "Material
Defect"), the Indenture Trustee, or the Custodian on behalf of the Indenture
Trustee, discovering such Material Defect shall identify the Mortgage Loan to
which such Material Defect relates in the Interim Certification delivered to the
Depositor and the Master Servicer. Within 90 days of its receipt of such notice,
the Seller shall be required to cure such Material Defect (and, in such event,
the Seller shall provide the Indenture Trustee with an Officer's Certificate
confirming that such cure has been effected). If the Seller does not so cure
such Material Defect, if a loss has been incurred with respect to such Mortgage
Loan that would, if such Mortgage Loan were not purchased from the Trust Estate,
constitute a Realized Loss, and such loss is attributable to the failure of the
Seller to cure such Material Defect, the Seller shall repurchase the related
Mortgage Loan from the Trust Estate at the Purchase Price. A loss shall be
deemed to be attributable to the failure of the Seller to cure a Material Defect
if, as determined by the Seller, upon mutual agreement with the Indenture
Trustee each acting in good faith, absent such Material Defect, such loss would
not have been incurred. The Seller may, in lieu of repurchasing a Mortgage Loan
pursuant to this Section 2.02, substitute for such Mortgage Loan a Qualifying
Substitute Mortgage Loan subject to the provisions of Section 3.03. The failure
of the Indenture Trustee or the Custodian to deliver the Interim Certification
within 45 days after the Closing Date shall not affect or relieve the Seller of
its obligation to repurchase any Mortgage Loan pursuant to this Section 2.02 or
any other Section of this Agreement requiring the repurchase of Mortgage Loans
from the Trust Estate.
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(d) Within 180 days following the Closing Date, the Indenture Trustee, or
the Custodian, shall deliver to the Depositor, the Master Servicer, the Servicer
and the Subservicer (and the Indenture Trustee if delivered by the Custodian) a
Final Certification substantially in the form attached as Exhibit A-3 (or in the
form annexed to the Custodial Agreement as Exhibit A-3, as applicable)
evidencing the completeness of the Mortgage Files in its possession or control,
with any exceptions noted thereto.
(e) Nothing in this Agreement shall be construed to constitute an
assumption by the Trust Estate, the Indenture Trustee, the Custodian or the
Noteholders of any unsatisfied duty, claim or other liability on any Mortgage
Loan or to any Mortgagor.
(f) Notwithstanding anything to the contrary contained herein, each of the
parties hereto acknowledges that the Custodian shall perform the applicable
review of the Mortgage Loans and respective certifications thereof as provided
in the Custodial Agreement.
(g) Upon execution of this Agreement, the Depositor hereby delivers to the
Indenture Trustee and the Indenture Trustee acknowledges a receipt of the
Mortgage Loan Purchase Agreement.
Section 2.03. Grant Clause.
(a) It is intended that the conveyance by the Depositor to the Issuer of
the Mortgage Loans, as provided for in Section 2.01 be construed as a sale by
the Depositor to the Issuer of the Mortgage Loans and other assets in the Trust
Estate for the benefit of the Noteholders and the Swap Counterparty. Further, it
is not intended that any such conveyance be deemed to be a pledge of the
Mortgage Loans by the Depositor to the Issuer to secure a debt or other
obligation of the Depositor. However, in the event that the Mortgage Loans are
held to be property of the Depositor or if for any reason this Agreement is held
or deemed to create a security interest in the Mortgage Loans and other assets
in the Trust Estate, then it is intended that (a) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
New York UCC (or the Relevant UCC if not the New York UCC); (b) the conveyances
provided for in Section 2.01 shall be deemed to be (1) a grant by the Depositor
to the Issuer of a security interest in all of the Depositor's right (including
the power to convey title thereto), title and interest, whether now owned or
hereafter acquired, in and to (A) the Mortgage Loans, including the Mortgage
Notes, the Mortgages, any related insurance policies and all other documents in
the related Mortgage Files, (B) all amounts payable pursuant to the Mortgage
Loans in accordance with the terms thereof and (C) any and all general
intangibles consisting of, arising from or relating to any of the foregoing, and
all proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, instruments, securities or other property, including without limitation
all Liquidation Proceeds, all Insurance Proceeds, all amounts from time to time
held or invested in the Collection Account, whether in the form of cash,
instruments, securities or other property and (2) an assignment by the Depositor
to the Issuer of any security interest in any and all of the Depositor's right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to the property described in the foregoing
clauses (1)(A) through (C); (c) the possession by the Indenture Trustee or any
other agent of the Issuer of Mortgage Notes, and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by
47
the secured party," or possession by a purchaser or a person designated by such
secured party, for purposes of perfecting the security interest pursuant to the
New York UCC and any other Relevant UCC (including, without limitation, Section
9-313, 8-313 or 8-321 thereof); and (d) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, financial intermediaries, bailees or agents (as applicable)
of the Issuer for the purpose of perfecting such security interest under
applicable law.
(b) The Depositor and, at the Depositor's direction, the Issuer shall, to
the extent consistent with this Agreement, take such reasonable actions as may
be necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans and the other property of the Trust Estate, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Agreement. Without limiting the generality of the foregoing, the
Depositor shall prepare and file any UCC financing statements that are necessary
to perfect the Indenture Trustee's security interest in or lien on the Mortgage
Loans, as evidenced by an Officer's Certificate of the Depositor, and furnish a
copy of each such filed financing statement to the Trust Administrator. The
Trust Administrator shall prepare and file, at the expense of the Issuer, all
filings necessary to maintain the effectiveness of any original filings
necessary under the Relevant UCC to perfect the Indenture Trustee's security
interest in or lien on the Mortgage Loans, including without limitation (x)
continuation statements, and (y) to the extent that a Responsible Officer of the
Trust Administrator has received written notice of such change or transfer, such
other statements as may be occasioned by (1) any change of name of the Seller,
the Depositor or the Issuer, (2) any change of location of the place of business
or the chief executive office of the Seller or the Depositor or (3) any transfer
of any interest of the Seller or the Depositor in any Mortgage Loan.
Neither the Depositor nor the Issuer shall organize under the law of any
jurisdiction other than the State under which each is organized as of the
Closing Date (whether changing its jurisdiction of organization or organizing
under an additional jurisdiction) without giving 30 days prior written notice of
such action to its immediate and mediate transferee, including the Indenture
Trustee. Before effecting such change, each of the Depositor or the Issuer
proposing to change its jurisdiction of organization shall prepare and file in
the appropriate filing office any financing statements or other statements
necessary to continue the perfection of the interests of its immediate and
mediate transferees, including the Indenture Trustee, in the Mortgage Loans. In
connection with the transactions contemplated by this Agreement and the
Indenture, each of the Depositor and the Issuer authorizes its immediate or
mediate transferee, including the Indenture Trustee, to file in any filing
office any initial financing statements, any amendments to financing statements,
any continuation statements, or any other statements or filings described in
this Section 2.03(b).
(c) The Depositor shall not take any action inconsistent with the sale by
the Depositor of all of its right, title and interest in and to the Trust Estate
and shall indicate or shall cause to be indicated in its records and records
held on its behalf that ownership of each Mortgage Loan and the other property
of the Issuer is held by the Issuer. In addition, the Depositor shall respond to
any inquiries from third parties with respect to ownership of a Mortgage Loan or
any other property of the Trust Estate by stating that it is not the owner of
such Mortgage Loan and that
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ownership of such Mortgage Loan or other property of the Trust Estate is held by
the Issuer on behalf of the Noteholders and the Swap Counterparty.
Section 2.04. Subsequent Transfers.
(a) Subject to the satisfaction of the conditions set forth in paragraph
(b) below and pursuant to the terms of each Subsequent Transfer Agreement, in
consideration of the Trust Administrator's delivery, on behalf of the Trust, on
the related Subsequent Transfer Date to or upon the order of the Seller of the
purchase price therefor, (i) the Seller shall on any Subsequent Transfer Date
sell, transfer, assign, set over and otherwise convey without recourse to the
Depositor and (ii) the Depositor shall sell, transfer, assign, set over and
otherwise convey without recourse to the Trust, all right, title and interest of
the Seller and the Depositor, as applicable, in and to each Subsequent Mortgage
Loan transferred pursuant to such Subsequent Transfer Agreement, including (i)
the related Stated Principal Balance as of the Subsequent Cut-Off Date after
giving effect to payments of principal due on or before the Subsequent Cut-Off
Date; (ii) all collections in respect of interest and principal received after
the Subsequent Cut-Off Date (other than principal and interest due on or before
such Subsequent Cut-off Date); (iii) property which secured such Subsequent
Mortgage Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure; (iv) its interest in any insurance policies in respect of such
Subsequent Mortgage Loan; and (v) all proceeds of any of the foregoing. The
transfers by the Seller to the Depositor and by the Depositor to the Trust of
the Subsequent Mortgage Loans set forth on the Subsequent Mortgage Loan Schedule
attached thereto shall be absolute and shall be intended by the Seller, the
Depositor and all parties hereto, other than for federal income tax purposes, to
be treated as a sale by the Seller to the Depositor and as a sale by the
Depositor to the Trust. The parties hereto intend that for federal income tax
purposes the transfer of Subsequent Mortgage Loans will be characterized as
described in Section 8.7 of the Mortgage Loan Purchase Agreement. If the
assignment and transfer of the Mortgage Loans and the other property specified
in this Section 2.04 from the Seller to the Depositor and by the Depositor to
the Trust pursuant to this Agreement and each Subsequent Transfer Agreement is
held or deemed not to be a sale or is held or deemed to be a pledge of security
for a loan, each of the Seller and the Depositor intend that the rights and
obligations of the parties shall be established pursuant to the terms of this
Agreement and that, in such event, (i) the Seller shall be deemed to have
granted and does hereby grant to the Depositor and the Depositor shall be deemed
to have granted and does hereby grant to the Trust as of such Subsequent
Transfer Date a first priority security interest in the entire right, title and
interest of the Seller and of the Depositor in and to the Subsequent Mortgage
Loans and all other property conveyed to the Trust pursuant to this Section 2.04
and all proceeds thereof and (ii) this Agreement shall constitute a security
agreement under applicable law. The purchase price shall be one hundred Percent
(100%) of the aggregate Stated Principal Balance of the Subsequent Mortgage
Loans as of the Subsequent Cut-Off Date. On or before each Subsequent Transfer
Date, the Seller shall deliver to, and deposit with the Indenture Trustee or the
Custodian on behalf of the Indenture Trustee, the related documents with respect
to each Subsequent Mortgage Loan transferred on such Subsequent Transfer Date,
and the related Subsequent Mortgage Loan Schedule in computer readable format
with respect to such Subsequent Mortgage Loans.
(b) The Seller shall transfer and deliver to the Indenture Trustee or the
Custodian on behalf of the Indenture Trustee the Subsequent Mortgage Loans and
the other property and rights
49
related thereto described in paragraph (a) of this Section 2.04 only upon the
satisfaction of each of the following conditions on or prior to the applicable
Subsequent Transfer Date:
(i) The Seller shall have provided the Servicer, the Indenture
Trustee, the Depositor, the Trust Administrator, the Master Servicer, the
Subservicer and the Rating Agencies with an Addition Notice, which notice shall
be given not less than two Business Days prior to the applicable Subsequent
Transfer Date and shall designate the Subsequent Mortgage Loans to be sold to
the Trust and the aggregate Stated Principal Balance of such Mortgage Loans and
the Rating Agencies shall have informed the Seller, the Depositor, the Indenture
Trustee, the Trust Administrator, the Master Servicer, the Servicer or the
Subservicer prior to the applicable Subsequent Transfer Date that the inclusion
of such Subsequent Mortgage Loans will not result in the downgrade or withdrawal
of the ratings assigned to the Notes;
(ii) The Seller shall have delivered to the Indenture Trustee, the
Depositor, the Trust Administrator, the Master Servicer, the Subservicer and the
Servicer a duly executed Subsequent Transfer Agreement in substantially the form
of Exhibit I;
(iii) The Seller shall have delivered to the Trust Administrator for
deposit in the Collection Account all principal collected and interest collected
to the extent accrued and due after the Subsequent Cut-off Date;
(iv) As of each Subsequent Transfer Date, the Seller was not
insolvent, the Seller will not be made insolvent by such transfer and the Seller
is not aware of any pending insolvency;
(v) Such addition will not result in a material adverse tax
consequence to any Noteholder;
(vi) The Pre-Funding Period shall not have terminated;
(vii) The Seller shall have provided the Indenture Trustee, the Trust
Administrator, the Depositor and the Rating Agencies with an Opinion of Counsel
relating to the sale (i.e., "True Sale Opinion") of the Subsequent Mortgage
Loans from the Seller to the Depositor and the enforceability of the Subsequent
Transfer Agreement with respect to the Seller and the Depositor, which matters
may be covered in the opinions delivered on the Closing Date;
(viii) The Depositor shall have provided the Indenture Trustee, the
Trust Administrator and the Rating Agencies with an Opinion of Counsel relating
to the sale (i.e., "True Sale Opinion") of the Subsequent Mortgage Loans from
the Depositor to the Trust, the enforceability of the Subsequent Transfer
Agreement with respect to the Depositor and to the effect that the transfer of
such Subsequent Mortgage Loans will not adversely affect the tax status of the
Notes, which matters may be covered in the opinions delivered on the Closing
Date;
(ix) The aggregate Stated Principal Balance of Subsequent Mortgage
Loans does not exceed the amount deposited in the Pre-Funding Account as of the
Closing Date;
(x) The conditions specified in Exhibit J hereto shall be met;
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(xi) On the last Subsequent Transfer Date, the Indenture Trustee and
the Trust Administrator shall have received an accountant's letter confirming
that the characteristics of the Mortgage Loans (including the Subsequent
Mortgage Loans), satisfy the parameters set forth in Exhibit J hereto; and
(xii) The Issuer shall have provided the Indenture Trustee, the Trust
Administrator, the Depositor, the Rating Agencies, the Seller and the
Underwriters with an Opinion of Counsel relating to general corporate matters,
in a form reasonably satisfactory to the addressees thereto.
(c) Each party hereto shall comply with their respective obligations set
forth in Sections 2.01, 2.02, 3.01, 3.02 and 3.03 with respect to the Subsequent
Mortgage Loans delivered on each Subsequent Transfer Date. References in such
Sections to the Initial Mortgage Loans or Mortgage Loans shall be deemed to
refer to the Subsequent Mortgage Loans and references to the Initial Cut-Off
Date or the Closing Date, as applicable, shall be deemed to refer to the
applicable related Subsequent Cut-Off Date or Subsequent Transfer Date,
respectively, except that references to 360 days after the Closing Date shall
remain unchanged as shall representations made with specific reference to the
Initial Mortgage Loans.
Section 2.05. Option to Contribute Derivative Instrument.
At any time on or after the Closing Date, the Seller shall have the right
to contribute to, and deposit into, the Trust a derivative contract or
comparable instrument (a "Derivative Instrument"). The Derivative Instrument may
have a notional amount in excess of the sum of the beneficial interests in the
Trust. Any such instrument shall constitute a fully prepaid agreement. The Trust
Administrator shall have no tax reporting duties with respect to any such
Derivative Instrument.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01. Representations and Warranties of the Depositor and the
Seller.
(a) The Depositor hereby represents and warrants to the Issuer, the
Indenture Trustee for the benefit of Noteholders and the Swap Counterparty, the
Trust Administrator, the Master Servicer, the Servicer and the Subservicer as of
the Closing Date or such other date as is specified, that:
(i) This Agreement constitutes a legal, valid and binding obligation
of the Depositor, enforceable against the Depositor in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors' rights in general and except as
such enforceability may be limited by general principles of equity (whether
considered in a proceeding at law or in equity);
(ii) Immediately prior to the transfer by the Depositor to the Trust
Estate of each Mortgage Loan, the Depositor had good and equitable title to each
Initial Mortgage Loan
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(insofar as such title was conveyed to it by the Seller) subject to no prior
lien, claim, participation interest, mortgage, security interest, pledge, charge
or other encumbrance or other interest of any nature;
(iii) As of the Closing Date, the Depositor has transferred all right,
title and interest in the Initial Mortgage Loans to the Trust Estate;
(iv) The Depositor has not transferred the Initial Mortgage Loans to
the Trust Estate with any intent to hinder, delay or defraud any of its
creditors;
(v) The Depositor has been duly organized and is validly existing as a
corporation in good standing under the laws of Delaware, with full power and
authority to own its assets and conduct its business as presently being
conducted; and
(b) The Seller hereby represents and warrants to the Issuer, the Indenture
Trustee for the benefit of Noteholders and the Swap Counterparty, the Trust
Administrator, the Master Servicer, the Subservicer and the Depositor as of the
Closing Date or such other date as is specified, that:
(i) the Seller is a Maryland corporation, duly organized validly
existing and in good standing under the laws of the State of Maryland, and has
the corporate power to own its assets and to transact the business in which it
is currently engaged. The Seller is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the character
of the business transacted by it or any properties owned or leased by it
requires such qualification and in which the failure so to qualify would have a
material adverse effect on the business, properties, assets, or condition
(financial or other) of the Seller;
(ii) the Seller has the corporate power and authority to make,
execute, deliver and perform this Agreement and all of the transactions
contemplated under the Agreement, and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the legal, valid and
binding obligation of the Seller enforceable in accordance with its terms,
except as enforcement of such terms may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies;
(iii) the Seller is not required to obtain the consent of any other
party or any consent, license, approval or authorization from, or registration
or declaration with, any governmental authority, bureau or agency in connection
with the execution, delivery, performance, validity or enforceability of this
Agreement, except for such consent, license, approval or authorization, or
registration or declaration, as shall have been obtained or filed, as the case
may be, prior to the Closing Date;
(iv) the execution, delivery and performance of this Agreement by the
Seller will not violate any provision of any existing law or regulation or any
order or decree of any court applicable to the Seller or any provision of the
articles of incorporation or bylaws of the Seller, or constitute a material
breach of any mortgage, indenture, contract or other agreement to which the
Seller is a party or by which the Seller may be bound;
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(v) no litigation or administrative proceeding of or before any court,
tribunal or governmental body is currently pending, or to the knowledge of the
Seller threatened, against the Seller or any of its properties or with respect
to this Agreement which in the opinion of the Seller has a reasonable likelihood
of resulting in a material adverse effect on the transactions contemplated by
this Agreement; and
(vi) the Seller has been organized in conformity with the requirements
for qualification as a REIT and currently qualifies as a REIT; the Seller has
filed an election to be treated as a REIT for federal income tax purposes; and
the Seller has operated in a manner and will continue to operate in a manner
that will enable it to continue to maintain its current qualification as a REIT.
(c) The Seller hereby represents and warrants to the Issuer, the Indenture
Trustee for the benefit of Noteholders and the Swap Counterparty, the Trust
Administrator, the Master Servicer, the Subservicer and the Depositor as of the
Closing Date or such other date as is specified, with respect to the Mortgage
Loans, the representations and warranties set forth in Section 3.2 of the
Mortgage Loan Purchase Agreement.
(d) To the extent that any fact, condition or event with respect to a
Mortgage Loan constitutes a breach of a representation or warranty of the Seller
under subsection (c) above or the Mortgage Loan Purchase Agreement, the only
right or remedy of the Indenture Trustee or any Certificateholder hereunder
shall be their rights to enforce the obligations of the Seller under any
applicable representation or warranty made by it. The Indenture Trustee
acknowledges that the Depositor shall have no obligation or liability with
respect to any breach of any representation or warranty with respect to the
Mortgage Loans (except as set forth in Section 3.01(a)(ii)) under any
circumstances.
Section 3.02. Discovery of Breach. It is understood and agreed that the
representations and warranties (i) of the Depositor set forth in Section, (ii)
of the Seller set forth in Section 4.05 and 3.01(b) and (iii) of the Servicer
and the Subservicer pursuant to Section 4.05 of this Agreement, shall each
survive delivery of the Mortgage Files and the Assignment of Mortgage of each
Mortgage Loan to the Indenture Trustee and shall continue throughout the term of
this Agreement. With respect to the representations and warranties which are
made to the best of the Seller's knowledge, if it is discovered by the
Depositor, the Seller, the Trust Administrator, the Indenture Trustee, the
Master Servicer, the Underwriters, the Servicer or the Subservicer that the
substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the Mortgage Loans or the
interests of the Noteholders or the Indenture Trustee therein, notwithstanding
such Seller's lack of knowledge with respect to the substance of such
representation or warranty, remedies for breach will apply to such inaccuracy.
Any breach of the representation and warranty set forth in clauses (xxi),
(xxxiv), (lxxii), (lxxiv), (lxxv), (lxxvi), (lxxxv), (lxxxvi), (lxxxvii) and
(lxxxviii) of Section 3.2 of the Mortgage Loan Purchase Agreement shall be
deemed to materially and adversely affect the interest of the Trust in that
Mortgage Loan, notwithstanding the Seller's lack of knowledge with respect to
the substance of such representation and warranty. Upon discovery by any of the
Depositor, the Master Servicer, the Trust Administrator or the Indenture Trustee
of a breach of any of such representations and warranties made by the Seller
that adversely and materially affects the value of the related Mortgage Loan,
the party discovering such breach shall give prompt written notice
53
to the other parties. Within 60 days of the discovery by the Seller of a breach
of any representation or warranty given to the Indenture Trustee by the Seller
or the Seller's receipt of written notice of such a breach, the Seller shall
either (a) cure such breach in all material respects, (b) repurchase such
Mortgage Loan or any property acquired in respect thereof from the Indenture
Trustee at the Purchase Price or (c) substitute a Qualifying Substitute Mortgage
Loan for the affected Mortgage Loan.
Section 3.03. Repurchase, Purchase or Substitution of Mortgage Loans.
(a) With respect to any Mortgage Loan repurchased by the Seller pursuant to
Section 3.02(b) of this Agreement, or any Mortgage Loan purchased by the
Servicer pursuant to Section 4.02(b) of this Agreement, the principal portion of
the funds in respect of such repurchase or purchase of a Mortgage Loan will be
considered a Principal Prepayment and the Purchase Price shall be deposited in
the Collection Account. Upon receipt by the Trust Administrator of the full
amount of the Purchase Price for a Deleted Mortgage Loan, or upon receipt of
notification from the Custodian that it had received the Mortgage File for a
Qualifying Substitute Mortgage Loan substituted for a Deleted Mortgage Loan (and
any applicable Substitution Amount), the Indenture Trustee shall release or
cause to be released and reassign to the Depositor, the Seller or the Servicer,
as applicable, the related Mortgage File for the Deleted Mortgage Loan and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, representation or warranty, as shall be necessary to vest in
such party or its designee or assignee title to any Deleted Mortgage Loan
released pursuant hereto, free and clear of all security interests, liens and
other encumbrances created by this Agreement and the Indenture, which
instruments shall be prepared by the Servicer or the Subservicer and the
Indenture Trustee shall have no further responsibility with respect to the
Mortgage File relating to such Deleted Mortgage Loan.
(b) With respect to each Qualifying Substitute Mortgage Loan to be
delivered to the Indenture Trustee (or its custodian) in exchange for a Deleted
Mortgage Loan: (i) the Depositor, the Seller, or the Servicer, as applicable,
must deliver to the Indenture Trustee (or a Custodian) the Mortgage File for the
Qualifying Substitute Mortgage Loan containing the documents set forth in
Section 2.01(b) along with a written certification certifying as to the delivery
of such Mortgage File and containing the granting language set forth in Section
2.01(a); and (ii) the Seller and the Depositor will be deemed to have made, with
respect to such Qualifying Substitute Mortgage Loan, each of the representations
and warranties made by it with respect to the related Deleted Mortgage Loan. As
soon as practicable after the delivery of any Qualifying Substitute Mortgage
Loan hereunder, the Indenture Trustee, at the expense of the Depositor and at
the direction and with the cooperation of the Servicer shall (i) with respect to
a Qualifying Substitute Mortgage Loan that is a Non-MERS Mortgage Loan, cause
the Assignment of Mortgage to be recorded by the Servicer if required pursuant
to Section 2.01(c), or (ii) with respect to a Qualifying Substitute Mortgage
Loan that is a MERS Mortgage Loan, cause to be taken such actions as are
necessary to cause the Indenture Trustee (on behalf of the Issuer) to be clearly
identified as the owner of each such Mortgage Loan on the records of MERS if
required pursuant to Section 2.01(c).
ARTICLE IV
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ADMINISTRATION AND SERVICING OF THE
MORTGAGE LOANS BY THE SERVICER
Section 4.01. Seller's Engagement of Servicer to Perform Servicing
Responsibilities.
(a) Contract for Servicing; Possession of Servicing Files. The Seller, as
the owner of the servicing rights, by execution and delivery of this Agreement,
does hereby contract with the Servicer and the Subservicer, each subject to the
terms of this Agreement, for the servicing of the Mortgage Loans for the benefit
of the Issuer and the Indenture Trustee. The Servicer or Subservicer shall
maintain a Servicing File with respect to each Mortgage Loan in order to service
such Mortgage Loans pursuant to this Agreement and each Servicing File delivered
to the Servicer or Subservicer shall be held in trust by the Servicer or
Subservicer for the benefit of the Issuer and the Indenture Trustee; provided,
however, that neither the Servicer nor the Subservicer shall have any liability
for any Servicing Files (or portions thereof) not delivered by the Seller. The
Servicer's or Subservicer's possession of any portion of the Mortgage Loan
documents shall be at the will of the Indenture Trustee for the sole purpose of
facilitating servicing of the related Mortgage Loan pursuant to this Agreement,
and such retention and possession by the Servicer or Subservicer shall be in a
custodial capacity only. The ownership of each Mortgage Note, Mortgage, and the
contents of the Servicing File shall be vested in the Indenture Trustee and the
ownership of all records and documents with respect to the related Mortgage Loan
prepared by or which come into the possession of the Servicer or Subservicer
shall immediately vest in the Indenture Trustee and shall be retained and
maintained, in trust, by the Servicer or Subservicer at the will of the
Indenture Trustee in such custodial capacity only. The Servicing File retained
by the Servicer or Subservicer pursuant to this Agreement shall be identified in
accordance with the Servicer's or Subservicer's file tracking system to reflect
the ownership of the related Mortgage Loan by the Indenture Trustee. The
Servicer or Subservicer shall release from its custody the contents of any
Servicing File retained by it only in accordance with this Agreement.
(b) Books and Records. All rights arising out of the Mortgage Loans shall
be vested in the Indenture Trustee, subject to the Servicer's and the
Subservicer's rights to service and administer the Mortgage Loans hereunder in
accordance with the terms of this Agreement. All funds received on or in
connection with a Mortgage Loan, other than the Master Servicing Fee, the
Servicing Administration Fee and other compensation and reimbursement to which
the Servicer, the Subservicer and the Master Servicer are entitled as set forth
herein, including but not limited to Sections 4.04 and 4.21 below, shall be
received and held by them in trust for the benefit of the Indenture Trustee
pursuant to the terms of this Agreement.
The Servicer or the Subservicer, as applicable, shall forward to the
Custodian original documents evidencing an assumption, modification,
consolidation or extension of any Mortgage Loan entered into in accordance with
Section 3.01 within one week of their execution; provided, however, that the
Servicer or Subservicer shall provide the Custodian with a Servicer or
Subservicer certified true copy of any such document submitted for recordation
within one week of its execution, and shall provide the original of any document
submitted for recordation or a copy of such document certified by the
appropriate public recording office to be a true and complete copy of the
original within 120 days of its submission for recordation.
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Section 4.02. Servicing of the Mortgage Loans.
(a) Servicer and Subservicer to Service. The Servicer shall service and
administer the Mortgage Loans from and after the Closing Date and, except where
prior consent or approval of the Master Servicer is required under this
Agreement, shall have full power and authority, acting alone, to do any and all
things in connection with such servicing and administration which the Servicer
may deem necessary or desirable, consistent with the terms of this Agreement and
with Servicing Standards. The Servicer hereby delegates to the Subservicer such
power and authority, but only to the extent provided in this Section 4.02(a).
The Subservicer, in turn, shall be permitted to delegate any and all such power
and authority to subservice the Mortgage Loans to its affiliate, Chase Home
Finance LLC, but only to the extent provided in this Section 4.02(a) and
provided that, notwithstanding anything to the contrary contained herein, the
Subservicer shall remain responsible hereunder for all obligations of the
Subservicer hereunder irrespective of any delegation to Chase Home Finance LLC,
as fully as if such acts and omissions were those of the Subservicer. Beginning
on the Closing Date, the Subservicer shall perform all of the obligations of the
Servicer under this Agreement relating to the servicing of the Mortgage Loans,
on behalf of the Servicer. All references to the "Servicer" in this Agreement
relating to a servicing right or a servicing obligation in respect of the
Mortgage Loans shall mean the "Subservicer" beginning on the Closing Date,
except in the case where this Agreement expressly states that FSC, in its
capacity as Servicer, shall retain such right or perform such obligation.
Notwithstanding any of the provisions of this Agreement referring to actions
taken through the Subservicer, the Servicer shall not be relieved of any of its
obligations hereunder with respect to the servicing of the Mortgage Loans and
the Servicer shall remain responsible hereunder for all acts and omissions of
the Subservicer as fully as if such acts and omissions were those of the
Servicer. However, FSC, in its capacity as Servicer hereunder, shall not
directly service any Mortgage Loan unless and until FSC has obtained all
necessary licenses and approvals in each jurisdiction as may be necessary for
FSC to directly service such Mortgage Loans; provided, however, that FSC shall
promptly obtain all such licenses and approvals if required to directly service
any Mortgage Loans pursuant to the terms of this Agreement.
Consistent with the terms of this Agreement, the Servicer may waive, modify
or vary any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Servicer's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
interests of the Issuer, the Indenture Trustee and the Noteholders; provided,
however, that unless the Servicer has obtained the prior written consent of the
Master Servicer, the Servicer shall not permit any modification with respect to
any Mortgage Loan that would change the Mortgage Rate, defer or forgive the
payment of principal or interest, reduce or increase the outstanding principal
balance (except for actual payments of principal) or change the final maturity
date on such Mortgage Loan. In the event of any such modification which permits
the deferral of interest or principal payments on any Mortgage Loan, the
Servicer shall, on the Business Day immediately preceding the Servicer
Remittance Date in any month in which any such principal or interest payment has
been deferred, make an Advance in accordance with Section 4.03(c) in an amount
equal to the difference between (a) such month's principal and one month's
interest at the Mortgage Loan Remittance Rate on the unpaid principal balance of
such Mortgage Loan and (b) the amount paid by the Mortgagor. The Servicer shall
be entitled to reimbursement for such advances to the same extent as for all
other Advances made pursuant to
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Without limiting the generality of the foregoing, the Servicer shall
continue, and is hereby authorized and empowered, to execute and deliver on
behalf of itself, the Issuer and the Indenture Trustee, all instruments of
satisfaction or cancellation, or of partial or full release, discharge and all
other comparable instruments, with respect to the Mortgage Loans and with
respect to the Mortgaged Properties. The Indenture Trustee shall execute and
deliver to the Servicer powers of attorney and other documents, furnished to it
by the Servicer and reasonably satisfactory to the Indenture Trustee, necessary
or appropriate to enable the Servicer to carry out its servicing and
administrative duties under this Agreement; provided that the Indenture Trustee
shall not be liable for the actions of the Servicer under any such powers of
attorney. Promptly after the execution of any assumption, modification,
consolidation or extension of any Mortgage Loan, the Servicer shall forward to
the Master Servicer copies of any documents evidencing such assumption,
modification, consolidation or extension.
In servicing and administering the Mortgage Loans, the Servicer shall
adhere to the Servicing Standard.
(b) Delinquent and Defaulted Mortgage Loans; FSC Discretion. FSC, in its
capacity as Servicer, may, at any time either (i) purchase any delinquent
Mortgage Loan in consideration of the Purchase Price of such Mortgage Loan or
(ii) substitute a defaulted Mortgage Loan with a Qualifying Substitute Mortgage
Loan. Any purchase or substitution effected by FSC in reliance on this Section
4.02(b) shall be performed in accordance with the terms specified in Section
3.03 hereof.
In addition, in connection with its management of the liquidation of
defaulted Mortgage Loans, FSC, in its capacity as Servicer, may sell defaulted
Mortgage Loans; provided, however, that FSC shall not take any action that is
inconsistent with or prejudices the interest of the Noteholders in any Mortgage
Loan or the rights and interest of the Depositor, the Indenture Trustee, the
Master Servicer, the Trust Administrator, the Custodian and the Noteholders
under this Agreement.
(c) Collection and Liquidation of Mortgage Loans. Continuously from the
Closing Date, until the date each Mortgage Loan ceases to be subject to this
Agreement, the Servicer shall proceed diligently to collect all payments due
under each of the Mortgage Loans when the same shall become due and payable and
shall take special care in ascertaining and estimating Escrow Payments and all
other charges that will become due and payable with respect to the Mortgage
Loans and each related Mortgaged Property, to the end that the installments
payable by the Mortgagors will be sufficient to pay such charges as and when
they become due and payable.
The Servicer shall use its best efforts, consistent with the Servicing
Standard to foreclose upon or otherwise comparably convert the ownership of such
Mortgaged Properties 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 3.01. The Servicer shall use its best efforts to realize
upon defaulted Mortgage Loans in such a manner as will maximize the receipt of
principal and interest by the Trust, taking into account, among other things,
the timing of foreclosure proceedings. The foregoing is subject to the
provisions that, in any case in which Mortgaged Property shall have suffered
damage, the Servicer shall not be required to expend its own funds
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toward the restoration of such property unless it shall determine in its
discretion (i) that such restoration will increase the proceeds of liquidation
of the related Mortgage Loan to the Issuer and the Indenture Trustee after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by the Servicer through Insurance Proceeds or Liquidation Proceeds
from the related Mortgaged Property. In the event that any payment due under any
Mortgage Loan and not otherwise postponed, deferred or waived pursuant to
Section 4.02 is not paid when the same becomes due and payable, or in the event
the Mortgagor fails to perform any other covenant or obligation under the
Mortgage Loan and such failure continues beyond any applicable grace period, the
Servicer shall take such action as (1) shall be consistent with Servicing
Standards and (2) the Servicer shall determine prudently to be in the best
interest of the Issuer, the Indenture Trustee and the Noteholders. In the event
that any payment due under any Mortgage Loan is not otherwise postponed,
deferred or waived pursuant to Section 4.02(a) and remains delinquent for a
period of 105 days or any other default continues for a period of 105 days
beyond the expiration of any grace or cure period, the Servicer shall commence
foreclosure proceedings. The Servicer shall notify the Master Servicer in
writing of the commencement of foreclosure proceedings on a monthly basis no
later than the fifth Business Day of each month (which notification may be
included within the monthly reports submitted to the Master Servicer under
Section 4.03(b) this Agreement). In such connection, the Servicer shall be
responsible for all costs and expenses incurred by it in any such proceedings;
provided, however, that it shall be entitled to reimbursement thereof from the
related Mortgaged Property, as contemplated in Sections 4.02(e) and 4.02(p).
Notwithstanding the generality of the preceding paragraph, the Servicer
shall take such actions generally in accordance with the Servicer's established
default timeline and in accordance with Servicing Standards with respect to each
Mortgage Loan and Mortgagor for which there is a delinquency until such time as
the related Mortgagor is current with all payments due under the Mortgage Loan.
(d) Establishment of and Deposits to Custodial Account.
(i) The Servicer shall segregate and hold all funds collected and
received pursuant to the Mortgage Loans separate and apart from any of its own
funds and general assets and shall initially establish and maintain one or more
Custodial Accounts, in the form of time deposit or demand accounts, each of
which accounts shall be titled "Fieldstone Servicing Corp. (or Chase Home
Finance, LLC as subservicer for JPMorgan Chase Bank, National Association, as
Subservicer) in trust for HSBC Bank USA, National Association, as Indenture
Trustee, for the Fieldstone Mortgage Investment Trust, Series 2005-3
Mortgage-Backed Notes" and referred to herein as a "Custodial Account." Each
Custodial Account shall be an Eligible Account. Any funds deposited in the
Custodial Account may be invested in Eligible Investments subject to the
provisions of Section 4.02(j) hereof. Funds deposited in the Custodial Account
may be drawn on by the Servicer in accordance with Section 4.02(e) hereof. The
creation of any Custodial Account shall be evidenced by a letter agreement in
the form of Exhibit E hereto. A copy of such certification or letter agreement
shall be furnished to the Indenture Trustee, the Master Servicer and, upon
request, to any subsequent owner of the Mortgage Loans.
(ii) The Servicer shall deposit in the Custodial Account on a daily
basis, but not more than two (2) Business Days after receipt by the Servicer and
retain therein, the
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following collections received by the Servicer and payments made by the Servicer
after the related Cut-off Date (other than scheduled payments of principal and
interest due on or before the related Cut-off Date), as applicable:
(A) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(B) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(C) all Liquidation Proceeds (net of Liquidation Expenses);
(D) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 4.02(k) (other than proceeds to be held
in the Escrow Account and applied to the restoration and repair of the
Mortgaged Property or released to the Mortgagor in accordance with the
related Mortgage Loan documents and Servicing Standards);
(E) all Condemnation Proceeds that are not applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the related Mortgage Loan documents and
Servicing Standards;
(F) with respect to each Principal Prepayment in full or in part,
the Prepayment Interest Shortfall Amount, if any, for the month of
payment. Such deposit shall be made from the Servicer's own funds,
without reimbursement therefore, up to a maximum amount per month in
the aggregate of the Servicing Administration Fee, actually received
for such month for the Mortgage Loans;
(G) all Advances made by the Servicer pursuant to Section
4.03(c);
(H) any amounts received from the Seller, the Depositor or any
other person giving representations and warranties with respect to the
Mortgage Loans, in connection with the repurchase of any Mortgage
Loan;
(I) any amounts required to be deposited by the Servicer pursuant
to Section 4.03(k) in connection with the deductible clause in any
blanket hazard insurance policy;
(J) any amounts received with respect to or related to any REO
Property or REO Disposition Proceeds pursuant to Section 4.02(p); and
(K) any other amounts required to be deposited in the Custodial
Account pursuant to this Agreement.
The foregoing requirements for deposit into the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of the Servicing Administration Fee,
Prepayment Interest Excess Amounts and Ancillary Income need not be deposited by
the Servicer into the Custodial Account. Any interest
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paid on funds deposited in the Custodial Account by the depository institution
maintaining such account shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Custodial Account pursuant to Section 3.04. Additionally, any other benefit
derived from the Custodial Account associated with the receipt, disbursement and
accumulation of principal, interest, taxes, hazard insurance, mortgage
insurance, etc. shall accrue to the Servicer.
(e) Permitted Withdrawals from Custodial Account.
The Servicer shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(1) to make payments to the Master Servicer in the amounts and in
the manner provided for in Section 4.03(a);
(2) in the event the Servicer has elected not to retain the
Servicing Administration Fee out of any Mortgagor payments on account
of interest or other recovery of interest with respect to a particular
Mortgage Loan (including late collections of interest on such Mortgage
Loan, or interest portions of Insurance Proceeds, Liquidation Proceeds
or Condemnation Proceeds) prior to the deposit of such Mortgagor
payment or recovery into the Custodial Account, to pay to itself the
related Servicing Administration Fee from all such Mortgagor payments
on account of interest or other such recovery for interest with
respect to that Mortgage Loan;
(3) to reimburse itself for unreimbursed Advances and Xxxxxxxxx
Advances, the Servicer's right to reimburse itself pursuant to this
subclause (3) with respect to any Mortgage Loan being limited to
related Liquidation Proceeds (net of Liquidation Expenses),
Condemnation Proceeds, Insurance Proceeds, REO Disposition Proceeds
and other amounts received in respect of the related REO Property, and
such other amounts as may be collected by the Servicer from the
Mortgagor or otherwise relating to such Mortgage Loan, it being
understood that, in the case of any such reimbursement, the Servicer's
right thereto shall be prior to the rights of the Noteholders;
(4) to reimburse itself for any previously unreimbursed Advances
or Servicing Advances that it determines are Nonrecoverable Advances,
it being understood, in the case of each such reimbursement, that the
Servicer's right thereto shall be prior to the rights of the
Noteholders;
(5) to pay itself investment earnings on funds deposited in the
Custodial Account;
(6) to transfer funds to another Eligible Account in accordance
with Section 4.02(j) hereof;
(7) to invest funds in certain Eligible Investments in accordance
with Section 4.02(d)(i) and Section 4.02(i) hereof;
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(8) to withdraw funds deposited in error;
(9) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
(10) to pay itself any Prepayment Interest Excess Amount.
(f) Establishment of and Deposits to Escrow Account. The Servicer shall
segregate and hold all funds collected and received pursuant to a Mortgage Loan
constituting Escrow Payments separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Escrow Accounts, in
the form of time deposit or demand accounts, titled "Fieldstone Servicing Corp.
(or Chase Home Finance, LLC as subservicer for JPMorgan Chase Bank, National
Association, as Subservicer) in trust for HSBC Bank USA, National Association,
as Indenture Trustee, for the Fieldstone Mortgage Investment Trust, Series
2005-3." The Escrow Accounts shall be established with an Eligible Institution
in a manner that shall provide maximum available insurance thereunder. Nothing
herein shall require the Servicer to compel a Mortgagor to establish an Escrow
Account in violation of applicable law. Funds deposited in the Escrow Account
may be drawn on by the Servicer in accordance with Section 4.02(g). The creation
of any Escrow Account shall be evidenced by a letter agreement in the form of
Exhibit F hereto. A copy of such certification or letter agreement shall be
furnished to the Master Servicer.
The Servicer shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any such items as required under
the terms of this Agreement; and
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any Mortgaged
Property.
The Servicer shall make withdrawals from the Escrow Account only to effect
such payments as are required under this Agreement, as set forth in Section
4.02(g). The Servicer shall be entitled to retain any interest earnings paid on
funds deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Servicer shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
the interest earnings paid thereon are insufficient for such purposes.
(g) Permitted Withdrawals from Escrow Account. Withdrawals from the Escrow
Account or Accounts may be made by the Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire and hazard
insurance premiums or other items constituting Escrow Payments for the related
Mortgage;
(ii) to reimburse the Servicer for any Servicing Advance of an Escrow
Payment made by the Servicer with respect to a related Mortgage Loan, but only
from amounts
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received on the related Mortgage Loan which represent late collections of Escrow
Payments thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess of
the amounts required to be escrowed under the terms of the related Mortgage
Loan;
(iv) to the extent permitted by applicable law, for transfer to the
Custodial Account and application to reduce the principal balance of the
Mortgage Loan in accordance with the terms of the related Mortgage and Mortgage
Note;
(v) for application to restoration or repair of the Mortgaged Property
in accordance with Section 4.02(o);
(vi) to pay to the Servicer, or any Mortgagor to the extent required
by law, any interest paid on the funds deposited in the Escrow Account; and
(vii) to clear and terminate the Escrow Account on the termination of
this Agreement.
The Servicer will be responsible for the administration of the Escrow
Accounts and will be obligated to make Servicing Advances to the Escrow Account
in respect of its obligations under this Agreement, reimbursable from the
Escrow Accounts or Custodial Account to the extent not collected from the
related Mortgagor, anything to the contrary notwithstanding, when and as
necessary to avoid the lapse of insurance coverage on the Mortgaged Property, or
which the Servicer knows, or in servicing the Mortgage Loans in accordance with
Servicing Standards should know, is necessary to avoid the loss of the Mortgaged
Property due to a tax sale or the foreclosure as a result of a tax lien. If any
such payment has not been made and the Servicer receives notice of a tax lien
with respect to the Mortgage being imposed, the Servicer will advance or cause
to be advanced funds necessary to discharge such lien on the Mortgaged Property
in order to prevent loss of title to the Mortgaged Property.
(h) Notification of Adjustments. With respect to each Mortgage Loan, the
Servicer shall adjust the Mortgage Rate on the related interest rate adjustment
date and shall adjust the Scheduled Payment on the related mortgage payment
adjustment date, if applicable, in compliance with the requirements of
applicable law and the related Mortgage and Mortgage Note. The Servicer shall
execute and deliver any and all necessary notices required under applicable law
and the terms of the related Mortgage Note and Mortgage regarding the Mortgage
Rate and Scheduled Payment adjustments. The Servicer shall promptly, upon
written request therefor, deliver to the Master Servicer such notifications and
any additional applicable data regarding such adjustments and the methods used
to calculate and implement such adjustments. Upon the discovery by the Servicer
or the receipt of notice from the Master Servicer that the Servicer has failed
to adjust a Mortgage Rate or Scheduled Payment in accordance with the terms of
the related Mortgage Note, the Servicer shall immediately deposit in the
Custodial Account from its own funds the amount of any interest loss or deferral
caused the Seller thereby.
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(i) Payment of Taxes, Insurance and Other Charges.
(i) With respect to each Mortgage Loan which provides for Escrow
Payments, the Servicer shall maintain accurate records reflecting the status of
ground rents, taxes, assessments, water rates, sewer rents, and other charges
which are or may become a lien upon the Mortgaged Property and the status of
fire and hazard insurance coverage and shall obtain, from time to time, all
bills for the payment of such charges (including renewal premiums) ("Property
Charges") and shall effect payment thereof prior to the applicable penalty or
termination date, employing for such purpose deposits of the Mortgagor in the
Escrow Account which shall have been estimated and accumulated by the Servicer
in amounts sufficient for such purposes, as allowed under the terms of the
Mortgage. The Servicer shall effect timely payment of all such charges
irrespective of each Xxxxxxxxx's faithful performance in the payment of the same
or the making of the Escrow Payments.
(ii) To the extent that a Mortgage does not provide for Escrow
Payments, the Servicer shall make Servicing Advances from its own funds to
effect payment of all Property Charges upon receipt of notice of any failure to
pay on the part of the Mortgagor, or at such other time as the Servicer
determines to be in the best interest of the Trust; provided, that in any event
the Servicer shall pay such charges on or before any date by which payment is
necessary to preserve the lien status of the Mortgage. The Servicer shall pay
any late fee or penalty which is payable due to any delay in payment of any
Property Charge and necessary to avoid a lien on or loss on Mortgage Property.
(j) Protection of Accounts. The Servicer may transfer the Custodial Account
or the Escrow Account to a different Eligible Institution from time to time.
Such transfer shall be made only upon obtaining the consent of the Master
Servicer, which consent shall not be withheld unreasonably, and the Servicer
shall give notice to the Master Servicer, the Indenture Trustee and the Swap
Counterparty of any change in the location of the Custodial Account.
The Servicer shall bear any expenses, losses or damages sustained by the
Master Servicer or the Indenture Trustee if the Custodial Account and/or the
Escrow Account are not Eligible Accounts.
Amounts on deposit in the Custodial Account and the Pre-Funding Account may
be invested at the option of the Servicer and the Seller, respectively, but only
in Eligible Investments. Any such Eligible Investment with respect to the
Custodial Account shall mature no later than two (2) Business Days prior to the
Servicer Remittance Date in each month; provided, however, that if such Eligible
Investment is an obligation of an Eligible Institution (other than the Servicer)
that maintains the Custodial Account, then such Eligible Investment may mature
on the related Servicer Remittance Date. Any such Eligible Investment shall be
made in the name of the Servicer (with respect to the Custodial Account) and the
Seller (with respect to the Pre-Funding Account) in trust for the benefit of the
Indenture Trustee. All income on or gain realized from any such Eligible
Investment shall be for the benefit of the Servicer (with respect to the
Custodial Account) and the Seller (with respect to the Pre-Funding Account) and
may be withdrawn at any time by the Servicer (with respect to the Custodial
Account) and the Seller (with respect to the Pre-Funding Account). Any losses
incurred in respect of any such investment shall be deposited in the Custodial
Account by the Servicer (with respect to the
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Custodial Account) and the Seller (with respect to the Pre-Funding Account) out
of its own funds immediately as realized. If, at any time, the amount on deposit
in the Custodial Account or the Pre-Funding Account exceeds the amount of the
applicable FDIC insurance, such excess above the amount of the applicable FDIC
insurance shall be invested in Eligible Investments.
(k) Maintenance of Hazard Insurance. The Servicer shall cause to be
maintained for each Mortgage Loan hazard insurance such that all buildings upon
the Mortgaged Property are insured by a generally acceptable insurer acceptable
under Servicing Standards against loss by fire, hazards of extended coverage and
such other hazards as are customary in the area where the Mortgaged Property is
located, in an amount which is at least equal to the lesser of (i) the
replacement value of the improvements securing such Mortgage Loan and (ii) the
greater of (a) the outstanding principal balance of the Mortgage Loan and (b) an
amount such that the proceeds thereof shall be sufficient to prevent the
Mortgagor or the loss payee from becoming a co-insurer.
If upon origination of the Mortgage Loan the related Mortgaged Property was
located in an area identified in the Federal Register by the Flood Emergency
Management Agency as having special flood hazards (and such flood insurance has
been made available), a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration shall be in effect
with a generally acceptable insurance carrier acceptable under Servicing
Standards in an amount representing coverage equal to the lesser of (i) the
minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of building
insured) and (ii) the maximum amount of insurance which is available under the
Flood Disaster Protection Act of 1973, as amended. If at any time during the
term of the Mortgage Loan, the Servicer determines in accordance with applicable
law and pursuant to Servicing Standards that a Mortgaged Property is located in
a special flood hazard area and is not covered by flood insurance or is covered
in an amount less than the amount required by the Flood Disaster Protection Act
of 1973, as amended, the Servicer shall notify the related Mortgagor that the
Mortgagor must obtain such flood insurance coverage, and if said Xxxxxxxxx fails
to obtain the required flood insurance coverage within thirty (30) days after
such notification, the Servicer shall immediately force place the required flood
insurance on the Mortgagor's behalf.
The Servicer shall cause to be maintained on each Mortgaged Property such
other or additional insurance as may be required pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance, or pursuant to the requirements of any private mortgage
guaranty insurer, or as may be required to conform with Servicing Standards.
In the event that the Master Servicer or the Servicer shall determine that
the Mortgaged Property should be insured against loss or damage by hazards and
risks not covered by the insurance required to be maintained by the Mortgagor
pursuant to the terms of the Mortgage, the Servicer shall communicate and
consult with the Mortgagor with respect to the need for such insurance and bring
to the Mortgagor's attention the desirability of protection of the Mortgaged
Property.
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All policies required hereunder shall name the Servicer as loss payee and
shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least 30 days prior written notice of
any cancellation, reduction in amount or material change in coverage.
The Servicer shall not interfere with the Mortgagor's freedom of choice in
selecting either his insurance carrier or agent; provided, however, that the
Servicer shall not accept any such insurance policies from insurance companies
unless such companies are generally acceptable under Servicing Standards. The
Servicer shall determine that such policies provide sufficient risk coverage and
amounts, that they insure the property owner, and that they properly describe
the property address. The Servicer shall furnish to the Mortgagor a formal
notice of expiration of any such insurance in sufficient time for the Mortgagor
to arrange for renewal coverage by the expiration date.
Pursuant to Section 4.02(d), any amounts collected by the Servicer under
any such policies (other than amounts to be deposited in the Escrow Account and
applied to the restoration or repair of the related Mortgaged Property, or
property acquired in liquidation of the Mortgage Loan, or to be released to the
Mortgagor, in accordance with the Servicer's normal servicing procedures) shall
be deposited in the Custodial Account subject to withdrawal pursuant to Section
4.02(e).
Notwithstanding anything set forth in the preceding paragraph, the Servicer
agrees to indemnify the Indenture Trustee, the Issuer, the Noteholders and the
Master Servicer for any claims, losses, damages, penalties, fines, forfeitures,
legal fees and related costs, judgments and any other costs, fees and expenses
that any such indemnified party may sustain in any way related to the failure of
the Mortgagor (or the Servicer) to maintain hazard or flood insurance with
respect to the related Mortgaged Property which complies with the requirements
of this section.
(l) Maintenance of Mortgage Impairment Insurance. In the event that the
Servicer shall obtain and maintain a blanket policy insuring against losses
arising from fire and hazards covered under extended coverage on all of the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 4.02(k) and otherwise complies
with all other requirements of Section 4.02(k), it shall conclusively be deemed
to have satisfied its obligations as set forth in Section 4.02(k). Any amounts
collected by the Servicer under any such policy relating to a Mortgage Loan
shall be deposited in the Custodial Account subject to withdrawal pursuant to
Section 4.02(e). Such policy may contain a deductible clause, in which case, in
the event that there shall not have been maintained on the related Mortgaged
Property a policy complying with Section 4.02(k), and there shall have been a
loss which would have been covered by such policy, the Servicer shall deposit in
the Custodial Account at the time of such loss the amount not otherwise payable
under the blanket policy because of such deductible clause, such amount to
deposited from the Servicer's funds, without reimbursement therefor. Upon
request of the Master Servicer or the Indenture Trustee, the Servicer shall
cause to be delivered to such person a certified true copy of such policy and a
statement from the insurer thereunder that such policy shall in no event be
terminated or materially modified without 30 days' prior written notice to the
Master Servicer and the Indenture Trustee.
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(m) Maintenance of Fidelity Bond and Errors and Omissions Insurance. The
Servicer shall maintain with responsible companies, at its own expense, a
blanket Fidelity Bond and an Errors and Omissions Insurance Policy, with broad
coverage on all officers, employees or other persons acting in any capacity
requiring such persons to handle funds, money, documents or papers relating to
the Mortgage Loans ("Servicer Employees"). Any such Fidelity Bond and Errors and
Omissions Insurance Policy shall be in the form of the Mortgage Banker's Blanket
Bond and shall protect and insure the Servicer against losses, including
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of
such Servicer Employees. Such Fidelity Bond and Errors and Omissions Insurance
Policy also shall protect and insure the Servicer against losses in connection
with the release or satisfaction of a Mortgage Loan without having obtained
payment in full of the indebtedness secured thereby. No provision of this
Section 4.02(m) requiring such Fidelity Bond and Errors and Omissions Insurance
Policy shall diminish or relieve the Servicer from its duties and obligations as
set forth in this Agreement. The minimum coverage under any such bond and
insurance policy shall be at least equal to the coverage amounts which are
acceptable for the Servicer as determined by Xxxxxx Xxx and Freddie Mac. Upon
the request of the Master Servicer or the Indenture Trustee, the Servicer shall
cause to be delivered to such party a certified true copy of such fidelity bond
and insurance policy and a statement from the surety and the insurer that such
fidelity bond and insurance policy shall in no event be terminated or materially
modified without 30 days' prior written notice to the Master Servicer and the
Indenture Trustee.
(n) Inspections. The Servicer shall inspect the Mortgaged Property as often
as deemed necessary by the Servicer to assure itself that the value of the
Mortgaged Property is being preserved. In addition, the Servicer shall inspect
the Mortgaged Property and/or take such other actions as may be necessary or
appropriate in accordance with Servicing Standards or as may be required by the
primary mortgage guaranty insurer. The Servicer shall keep a written report of
each such inspection.
(o) Restoration of Mortgaged Property. The Servicer need not obtain the
approval of the Master Servicer or the Indenture Trustee prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Servicing Standards. At a minimum, the Servicer shall comply
with the following conditions in connection with any such release of Insurance
Proceeds or Condemnation Proceeds:
(i) the Servicer shall receive satisfactory independent verification
of completion of repairs and issuance of any required approvals with respect
thereto;
(ii) the Servicer shall take all steps necessary to preserve the
priority of the lien of the Mortgage, including, but not limited to requiring
waivers with respect to mechanics' and materialmen's liens; and
(iii) pending repairs or restoration, the Servicer shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow Account.
(p) Title, Management and Disposition of REO Property. In the event that
title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of
foreclosure, the deed or
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certificate of sale shall be taken in the name of the Indenture Trustee or its
nominee in trust for the benefit of the Noteholders and the Swap Counterparty,
or in the event the Indenture Trustee is not authorized or permitted to hold
title to real property in the state where the REO Property is located, or would
be adversely affected under the "doing business" or tax laws of such state by so
holding title, the deed or certificate of sale shall be taken in the name of
such Person or Persons as shall be consistent with an Opinion of Counsel
obtained by the Servicer (with a copy delivered to the Indenture Trustee) from
any attorney duly licensed to practice law in the state where the REO Property
is located. The Person or Persons holding such title other than the Indenture
Trustee shall acknowledge in writing that such title is being held as nominee
for the Indenture Trustee.
The Servicer shall manage, conserve, protect and operate each REO Property
for the Indenture Trustee solely for the purpose of its prompt disposition and
sale. The Servicer, either itself or through an agent selected by the Servicer,
shall manage, conserve, protect and operate the REO Property in the same manner
that it manages, conserves, protects and operates other foreclosed property for
its own account, and in the same manner that similar property in the same
locality as the REO Property is managed. The Servicer shall attempt to sell the
same (and may temporarily rent the same for a period not greater than one year,
except as otherwise provided below) on such terms and conditions as the Servicer
deems to be in the best interest of the Issuer, the Indenture Trustee and the
Noteholders.
If the Servicer hereafter becomes aware that a Mortgaged Property is an
Environmental Problem Property, the Servicer will notify the Master Servicer of
the existence of the Environmental Problem Property. Additionally, the Servicer
shall set forth in such notice a description of such problem, a recommendation
to the Master Servicer relating to the proposed action regarding the
Environmental Problem Property, and the Servicer shall carry out the
recommendation set forth in such notice. Notwithstanding the foregoing, the
Servicer shall obtain the Master Servicer's prior written consent to any
expenditures proposed to remediate Environmental Problem Properties or to defend
any claims associated with Environmental Problem Properties if such expenses, in
the aggregate, are expected to exceed $100,000. Failure to provide written
notice of disapproval of the expenditure within five (5) Business Days of
receipt of such request for prepaid expenditures shall be deemed an approval of
such expenditure. If the Servicer has received reliable instructions to the
effect that a Property is an Environmental Problem Property (e.g., Servicer
obtains a broker's price opinion which reveals the potential for such problem),
the Servicer will not accept a deed-in-lieu of foreclosure upon any such
Property without first obtaining a preliminary environmental investigation for
the Property.
The Servicer shall also maintain on each REO Property fire and hazard
insurance with extended coverage in amount which is at least equal to the
maximum insurable value of the improvements which are a part of such property
and, to the extent required and available under the Flood Disaster Protection
Act of 1973, as amended, flood insurance in the amount required above.
The proceeds of sale of the REO Property shall be promptly deposited in the
Custodial Account. As soon as practical thereafter the expenses of such sale
shall be paid and the Servicer
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shall reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Administration Fees and unreimbursed advances made pursuant to this
Section or Section 4.03.
The Servicer shall make Servicing Advances of all funds necessary for the
proper operation, management and maintenance of the REO Property, including the
cost of maintaining any hazard insurance pursuant to Section 4.02(k), such
advances to be reimbursed from the disposition or liquidation proceeds of the
REO Property. The Servicer shall make monthly remittances on each Servicer
Remittance Date to the Master Servicer of the net cash flow from the REO
Property (which shall equal the revenues from such REO Property net of the
expenses described in this Section 4.02(p) and of any reserves reasonably
required from time to time to be maintained to satisfy anticipated liabilities
for such expenses).
(q) Real Estate Owned Reports. Together with the statement furnished
pursuant to Section 4.03(b), the Servicer shall furnish to the Master Servicer
on or before the 10th calendar day in each month a statement with respect to any
REO Property covering the operation of such REO Property for the previous month
and the Servicer's efforts in connection with the sale of such REO Property and
any rental of such REO Property incidental to the sale thereof for the previous
month. That statement shall be accompanied by such other information as the
Master Servicer shall reasonably request.
(r) Liquidation Reports. Upon the foreclosure sale of any Mortgaged
Property or the acquisition thereof by the Indenture Trustee pursuant to a deed
in lieu of foreclosure, the Servicer shall submit to the Indenture Trustee and
the Master Servicer a monthly liquidation report with respect to such Mortgaged
Property.
(s) Reports of Foreclosures and Abandonments of Mortgaged Property.
Following the foreclosure sale or abandonment of any Mortgaged Property, the
Servicer shall report such foreclosure or abandonment as required pursuant to
Section 6050J of the Code.
(t) Prepayment Premiums. All Prepayment Premiums collected shall be payable
to the Servicer, or any successor servicer, as Ancillary Income and shall not be
available to make payments to the Noteholders or the Swap Counterparty
hereunder.
(u) Compliance with Safeguarding Customer Information Requirements. The
Servicer has implemented and will maintain security measures designed to meet
the objectives of the Interagency Guidelines Establishing Standards for
Safeguarding Customer Information published in final form on February 1, 2001,
66 Fed. Reg. 8616, and the rules promulgated thereunder, as amended from time to
time (the "Guidelines").
(v) Presentment of Claims and Collection of Proceeds. The Servicer shall
prepare and present on behalf of the Indenture Trustee and the Noteholders all
claims under the Insurance Policies with respect to the Mortgage Loans, and take
such actions (including the negotiation, settlement, compromise or enforcement
of the insured's claim) as shall be necessary to realize recovery under such
policies. Any proceeds disbursed to the Servicer in respect of such policies or
bonds shall be promptly deposited in the Custodial Account upon receipt, except
that any amounts realized that are to be applied to the repair or restoration of
the related
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Mortgaged Property as a condition requisite to the presentation of claims on the
related Mortgage Loan to the insurer under any applicable Insurance Policy need
not be so deposited (or remitted).
Section 4.03. Payments To the Master Servicer.
(a) Remittances. On each Servicer Remittance Date, the Servicer shall remit
on a scheduled/scheduled basis by wire transfer of immediately available funds
to the Master Servicer (a) all amounts deposited in the Custodial Account as of
the close of business on the last day of the related Due Period (net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.02(e)),
plus (b) all Advances, if any, which the Servicer is obligated to make pursuant
to Section 4.03(c), minus (c) any amounts attributable to Principal Prepayments,
Liquidation Proceeds, Insurance Proceeds, Condemnation Proceeds or REO
Disposition Proceeds received after the applicable Prepayment Period, which
amounts shall be remitted on the following Servicer Remittance Date, together
with any additional interest required to be deposited in the Custodial Account
in connection with such Principal Prepayment in accordance with Section
4.02(d)(ii)(G) and Section 4.04(c), and minus (d) any amounts attributable to
Scheduled Payments collected but due on a Due Date or Due Dates subsequent to
the first day of the month in which such Servicer Remittance Date occurs, which
amounts shall be remitted on the Servicer Remittance Date next succeeding the
Due Date related to such Scheduled Payment.
With respect to any remittance received by the Master Servicer after the
Servicer Remittance Date on which such remittance was due, the Servicer shall
pay to the Master Servicer interest on any such late remittance at an annual
rate equal to the Prime Rate, adjusted as of the date of each change, plus three
percentage points, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be deposited in the Custodial Account by the
Servicer on the date such late remittance is made and shall cover the period
commencing with the day following such Servicer Remittance Date and ending with
the Business Day on which such remittance is made, both inclusive. Such interest
shall be remitted on the next succeeding Servicer Remittance Date. The payment
by the Servicer of any such interest shall not be deemed an extension of time
for payment or a waiver of any Event of Default by the Servicer.
All remittances required to be made to the Master Servicer shall be made to
the following wire account or to such other account as may be specified by the
Master Servicer from time to time:
Xxxxx Fargo Bank, N.A.
San Francisco, CA
ABA#: 000-000-000
Account Name: Corporate Trust Clearing
Account Number: 3970771416
For further credit to: 17205500, Fieldstone 2005-3
(b) Statements to Master Servicer and Trust Administrator. On the 10th day
of each calendar month (or, if such 10th day is not a Business Day, then on the
next succeeding Business Day), the Servicer shall furnish to the Master Servicer
(i) a monthly remittance advice in the format set forth in Exhibit G-1 hereto, a
monthly defaulted loan report in the format set forth in Exhibit G-2 hereto and
a realized loss report in the format set forth in Exhibit G-3 hereto (or in
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such other format mutually agreed to between the Servicer and the Master
Servicer) relating to the period ending on the last day of the preceding
calendar month and (ii) all such information required pursuant to clause (i)
above on a magnetic tape or other similar media reasonably acceptable to the
Master Servicer. No later than three Business Days after the fifteenth day of
each calendar month, the Servicer shall furnish to the Master Servicer a monthly
report containing such information regarding prepayments of Mortgage Loans
during the applicable Prepayment Period and in a format as mutually agreed to
between the Servicer and the Master Servicer.
Such monthly remittance advice shall also be accompanied by a supplemental
report provided to the Master Servicer and the Seller which includes on an
aggregate basis for the previous calendar month (i) the amount of any insurance
claims filed, (ii) the amount of any claim payments made and (iii) the amount of
claims denied or curtailed. The Master Servicer will convert such data into a
format acceptable to the Trust Administrator and provide monthly reports to the
Trust Administrator pursuant to the Trust Agreement.
In addition, not more than 75 days after the end of each calendar year,
commencing December 31, 2005, the Servicer shall provide (as such information
becomes reasonably available to the Servicer) to the Master Servicer and the
Trust Administrator such information concerning the Mortgage Loans and annual
remittances to the Master Servicer therefrom as is necessary for the Trust
Administrator to prepare the reports required by Section 5.09(c). Such
obligation of the Servicer shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Servicer to
the Master Servicer and the Trust Administrator pursuant to any requirements of
the Code as from time to time are in force. The Servicer shall also provide to
the Trust Administrator such information as may be requested by it and required
for the completion of any tax reporting responsibility of the Trust
Administrator within such reasonable time frame as shall enable the Trust
Administrator to timely file each Schedule Q (or other applicable tax report or
return) required to be filed by it.
(c) Advances by Servicer. On each Servicer Remittance Date, the Servicer
shall deposit in the Custodial Account from its own funds or from amounts held
for future payment, or a combination of both, an amount equal to all Scheduled
Payments (with interest adjusted to the Mortgage Loan Remittance Rate) which
were due on the Mortgage Loans during the applicable Due Period and which were
delinquent at the close of business on the immediately preceding Determination
Date. Any amounts held for future payment and so used shall be replaced by the
Servicer by deposit in the Custodial Account on or before any future Servicer
Remittance Date if funds in the Custodial Account on such Servicer Remittance
Date shall be less than remittances to the Master Servicer required to be made
on such Servicer Remittance Date. The Servicer shall keep appropriate records of
such amounts and will provide such records to the Master Servicer upon request.
The Servicer's obligation to make such Advances as to any Mortgage Loan
will continue through the last Scheduled Payment due prior to the payment in
full of the Mortgage Loan, or through the last Remittance Date prior to the
Remittance Date for the payment of all Liquidation Proceeds and other payments
or recoveries (including Insurance Proceeds and Condemnation Proceeds) with
respect to the related Mortgage Loan.
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Notwithstanding the foregoing, if the Subservicer fails to make any Advance
required to be made by this Section 4.03 with respect to any Remittance Date,
then the Servicer shall be obligated to make such Advance, subject to its
determination of the recoverability of such Advance.
(d) Due Dates Other Than the First of the Month. Mortgage Loans having Due
Dates other than the first day of a month shall be accounted for as described in
this Section 4.03(d). Any Scheduled Payment due on a day other than the first
day of each month shall be considered due on the first day of the month
following the month in which that payment is due as if such payment were due on
the first day of that month. For example, a Scheduled Payment due on November 15
shall be considered to be due on December 1. Any Scheduled Payment due and
collected on a Mortgage Loan after the Cut-off Date shall be deposited in the
Custodial Account. For Mortgage Loans with Due Dates on the first day of a
month, deposits to the Custodial Account begin with the Scheduled Payment due on
the first of the month following the Cut-off Date.
(e) Credit Reporting. For each Mortgage Loan, in accordance with its
current servicing practices, the Servicer will accurately and fully report its
underlying borrower credit files to each of the following credit repositories or
their successors: Equifax Credit Information Services, Inc., Trans Union, LLC
and Experian Information Solution, Inc., on a monthly basis in a timely manner.
In addition, with respect to any Mortgage Loan serviced for a Xxxxxx Xxx pool,
the Servicer shall transmit full credit reporting data to each of such credit
repositories in accordance with Xxxxxx Xxx Guide Announcement 95-19 (November
11, 1995), a copy of which is attached hereto as Exhibit K, reporting each of
the following statuses, each month with respect to a Mortgage Loan in a Xxxxxx
Xxx pool: New origination, current, delinquent (30-60-90-days, etc), foreclosed
or charged off.
Section 4.04. General Servicing Procedures.
(a) Transfers of Mortgaged Property. The Servicer shall use its best
efforts to enforce any "due-on-sale" provision contained in any Mortgage or
Mortgage Note and to deny assumption by the person to whom the Mortgaged
Property has been or is about to be sold whether by absolute conveyance or by
contract of sale, and whether or not the Mortgagor remains liable on the
Mortgage and the Mortgage Note. When the Mortgaged Property has been conveyed by
the Mortgagor, the Servicer shall, to the extent it has knowledge of such
conveyance, exercise its rights to accelerate the maturity of such Mortgage Loan
under the "due-on-sale" clause applicable thereto; provided, however, that the
Servicer shall not exercise such rights if prohibited by law from doing so.
If the Servicer reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Servicer shall enter into (i) an
assumption and modification agreement with the person to whom such property has
been conveyed pursuant to which such person becomes liable under the Mortgage
Note and the original Mortgagor remains liable thereon or (ii) in the event the
Servicer is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Servicer has the prior consent of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the seller of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the buyer of the
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Mortgaged Property is substituted as Mortgagor and becomes liable under the
Mortgage Note. In connection with any such assumption, neither the Mortgage Rate
borne by the related Mortgage Note, the timing of principal or interest payments
on the Mortgage Loan, the term of the Mortgage Loan nor the outstanding
principal amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Servicer shall
inquire diligently into the creditworthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used by the Servicer, its affiliates or Xxxxxx Xxx with
respect to underwriting mortgage loans of the same type as the Mortgage Loans.
If the credit of the proposed transferee does not meet such underwriting
criteria, the Servicer diligently shall, to the extent permitted by the Mortgage
or the Mortgage Note and by applicable law, accelerate the maturity of the
Mortgage Loan.
(b) Satisfaction of Mortgages and Release of Mortgage Files. Upon the
payment in full of any Mortgage Loan, or the receipt by the Servicer of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Servicer shall notify the Master Servicer in the monthly
remittance advice as provided in Section 4.03(b), and may request the release of
any Mortgage Loan Documents from the Custodian in accordance with the Custodial
Agreement.
If the Servicer satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Servicer otherwise prejudice any rights the Seller, the Indenture Trustee or
the Issuer may have under the mortgage instruments, the Servicer shall deposit
into the Custodial Account the entire outstanding principal balance, plus all
accrued interest on such Mortgage Loan, on the day preceding the Servicer
Remittance Date in the month following the date of such release. The Servicer
shall maintain the Fidelity Bond and Errors and Omissions Insurance Policy as
provided for in Section 4.02(m) insuring the Servicer against any loss it may
sustain with respect to any Mortgage Loan not satisfied in accordance with the
procedures set forth herein.
(c) Servicing Compensation. As consideration for servicing the Mortgage
Loans subject to this Agreement, the Servicer and the Subservicer shall be paid
in the aggregate the relevant Servicing Administration Fee for each Mortgage
Loan remaining subject to this Agreement during any month or part thereof. Such
Servicing Administration Fee shall be payable monthly and retained by the
Servicer or the Subservicer, as applicable. Additional servicing compensation in
the form of Ancillary Income shall be retained by the Subservicer only and is
not required to be deposited in the Custodial Account. The obligation of the
Issuer to pay the Servicing Administration Fee is limited to, and the Servicing
Administration Fee is payable from, the interest portion (including recoveries
with respect to interest from Liquidation Proceeds) of such Scheduled Payment
collected by the Servicer, or as otherwise provided in Section 4.02(e)(2).
Each of the Servicer and the Subservicer shall be required to pay all
expenses incurred by it in connection with its servicing activities hereunder
and shall not be entitled to reimbursement thereof except as specifically
provided for herein.
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The Servicing Administration Fee payable to or retained by the Servicer or
the Subservicer, as applicable, with respect to any Due Period shall be reduced
by the Prepayment Interest Shortfall Amount for the related Prepayment Period
required to be deposited in the Custodial Account and remitted to the Master
Servicer on the related Servicer Remittance Date. The Servicer and the
Subservicer shall be obligated to remit to the Master Servicer on each Servicer
Remittance Date the Prepayment Interest Shortfall Amount, only up to an amount
equal to in the aggregate the Servicing Administration Fee the Servicer and the
Subservicer are entitled to receive for such Due Period.
(d) Annual Audit Report. The Subservicer shall, at its own expense, cause a
firm of independent public accountants (who may also render other services to
the Subservicer), which is a member of the American Institute of Certified
Public Accountants, to furnish, as soon as practicable in each year beginning
with 2006, but in no event later than March 15 of each calendar year, to the
Seller, the Master Servicer, the Indenture Trustee and the Sarbanes Certifying
Party (i) year-end audited (if available) financial statements of the
Subservicer and (ii) a statement to the effect that such firm has examined
certain documents and records for the preceding fiscal year (or during the
period from the date of commencement of such Subservicer's duties hereunder
until the end of such preceding fiscal year in the case of the first such
certificate) and that, on the basis of such examination conducted substantially
in compliance with the Uniform Single Attestation Program for Mortgage Bankers,
such firm is of the opinion that the Subservicer's overall servicing operations
have been conducted in compliance with the Uniform Single Attestation Program
for Mortgage Bankers except for such exceptions that, in the opinion of such
firm, the Uniform Single Attestation Program for Mortgage Bankers requires it to
report, in which case such exceptions shall be set forth in such statement.
(e) Annual Compliance Certifications.
(i) No later than March 15 of each calendar year, commencing with the
year 2006, the Subservicer shall, at its own expense, deliver to the Seller, the
Master Servicer, the Indenture Trustee, the Trust Administrator and the Servicer
a servicer's certificate stating, as to each signer thereof, that (i) a review
of the activities of the Subservicer during such preceding fiscal year and of
performance under this Agreement has been made under such officers' supervision,
and (ii) to the best of such officers' knowledge, based on such review, the
Subservicer has fulfilled all its obligations under this Agreement for such
year, or, if there has been a default in the fulfillment of all such
obligations, specifying each such default known to such officers and the nature
and status thereof including the steps being taken by the Subservicer to remedy
such default.
(ii) For so long as a certificate under the Xxxxxxxx-Xxxxx Act of
2002, as amended ("Xxxxxxxx-Xxxxx"), is required to be given on behalf of the
Issuer, no later than March 15 of each calendar year, commencing with the year
2006, or at any other time that the Master Servicer provides a certification
pursuant to Xxxxxxxx-Xxxxx and upon thirty (30) days written request of such
parties, an officer of the Subservicer shall execute and deliver an Officer's
Certificate to the Depositor, the Master Servicer, the Trust Administrator and
the Servicer for the benefit of the Issuer and the Sarbanes Certifying Party and
its officers, directors and affiliates, in the form of Exhibit H hereto.
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(iii) The Subservicer shall indemnify and hold harmless the Issuer,
the Depositor, the Indenture Trustee, the Owner Trustee, the Trust
Administrator, the Servicer and the Master Servicer and their respective
officers, directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Subservicer or any of its officers, directors, agents or affiliates of its
obligations under this Section 4.04(e) for the negligence, fraud, bad faith or
willful misconduct of the Subservicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless any of the foregoing parties, then the Subservicer agrees that it shall
contribute to the amount paid or payable by the Master Servicer as a result of
the losses, claims, damages or liabilities of the Master Servicer in such
proportion as is appropriate to reflect the relative fault of the Master
Servicer on the one hand and the Subservicer on the other in connection with a
breach of the Subservicer's obligations under this Section 4.04(e) or the
Subservicer's negligence, fraud, bad faith or willful misconduct in connection
therewith.
(iv) In addition, the Servicer shall provide the certifications and
reports specified in this Section 4.04(e) (with the exception of the
certification required by Section 4.04(e)(ii)) to the Persons specified therein
within the time period specified therein. The Servicer hereby agrees to
indemnify the Master Servicer and the other Persons specified in Section
4.04(e)(iii) to the same extent as though such provisions referred to the
Servicer rather than the Subservicer.
(f) Inspection. The Servicer shall provide the Indenture Trustee and the
Master Servicer, upon five (5) Business Days' advance notice, during normal
business hours, access to all records maintained by the Servicer in respect of
its rights and obligations hereunder and access to officers of the Servicer
responsible for such obligations. Upon request, the Servicer shall furnish to
the Indenture Trustee and the Master Servicer its most recent publicly available
financial statements and such other information relating to its capacity to
perform its obligations under this Agreement.
Section 4.05. Representations, Warranties and Agreements.
(a) Representations, Warranties and Agreements of FSC. FSC, in its capacity
as Servicer, as a condition to the consummation of the transactions contemplated
hereby, hereby makes the following representations and warranties to the Master
Servicer, the Subservicer, the Swap Counterparty, the Depositor and the
Indenture Trustee and the Trust Administrator, as of the Closing Date:
(i) Due Organization and Authority. FSC is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation and has all licenses necessary to carry on its
business as now being conducted; FSC has the full corporate power and authority
to execute and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all instruments
of transfer to be delivered pursuant to this Agreement) by FSC and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement evidences the valid, binding and enforceable
obligation of FSC (except to the extent bankruptcy, insolvency, reorganization,
fraudulent conveyance or similar laws affect the enforcement of
74
creditor's rights generally) and all requisite corporate action has been taken
by FSC to make this Agreement valid and binding upon FSC in accordance with its
terms;
(ii) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of FSC;
(iii) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition of the servicing responsibilities by FSC or the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will (a) conflict with or result in a
breach of any of the terms, conditions or provisions of FSC's charter or by-laws
or any legal restriction or any agreement or instrument to which FSC is now a
party or by which it is bound, (b) constitute a default under any of the
foregoing, (c) result in an acceleration under any of the foregoing, (d) result
in the violation of any law, rule, regulation, order, judgment or decree to
which FSC or its property is subject or (e) impair the ability of FSC to act as
Servicer hereunder with respect to the Mortgage Loans, or impair the value of
the Mortgage Loans;
(iv) Ability to Perform. FSC does not believe, nor does it have any
reason or cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(v) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to FSC's knowledge, threatened against FSC which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of FSC, or in any material impairment of the right or ability of FSC to
carry on its business substantially as now conducted, or in any material
liability on the part of FSC, or which would draw into question the validity of
this Agreement or of any action taken or to be taken in connection with the
obligations of FSC contemplated herein, or which would be likely to impair
materially the ability of FSC to perform under the terms of this Agreement;
(vi) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by FSC of or compliance by FSC with this Agreement, or
if required, such approval has been obtained prior to the Closing Date;
(vii) No Default. FSC is not in default, and no event or condition
exists that after the giving of notice or lapse of time or both, would
constitute an event of default under any material mortgage, indenture, contract,
agreement, judgment, or other undertaking, to which FSC is a party or which
purports to be binding upon it or upon any of its assets, which default could
impair materially the ability of FSC to perform under the terms of this
Agreement;
(viii) Ability to Service. FSC or an affiliate is an approved
seller/servicer of conventional residential mortgage loans for Xxxxxx Xxx and
Freddie Mac, with the facilities, procedures and experienced personnel necessary
for the sound servicing of mortgage loans of the same type as the Mortgage
Loans. FSC or an affiliate is in good standing to service mortgage loans for
either Xxxxxx Xxx or Freddie Mac, and no event has occurred, including but not
limited to a change in insurance coverage, which would make FSC or an affiliate
unable to comply with
75
either Xxxxxx Xxx or Xxxxxxx Mac eligibility requirements or which would require
notification to either of Xxxxxx Xxx or Freddie Mac;
(ix) No Untrue Information. Neither this Agreement nor any statement,
report or other document furnished or to be furnished pursuant to this Agreement
or in connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained therein not misleading; and
(x) No Commissions to Third Parties. FSC has not dealt with any broker
or agent or anyone else who might be entitled to a fee or commission in
connection with this transaction other than the Seller.
(b) Representations, Warranties and Agreements of the Subservicer. The
Subservicer, as a condition to the consummation of the transactions contemplated
hereby, hereby makes the following representations and warranties to the
Servicer, the Master Servicer, the Swap Counterparty, the Depositor and the
Issuer, the Indenture Trustee and the Trust Administrator, as of the Closing
Date:
(i) Due Organization and Authority. The Subservicer is validly
existing and in good standing as a federally chartered national banking
association with full power and authority to transact any business contemplated
by this Agreement and to execute, deliver and comply with its obligations under
the terms of this Agreement, the execution, delivery and performance of which
have been duly authorized by all necessary corporate action on the part of the
Subservicer;
(ii) Ordinary Course of Business. The consummation of the transactions
contemplated by this Agreement are in the ordinary course of business of the
Subservicer;
(iii) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition of the servicing responsibilities by the Subservicer
or the transactions contemplated hereby, nor the fulfillment of or compliance
with the terms and conditions of this Agreement, will (a) conflict with or
result in a breach of any of the terms, conditions or provisions of the
Subservicer's charter or any legal restriction or any agreement or instrument to
which the Subservicer is now a party or by which it is bound, (b) constitute a
material default under any of the foregoing, (c) result in an acceleration under
any of the foregoing, (d) result in the violation of any law, rule, regulation,
order, judgment or decree to which the Subservicer or its property is subject or
(e) impair the ability of the Subservicer to service the Mortgage Loans, or
impair the value of the Mortgage Loans;
(iv) Ability to Perform. The Subservicer does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement;
(v) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to the Subservicer's knowledge, threatened against the
Subservicer which, either in any one instance or in the aggregate, may result in
any material adverse change in the business, operations, financial condition,
properties or assets of the Subservicer, or in any material impairment of the
right or ability of the Subservicer to carry on its business substantially
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as now conducted, or in any material liability on the part of the Subservicer,
or which would draw into question the validity of this Agreement or of any
action taken or to be taken in connection with the obligations of the
Subservicer contemplated herein, or which would be likely to impair materially
the ability of the Subservicer to perform under the terms of this Agreement;
(vi) No Consent Required. No consent, approval, authorization or order
of any court or governmental agency or body is required for the execution,
delivery and performance by the Subservicer of or compliance by the Subservicer
with this Agreement, or if required, such approval has been obtained prior to
the Closing Date;
(vii) No Default. The Subservicer is not in default, and no event or
condition exists that after the giving of notice or lapse of time or both, would
constitute an event of default under any material mortgage, indenture, contract,
agreement, judgment, or other undertaking, to which the Subservicer is a party
or which purports to be binding upon it or upon any of its assets, which default
could impair materially the ability of the Subservicer to perform under the
terms of this Agreement;
(viii) Ability to Service. The Subservicer is an approved
seller/Subservicer of conventional residential mortgage loans for Xxxxxx Xxx and
Freddie Mac, with the facilities, procedures and experienced personnel necessary
for the sound servicing of mortgage loans of the same type as the Mortgage
Loans. The Subservicer is in good standing to service mortgage loans for either
Xxxxxx Xxx or Freddie Mac, and no event has occurred, including but not limited
to a change in insurance coverage, which would make the Subservicer unable to
comply with either Xxxxxx Xxx or Xxxxxxx Mac eligibility requirements or which
would require notification to either of Xxxxxx Xxx or Freddie Mac; and
(ix) No Commissions to Third Parties. The Subservicer has not dealt
with any broker or agent or anyone else who might be entitled to a fee or
commission in connection with this transaction other than the Seller.
(c) Remedies for Breach of Representations and Warranties of FSC and the
Subservicer. It is understood and agreed that the representations and warranties
set forth in Sections 4.05(a) and Section 4.05(b) shall survive the engagement
of each Representing Party to perform the servicing responsibilities as of the
Closing Date hereunder and the delivery of the Servicing Files to the Servicer
and the Subservicer, as applicable, and shall inure to the benefit of the Master
Servicer and the Indenture Trustee. Upon discovery by either the Servicer, the
Subservicer, the Master Servicer or the Indenture Trustee of a breach of any of
the foregoing representations and warranties which materially and adversely
affects the ability of the such Representing Party to perform its duties and
obligations under this Agreement or otherwise materially and adversely affects
the value of the Mortgage Loans, the Mortgaged Property or the priority of the
security interest on such Mortgaged Property or the interests of the Master
Servicer or the Indenture Trustee, the party discovering such breach shall give
prompt written notice to the other parties.
Within 60 days of the earlier of either discovery by or notice to a
Representing Party of any breach of a representation or warranty set forth in
Section 4.05(a) or Section 4.05(b), as applicable, which materially and
adversely affects the ability of such Representing Party to
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perform its duties and obligations under this Agreement or otherwise materially
and adversely affects the value of the Mortgage Loans, the Mortgaged Property or
the priority of the security interest on such Mortgaged Property, such
Representing Party shall use its best efforts promptly to cure such breach in
all material respects and, if such breach cannot be cured, such Representing
Party shall, at the Indenture Trustee's or the Master Servicer's option, assign
its rights and obligations under this Agreement (or respecting the affected
Mortgage Loans) to a successor servicer. Such assignment shall be made in
accordance with Sections 4.06(e) and 4.06(f).
In addition, such Representing Party shall indemnify all other parties to
this Agreement and hold each of them harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
such Representing Party's representations and warranties contained in Section
4.05.
Any cause of action against a Representing Party relating to or arising out
of the breach of any representations and warranties made in Section 4.05(a) or
Section 4.05(b), as applicable, shall accrue upon (i) discovery of such breach
by such Representing Party or notice thereof by the Master Servicer, the
Depositor or the Indenture Trustee to such Representing Party, (ii) failure by
the Representing Party to cure such breach within the applicable cure period,
and (iii) demand upon the Representing Party by the Master Servicer or the
Indenture Trustee for compliance with this Agreement.
(d) Additional Indemnification by FSC. FSC shall indemnify the Master
Servicer, the Depositor, the Issuer, the Indenture Trustee, the Owner Trustee,
and the Trust Administrator and hold each of them harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
(collectively, the "Liabilities") that the indemnified party may sustain in any
way related to the failure of FSC to perform its duties and service the Mortgage
Loans in accordance with the terms of this Agreement. FSC shall immediately
notify the Master Servicer, the Depositor, the Indenture Trustee, the Owner
Trustee and the Trust Administrator if a claim is made by a third party with
respect to this Agreement or the Mortgage Loans that may result in such
Liabilities, and FSC shall assume (with the prior written consent of the
indemnified party) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or any
indemnified party in respect of such claim and follow any written instructions
received from such indemnified party in connection with such claim. FSC shall be
reimbursed promptly from the Trust Fund for all amounts advanced by it pursuant
to the preceding sentence except when the claim is in any way related to FSC's
indemnification pursuant to this Section 4.05(d), or the failure of FSC to
service and administer the Mortgage Loans in accordance with the terms of this
Agreement.
(e) Additional Indemnification by the Subservicer. The Subservicer shall
indemnify the Master Servicer, the Servicer, the Depositor, the Indenture
Trustee, the Owner Trustee, the Issuer and the Trust Administrator and hold each
of them harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related
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costs, judgments, and any other costs, fees and expenses (collectively, the
"Liabilities") that the indemnified party may sustain in any way related to the
failure of the Subservicer to perform its duties and service the Mortgage Loans
in accordance with the terms of this Agreement. The Subservicer shall
immediately notify the Master Servicer, the Servicer, the Depositor, the
Indenture Trustee, the Owner Trustee and the Trust Administrator if a claim is
made by a third party with respect to this Agreement or the Mortgage Loans that
may result in such Liabilities, and the Subservicer shall assume (with the prior
written consent of the indemnified party) the defense of any such claim and pay
all expenses in connection therewith, including counsel fees, promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
any indemnified party in respect of such claim and follow any written
instructions received from the such indemnified party in connection with such
claim. The Subservicer shall be reimbursed promptly from the Trust Fund for all
amounts advanced by it pursuant to the preceding sentence except when the claim
is in any way related to the Subservicer's indemnification pursuant to this
Section 4.05(e), or the failure of the Subservicer to service and administer the
Mortgage Loans in accordance with the terms of this Agreement.
Section 4.06. The Servicer and the Subservicer.
(a) Merger or Consolidation of FSC. FSC shall keep in full effect its
existence, rights and franchises as a corporation, and shall obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement.
Any Person into which FSC may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which FSC shall be a
party, or any Person succeeding to the business of FSC, shall be the successor
of FSC hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding, provided, however, that the successor or surviving Person shall
be an institution (i) having a net worth of not less than $15,000,000, and (ii)
which is a Xxxxxx Xxx- and Freddie Mac-approved servicer in good standing.
(b) Limitation on Liability of FSC and Others. Neither FSC nor any of the
directors, officers, employees or agents of FSC shall be under any liability to
the Master Servicer, the Depositor, the Issuer, the Indenture Trustee or the
Trust Administrator for any action taken or for refraining from the taking of
any action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect FSC or any such person
against any breach of warranties or representations made herein, or failure to
perform its obligations in strict compliance with any standard of care set forth
in this Agreement, or any liability which would otherwise be imposed by reason
of any breach of the terms and conditions of this Agreement. FSC and any
director, officer, employee or agent of FSC may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. FSC shall not be under any obligation
to appear in, prosecute or defend any legal action which is not incidental to
its duties to service the Mortgage Loans in accordance with this Agreement and
which in its opinion may involve it in any expense or liability; provided,
however, that FSC may undertake any such action which it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the parties
hereto.
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In such event, FSC shall be entitled to reimbursement from the Trust Fund for
the reasonable legal expenses and costs of such action.
(c) Limitation on Resignation and Assignment by FSC. This Agreement has
been entered into with FSC in reliance upon the independent status of FSC, and
the representations as to the adequacy of its servicing facilities, plant,
personnel, records and procedures, its integrity, reputation and financial
standing, and the continuance thereof. Therefore, except as expressly provided
in this Section 4.06(c) and Section 4.02(a), FSC shall neither assign its rights
under this Agreement or the servicing hereunder nor delegate its duties
hereunder or any portion thereof, or sell or otherwise dispose of all or
substantially all of its property or assets without, in each case, the prior
written consent of the Seller, the Indenture Trustee, the Master Servicer and
the Trust Administrator, which consent, in the case of an assignment of rights
or delegation of duties, shall be granted or withheld in the discretion of the
Seller, the Indenture Trustee, the Master Servicer and the Trust Administrator;
provided, that in each case, there must be delivered to the Seller, the Master
Servicer, the Indenture Trustee and the Trust Administrator a letter from each
Rating Agency to the effect that such transfer of servicing or sale or
disposition of assets will not result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Notes.
FSC shall not resign from the obligations and duties hereby imposed on it
except by mutual consent of FSC and the Master Servicer, or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by FSC. Any such
determination permitting the resignation of FSC shall be evidenced by an Opinion
of Counsel to such effect delivered to the Seller, the Master Servicer and the
Indenture Trustee which Opinion of Counsel shall be in form and substance
reasonably acceptable to each of them. No such resignation shall become
effective until a successor shall have assumed FSC's responsibilities and
obligations hereunder in the manner provided in Section 4.08.
Without in any way limiting the generality of this Section 4.06, in the
event that FSC either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof or sell or otherwise dispose of all or substantially all of its property
or assets, except to the extent permitted by and in accordance with this Section
4.06 and Section 4.02(a), without the prior written consent of the Seller, the
Master Servicer, the Indenture Trustee and the Trust Administrator, then such
parties shall have the right to terminate this Agreement upon notice given as
set forth in Section 11.07 of the Agreement, without any payment of any penalty
or damages and without any liability whatsoever to FSC or any third party.
(d) Merger or Consolidation of the Subservicer. The Subservicer shall keep
in full effect its existence, rights and franchises as a national banking
association as shall be necessary to protect the validity and enforceability of
this Agreement or any of the Mortgage Loans and to perform its duties under this
Agreement.
Any Person into which the Subservicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Subservicer shall be a party, or any Person succeeding to the business of the
Subservicer, shall be the successor of the Subservicer 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
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notwithstanding, provided, however, that the successor or surviving Person shall
be a Person that shall be qualified and approved to service mortgage loans for
Xxxxxx Xxx or FHLMC and shall have a net worth of not less than $15,000,000.
(e) Limitation on Liability of the Subservicer and Others. Neither the
Subservicer nor any of the directors, officers, employees or agents of the
Subservicer shall be under any liability to the Master Servicer, the Depositor,
the Issuer, Indenture Trustee or the Trust Administrator for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Subservicer or any such person against any breach of
warranties or representations made herein, or failure to perform its obligations
in strict compliance with any standard of care set forth in this Agreement, or
any liability which would otherwise be imposed by reason of any breach of the
terms and conditions of this Agreement. The Subservicer and any director,
officer, employee or agent of the Subservicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. The Subservicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage Loans in accordance with this
Agreement and which in its opinion may involve it in any expense or liability,
provided, however, that the Subservicer may undertake any such action which it
may deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties hereto. In such event, the Subservicer shall be entitled
to reimbursement from the Trust Fund for the reasonable legal expenses and costs
of such action.
(f) Limitation on Resignation and Assignment by the Subservicer. This
Agreement has been entered into with the Subservicer in reliance upon the
independent status of the Subservicer, and the representations as to the
adequacy of its servicing facilities, plant, personnel, records and procedures,
its integrity, reputation and financial standing, and the continuance thereof.
Therefore, except as expressly provided in this Section 4.06(f) and Section
4.02(a), the Subservicer shall neither assign its rights under this Agreement or
the servicing hereunder nor delegate its duties hereunder or any portion
thereof, without the prior written consent of the Seller, the Indenture Trustee,
the Master Servicer and the Trust Administrator, which consent, in the case of
an assignment of rights or delegation of duties, shall be granted or withheld in
the discretion of the Seller, the Indenture Trustee, the Master Servicer and the
Trust Administrator, and which consent, in the case of a sale or disposition of
all or substantially all of the property or assets of the Subservicer, shall not
be unreasonably withheld by any of them; provided, that in each case, there must
be delivered to the Seller, the Master Servicer, the Indenture Trustee and the
Trust Administrator a letter from each Rating Agency to the effect that such
transfer of servicing or sale or disposition of assets will not result in a
qualification, withdrawal or downgrade of the then-current rating of any of the
Notes.
The Subservicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Subservicer and the Master
Servicer, or upon the determination that its duties hereunder are no longer
permissible under applicable law and such incapacity cannot be cured by the
Subservicer. Any such determination permitting the resignation of the
Subservicer shall be evidenced by an Opinion of Counsel to such effect delivered
to the Seller, the Master Servicer and the Indenture Trustee which Opinion of
Counsel shall be in form and substance reasonably acceptable to each of them. No
such resignation shall become effective
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until a successor shall have assumed the Subservicer's responsibilities and
obligations hereunder in the manner provided in Section 4.08.
Without in any way limiting the generality of this Section 4.06, in the
event that the Subservicer either shall assign this Agreement or the servicing
responsibilities hereunder or delegate its duties hereunder or any portion
thereof or sell or otherwise dispose of all or substantially all of its property
or assets, except to the extent permitted by and in accordance with this Section
4.06(f) and Section 4.02(a), without the prior written consent of the Seller,
the Master Servicer, the Indenture Trustee and the Trust Administrator, then
such parties shall have the right to terminate this Agreement upon notice given
as set forth in Section 11.07 of this Agreement, without any payment of any
penalty or damages and without any liability whatsoever to the Subservicer or
any third party.
(g) Successor Servicers. The provisions of Sections 4.06(a), (b), and (c)
shall apply to any successor to FSC as Servicer hereunder other than the
Subservicer.
Section 4.07. Termination for Cause.
Any of the following occurrences shall constitute an event of default
(each, a "Servicer Event of Default" or "Subservicer Event of Default," as
applicable) on the part of the Servicer or the Subservicer:
(1) any failure by the Servicer or the Subservicer, as
applicable, to remit to the Master Servicer any payment required to be
made under the terms of this Agreement which continues unremedied for
a period of two Business Days after the date upon which written notice
of such failure, requiring the same to be remedied, shall have been
given to the Servicer or the Subservicer, as applicable, and the Swap
Counterparty, by the Master Servicer or the Servicer; or
(2) failure by the Servicer or the Subservicer, as applicable,
duly to observe or perform in any material respect any other of the
covenants or agreements on the part of the Servicer or the
Subservicer, as applicable, set forth in this Agreement which
continues unremedied for a period of 30 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer or the Subservicer, as
applicable, and the Swap Counterparty by the Master Servicer or the
Servicer; or
(3) failure by the Servicer or the Subservicer, as applicable, to
maintain its license to do business or service residential mortgage
loans in any jurisdiction where the Mortgaged Properties are located
except where the failure to so maintain such license does not have a
material adverse effect on the Servicer's or the Subservicer's, as
applicable, ability to service the Mortgage Loans; or
(4) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
including bankruptcy, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation
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of its affairs, shall have been entered against the Servicer or the
Subservicer, as applicable, and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or
(5) the Servicer or the Subservicer, as applicable, shall consent
to the appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Servicer or
the Subservicer, as applicable, or of or relating to all or
substantially all of its property; or
(6) the Servicer or the Subservicer, as applicable, shall admit
in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable insolvency,
bankruptcy or reorganization statute, make an assignment for the
benefit of its creditors, voluntarily suspend payment of its
obligations or cease its normal business operations for three Business
Days; or
(7) the Servicer or the Subservicer, as applicable, ceases to
meet the qualifications of a Xxxxxx Xxx or Freddie Mac
lender/servicer;
(8) the Servicer or the Subservicer, as applicable, attempts to
assign the servicing of the Mortgage Loans or its right to servicing
compensation hereunder or the Servicer or the Subservicer, as
applicable, or attempts to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any
portion thereof in a manner not permitted under this Agreement;
(9) if (x) any of the Rating Agencies reduces or withdraws the
rating of any of the Notes due to a reason attributable to the
Subservicer or (y) the Subservicer's residential primary servicer
rating for servicing of subprime loans issued by any of the Rating
Agencies is reduced below its rating in effect on the Closing Date or
withdrawn; provided that if the Subservicer's rating by any Rating
Agency is reduced by not more than two levels, the Subservicer shall
have 180 days to cure such default by having the applicable Rating
Agency restore the Subservicer's rating to its level in effect on the
Closing Date; or
(10) the net worth of the Servicer or the Subservicer, as
applicable, shall be less than $15,000,000; or
(11) failure by the Servicer or Subservicer, as applicable, to
duly perform, within the required time period, its obligations under
Sections 4.04(e) or 4.04(d) which failure continues unremedied for a
period of 7 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Servicer and the Swap Counterparty, by the Master Servicer or to
the Subservicer by the Servicer, as applicable.
In each and every such case, so long as an Event of Default shall not have
been remedied, in addition to whatsoever rights the Master Servicer, the
Indenture Trustee or the Servicer (in the case of a Subservicer Event of
Default) may have at law or equity to damages, including
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injunctive relief and specific performance, the Master Servicer, the Indenture
Trustee or the Servicer (in the case of a Subservicer Event of Default), by
notice in writing to the Servicer or the Subservicer, as applicable, and the
Swap Counterparty, may terminate all the rights and obligations of the Servicer
or the Subservicer, as applicable, under this Agreement and in and to the
servicing contract established hereby and the proceeds thereof.
Upon receipt by the Subservicer of such written notice of termination, all
authority and power of the Subservicer under this Agreement, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
Servicer, an Affiliate of the Servicer or a successor Subservicer appointed by
the Servicer with the consent of the Master Servicer and the Indenture Trustee,
which consent shall not be unreasonably withheld, and the Servicer (or the
successor Subservicer) shall be subject to all of the responsibilities, duties
and liabilities relating thereto, including the obligation to make Monthly
Advances, provided however, any assumption of such duties by the Servicer or an
Affiliate of the Servicer pursuant to this paragraph shall be conditioned upon
the receipt by the Master Servicer, the Seller, the Depositor, the Indenture
Trustee and the Trust Administrator of a letter from each Rating Agency to the
effect that such transfer of servicing to the Servicer or its Affiliate will not
result in a qualification, withdrawal or downgrade of the then-current rating of
any of the Notes. Upon receipt by the Servicer, of such written termination
notice, all authority and power of the Servicer, under this Agreement, whether
with respect to the Mortgage Loans or otherwise, shall pass to and be vested in
a successor servicer appointed by the Master Servicer, in accordance with
Section 4.08(a). Upon written request from the Master Servicer, the Servicer or
the Subservicer, as applicable, shall prepare, execute and deliver to the
successor servicer or Subservicer any and all documents and other instruments,
place in such successor's possession all Servicing Files, and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, including but not limited to the transfer and
endorsement or assignment of the Mortgage Loans and related documents, at the
Servicer's or the Subservicer's, as applicable, sole expense. The Servicer or
the Subservicer, as applicable, shall cooperate with the Seller, the Master
Servicer, the Indenture Trustee and such successor in effecting the termination
of the Servicer's or the Subservicer's, as applicable, responsibilities and
rights hereunder, including without limitation, the transfer to such successor
for administration by it of all cash amounts which shall at the time be credited
by the Servicer or the Subservicer, as applicable, to the Custodial Account or
Escrow Account or thereafter received with respect to the Mortgage Loans.
By a written notice, the Master Servicer, with the consent of the other
parties, may waive any default by the Servicer or the Subservicer, as
applicable, in the performance of its obligations hereunder and its
consequences. Upon any waiver of a past default, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to any
subsequent or other default or impair any right consequent thereon except to the
extent expressly so waived.
The Master Servicer shall promptly notify the Servicer at any time that the
Master Servicer obtains actual knowledge of the occurrence of a Subservicer
Event of Default.
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Section 4.08. Successor to Servicer and Subservicer, Miscellaneous
Provisions.
(a) Successor to the Servicer. Simultaneously with the termination of the
Servicer's responsibilities and duties under this Agreement pursuant to Sections
4.05, 4.06, or 4.07, the Master Servicer shall (i) within 90 days of the
Servicer's notice of such termination, succeed to and assume all of the
Servicer's responsibilities, rights, duties and obligations under this
Agreement, or (ii) appoint a successor having the characteristics set forth in
clauses (i) and (ii) of Section 4.06(d) and which shall succeed to all rights
and assume all of the responsibilities, duties and liabilities of the Servicer
under this Agreement simultaneously with the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement. Any successor to
the Servicer shall be subject to the approval of the Master Servicer, the
Indenture Trustee and the Trust Administrator. Any approval of a successor
servicer by the Master Servicer, the Indenture Trustee and the Trust
Administrator, shall, if the successor servicer is not at that time a servicer
of other Mortgage Loans for the Trust, be conditioned upon the receipt by the
Master Servicer, the Seller, the Indenture Trustee and the Trust Administrator
of a letter from each Rating Agency to the effect that such transfer of
servicing will not result in a qualification, withdrawal or downgrade of the
then-current rating of any of the Notes. In connection with such appointment and
assumption, the Master Servicer 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 Servicer under this Agreement. In the event that the
Servicer's duties, responsibilities and liabilities under this Agreement should
be terminated pursuant to the aforementioned sections, the Servicer shall
discharge such duties and responsibilities during the period from the date it
acquires knowledge of such termination until the effective date thereof with the
same degree of diligence and prudence which it is obligated to exercise under
this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The resignation or
removal of the Servicer pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 4.08(a)
and shall in no event relieve the Servicer of the representations and warranties
made pursuant to Sections 4.05 and the remedies available to the Master
Servicer, the Indenture Trustee and the Seller under Sections 4.08(c), 4.05(d)
and 4.05(e), it being understood and agreed that the provisions of such Sections
4.08(c), 4.05(d) and 4.05(e) shall be applicable to the Servicer notwithstanding
any such resignation or termination of the Servicer, or the termination of this
Agreement. Neither the Master Servicer, in its capacity as successor servicer,
nor any other successor servicer shall be responsible for the lack of
information and/or documents that it cannot otherwise obtain through reasonable
efforts.
Within a reasonable period of time, but in no event longer than 30 days of
the appointment of a successor entity, the Servicer shall prepare, execute and
deliver to the successor entity any and all documents and other instruments,
place in such successor's possession all Servicing Files, and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, including but not limited to the transfer of any
Mortgage Notes and the related documents. The Servicer shall cooperate with the
Indenture Trustee, the Master Servicer or the Seller, as applicable, and such
successor in effecting the termination of the Servicer's responsibilities and
rights hereunder and the transfer of servicing responsibilities to the successor
Servicer, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the
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Servicer to the Custodial Account or Escrow Account or thereafter received with
respect to the Mortgage Loans.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Indenture Trustee, the Servicer, the Master Servicer, the Trust
Administrator and the Seller an instrument (i) accepting such appointment,
wherein the successor shall make the representations and warranties set forth in
Section 4.05(a) and provide for the same remedies set forth in such Section
herein and (ii) an assumption of the due and punctual performance and observance
of each covenant and condition to be performed and observed by the Servicer
under this Agreement, whereupon such successor shall become fully vested with
all the rights, powers, duties, responsibilities, obligations and liabilities of
the Servicer, with like effect as if originally named as a party to this
Agreement. Any termination or resignation of the Servicer or termination of this
Agreement pursuant to Sections 4.05, 4.06 and 4.07 shall not affect any claims
that the Seller, the Master Servicer, the Indenture Trustee or the Trust
Administrator may have against the Servicer arising out of the Servicer's
actions or failure to act prior to any such termination or resignation.
The Servicer shall deliver promptly to the successor servicer the funds in
the Custodial Account and Escrow Account and all Mortgage Loan documents and
related documents and statements held by it hereunder and the Servicer shall
account for all funds and shall execute and deliver such instruments and do such
other things as may reasonably be required to more fully and definitively vest
in the successor all such rights, powers, duties, responsibilities, obligations
and liabilities of the Servicer.
Upon a successor's acceptance of appointment as such, it shall notify the
Indenture Trustee, the Trust Administrator, the Seller and Master Servicer and
the Depositor of such appointment.
(b) Successor to the Subservicer. Notwithstanding anything to the contrary
in Section 4.08(a), any successor to the Subservicer (but not the Servicer
acting as successor to the Subservicer, in which case the Servicer shall be
governed by Section 4.08(a)) shall be governed by this Section 4.08(b).
Simultaneously with the termination of the Subservicer's responsibilities and
duties under this Agreement pursuant to Sections 4.05, 4.06 or 4.07, the
Servicer shall (i) within 90 days of the Subservicer's notice of such
termination, succeed to and assume all of the Subservicer's responsibilities,
rights, duties and obligations under this Agreement, or (ii) appoint a successor
having the characteristics set forth in clauses (i) and (ii) of Section 4.06(d)
and which shall succeed to all rights and assume all of the responsibilities,
duties and liabilities of the Subservicer under this Agreement simultaneously
with the termination of the Subservicer's responsibilities, duties and
liabilities under this Agreement. Any successor to the Subservicer pursuant to
(i) or (ii) above, in either case shall be subject to the approval of the Master
Servicer, the Indenture Trustee and the Trust Administrator. Any approval of a
successor Subservicer by the Servicer, the Master Servicer, the Indenture
Trustee and the Trust Administrator, shall, if the successor Subservicer is not
at that time a Subservicer of other Mortgage Loans for the Trust, be conditioned
upon the receipt by the Master Servicer, the Seller, the Indenture Trustee and
the Trust Administrator of a letter from each Rating Agency to the effect that
such transfer of servicing will not result in a qualification, withdrawal or
downgrade of the then-current rating of any of the Notes. In connection with
such appointment and assumption, the Servicer, as
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applicable, 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 Subservicer under this Agreement. In the event that the
Subservicer's duties, responsibilities and liabilities under this Agreement
should be terminated pursuant to the aforementioned sections, the Subservicer
shall discharge such duties and responsibilities during the period from the date
it acquires knowledge of such termination until the effective date thereof with
the same degree of diligence and prudence which it is obligated to exercise
under this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor. The resignation or
removal of the Subservicer pursuant to the aforementioned sections shall not
become effective until a successor shall be appointed pursuant to this Section
4.08(b) and shall in no event relieve the Subservicer of the representations and
warranties made pursuant to Sections 4.05 and the remedies available to the
Servicer, the Master Servicer, the Indenture Trustee, the Trust Administrator
and the Seller under Sections 4.05(c), 4.05(d) and 4.05(e), it being understood
and agreed that the provisions of such Sections 4.05(c), 4.05(d) and 4.05(e)
shall be applicable to the Subservicer notwithstanding any such resignation or
termination of the Subservicer, or the termination of this Agreement. Neither
the Servicer, in its capacity as successor Subservicer, nor any other successor
Subservicer shall be responsible for the lack of information and/or documents
that it cannot otherwise obtain through reasonable efforts.
Within a reasonable period of time, but in no event longer than 30 days of
the appointment of a successor entity, the Subservicer shall prepare, execute
and deliver to the successor entity any and all documents and other instruments,
place in such successor's possession all Servicing Files, and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes of
such notice of termination, including but not limited to the transfer of any
Mortgage Notes and the related documents. The Subservicer shall cooperate with
the Servicer, the Indenture Trustee, the Master Servicer or the Seller, as
applicable, and such successor in effecting the termination of the Subservicer's
responsibilities and rights hereunder and the transfer of servicing
responsibilities to the successor Subservicer, including without limitation, the
transfer to such successor for administration by it of all cash amounts which
shall at the time be credited by the Subservicer to the Custodial Account or
Escrow Account or thereafter received with respect to the Mortgage Loans.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Servicer, the Indenture Trustee, the Subservicer, the Master
Servicer and the Seller an instrument (i) accepting such appointment, wherein
the successor shall make the representations and warranties set forth in Section
4.05(a) and provide for the same remedies set forth in such Section herein and
(ii) an assumption of the due and punctual performance and observance of each
covenant and condition to be performed and observed by the Subservicer under
this Agreement, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Subservicer, with like effect as if originally named as a party to this
Agreement. Any termination or resignation of the Subservicer or termination of
this Agreement pursuant to Sections 4.05, 4.06 and 4.07 shall not affect any
claims that the Seller, the Servicer, the Master Servicer, the Trust
Administrator or the Indenture Trustee may have against the Subservicer arising
out of the Subservicer's actions or failure to act prior to any such termination
or resignation.
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The Subservicer shall deliver promptly to the successor Subservicer the
funds in the Custodial Account and Escrow Account and all Mortgage Loan
documents and related documents and statements held by it hereunder and the
Subservicer shall account for all funds and shall execute and deliver such
instruments and do such other things as may reasonably be required to more fully
and definitively vest in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of the Subservicer.
Upon a successor's acceptance of appointment as such, it shall notify the
Indenture Trustee, the Trust Administrator, the Seller, Master Servicer and the
Depositor of such appointment.
(c) Costs. The Seller shall pay the legal fees and expenses of its
attorneys. Costs and expenses incurred in connection with the transfer of the
servicing responsibilities, including fees for delivering Servicing Files, shall
be paid by (i) the terminated or resigning Servicer if such termination or
resignation is a result of an occurrence of a termination event under Sections
4.05(c) or 4.07, and (ii) in all other cases by the Trust.
Section 4.09. Miscellaneous Servicing Provisions.
(a) Protection of Confidential Information. The Servicer shall keep
confidential and shall not divulge to any party, without the Seller's prior
written consent, any nonpublic information pertaining to the Mortgage Loans or
any borrower thereunder, except to the extent that it is appropriate for the
Servicer to do so in working with legal counsel, subservicers, special
servicers, auditors, taxing authorities or other governmental agencies.
(b) No Personal Solicitation. For so long as either the Servicer or the
Subservicer services the Mortgage Loans, each covenants that it will not, and
that it will ensure that its affiliates and agents, will not, directly solicit
or provide information for any other party to solicit for prepayment or
refinancing of any of the Mortgage Loans by the related mortgagors; provided,
however, that it is understood that this limitation on solicitations is not
intended to prohibit either (i) solicitation programs maintained by the Seller
or any of its Affiliates, including FSC as Servicer, that are directed uniformly
to all or a portion of the Seller's or its Affiliate's borrowers or other
customers and not specifically targeted to the borrowers of the Mortgage Loans
or (ii) promotions undertaken by the Seller or any of its Affiliates, including
FSC as Servicer, that are directed to the general public at large or to certain
segments thereof.
(c) Intention of the Parties. It is the intention of the Seller, Servicer
and Subservicer that the Seller is conveying, and the Servicer is receiving only
a contract for servicing the Mortgage Loans. Accordingly, the parties hereby
acknowledge that the Trust remains the sole and absolute owner of the Mortgage
Loans (other than the servicing rights) and all rights related thereto, subject
to the lien of the Indenture.
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ARTICLE V
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY THE
MASTER SERVICER AND THE TRUST ADMINISTRATOR
Section 5.01. Duties of the Master Servicer; Representations and
Warranties.
(a) For and on behalf of the Issuer, the Swap Counterparty, the Indenture
Trustee and the Noteholders, the Master Servicer shall master service the
Mortgage Loans from and after the Closing Date in accordance with the provisions
of this Article V. The Master Servicer hereby represents and warrants to the
Depositor, the Issuer, the Swap Counterparty, the Indenture Trustee, the Trust
Administrator, the Servicer and the Subservicer, as of the Closing Date, that:
(i) it is validly existing and in good standing as a federally
chartered national banking association and as Master Servicer has full power and
authority to transact any and all business contemplated by this Agreement and to
execute, deliver and comply with its obligations under the terms of this
Agreement, the execution, delivery and performance of which have been duly
authorized by all necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this Agreement
will not (A) violate the Master Servicer's charter or bylaws, (B) violate any
law or regulation or any administrative decree or order to which it is subject
or (C) constitute a default (or an event which, with notice or lapse of time, or
both, would constitute a default) under, or result in the breach of, any
material contract, agreement or other instrument to which the Master Servicer is
a party or by which it is bound or to which any of its assets are subject, which
violation, default or breach would materially and adversely affect the Master
Servicer's ability to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a legal,
valid and binding obligation of the Master Servicer, enforceable against it in
accordance with the terms hereof, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights in general, and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in equity
or at law);
(iv) the Master Servicer is not in default with respect to any order
or decree of any court or any order or regulation of any federal, state,
municipal or governmental agency to the extent that any such default would
materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any agreement or
instrument or subject to any charter provision, bylaw or any other corporate
restriction or any judgment, order, writ, injunction, decree, law or regulation
that may materially and adversely affect its ability as Master Servicer to
perform its obligations under this Agreement or that requires the consent of any
third person to the execution of this Agreement or the performance by the Master
Servicer of its obligations under this Agreement;
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(vi) no litigation is pending or, to the best of the Master Servicer's
knowledge, threatened against the Master Servicer which would prohibit its
entering into this Agreement or performing its obligations under this Agreement;
(vii) the Master Servicer, or an affiliate thereof the primary
business of which is the servicing of conventional residential mortgage loans,
is a Xxxxxx Xxx- or FHLMC-approved seller/servicer;
(viii) 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 Agreement or the consummation of the transactions contemplated by this
Agreement, except for such consents, approvals, authorizations and orders (if
any) as have been obtained;
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer;
(x) the Master Servicer has obtained an Errors and Omissions Insurance
Policy and a Fidelity Bond in accordance with Section 5.02 each of which is in
full force and effect, and each of which provides at least such coverage as is
required hereunder; and
(xi) the information about the Master Servicer under the heading "The
Master Servicer" in the Offering Documents relating to the Master Servicer does
not include an untrue statement of a material fact and does not omit to state a
material fact, with respect to the statements made, necessary in order to make
the statements in light of the circumstances under which they were made not
misleading.
(b) It is understood and agreed that the representations and warranties set
forth in this Section 5.01 shall survive the execution and delivery of this
Agreement. The Master Servicer shall indemnify the Depositor, the Issuer, the
Indenture Trustee, the Owner Trustee, the Trust Administrator, the Servicer and
the Subservicer and hold them harmless against any loss, damages, penalties,
fines, forfeitures, legal fees and related costs, judgments, and other costs and
expenses resulting from any claim, demand, defense or assertion based on or
grounded upon, or resulting from, a breach of the Master Servicer's
representations and warranties contained in this Section 5.01. It is understood
and agreed that the enforcement of the obligation of the Master Servicer set
forth in this Section to indemnify the foregoing parties as provided in this
Section constitutes the sole remedy (other than as set forth in Section 8.01) of
such parties respecting a breach of the foregoing representations and
warranties. Such indemnification shall survive any termination of the Master
Servicer as Master Servicer hereunder, and any termination of this Agreement.
Any cause of action against the Master Servicer relating to or arising out
of the breach of any representations and warranties made in this Section shall
accrue upon discovery of such breach by the Depositor, the Issuer, the Indenture
Trustee, the Trust Administrator, the Servicer or the Subservicer or notice
thereof by any one of such parties to the other parties. Notwithstanding
anything in this Agreement to the contrary, the Master Servicer shall not be
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liable for special, indirect or consequential losses or damages of any kind
whatsoever (including, but not limited to, lost profits).
Section 5.02. Master Servicer Fidelity Bond and Master Servicer Errors and
Omissions Insurance Policy.
(a) The Master Servicer, at its expense, shall maintain in effect a Master
Servicer Fidelity Bond and a Master Servicer Errors and Omissions Insurance
Policy, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Xxxxxxxx's behalf, and covering errors
and omissions in the performance of the Master Servicer's obligations hereunder.
The Master Servicer Errors and Omissions Insurance Policy and the Master
Servicer Fidelity Bond shall be in such form and amount that would be consistent
with coverage customarily maintained by master servicers of mortgage loans
similar to the Mortgage Loans and shall by its terms not be cancelable without
thirty days' prior written notice to the Indenture Trustee. The Master Servicer
shall provide the Depositor and the Indenture Trustee, upon request, with a copy
of such policy and fidelity bond. The Master Servicer shall (i) require the
Servicer to maintain an Errors and Omissions Insurance Policy and a Servicer
Fidelity Bond in accordance with the provisions of Section 4.02(m) of this
Agreement, (ii) cause the Servicer to provide to the Master Servicer
certificates evidencing that such policy and bond is in effect and to furnish to
the Master Servicer any notice of cancellation, non-renewal or modification of
the policy or bond received by it, as and to the extent provided in Section
4.02(m) of the Agreement, and (iii) furnish copies of such policies and of the
certificates and notices referred to in clause (ii) to the Indenture Trustee
upon request.
(b) The Master Servicer shall promptly report to the Indenture Trustee and
the Trust Administrator any material changes that may occur in the Master
Servicer's Fidelity Bond or the Master Servicer Errors and Omissions Insurance
Policy and shall furnish either such party, on request, certificates evidencing
that such bond and insurance policy are in full force and effect. The Master
Servicer shall promptly report to the Indenture Trustee and the Trust
Administrator all cases of embezzlement or fraud, if such events involve funds
relating to the Mortgage Loans. The total losses, regardless of whether claims
are filed with the applicable insurer or surety, shall be disclosed in such
reports together with the amount of such losses covered by insurance. If a bond
or insurance claim report is filed with any of such bonding companies or
insurers, the Master Servicer shall promptly furnish a copy of such report to
the Indenture Trustee and the Trust Administrator. Any amounts relating to the
Mortgage Loans collected by the Master Servicer under any such bond or policy
shall be promptly remitted by the Master Servicer to the Indenture Trustee for
deposit into the Collection Account. Any amounts relating to the Mortgage Loans
collected by the Servicer under any such bond or policy shall be remitted to the
Master Servicer.
Section 5.03. Master Servicer's Financial Statements and Related
Information. For each year this Agreement is in effect, the Master Servicer
shall deliver to the Trust Administrator, the Indenture Trustee, each Rating
Agency and the Depositor a copy of its annual unaudited financial statements on
or prior to May 31 of each year, beginning May 31, 2006. Such financial
statements shall include a balance sheet, income statement, statement of
retained earnings, statement of additional paid-in capital, statement of changes
in financial position and all related notes and schedules and shall be in
comparative form, certified by a nationally recognized firm
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of Independent Accountants to the effect that such statements were examined and
prepared in accordance with generally accepted accounting principles applied on
a basis consistent with that of the preceding year.
Section 5.04. Power to Act; Procedures.
(a) The Master Servicer shall master service the Mortgage Loans, provided
that the Master Servicer shall not take, or knowingly permit the Servicer to
take, any action that is inconsistent with or prejudices the interests of the
Issuer, the Indenture Trustee or the Noteholders in any Mortgage Loan or the
rights and interests of the Depositor, the Issuer, the Indenture Trustee and the
Noteholders under this Agreement and the Indenture. The Master Servicer shall
represent and protect the interests of the Issuer, the Indenture Trustee and the
Noteholders in the same manner as it protects its own interests in mortgage
loans in its own portfolio in any claim, proceeding or litigation regarding a
Mortgage Loan. Without limiting the generality of the foregoing, the Master
Servicer in its own name, and the Servicer, to the extent such authority is
delegated to such Servicer under this Agreement, is hereby authorized and
empowered by the Indenture Trustee when the Master Servicer or such Servicer, as
the case may be, believes it appropriate in its best judgment and in accordance
with Servicing Standards, to execute and deliver, on behalf of itself and the
Noteholders, the Trust Administrator, the Indenture Trustee or any of them, any
and all instruments of satisfaction or cancellation, or of partial or full
release or discharge and all other comparable instruments, with respect to the
Mortgage Loans and with respect to the Mortgaged Properties. The Indenture
Trustee (or the Trust Administrator acting for the Indenture Trustee) shall
furnish the Master Servicer, upon request, with any powers of attorney
empowering the Master Servicer or the Servicer to execute and deliver
instruments of satisfaction or cancellation, or of partial or full release or
discharge, and to foreclose upon or otherwise liquidate Mortgaged Property, and
to appeal, prosecute or defend in any court action relating to the Mortgage
Loans or the Mortgaged Property, in accordance with this Agreement, and the
Indenture Trustee shall execute and deliver such other documents as the Master
Servicer may request, necessary or appropriate to enable the Master Servicer to
master service the Mortgage Loans and carry out its duties hereunder, and to
allow the Servicer to service the Mortgage Loans in each case in accordance with
Servicing Standards (and the Indenture Trustee or the Trust Administrator shall
have no liability for misuse of any such powers of attorney by the Master
Servicer or the Servicer). If the Master Servicer or the Indenture Trustee has
been advised that it is likely that the laws of the state in which action is to
be taken prohibit such action if taken in the name of the Indenture Trustee or
that the Indenture Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, then
upon request of the Indenture Trustee, the Master Servicer shall join with the
Indenture Trustee in the appointment of a co-trustee pursuant to Section 6.10 of
the Indenture. In no event shall the Master Servicer, without the Indenture
Trustee's written consent: (i) initiate any action, suit or proceeding solely
under the Indenture Trustee's name without indicating the Master Servicer's
representative capacity or (ii) take any action with the intent to cause, and
which actually does cause, the Indenture Trustee to be registered to do business
in any state. The Master Servicer shall indemnify the Indenture Trustee for any
and all costs, liabilities and expenses incurred by the Indenture Trustee in
connection with the negligent or willful misuse of such powers of attorney by
the Master Servicer. In the performance of its duties hereunder, the Master
Servicer shall be an independent contractor and shall not, except in
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those instances where it is taking action in the name of the Indenture Trustee,
be deemed to be the agent of the Indenture Trustee.
(b) In master servicing and administering the Mortgage Loans, the Master
Servicer shall employ procedures and exercise the same care that it customarily
employs and exercises in master servicing and administering loans for its own
account, giving due consideration to Servicing Standards where such practices do
not conflict with this Agreement. Consistent with the foregoing, the Master
Servicer may, and may permit the Servicer to, in its discretion (i) waive any
late payment charge and (ii) extend the due dates for payments due on a Mortgage
Note for a period not greater than 120 days; provided, however, that the
maturity of any Mortgage Loan shall not be extended past the date on which the
final payment is due on the latest maturing Mortgage Loan as of the Cut-off
Date. In the event of any extension described in clause (ii) above, the Master
Servicer shall make or cause the Servicer to make Advances on the related
Mortgage Loan in accordance with the provisions of Section 4.03 on the basis of
the amortization schedule of such Mortgage Loan without modification thereof by
reason of such extension.
Section 5.05. Enforcement of Servicer's and Master Servicer's Obligations.
(a) The Master Servicer shall not be required to (i) take any action with
respect to the servicing of any Mortgage Loan that the Servicer is not required
to take under this Agreement and (ii) cause the Servicer to take any action or
refrain from taking any action if this Agreement does not require the Servicer
to take such action or refrain from taking such action.
(b) The Master Servicer, for the benefit of the Issuer, the Swap
Counterparty, the Indenture Trustee and the Noteholders, shall enforce the
obligations of the Servicer hereunder, and shall, in the event that the Servicer
fails to perform its obligations in accordance herewith, terminate the rights
and obligations of the Servicer hereunder and either act as servicer of the
related Mortgage Loans or cause other parties hereto to either assume the
obligations of the Servicer-under this Agreement (or agree to execute and
deliver a successor servicing or sub-servicing agreement with a successor
servicer). Such enforcement, including, without limitation, the legal
prosecution of claims, termination of servicing or sub-servicing rights and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Master Servicer, in its good faith
business judgment, would require were it the owner of the related Mortgage
Loans. The Master Servicer shall pay the costs of such enforcement at its own
expense, and shall be reimbursed therefor initially (i) from a general recovery
resulting from such enforcement only to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Mortgage Loans, (ii) from a
specific recovery of costs, expenses or attorneys' fees against the party
against whom such enforcement is directed, and then, (iii) to the extent that
such amounts are insufficient to reimburse the Master Servicer for the costs of
such enforcement, from the Collection Account.
Section 5.06. [Reserved].
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Section 5.07. Collection Account.
(a) On the Closing Date, the Trust Administrator shall open and shall
thereafter maintain a segregated account held in trust in the name of the
Securities Intermediary (the "Collection Account"), entitled "Collection
Account, HSBC Bank USA, National Association, as Indenture Trustee, in trust for
Holders of the Fieldstone Mortgage Investment Trust, Series 2005-3,
Mortgage-Backed Notes." The Collection Account shall relate solely to the Notes
issued by the Issuer, and funds deposited in the Collection Account shall not be
commingled with any other monies.
(b) The Collection Account shall be an Eligible Account. If an existing
Collection Account ceases to be an Eligible Account, the Trust Administrator
shall establish a new Collection Account that is an Eligible Account within 10
days and transfer all funds and investment property on deposit in such existing
Collection Account into such new Collection Account.
(c) The Trust Administrator shall give to the Master Servicer and the
Indenture Trustee prior written notice of the name and address of the depository
institution at which the Collection Account is maintained and the account number
of such Collection Account. The Trust Administrator shall take such actions as
are necessary to cause the depository institution holding the Collection Account
to hold such account in the name of the Indenture Trustee. On each Payment Date,
the entire amount on deposit in the Collection Account relating to the Mortgage
Loans (subject to permitted withdrawals set forth in Section 5.08), other than
amounts not included in Interest Funds or Principal Funds to be paid to
Noteholders for such Payment Date, shall be applied to make the requested
payment of principal and/or interest on each Class of Notes.
(d) The Master Servicer shall deposit or cause to be deposited into the
Collection Account, no later than the Business Day following the Closing Date,
any amounts received with respect to the Mortgage Loans representing Scheduled
Payments on the Mortgage Loans due after the Cut-off Date and unscheduled
payments received on or after the Cut-off Date and on or before the Closing
Date. Thereafter, the Master Servicer shall deposit or cause to be deposited in
the Collection Account on the earlier of the applicable Payment Date and one
Business Day following receipt thereof, the following amounts received or
payments made by the Master Servicer (other than in respect of principal of and
interest on the Mortgage Loans due on or before the Cut-off Date):
(i) all remittances from the Custodial Account to the Master Servicer
pursuant to Section 4.03;
(ii) all Advances made by the Servicer or the Master Servicer pursuant
to Section 6.05 hereof and any payment in respect of Prepayment Interest
Shortfalls paid by the Master Servicer pursuant to Section 5.21 hereof;
(iii) the Purchase Price of any Mortgage Loan repurchased by the
Depositor or the Seller during the related Prepayment Period or any other Person
and any Substitution Amount related to any Qualifying Substitute Mortgage Loan;
and
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(iv) any Net Swap Receipts or any swap breakage costs (as reported to
the Trust Administrator by the Swap Counterparty) received by the Trust
Administrator.
(e) Funds in the Collection Account may be invested by the Trust
Administrator in Eligible Investments selected by and at the written direction
of the Trust Administrator, which shall mature not later than one Business Day
prior to the next Payment Date (or on the Payment Date with respect to any
Eligible Investment of the Trust Administrator or any other fund managed or
advised by it or any Affiliate) and any such Eligible Investment shall not be
sold or disposed of prior to its maturity. All such Eligible Investments shall
be made in the name of the Master Servicer in trust for the benefit of the
Indenture Trustee and the Noteholders and the Swap Counterparty. All income and
gain realized from any Eligible Investment shall be for the benefit of the
Master Servicer and shall be subject to its withdrawal or order from time to
time, subject to Section 5.08 and shall not be part of the Trust Estate. The
amount of any losses incurred in respect of any such investments shall be
deposited in such Collection Account by the Master Servicer out of its own
funds, without any right of reimbursement therefor, immediately as realized. The
foregoing requirements for deposit in the Collection Account are exclusive, it
being understood and agreed that, without limiting the generality of the
foregoing, payments of interest on funds in the Collection Account and payments
in the nature of late payment charges, assumption fees and other incidental fees
and charges relating to the Mortgage Loans need not be deposited by the Master
Servicer in the Collection Account and may be retained by the Master Servicer or
the Servicer, as applicable, as additional servicing compensation. If the Master
Servicer deposits in the Collection Account any amount not required to be
deposited therein, it may at any time withdraw such amount from such Collection
Account.
Section 5.08. Application of Funds in the Collection Account. The Trust
Administrator may, from time to time, make, or cause to be made, withdrawals
from the Collection Account for the following purposes:
(i) to reimburse the Master Servicer or the Servicer, as applicable,
for any previously unreimbursed Advances or Servicing Advances made by any such
party, such right to reimbursement pursuant to this subclause (i) being limited
to amounts received on or in respect of a particular Mortgage Loan (including,
for this purpose, Liquidation Proceeds and amounts representing Insurance
Proceeds with respect to the property subject to the related Mortgage) which
represent late recoveries (net of the applicable Servicing Administration Fee)
of payments of principal or interest respecting which any such Advance was made,
it being understood, in the case of any such reimbursement, that the Master
Servicer's or Servicer's right thereto shall be prior to the rights of the
Noteholders;
(ii) to reimburse the Master Servicer or the Servicer following a
final liquidation of a Mortgage Loan for any previously unreimbursed Advances
made by any such party (A) that such party determines in good faith will not be
recoverable from amounts representing late recoveries of payments of principal
or interest respecting the particular Mortgage Loan as to which such Advance was
made or from Liquidation Proceeds or Insurance Proceeds with respect to such
Mortgage Loan and/or (B) to the extent that such unreimbursed Advances exceed
the related Liquidation Proceeds or Insurance Proceeds, it being understood, in
the case of each such reimbursement, that the Master Servicer's or Servicer's
right thereto shall be prior to the rights of the Noteholders;
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(iii) to reimburse the Master Servicer or the Servicer from
Liquidation Proceeds for Liquidation Expenses and for amounts expended by it
pursuant to Section 4.02(o) in good faith in connection with the restoration of
damaged property and, to the extent that Liquidation Proceeds after such
reimbursement exceed the unpaid principal balance of the related Mortgage Loan,
together with accrued and unpaid interest thereon at the applicable Mortgage
Rate less the applicable Servicing Administration Fee Rate and Master Servicing
Fee Rate for such Mortgage Loan to the Due Date next succeeding the date of its
receipt of such Liquidation Proceeds, to pay to the Master Servicer or the
Servicer out of such excess the amount of any unpaid assumption fees, late
payment charges or other Mortgagor charges on the related Mortgage Loan and to
retain any excess remaining thereafter as additional servicing compensation, it
being understood, in the case of any such reimbursement or payment, that such
Master Servicer's or Servicer's right thereto shall be prior to the rights of
the Noteholders;
(iv) to pay to the Depositor or the Seller or any other Person, as
applicable, with respect to each Mortgage Loan or REO Property acquired in
respect thereof that has been purchased pursuant to this Agreement, all amounts
received thereon and not paid on the date on which the related repurchase was
effected, and to pay to the applicable party any Advances and Servicing Advances
to the extent specified in the definition of Purchase Price;
(v) to the extent not paid by the Servicer, to pay any Insurance
Premium with respect to a Mortgage Loan;
(vi) to pay to the Master Servicer income earned on the investment of
funds on deposit in the Collection Account;
(vii) on each Payment Date, to make payment to the Noteholders in the
amounts and in the manner provided for in Section 6.02 for the related Payment
Date (to the extent collected by the Master Servicer or the Servicer);
(viii) on each Payment Date, to the extent not previously collected
and retained by the Servicer, to make payment to the Servicer, all Prepayment
Premiums received during the immediately preceding Prepayment Period;
(ix) to make payment to itself, the Master Servicer, the Servicer, the
Subservicer, the Indenture Trustee, the Custodian, the Owner Trustee and others
pursuant to any provision of this Agreement, the Trust Agreement, the Indenture
or the Custodial Agreement;
(x) to withdraw funds deposited in error in the Collection Account;
(xi) to clear and terminate the Collection Account pursuant to Article
IX;
(xii) to reimburse a successor master servicer (solely in its capacity
as successor master servicer), for any fee or advance occasioned by a
termination of the Master Servicer, and the assumption of such duties by the
Indenture Trustee or a successor master servicer appointed by the Indenture
Trustee pursuant to Section 8.01, in each case to the extent not reimbursed by
the terminated Master Servicer, it being understood, in the case of any such
reimbursement or payment, that the right of the Master Servicer or the Indenture
Trustee thereto shall be prior to the rights of the Noteholders;
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(xiii) to pay the Swap Counterparty any Net Swap Payments and any swap
termination payments (as reported to the Trust Administrator by the Swap
Counterparty) two Business Days prior to each applicable Payment Date; and
(xiv) to make payment to the Owner Trustee, the Owner Trustee Fee for
such Payment Date, if any.
In connection with withdrawals pursuant to subclauses (i), (ii), (iii) and
(iv) above, the Master Servicer's or the Servicer's or such other Person's
entitlement thereto is limited to collections or other recoveries on the related
Mortgage Loan. The Trust Administrator shall therefore keep and maintain a
separate accounting for each Mortgage Loan for the purpose of justifying any
withdrawal from the Collection Account it maintains pursuant to such subclauses.
Section 5.09. Reports to Indenture Trustee and Noteholders.
(a) On each Payment Date, the Trust Administrator shall make available to
the Indenture Trustee and each Noteholder and the Swap Counterparty, a report
setting forth the following information (on the basis of Mortgage Loan level
information obtained from the Servicer or Subservicer and information provided
by the Swap Counterparty):
(i) the aggregate amount of the payment to be made on such Payment
Date to the Holders of each Class of Notes, to the extent applicable, allocable
to principal on the Mortgage Loans, including Liquidation Proceeds and Insurance
Proceeds, stating separately the amount attributable to scheduled principal
payments and unscheduled payments in the nature of principal;
(ii) the aggregate amount of the payment to be made on such Payment
Date to the Holders of each Class of Notes allocable to interest and the
calculation thereof;
(iii) the amount, if any, of any payment to the Holder of the
Ownership Certificate;
(iv) (A) the aggregate amount of any Advances required to be made by
or on behalf of the Servicer (or the Master Servicer) with respect to such
Payment Date, (B) the aggregate amount of such Advances actually made, and (C)
the amount, if any, by which (A) above exceeds (B) above;
(v) the total number of Mortgage Loans, the aggregate Stated Principal
Balance of all the Mortgage Loans as of the close of business on the last day of
the related Due Period, after giving effect to payments allocated to principal
reported under clause (i) above;
(vi) the Class Principal Amount of each Class of Notes, to the extent
applicable, as of such Payment Date after giving effect to payments allocated to
principal reported under clause (i) above;
(vii) the amount of all Prepayment Premiums paid to the Servicer;
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(viii) the amount of any Realized Losses incurred with respect to the
Mortgage Loans (x) in the applicable Prepayment Period and (y) in the aggregate
since the Cut-off Date;
(ix) the amount of the Owner Trustee Fee, Master Servicing Fee and
Servicing Administration Fee paid during the Due Period to which such payment
relates;
(x) the number and aggregate Stated Principal Balance of Mortgage
Loans, as reported to the Trust Administrator by the Servicer or Subservicer,
(a) remaining outstanding, (b) delinquent 30 to 59 days on a contractual basis,
(c) delinquent 60 to 89 days on a contractual basis, (d) delinquent 90 or more
days on a contractual basis, (e) as to which foreclosure proceedings have been
commenced as of the close of business on the last Business Day of the calendar
month immediately preceding the month in which such Payment Date occurs, (f) in
bankruptcy and (g) that are REO Properties;
(xi) the number and aggregate Stated Principal Balance as of the
related Determination Date of any Mortgage Loans with respect to which the
related Mortgaged Property became an REO Property as of the close of business on
the last Business Day of the calendar month immediately preceding the month in
which such Payment Date occurs;
(xii) with respect to substitution of Mortgage Loans in the preceding
calendar month, the Stated Principal Balance of each Deleted Mortgage Loan and
of each Qualifying Substitute Mortgage Loan;
(xiii) whether a Trigger Event has occurred;
(xiv) the Interest Rate applicable to such Payment Date with respect
to each Class of Notes;
(xv) the Interest Funds and the Principal Funds applicable to such
Payment Date;
(xvi) if applicable, the amount of any shortfall (i.e., the difference
between the aggregate amounts of principal and interest which Noteholders would
have received if there were sufficient available amounts in the Collection
Account and the amounts actually paid);
(xvii) the amount of any Overcollateralization Deficiency after giving
effect to the payments made on such Payment Date;
(xviii) LIBOR with respect to such Payment Date;
(xix) the Available Funds Shortfall of each Class of Notes, if any;
and
(xx) to the extent such information is provided to the Master Servicer
by the Servicer or the Subservicer, the number of Mortgage Loans with respect to
which (a) a reduction in the Mortgage Rate has occurred or (b) the related
Mortgagor's obligation to repay interest on a monthly basis has been suspended
or reduced pursuant to the Civil Relief Act or the California Military and
Veterans Code, as amended; and the amount of interest not required to be paid
with respect to any such Mortgage Loans during the related Due Period as a
result of such reductions,
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in the aggregate and with respect to the Group 1 Mortgage Loans and the Group 2
Mortgage Loans.
In the case of information furnished pursuant to subclauses (i), (ii) and
(vi) above, the amounts shall (except in the case of the report delivered to the
holder of the Ownership Certificate) be expressed as a dollar amount per $1,000
of original principal amount of Notes.
The Trust Administrator will make such report and additional loan level
information (and, at its option, any additional files containing the same
information in an alternative format) available each month to the Rating
Agencies and Noteholders via the Trust Administrator's website. The Trust
Administrator's website can be accessed at xxx.xxxxxxx.xxx. Assistance in using
the website can be obtained by calling the Trust Administrator's customer
service desk at (000) 000-0000. Such parties that are unable to use the website
are entitled to have a paper copy mailed to them via first class mail by
notifying the Trust Administrator at Xxxxx Fargo Bank, N.A., P.O. Box 98,
Columbia, Maryland 21046 (or for overnight deliveries at 0000 Xxx Xxxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000), and indicating such. The Trust Administrator
shall have the right to change the way such statements are distributed in order
to make such distribution more convenient and/or more accessible to the above
parties and the Trust Administrator shall provide timely and adequate
notification to all above parties regarding any such changes.
The foregoing information and reports shall be prepared and determined by
the Trust Administrator based solely on Mortgage Loan data provided to the Trust
Administrator by the Master Servicer (in a format agreed to by the Trust
Administrator and the Master Servicer) no later than 12:00 p.m.(noon) Eastern
Standard Time four Business Days prior to the Payment Date. In preparing or
furnishing the foregoing information, the Trust Administrator and the Master
Servicer shall be entitled to rely conclusively on the accuracy of the
information or data regarding the Mortgage Loans and the related REO Property
that has been provided to the Master Servicer by the Servicer or the
Subservicer, and neither the Trust Administrator nor the Master Servicer shall
be obligated to verify, recompute, reconcile or recalculate any such information
or data. The Trust Administrator and the Master Servicer shall be entitled to
conclusively rely on the Mortgage Loan data provided to the Master Servicer and
shall have no liability for any errors in such Mortgage Loan data.
(b) Upon the reasonable advance written request of any Noteholder that is a
savings and loan, bank or insurance company, which request, if received by the
Indenture Trustee shall be forwarded promptly to the Trust Administrator, the
Trust Administrator shall provide, or cause to be provided (or, to the extent
that such information or documentation is not required to be provided by the
Servicer, shall use reasonable efforts to obtain such information and
documentation from the Servicer, and provide), to such Noteholder such reports
and access to information and documentation regarding the Mortgage Loans as such
Noteholder may reasonably deem necessary to comply with applicable regulations
of the Office of Thrift Supervision or its successor or other regulatory
authorities with respect to an investment in the Notes; provided, however, that
the Trust Administrator shall be entitled to be reimbursed by such Noteholder
for actual expenses incurred in providing such reports and access.
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(c) Within 90 days, or such shorter period as may be required by statute or
regulation, after the end of each calendar year, the Trust Administrator shall
have prepared and shall make available to each Person who at any time during the
calendar year was a Noteholder of record, and make available to Security Owners
(identified as such by the Clearing Agency) in accordance with applicable
regulations, a report summarizing the items provided to the Noteholders pursuant
to Section 5.09(a) on an annual basis as may be required to enable such Holders
to prepare their federal income tax returns; provided, however, that this
Section 5.09(c) shall not be applicable where relevant reports or summaries are
required elsewhere in this Agreement. Such information shall include the amount
of original issue discount accrued on each Class of Notes and information
regarding the expenses of the Issuer. The Trust Administrator shall be deemed to
have satisfied such requirement if it forwards such information in any other
format permitted by the Code. The Master Servicer shall provide the Trust
Administrator with such information as is necessary for the Indenture Trustee to
prepare such reports.
(d) The Trust Administrator shall furnish any other information that is
required by the Code and regulations thereunder to be made available to
Noteholders. The Master Servicer shall provide the Trust Administrator with such
information as is necessary for the Trust Administrator to prepare such reports
(and the Trust Administrator may rely solely upon such information).
Section 5.10. Termination of Servicer or Subservicer; Successor Servicers.
(a) The Master Servicer shall be entitled to terminate the rights and
obligations of the Servicer or Subservicer, as applicable, upon the occurrence
of a Servicer Event of Default as set forth in Section 4.07; provided, however,
that in the event of termination of the Servicer or of both the Servicer and the
Subservicer by the Master Servicer, the Master Servicer shall provide for the
servicing of the Mortgage Loans by a successor servicer as provided in Section
4.08.
The parties acknowledge that notwithstanding the preceding sentence, there
may be a transition period, not to exceed 90 days, in order to effect the
transfer of servicing to a successor servicer. The Master Servicer shall be
entitled to be reimbursed by the Servicer or Subservicer, as applicable (or by
the Trust Estate, if the Servicer or Subservicer is unable to fulfill its
obligations hereunder) for all costs associated with the transfer of servicing,
including without limitation, any 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 Master Servicer to correct any
errors or insufficiencies in the servicing data or otherwise to enable the
Master Servicer to service the Mortgage Loans properly and effectively.
(b) If the Master Servicer acts as a successor Servicer, it shall not
assume liability for the representations and warranties of the Servicer that it
replaces. The Master Servicer shall use reasonable efforts to have the successor
Servicer assume liability for the representations and warranties made by the
terminated Servicer and in the event of any such assumption by the successor
servicer, the Master Servicer may, in the exercise of its business judgment,
release the terminated Servicer from liability for such representations and
warranties.
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(c) If the Master Servicer acts as a successor Servicer, it will have no
obligation to make an Advance if it determines in its reasonable judgment that
such Advance would constitute a Nonrecoverable Advance.
Section 5.11. Master Servicer Liable for Enforcement. The Master Servicer
shall use commercially reasonable efforts to ensure that the Mortgage Loans are
serviced in accordance with the provisions of this Agreement and shall use
commercially reasonable efforts to enforce the provisions of Article IV for the
benefit of the Noteholders and the Swap Counterparty. The Master Servicer shall
be entitled to enter into any agreement with any Servicer for indemnification of
the Master Servicer and nothing contained in this Agreement shall be deemed to
limit or modify such indemnification. Except as expressly set forth herein, the
Master Servicer shall have no liability for the acts or omissions of either the
Servicer or Subservicer in the performance by such Servicer of its obligations
under Article IV.
Section 5.12. Assumption of Master Servicing by Indenture Trustee.
(a) In the event the Master Servicer shall for any reason no longer be the
Master Servicer (including by reason of any Master Servicer Event of Default
under Section 8.01 of this Agreement), the Indenture Trustee shall thereupon
assume all of the rights and obligations of such Master Servicer hereunder. The
Indenture Trustee, its designee or any successor master servicer appointed by
the Indenture Trustee shall be deemed to have assumed all of the Master
Servicer's interest herein, except that the Master Servicer shall not thereby be
relieved of any liability or obligations of the Master Servicer accruing prior
to its replacement as Master Servicer, and shall be liable to the Indenture
Trustee, and hereby agrees to indemnify and hold harmless the Indenture Trustee
from and against all costs, damages, expenses and liabilities (including
reasonable attorneys' fees) incurred by the Indenture Trustee as a result of
such liability or obligations of the Master Servicer and in connection with the
Indenture Trustee's assumption (but not its performance, except to the extent
that costs or liability of the Indenture Trustee are created or increased as a
result of negligent or wrongful acts or omissions of the Master Servicer prior
to its replacement as Master Servicer) of the Master Servicer's obligations,
duties or responsibilities thereunder.
(b) The Master Servicer that has been terminated shall, upon request of the
Indenture Trustee but at the expense of such Master Servicer, deliver to the
assuming party all documents and records relating to the Mortgage Loans and an
accounting of amounts collected and held by it and otherwise use its best
efforts to effect the orderly and efficient transfer of master servicing to the
assuming party.
Section 5.13. [Reserved].
Section 5.14. Release of Mortgage Files.
(a) Upon (i) becoming aware of the payment in full of any Mortgage Loan or
(ii) the receipt by the Master Servicer of a notification that payment in full
has been or will be escrowed in a manner customary for such purposes, the Master
Servicer will, or will cause the Servicer to, promptly notify the Indenture
Trustee (or the Custodian) by a certification (which certification shall include
a statement to the effect that all amounts received in connection with such
payment
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that are required to be deposited in the Collection Account maintained by the
Trust Administrator pursuant to Section 5.07 have been or will be so deposited)
of a Servicing Officer and shall request (on the form attached to the Custodial
Agreement) the Indenture Trustee or the Custodian, to deliver to the Servicer or
Subservicer the related Mortgage File. Upon receipt of such certification and
request, the Indenture Trustee or the Custodian (with the consent, and at the
direction of the Indenture Trustee), shall promptly release the related Mortgage
File to the Servicer and the Indenture Trustee shall have no further
responsibility with regard to such Mortgage File. Upon any such payment in full,
the Master Servicer is authorized, and the Servicer is authorized, to give, as
agent for the Indenture Trustee, as the mortgagee under the Mortgage that
secured the Mortgage Loan, an instrument of satisfaction (or assignment of
mortgage without recourse) regarding the Mortgaged Property subject to the
Mortgage, which instrument of satisfaction or assignment, as the case may be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of such payment, it being understood and agreed that no expenses
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Collection Account.
(b) From time to time and as appropriate for the servicing or foreclosure
of any Mortgage Loan, the Indenture Trustee shall execute such documents as
shall be prepared and furnished to the Indenture Trustee by the Master Servicer,
or by the Servicer, as applicable, (in form reasonably acceptable to the
Indenture Trustee) and as are necessary to the prosecution of any such
proceedings. The Indenture Trustee or the Custodian, shall, upon request of the
Master Servicer or of the Servicer, as applicable, and delivery to the Indenture
Trustee or the Custodian, of a trust receipt signed by a Servicing Officer
substantially in the form attached to the Custodial Agreement, release the
related Mortgage File held in its possession or control to the Master Servicer
(or the Servicer, as applicable). Such trust receipt shall obligate the Master
Servicer or the Servicer, as applicable, to return the Mortgage File to the
Indenture Trustee or the Custodian, as applicable, when the need therefor by the
Master Servicer or the Servicer, as applicable, no longer exists unless the
Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate
of a Servicing Officer similar to that hereinabove specified, the trust receipt
shall be released by the Indenture Trustee or the Custodian, as applicable, to
the Master Servicer or the Servicer as applicable.
Section 5.15. Documents, Records and Funds in Possession of Master Servicer
To Be Held for Indenture Trustee.
(a) The Master Servicer shall transmit, or cause the Servicer to transmit,
to the Indenture Trustee such documents and instruments coming into the
possession of the Master Servicer or the Servicer from time to time as are
required by the terms hereof to be delivered to the Indenture Trustee or the
Custodian. Any funds received by the Master Servicer or by the Servicer in
respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer or the Servicer as Liquidation Proceeds or Insurance Proceeds in
respect of any Mortgage Loan shall be held for the benefit of the Indenture
Trustee and the Noteholders and the Swap Counterparty subject to the Master
Servicer's right to retain or withdraw amounts provided in this Agreement and to
the right of the Servicer to retain its Servicing Administration Fee and other
amounts as provided herein. The Master Servicer shall, and shall cause the
Servicer to, provide access to information and documentation regarding the
Mortgage Loans to the Indenture Trustee, their respective agents and accountants
at any time upon reasonable request and during
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normal business hours, and to Noteholders that are savings and loan
associations, banks or insurance companies, the Office of Thrift Supervision,
the FDIC and the supervisory agents and examiners of such Office and Corporation
or examiners of any other federal or state banking or insurance regulatory
authority if so required by applicable regulations of the Office of Thrift
Supervision or other regulatory authority, such access to be afforded without
charge but only upon reasonable request in writing and during normal business
hours at the offices of the Master Servicer designated by it. In fulfilling such
a request the Master Servicer shall not be responsible for determining the
sufficiency of such information.
(b) All Mortgage Files and funds collected or held by, or under the control
of, the Master Servicer or the Servicer, in respect of any Mortgage Loans,
whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be held by the Master Servicer
or by the Servicer for and on behalf of the Indenture Trustee as the Indenture
Trustee's agent and bailee for purposes of perfecting the Indenture Trustee's
security interest therein as provided by relevant Uniform Commercial Code or
laws; provided, however, that the Master Servicer and the Servicer shall be
entitled to setoff against, and deduct from, any such funds any amounts that are
properly due and payable to the Master Servicer or the Servicer under this
Agreement and shall be authorized to remit such funds to the Indenture Trustee
in accordance with this Agreement.
(c) The Master Servicer hereby acknowledges that concurrently with the
execution of this Agreement, the Indenture Trustee shall own or, to the extent
that a court of competent jurisdiction shall deem the conveyance of the Mortgage
Loans from the Seller to the Depositor not to constitute a sale, the Indenture
Trustee shall have a security interest in the Mortgage Loans and in all Mortgage
Files representing such Mortgage Loans and in all funds and investment property
now or hereafter held by, or under the control of, the Servicer or the Master
Servicer that are collected by the Servicer or the Master Servicer in connection
with the Mortgage Loans, whether as scheduled installments of principal and
interest or as full or partial prepayments of principal or interest or as
Liquidation Proceeds or Insurance Proceeds or otherwise, and in all proceeds of
the foregoing and proceeds of proceeds (but excluding any fee or other amounts
to which the Servicer or the Master Servicer is entitled to hereunder); and the
Master Servicer agrees that so long as the Mortgage Loans are assigned to and
held by the Indenture Trustee or the Custodian, all documents or instruments
constituting part of the Mortgage Files, and such funds relating to the Mortgage
Loans which come into the possession or custody of, or which are subject to the
control of, the Master Servicer or the Servicer shall be held by the Master
Servicer or the Servicer for and on behalf of the Indenture Trustee as the
Indenture Trustee's agent and bailee for purposes of perfecting the Indenture
Trustee's security interest therein as provided by the applicable Uniform
Commercial Code or other applicable laws.
(d) The Master Servicer agrees that it shall not, and shall not authorize
the Servicer to, create, incur or subject any Mortgage Loans, or any funds that
are deposited in any Custodial Account, Escrow Account or the Collection
Account, or any funds that otherwise are or may become due or payable to the
Indenture Trustee, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, nor assert by legal action or otherwise any
claim or right of setoff against any Mortgage Loan or any funds collected on, or
in connection with, a Mortgage Loan.
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Section 5.16. Opinion. On or before the Closing Date, the Master Servicer
shall cause to be delivered to the Depositor, the Seller, the Indenture Trustee,
the Issuer, the Trust Administrator, the Swap Counterparty, the Servicer and the
Subservicer one or more Opinions of Counsel, dated the Closing Date, in form and
substance reasonably satisfactory to the Depositor and a representative of the
Underwriters, as to the due authorization, execution and delivery of this
Agreement by the Master Servicer and the enforceability thereof.
Section 5.17. [Reserved].
Section 5.18. [Reserved].
Section 5.19. [Reserved].
Section 5.20. Indenture Trustee To Retain Possession of Certain Insurance
Policies and Documents. The Indenture Trustee (or the Custodian on behalf of the
Indenture Trustee) shall retain possession and custody of the originals of the
primary mortgage insurance policies or certificate of insurance if applicable
and any certificates of renewal as to the foregoing as may be issued from time
to time as contemplated by this Agreement. Until all amounts payable in respect
of the Notes have been paid in full and the Master Servicer otherwise has
fulfilled its obligations under this Agreement, the Indenture Trustee (or the
Custodian) shall also retain possession and custody of each Mortgage File in
accordance with and subject to the terms and conditions of this Agreement. The
Master Servicer shall promptly deliver or cause the Servicer to deliver to the
Indenture Trustee (or the Custodian), upon the execution or receipt thereof the
originals of the primary mortgage insurance policies and any certificates of
renewal thereof, and such other documents or instruments that constitute
portions of the Mortgage File that come into the possession of the Master
Servicer or the Servicer or Subservicer from time to time.
Section 5.21. Compensation to the Master Servicer. As compensation for its
services hereunder, the Master Servicer shall be entitled to retain all income
and gain realized from any investment of funds in the Collection Account
pursuant to Section 5.07(e) and the Master Servicing Fee (together, the "Master
Servicing Compensation"). Notwithstanding the foregoing, the Master Servicer
shall deposit in the Collection Account, on or before the related Payment Date,
an amount equal to the lesser of (i) its master servicing compensation with
respect to such Payment Date and (ii) the amount of any Compensating Interest
Payment required to be paid by the Servicer with respect to such Payment Date
pursuant to this Agreement, but which is not paid by the Servicer or by the
Subservicer on its behalf. The Master Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder and shall
not be entitled to reimbursement therefor except as provided in this Agreement.
Section 5.22. [Reserved].
Section 5.23. Reports to the Indenture Trustee.
(a) Not later than 30 days after each Payment Date, the Trust Administrator
shall, upon request, forward to the Indenture Trustee a statement, deemed to
have been certified by a officer of the Trust Administrator, setting forth the
status of the Collection Account maintained by the Trust Administrator as of the
close of business on the related Payment Date, indicating that all payments
required by this Agreement to be made by the Trust Administrator have been
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made (or if any required payment has not been made by the Trust Administrator,
specifying the nature and status thereof) and showing, for the period covered by
such statement, the aggregate of deposits into and withdrawals from the
Collection Account maintained by the Trust Administrator. Copies of such
statement shall be provided by the Trust Administrator, upon request, to the
Depositor, Attention: Contract Finance and any Noteholders (or by the Indenture
Trustee at the Trust Administrator's expense if the Trust Administrator shall
fail to provide such copies to the Noteholders, unless (i) the Trust
Administrator shall have failed to provide the Indenture Trustee with such
statement or (ii) the Indenture Trustee shall be unaware of the Trust
Administrator's failure to provide such statement).
(b) Not later than two Business Days following each Payment Date, the Trust
Administrator shall deliver to one Person designated by the Depositor, in a
format consistent with other electronic loan level reporting supplied by the
Master Servicer in connection with similar transactions, "loan level"
information with respect to the Mortgage Loans as of the related Determination
Date, to the extent that such information has been provided to the Master
Servicer by the Servicer or Subservicer or by the Depositor.
(c) All information, reports and statements prepared by the Master Servicer
under this Agreement shall be based on information supplied to the Master
Servicer by the Servicer without independent verification thereof and the Master
Servicer shall be entitled to rely on such information.
Section 5.24. Annual Officer's Certificate as to Compliance.
(a) The Master Servicer shall deliver to the Indenture Trustee no later
than five Business Days after the 15th of March of each calendar year,
commencing in March 2006, an Officer's Certificate, certifying that with respect
to the period ending on the immediately preceding December 31: (i) such
Servicing Officer has reviewed the activities of such Master Servicer during the
preceding calendar year or portion thereof and its performance under this
Agreement, (ii) to the best of such Servicing Officer's knowledge, based on such
review, such Master Servicer has performed and fulfilled its duties,
responsibilities and obligations under this Agreement in all material respects
throughout such year, or, if there has been a default in the fulfillment of any
such duties, responsibilities or obligations, specifying each such default known
to such Servicing Officer and the nature and status thereof, (iii) nothing has
come to the attention of such Servicing Officer to lead such Servicing Officer
to believe that the Servicer has failed to perform any of its duties,
responsibilities and obligations set forth in Article IV hereunder in all
material respects throughout such year, or, if there has been a material default
in the performance or fulfillment of any such duties, responsibilities or
obligations, specifying each such default known to such Servicing Officer and
the nature and status thereof, and (iv) the Master Servicer has received from
the Servicer an annual certificate of compliance and a copy of such Servicer's
or Subservicer's annual audit report, or, if any such certificate or report has
not been received by the Master Servicer, the Master Servicer is using its best
reasonable efforts to obtain such certificate or report.
(b) Copies of such statements shall be provided to any Noteholder upon
request, by the Master Servicer or by the Indenture Trustee at the Master
Servicer's expense if the Master Servicer failed to provide such copies (unless
(i) the Master Servicer shall have failed to provide
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the Indenture Trustee with such statement or (ii) the Indenture Trustee shall be
unaware of the Master Servicer's failure to provide such statement).
Section 5.25. Annual Independent Accountants' Servicing Report. If the
Master Servicer (or any of its Affiliates) has, during the course of any fiscal
year, directly serviced, as a successor Servicer, any of the Mortgage Loans,
then the Master Servicer at its expense shall cause a nationally recognized firm
of independent certified public accountants to furnish a statement to the
Indenture Trustee and the Depositor no later than five Business Days after the
fifteenth of March of each calendar year, commencing in March 2006 to the effect
that, with respect to the most recently ended calendar year, such firm has
examined certain records and documents relating to the Master Servicer's
performance of its servicing obligations under this Agreement and pooling and
servicing and trust agreements in material respects similar to this Agreement
and to each other and that, on the basis of such examination conducted
substantially in compliance with the audit program for mortgages serviced for
FHLMC or the Uniform Single Attestation Program for Mortgage Bankers, such firm
is of the opinion that the Master Servicer's activities have been conducted in
compliance with this Agreement, or that such examination has disclosed no
material items of noncompliance except for (i) such exceptions as such firm
believes to be immaterial, (ii) such other exceptions as are set forth in such
statement and (iii) such exceptions that the Uniform Single Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced by FHLMC
requires it to report. Copies of such statements shall be provided to any
Noteholder upon request by the Master Servicer, or by the Indenture Trustee at
the expense of the Master Servicer if the Master Servicer shall fail to provide
such copies. If such report discloses exceptions that are material, the Master
Servicer shall advise the Indenture Trustee whether such exceptions have been or
are susceptible of cure, and will take prompt action to do so.
Section 5.26. Merger or Consolidation. Any Person into which the Master
Servicer may be merged or consolidated, or any Person resulting from any merger,
conversion, other change in form 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 to 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 resulting Person to the Master Servicer shall be
a Person that shall be qualified and approved (or that have an Affiliate that is
qualified and approved) to service mortgage loans for Xxxxxx Xxx or FHLMC and
shall have a net worth of not less than $15,000,000.
Section 5.27. Resignation of Master Servicer. Except as otherwise provided
in Sections 5.26 and this Section 5.27 hereof, the Master Servicer shall not
resign from the obligations and duties hereby imposed on it unless it or the
Indenture Trustee determines that the Master Servicer's duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it and cannot be cured.
Any such determination permitting the resignation of the Master Servicer shall
be evidenced by an Opinion of Counsel that shall be Independent to such effect
delivered to the Indenture Trustee. No such resignation shall become effective
until the Indenture Trustee shall have assumed, or a successor master servicer
shall have been appointed by the Indenture Trustee and until such successor
shall have assumed, the Master Servicer's responsibilities and
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obligations under this Agreement. Notice of such resignation shall be given
promptly by the Master Servicer and the Depositor to the Indenture Trustee.
Section 5.28. Assignment or Delegation of Duties by the Master Servicer.
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, unless the Indenture Trustee and the Depositor
shall have consented to such action; provided, however, that the Master Servicer
shall have the right without the prior written consent of the Indenture Trustee
or the Depositor to delegate or assign to or subcontract with or authorize or
appoint an Affiliate of the Master Servicer to perform and carry out any duties,
covenants or obligations to be performed and carried out by the Master Servicer
hereunder. In no case, however, shall any such delegation, subcontracting or
assignment to an Affiliate of the Master Servicer relieve the Master Servicer of
any liability hereunder. Notice of such permitted assignment shall be given
promptly by the Master Servicer to the Depositor and the Indenture Trustee. If,
pursuant to any provision hereof, the duties of the Master Servicer are
transferred to a successor master servicer, the entire amount of compensation
payable to the Master Servicer pursuant hereto, including amounts payable to or
permitted to be retained or withdrawn by the Master Servicer pursuant to Section
5.21 hereof, shall thereafter be payable to such successor master servicer.
Section 5.29. Limitation on Liability of the Master Servicer and Others.
(a) The Master Servicer undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement.
(b) No provision of this Agreement shall be construed to relieve the Master
Servicer from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that the duties and
obligations of the Master Servicer shall be determined solely by the express
provisions of this Agreement, the Master Servicer shall not be liable except for
the performance of such duties and obligations as are specifically set forth in
this Agreement; no implied covenants or obligations shall be read into this
Agreement against the Master Servicer and, in absence of bad faith on the part
of the Master Servicer, the Master Servicer may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Master Servicer and
conforming to the requirements of this Agreement.
(c) Neither the Master Servicer nor any of the directors, officers,
employees or agents of the Master Servicer shall be under any liability to 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 Agreement, or for errors
in judgment; provided, however, that this provision shall not protect the Master
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, fraud, bad faith or negligence in its
performance of its duties or by reason of reckless disregard for its obligations
and duties under this Agreement. The Master Xxxxxxxx and any director, officer,
employee or agent of the Master Servicer shall be entitled to indemnification by
the Trust Estate and will be held harmless against any loss, liability or
expense incurred in connection with any legal action relating to this Agreement
or the Notes
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other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of his or its duties
hereunder or by reason of reckless disregard of his or its obligations and
duties hereunder. The Master Xxxxxxxx and any director, officer, employee or
agent of the Master Servicer may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Master Servicer shall be under no obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties to
master service the Mortgage Loans in accordance with this Agreement and that in
its opinion may involve it in any expenses or liability; provided, however, that
the Master Servicer may in its sole discretion undertake any such action that it
may deem necessary or desirable in respect to this 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 shall be expenses, costs and liabilities of the Issuer and
the Master Servicer shall be entitled to be reimbursed therefor out of the
Collection Account it maintains as provided by Section 5.08.
Section 5.30. Indemnification; Third-Party Claims. The Master Servicer
agrees to indemnify the Depositor, the Issuer and the Indenture Trustee, the
Owner Trustee, the Swap Counterparty, the Servicer and the Subservicer and hold
them harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, liability, fees
and expenses that the Depositor, the Issuer, the Indenture Trustee, the Owner
Trustee, the Swap Counterparty, the Servicer or Subservicer may sustain as a
result of the failure of the Master Servicer to perform its duties and master
service the Mortgage Loans in compliance with the terms of this Agreement. The
Depositor, the Issuer, the Indenture Trustee, the Owner Trustee, the Servicer
and the Subservicer shall immediately notify the Master Servicer if a claim is
made by a third party with respect to this Agreement, the Mortgage Loans
entitling the Depositor, the Issuer, the Indenture Trustee, the Owner Trustee,
the Servicer or Subservicer to indemnification under this Section 5.30,
whereupon the Master Servicer shall assume the defense of any such claim and pay
all expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered against it or
them in respect of such claim.
Section 5.31. Alternative Index. In the event that the Index for any
Mortgage Loan, as specified in the related Mortgage Note, becomes unavailable
for any reason, the Master Servicer shall select an alternative index in
accordance with the terms of such Mortgage Note or, if such Mortgage Note does
not make provision for the selection of an alternative index in such event, the
Master Servicer shall, subject to applicable law, select an alternative index
based on information comparable to that used in connection with the original
Index and, in either case, such alternative index shall thereafter be the Index
for such Mortgage Loan.
Section 5.32. Transfer of Servicing. The Seller agrees that it shall
provide written notice to the Master Servicer and the Indenture Trustee and the
Swap Counterparty thirty days prior to any proposed transfer or assignment by
the Seller of the servicing of the Mortgage Loans other than transfer or
assignment to the Subservicer. In addition, the ability of the Seller to
transfer or assign the servicing hereunder to a successor servicer shall be
subject to the following conditions:
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(i) receipt of written consent of the Master Servicer and Indenture
Trustee to such transfer;
(ii) Such successor servicer must be qualified to service loans for
FNMA or FHLMC, and must be a member in good standing of MERS;
(iii) Such successor servicer must satisfy the servicer eligibility
standards set forth in Section 4.06(d);
(iv) Such successor servicer must execute and deliver to the Indenture
Trustee an agreement, in form and substance reasonably satisfactory to the
Indenture Trustee, that contains an assumption by such successor servicer of the
due and punctual performance and observance of each covenant and condition to be
performed and observed by the Servicer;
(v) If the successor servicer is not a Servicer of Mortgage Loans at
the time of the transfer, there must be delivered to the Indenture Trustee a
letter from each Rating Agency to the effect that such transfer of servicing
will not result in a qualification, withdrawal or downgrade of the then-current
rating of any of the Notes; and
(vi) The Seller shall, at its cost and expense, take such steps, or
cause the terminated Servicer to take such steps, as may be necessary or
appropriate to effectuate and evidence the transfer of the servicing of the
Mortgage Loans to such successor servicer, including, but not limited to, the
following: (A) to the extent required by the terms of the Mortgage Loans and by
applicable federal and state laws and regulations, the Seller shall cause the
prior Servicer to timely mail to each obligor under a Mortgage Loan any required
notices or disclosures describing the transfer of servicing of the Mortgage
Loans to the successor servicer; (B) prior to the effective date of such
transfer of servicing, the Seller shall cause the prior Servicer to transmit to
any related insurer notification of such transfer of servicing; (C) on or prior
to the effective date of such transfer of servicing, the Seller shall cause the
prior Servicer to deliver to the successor servicer all Mortgage Loan Documents
and any related records or materials; (D) on or prior to the effective date of
such transfer of servicing, the Seller shall cause the prior Servicer to
transfer to the successor servicer, or, if such transfer occurs after a Servicer
Remittance Date but before the next succeeding Payment Date, to the Indenture
Trustee, all funds held by the prior Servicer in respect of the Mortgage Loans;
(E) on or prior to the effective date of such transfer of servicing, the Seller
shall cause the prior Servicer to, after the effective date of the transfer of
servicing to the successor servicer, continue to forward to such successor
servicer, within one Business Day of receipt, the amount of any payments or
other recoveries received by the prior Servicer, and to notify the successor
servicer of the source and proper application of each such payment or recovery;
and (F) the Seller shall cause the prior Servicer to, after the effective date
of transfer of servicing to the successor servicer, continue to cooperate with
the successor servicer to facilitate such transfer in such manner and to such
extent as the successor servicer may reasonably request. Notwithstanding the
foregoing, the prior Servicer shall be obligated to perform the items listed
above to the extent provided in the applicable Servicing Agreement.
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ARTICLE VI
DEPOSITS AND PAYMENTS TO HOLDERS
Section 6.01. The Collection Account.
(a) The Trust Administrator shall establish and maintain in the name of the
Securities Intermediary the Collection Account as provided in Section 5.07,
which account shall be pledged to the Indenture Trustee for the benefit of the
Noteholders and the Swap Counterparty.
(b) The Trust Administrator shall make withdrawals from the Collection
Account only for the purposes set forth in Section 5.08.
Section 6.02. Payments from the Collection Account.
(a) On each Payment Date, the Indenture Trustee (or the Paying Agent on
behalf of the Indenture Trustee) shall withdraw from the Collection Account the
Total Remittance Amount (to the extent such amount is on deposit in the
Collection Account) and shall pay such amount as specified in this Section. All
allocations and payments made between and with respect to Group 1 and Group 2 in
this Section shall be made concurrently.
(b) On each Payment Date, the Indenture Trustee (or the Paying Agent on
behalf of the Indenture Trustee) shall pay the Interest Funds for Group 1 for
such date in the following order of priority in accordance with the report of
the Trust Administrator:
(i) to the Swap Counterparty, to the extent not previously paid from
the Collection Account, the Group 1 Percentage of any Net Swap Payment for such
Payment Date and swap termination amounts payable to the Swap Counterparty in
the event that the Trust is a defaulting party or an affected party under the
terms of the Swap Agreement;
(ii) to the Class 1-A Notes, Current Interest thereon for such Payment
Date;
(iii) pro rata, to the Class 2-A1 Notes, the Class 2-A2 Notes and the
Class 2-A3 Notes, Current Interest thereon (after giving effect to the payment
of the Interest Funds for Group 2) for such Payment Date; and
(iv) for application pursuant to clause (d) below, any Interest Funds
for Group 1 remaining undistributed for such Payment Date.
(c) On each Payment Date, the Indenture Trustee (or the Paying Agent on
behalf of the Indenture Trustee) shall pay the Interest Funds for Group 2 for
such date in the following order of priority in accordance with the report of
the Trust Administrator:
(i) to the Swap Counterparty, to the extent not previously paid from
the Collection Account, the Group 2 Percentage of any Net Swap Payment for such
Payment Date and swap termination amounts payable to the Swap Counterparty in
the event that the Trust is a defaulting party or an affected party under the
terms of the Swap Agreement;
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(ii) pro rata, to Class 2-A1 Notes, Class 2-A2 Notes and Class 2-A3
Notes, Current Interest thereon for such Payment Date;
(iii) to the Class 1-A Notes, Current Interest thereon (after giving
effect to the payment of the Interest Funds for Group 1) for such Payment Date;
and
(iv) for application pursuant to clause (d) below, any Interest Funds
for Group 2 remaining undistributed for such Payment Date.
(d) On each Payment Date, the Indenture Trustee (or the Paying Agent on
behalf of the Indenture Trustee) shall pay the aggregate of any remaining
Interest Funds for Group 1 and Group 2 from Section 6.02(b)(iv) and Section
6.02(c)(iv), respectively, for such Payment Date in the following order of
priority in accordance with the report of the Trust Administrator:
(i) to the Class M1 Notes, Current Interest for such Class for such
Payment Date;
(ii) to the Class M2 Notes, Current Interest for such Class for such
Payment Date;
(iii) to the Class M3 Notes, Current Interest for such Class for such
Payment Date;
(iv) to the Class M4 Notes, Current Interest for such Class for such
Payment Date;
(v) to the Class M5 Notes, Current Interest for such Class for such
Payment Date;
(vi) to the Class M6 Notes, Current Interest for such Class for such
Payment Date;
(vii) to the Class M7 Notes, Current Interest for such Class for such
Payment Date;
(viii) to the Class M8 Notes, Current Interest for such Class for such
Payment Date;
(ix) to the Class M9 Notes, Current Interest for such Class for such
Payment Date;
(x) to the Class M10 Notes, Current Interest for such Class for such
Payment Date;
(xi) to the Class M11 Notes, Current Interest for such Class for such
Payment Date;
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(xii) to the Class M12 Notes, Current Interest for such Class for such
Payment Date;
(xiii) to the Class M13 Notes, Current Interest for such Class for
such Payment Date;
(xiv) to the Indenture Trustee, the Owner Trustee, the Master
Servicer, the Trust Administrator, the Servicer and the Subservicer, previously
unreimbursed extraordinary costs, liabilities and expenses to the extent
provided in this Agreement; and
(xv) for application as part of Monthly Excess Cashflow for such
Payment Date, as provided in subsection (f) of this Section any Interest Funds
for Group 1 and Group 2 remaining undistributed for such Payment Date.
(e) On each Payment Date, the Indenture Trustee (or the Paying Agent on
behalf of the Indenture Trustee) shall pay the Principal Funds for such date in
accordance with the report of the Trust Administrator as follows:
(i) On each Payment Date (a) prior to the Stepdown Date or (b) with
respect to which a Trigger Event is in effect, the Indenture Trustee (or the
Paying Agent on behalf of the Indenture Trustee) shall make the following
payments to the extent of funds then in the Collection Account available
therefor, concurrently:
(1) For Group 1: The Principal Payment Amount for Group 1 will be
paid in the following order of priority:
(A) to the Swap Counterparty, to the extent not previously
paid from the Collection Account, the Group 1 Percentage of swap
termination amounts payable to the Swap Counterparty in the event
that the Trust is a defaulting party or an affected party under
the terms of the Swap Agreement;
(B) to the Class 1-A Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(C) sequentially, to the Class 2-A1, Class 2-A2 and Class
2-A3 Notes, in that order, after giving effect to payments
pursuant to subsection 6.02(e)(i)(2)(B), until the Class
Principal Amount of each such Class has been reduced to zero;
provided that if on any Payment Date the Total Principal
Deficiency Amount exceeds the aggregate of the Class Principal
Amounts of the Class M Notes, all payments pursuant to this
clause shall be made concurrently, on a pro rata basis, to the
Class 2-A1 Notes, the Class 2-A2 Notes and the Class 2-A3 Notes;
(D) to the Class M1 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
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(E) to the Class M2 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(F) to the Class M3 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(G) to the Class M4 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(H) to the Class M5 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(I) to the Class M6 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(J) to the Class M7 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(K) to the Class M8 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(L) to the Class M9 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(M) to the Class M10 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(N) to the Class M11 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(O) to the Class M12 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(P) to the Class M13 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(Q) to the Swap Counterparty, to the extent not previously
paid, the Group 1 Percentage of swap termination amounts payable
to the Swap Counterparty in the event that the Swap Counterparty
is a defaulting party or the sole affected party under the terms
of the Swap Agreement; and
(R) for application as part of Monthly Excess Cashflow for
such Payment Date, as provided for in subsection (f) of this
Section, any such Principal Payment Amount for Group 1 remaining
after application pursuant to clauses (A) through (Q) above.
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(2) For Group 2: The Principal Payment Amount for Group 2 will be
paid in the following order of priority:
(A) to the Swap Counterparty, to the extent not previously
paid from the Collection Account, the Group 2 Percentage of swap
termination amounts payable to the Swap Counterparty in the event
that the Trust is a defaulting party or an affected party under
the terms of the Swap Agreement;
(B) sequentially, to the Class 2-A1, Class 2-A2 and Class
2-A3 Notes, until the Class Principal Amount of each such Class
has been reduced to zero; provided that if on any Payment Date
the Total Principal Deficiency Amount exceeds the aggregate of
the Class Principal Amounts of the Class M Notes, all payments
pursuant to this clause shall be made concurrently, on a pro rata
basis, to the Class 2-A1 Notes, the Class 2-A2 Notes and the
Class 2-A3 Notes;
(C) to the Class 1-A Notes, after giving effect to payments
pursuant to subsection 6.02(e)(i)(1)(B), until the Class
Principal Amount of such Classes has been reduced zero;
(D) to the Class M1 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(E) to the Class M2 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(F) to the Class M3 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(G) to the Class M4 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(H) to the Class M5 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(I) to the Class M6 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(J) to the Class M7 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(K) to the Class M8 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(L) to the Class M9 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
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(M) to the Class M10 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(N) to the Class M11 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(O) to the Class M12 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(P) to the Class M13 Notes, until the Class Principal Amount
of such Class has been reduced to zero;
(Q) to the Swap Counterparty, to the extent not previously
paid, the Group 2 Percentage of swap termination amounts payable
to the Swap Counterparty in the event that the Swap Counterparty
is a defaulting party or the sole affected party under the terms
of the Swap Agreement; and
(R) for application as part of Monthly Excess Cashflow for
such Payment Date, as provided for in subsection (f) of this
Section, any such Principal Payment Amount for Group 2 remaining
after application pursuant to clauses (A) through (Q) above.
(ii) On each Payment Date (a) on or after the Stepdown Date and (b)
with respect to which a Trigger Event is not in effect, the Indenture Trustee
(or the Paying Agent on behalf of the Indenture Trustee) shall pay the Principal
Payment Amount for such date in the following order of priority:
(1) to the Swap Counterparty, to the extent not previously paid
from the Collection Account, swap termination amounts payable to the
Swap Counterparty in the event that the Trust is a defaulting party or
an affected party under the terms of the Swap Agreement;
(2) to the Class 1-A Notes (from amounts in Group 1 except as
provided below) and, sequentially, to the Class 2-A1, Class 2-A2 and
Class 2-A3 Notes (from amounts in Group 2 except as provided below),
in that order, in each case, an amount equal to the lesser of (x) the
Principal Payment Amount for the related Mortgage Group for such
Payment Date and (y) the Related Senior Principal Payment Amount for
such Mortgage Group for such Payment Date, in each case until the
Class Principal Amount of each such Class or Classes has been reduced
to zero; provided, however, to the extent that the Principal Payment
Amount for a Mortgage Group exceeds the Related Senior Principal
Payment Amount for such Mortgage Group, such excess shall be applied
to the Class or Classes of Senior Notes of the other Mortgage Group
(with respect to the Class 1-A Notes, pro rata, and with respect to
the Class 2-A1, Class 2-A2 and Class 2-A3 Notes, sequentially, in that
order), but in an amount not to exceed the Senior Principal Payment
Amount for such Payment Date (as reduced by any payments pursuant to
subclauses (x) and (y) of this Subsection (2)(a) on such Payment Date;
provided that if on any Payment Date the Total Principal Deficiency
Amount
115
exceeds the aggregate of the Class Principal Amounts of the Class M
Notes, to the Class 1-A Notes (from amounts in Group 1) and to the
Class 2-A1, Class 2-A2 and Class 2-A3 Notes (from amounts in Group 2),
pro rata, the Principal Payment Amount for the related Mortgage Group
for such Payment Date;
(3) to the Class M1 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes on such Payment Date pursuant to clause (2) above,
and (y) the M1 Principal Payment Amount for such Payment Date, until
the Class Principal Amount of such Class has been reduced to zero;
(4) to the Class M2 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes and the Class M1 Notes on such Payment Date pursuant
to clauses (2) and (3) above, respectively, and (y) the M2 Principal
Payment Amount for such Payment Date, until the Class Principal Amount
of such Class has been reduced to zero;
(5) to the Class M3 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes and the Class M1 and Class M2 Notes on such Payment
Date pursuant to clauses (2), (3) and (4) above, respectively, and (y)
the M3 Principal Payment Amount for such Payment Date, until the Class
Principal Amount of such Class has been reduced to zero;
(6) to the Class M4 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes and the Class M1, Class M2 and Class M3 Notes on such
Payment Date pursuant to clauses (2), (3), (4) and (5) above,
respectively, and (y) the M4 Principal Payment Amount for such Payment
Date, until the Class Principal Amount of each such Class has been
reduced to zero;
(7) to the Class M5 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes and the Class M1, Class M2, Class M3 and Class M4
Notes on such Payment Date pursuant to clauses (2), (3), (4), (5) and
(6) above, respectively, and (y) the M5 Principal Payment Amount for
such Payment Date, until the Class Principal Amount of each such Class
has been reduced to zero;
(8) to the Class M6 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes and the Class M1, Class M2, Class M3, Class M4 and
Class M5 Notes on such
116
Payment Date pursuant to clauses (2), (3), (4), (5), (6) and (7)
above, respectively, and (y) the M6 Principal Payment Amount for such
Payment Date, until the Class Principal Amount of each such Class has
been reduced to zero;
(9) to the Class M7 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes and the Class M1, Class M2, Class M3, Class M4, Class
M5 and Class M6 Notes on such Payment Date pursuant to clauses (2),
(3), (4), (5), (6), (7) and (8) above, respectively, and (y) the M7
Principal Payment Amount for such Payment Date, until the Class
Principal Amount of each such Class has been reduced to zero; and
(10) to the Class M8 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes and the Class M1, Class M2, Class M3, Class M4, Class
M5, Class M6 and Class M7 Notes on such Payment Date pursuant to
clauses (2), (3), (4), (5), (6), (7), (8) and (9) above, respectively,
and (y) the M8 Principal Payment Amount for such Payment Date, until
the Class Principal Amount of each such Class has been reduced to
zero; and
(11) to the Class M9 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes and the Class M1, Class M2, Class M3, Class M4, Class
M5, Class M6, Class M7 and Class M8 Notes on such Payment Date
pursuant to clauses (2), (3), (4), (5), (6), (7), (8), (9) and (10)
above, respectively, and (y) the M9 Principal Payment Amount for such
Payment Date, until the Class Principal Amount of each such Class has
been reduced to zero; and
(12) to the Class M10 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes and the Class M1, Class M2, Class M3, Class M4, Class
M5, Class M6, Class M7, Class M8 and Class M9 Notes on such Payment
Date pursuant to clauses (2), (3), (4), (5), (6), (7), (8), (9), (10)
and (11) above, respectively, and (y) the M10 Principal Payment Amount
for such Payment Date, until the Class Principal Amount of each such
Class has been reduced to zero;
(13) to the Class M11 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes and the Class M1, Class M2, Class M3, Class M4, Class
M5, Class M6, Class M7, Class M8, Class M9 and Class M10 Notes on such
Payment Date pursuant to clauses (2), (3), (4), (5), (6), (7), (8),
(9), (10), (11) and (12) above, respectively, and (y) the M11
Principal Payment Amount for such Payment Date, until the Class
Principal Amount of each such Class has been reduced to zero;
117
(14) to the Class M12 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes and the Class M1, Class M2, Class M3, Class M4, Class
M5, Class M6, Class M7, Class M8, Class M9, Class M10 and Class M11
Notes on such Payment Date pursuant to clauses (2), (3), (4), (5),
(6), (7), (8), (9), (10), (11), (12) and (13) above, respectively, and
(y) the M12 Principal Payment Amount for such Payment Date, until the
Class Principal Amount of each such Class has been reduced to zero;
(15) to the Class M13 Notes, an amount equal to the lesser of (x)
the excess of (a) the aggregate Principal Payment Amounts for each of
Group 1 and Group 2 for such Payment Date over (b) the amount paid to
the Senior Notes and the Class M1, Class M2, Class M3, Class M4, Class
M5, Class M6, Class M7, Class M8, Class M9, Class M10, Class M11 and
Class M12 Notes on such Payment Date pursuant to clauses (2), (3),
(4), (5), (6), (7), (8), (9), (10), (11), (12), (13) and (14) above,
respectively, and (y) the M13 Principal Payment Amount for such
Payment Date, until the Class Principal Amount of each such Class has
been reduced to zero;
(16) to the Swap Counterparty, to the extent not previously paid,
swap termination amounts payable to the Swap Counterparty in the event
that the Swap Counterparty is a defaulting party or the sole affected
party under the terms of the Swap Agreement; and
(17) for application as part of Monthly Excess Cashflow for such
Payment Date, as provided in subsection (e) of this Section, any
Principal Payment Amount remaining after application pursuant to
clauses (1) through (16) above.
(f) On each Payment Date, the Indenture Trustee (or the Paying Agent on
behalf of the Indenture Trustee) shall pay the Monthly Excess Cashflow for such
date in accordance with the report of the Trust Administrator as follows:
(i) for each Payment Date occurring (a) before the Stepdown Date or
(b) on or after the Stepdown Date but for which a Trigger Event is in effect:
(a) up to the Overcollateralization Deficiency Amount for such
Payment Date, in the following order of priority:
i. concurrently, in proportion to the aggregate Class
Principal Amounts of each Class of Senior Notes, after giving
effect to previous principal payments on such Payment Date
pursuant to subsections 6.02(e)(i)(1) and 6.02(e)(i)(2), to the
Class 1-A, Class 2-A1, Class 2-A2 and Class 2-A3 Notes (with
respect to the Class 2-A1, Class 2-A2 and Class 2-A3 Notes, to be
paid sequentially, in that order; provided that if on any Payment
Date the Total Principal Deficiency Amount exceeds the
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aggregate Class Principal Amounts of the Class M Notes, all
payments pursuant to this clause will be made concurrently, on a
pro rata basis, to the Class 2-A1 Notes, the Class 2-A2 Notes and
the Class 2-A3 Notes), until the Class Principal Amount of each
such Class has been reduced to zero;
ii. to the Class M1 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;
iii. to the Class M2 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;
iv. to the Class M3 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;
v. to the Class M4 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;
vi. to the Class M5 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;
vii. to the Class M6 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero; and
viii. to the Class M7 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;
ix. to the Class M8 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;
x. to the Class M9 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;
xi. to the Class M10 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;
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xii. to the Class M11 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;
xiii. to the Class M12 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;
xiv. to the Class M13 Notes, in reduction of their Class
Principal Amount, until the Class Principal Amount of such Class
has been reduced to zero;
(b) to the extent of any Available Funds Shortfall, to the
payment of such amounts to the Notes, in the order of priority of the
Classes of Notes as set forth immediately above in proportion and with
respect to the Senior Notes to their amount of unpaid Available Funds
Shortfalls, until each such Class has received in full all amounts of
any Available Funds Shortfall.
(c) to the Swap Counterparty, to the extent not previously paid,
swap termination amounts payable to the Swap Counterparty in the event
that the Swap Counterparty is a defaulting party or the sole affected
party under the terms of the Swap Agreement;
(d) sequentially, to the Class M1 Notes, Class M2 Notes, Class M3
Notes, Class M4 Notes, Class M5 Notes, Class M6 Notes, Class M7 Notes,
Class M8 Notes, Class M9 Notes, Class M10 Notes, Class M11, Class M12
and Class M13 Notes in that order, Deferred Interest, if any, for such
Class, until each such Class has received in full its Deferred
Interest; and
(e) to the Ownership Certificate, any amount remaining on such
date after application pursuant to clauses (a) through (d) above; or
(ii) for each Payment Date occurring on or after the Stepdown Date and
for which a Trigger Event is not in effect, the Indenture Trustee (or the Paying
Agent on behalf of the Indenture Trustee) shall pay, in accordance with the
report of the Trust Administrator, in the following order of priority:
(a) concurrently, in proportion to the aggregate Class Principal
Amounts of each Class of Senior Notes, after giving effect to previous
principal payments on such Payment Date pursuant to subsections
6.02(d)(ii)(1) and 6.02(d)(ii)(2), to the Class 1-A, Class 2-A1, Class
2-A2 and Class 2-A3 Notes(with respect to the Class 2-A1, Class 2-A2
and Class 2-A3 Notes, to be paid sequentially, in that order; provided
that if on any Payment Date the Total Principal Deficiency Amount
exceeds the aggregate Class Principal Amounts of the Class M Notes,
all payments pursuant to this clause will be made concurrently, on a
pro rata basis, to the Class 2-A1 Notes, the Class 2-A2 Notes and the
Class 2-A3 Notes), until the aggregate Class Principal Amount of each
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such Class, after giving effect to payments on such Payment Date,
equals the Senior Target Amount;
(b) to the Class M1 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Class 1-A,
Class 2-A1, Class 2-A2, Class 2-A3 and Class M1 Notes, after giving
effect to payments on such Payment Date, equals the M1 Target Amount;
(c) to the Class M2 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Class 1-A,
Class 2-A1, Class 2-A2, Class 2-A3, Class M1 and Class M2 Notes, after
giving effect to payments on such Payment Date, equals the M2 Target
Amount;
(d) to the Class M3 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Class 1-A,
Class 2-A1, Class 2-A2, Class 2-A3, Class M1, Class M2 and Class M3
Notes, after giving effect to payments on such Payment Date, equals
the M3 Target Amount;
(e) to the Class M4 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Class 1-A,
Class 2-A1, Class 2-A2, Class 2-A3, Class M1, Class M2, Class M3 and
Class M4 Notes, after giving effect to payments on such Payment Date,
equals the M4 Target Amount;
(f) to the Class M5 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Class 1-A,
Class 2-A1, Class 2-A2, Class 2-A3, Class M1, Class M2, Class M3,
Class M4 and Class M5 Notes, after giving effect to payments on such
Payment Date, equals the M5 Target Amount;
(g) to the Class M6 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Class 1-A,
Class 2-A1, Class 2-A2, Class 2-A3, Class M1, Class M2, Class M3,
Class M4, Class M5 and Class M6 Notes, after giving effect to payments
on such Payment Date, equals the M6 Target Amount;
(h) to the Class M7 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Class 1-A,
Class 2-A1, Class 2-A2, Class 2-A3, Class M1, Class M2, Class M3,
Class M4, Class M5, Class M6 and Class M7 Notes, after giving effect
to payments on such Payment Date, equals the M7 Target Amount;
(i) to the Class M8 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Senior Notes
and the Class M1, Class M2, Class M3, Class M4, Class M5, Class M6,
Class M7 and Class M8 Notes, after giving effect to payments on such
Payment Date, equals the M8 Target Amount;
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(j) to the Class M9 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Senior Notes
and the Class M1, Class M2, Class M3, Class M4, Class M5, Class M6,
Class M7, Class M8 and Class M9 Notes, after giving effect to payments
on such Payment Date, equals the M9 Target Amount;
(k) to the Class M10 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Senior Notes
and the Class M1, Class M2, Class M3, Class M4, Class M5, Class M6,
Class M7, Class M8, Class M9 and Class M10 Notes, after giving effect
to payments on such Payment Date, equals the M10 Target Amount;
(l) to the Class M11 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Senior Notes
and the Class M1, Class M2, Class M3, Class M4, Class M5, Class M6,
Class M7, Class M8, Class M9, Class M10 and Class M11 Notes, after
giving effect to payments on such Payment Date, equals the M11 Target
Amount;
(m) to the Class M12 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Senior Notes
and the Class M1, Class M2, Class M3, Class M4, Class M5, Class M6,
Class M7, Class M8, Class M9, Class M10, Class M11 and Class M12
Notes, after giving effect to payments on such Payment Date, equals
the M12 Target Amount;
(n) to the Class M13 Notes, in reduction of their Class Principal
Amount, until the aggregate Class Principal Amount of the Senior Notes
and the Class M1, Class M2, Class M3, Class M4, Class M5, Class M6,
Class M7, Class M8, Class M9, Class M10, Class M11, Class M12 and
Class M13 Notes, after giving effect to payments on such Payment Date,
equals the M13 Target Amount;
(o) to the extent of any Available Funds Shortfall, to the
payment of such amounts to the Notes, in the order of priority of the
Classes of Notes as set forth immediately above, and with respect to
the Senior Notes, in proportion to their amount of unpaid Available
Funds Shortfalls, until each such Class has received in full all
amounts of any Available Funds Shortfall;
(p) to the Swap Counterparty, to the extent not previously paid,
swap termination amounts payable to the Swap Counterparty in the event
that the Swap Counterparty is a defaulting party or the sole affected
party under the terms of the Swap Agreement under the Swap Agreement;
(q) sequentially, to the Class M1 Notes, Class M2 Notes, Class M3
Notes, Class M4 Notes, Class M5 Notes, Class M6 Notes, Class M7 Notes,
Class M8 Notes, Class M9 Notes, Class M10, Class M11, Class M12 and
Class M13 Notes, in that order, Deferred Interest, if any, for such
Class, until each such Class has received in full its Deferred
Interest; and
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(r) to the Ownership Certificate, any amount remaining on such
date after application pursuant to clauses (a) through (q) above.
On the Redemption Date, the Indenture Trustee (or the Paying Agent on
behalf of the Indenture Trustee) shall distribute to each Class of Notes the
related Redemption Price therefor, as set forth in the Indenture.
Section 6.03. Net Swap Payments and Net Swap Receipts.
(a) Any Net Swap Receipts shall be deposited by the Swap Counterparty into
the Basis Risk Reserve Account in accordance with the terms of the Swap
Agreement. On any Payment Date for which there are funds on deposit in the Basis
Risk Reserve Account, the Indenture Trustee (or the Paying Agent on behalf of
the Indenture Trustee) shall withdraw such amounts from the Basis Risk Reserve
Account and deposit such amounts in the Collection Account, and from the
Collection Account shall apply the Group 1 Percentage of such Net Swap Receipt
as Interest Funds for Group 1 and shall make payments specified in the order and
priority described in Section 6.02 above.
(b) Any Net Swap Receipts shall be deposited by the Swap Counterparty into
the Basis Risk Reserve Account in accordance with the terms of the Swap
Agreement. On any Payment Date for which there are funds on deposit in the Basis
Risk Reserve Account, the Indenture Trustee (or the Paying Agent on behalf of
the Indenture Trustee) shall deposit such amounts in the Collection Account, and
from the Collection Account, shall apply the Group 2 Percentage of such Net Swap
Receipt as Interest Funds for Group 2 and shall make payments specified in the
order and priority described in Section 6.02 above.
Section 6.04. Control of the Trust Account and Deferred Interest.
(a) The Depositor, the Issuer and the Indenture Trustee hereby appoint the
Trust Administrator as Securities Intermediary with respect to the Trust
Account, and the Issuer has, pursuant to the Indenture, granted to the Indenture
Trustee, for the benefit of the Noteholders and the Swap Counterparty, a
security interest to secure all amounts due Noteholders and the Swap
Counterparty hereunder in and to the Trust Account and the Security Entitlements
to all Financial Assets credited to the Trust Account, including without
limitation all amounts, securities, investments, Financial Assets, investment
property and other property from time to time deposited in or credited to the
Trust Account and all proceeds thereof. Amounts held from time to time in the
Trust Account will continue to be held by the Securities Intermediary for the
benefit of the Indenture Trustee, as collateral agent, for the benefit of the
Noteholders and the Swap Counterparty. Upon the termination of the Issuer or the
discharge of the Indenture, the Indenture Trustee shall inform the Securities
Intermediary and the Swap Counterparty of such termination. By acceptance of
their Notes or interests therein, the Noteholders shall be deemed to have
appointed the Trust Administrator as Securities Intermediary. The Trust
Administrator hereby accepts such appointment as Securities Intermediary.
(b) With respect to the Trust Account Property credited to the Trust
Account, the Securities Intermediary agrees that:
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(i) with respect to any Trust Account Property that is held in deposit
accounts, each such deposit account shall be subject to the exclusive custody
and control of the Securities Intermediary, and the Securities Intermediary
shall have sole signature authority with respect thereto;
(ii) the sole assets permitted in the Trust Account shall be those as
the Securities Intermediary agrees to treat as Financial Assets; and
(iii) any such Trust Account Property that is, or is treated as, a
Financial Asset shall be physically delivered (accompanied by any required
endorsements) to, or credited to an account in the name of, the Securities
Intermediary or other eligible institution maintaining the Trust Account in
accordance with the Securities Intermediary's customary procedures such that the
Securities Intermediary or such other institution establishes a Security
Entitlement in favor of the Indenture Trustee with respect thereto over which
the Securities Intermediary or such other institution has Control;
(c) The Securities Intermediary hereby confirms that (A) the Trust Account
is an account to which Financial Assets are or may be credited, and the
Securities Intermediary shall, subject to the terms of this Agreement, treat the
Indenture Trustee, as collateral agent, as entitled to exercise the rights that
comprise any Financial Asset credited to the Trust Account, (B) all Trust
Account Property in respect of the Trust Account will be promptly credited by
the Securities Intermediary to such account, and (C) all securities or other
property underlying any Financial Assets credited to the Trust Account shall be
registered in the name of the Securities Intermediary, endorsed to the
Securities Intermediary or in blank or credited to another securities account
maintained in the name of the Securities Intermediary and in no case will any
Financial Asset credited to the Trust Account be registered in the name of the
Depositor or the Issuer, payable to the order of the Depositor or the Issuer or
specially endorsed to the Depositor or the Issuer, except to the extent the
foregoing have been specially endorsed to the Securities Intermediary or in
blank;
(d) The Securities Intermediary hereby agrees that each item of property
(whether investment property, Financial Asset, security, instrument or cash)
credited to the Trust Account shall be treated as a Financial Asset;
(e) If at any time the Securities Intermediary shall receive an Entitlement
Order from the Indenture Trustee directing transfer or redemption of any
Financial Asset relating to the Trust Account, the Securities Intermediary shall
comply with such Entitlement Order without further consent by the Depositor, the
Issuer or any other Person. If at any time the Indenture Trustee or the Trust
Administrator notifies the Securities Intermediary in writing that the Issuer
has been terminated or the Indenture discharged in accordance herewith and with
the Trust Agreement or the Indenture, as applicable, and the security interest
granted pursuant to the Indenture has been released, then thereafter if the
Securities Intermediary shall receive any order from the Depositor or the Issuer
directing transfer or redemption of any Financial Asset relating to the Trust
Account, the Securities Intermediary shall comply with such Entitlement Order
without further consent by the Indenture Trustee or any other Person;
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(f) In the event that the Securities Intermediary has or subsequently
obtains by agreement, operation of law or otherwise a security interest in the
Trust Account or any Financial Asset credited thereto, the Securities
Intermediary hereby agrees that such security interest shall be subordinate to
the security interest of the Indenture Trustee. The Financial Assets credited to
the Trust Account will not be subject to deduction, set-off, banker's lien, or
any other right in favor of any Person other than the Indenture Trustee (except
that the Securities Intermediary may set-off (i) all amounts due to it in
respect of its customary fees and expenses for the routine maintenance and
operation of the Trust Account and (ii) the face amount of any checks which have
been credited to the Trust Account but are subsequently returned unpaid because
of uncollected or insufficient funds);
(g) There are no other agreements entered into between the Securities
Intermediary in such capacity and the Depositor or the Issuer with respect to
the Trust Account. In the event of any conflict between this Agreement (or any
provision of this Agreement) and any other agreement now existing or hereafter
entered into, the terms of this Agreement shall prevail;
(h) The rights and powers granted under the Indenture and herein to the
Indenture Trustee have been granted in order to perfect its security interest in
the Trust Account and the Security Entitlements to the Financial Assets credited
thereto, and are powers coupled with an interest and will neither be affected by
the bankruptcy of the Depositor or the Issuer nor by the lapse of time. The
obligations of the Securities Intermediary hereunder shall continue in effect
until the security interest of the Indenture Trustee in the Trust Account, and
in such Security Entitlements, has been terminated pursuant to the terms of this
Agreement and the Indenture Trustee or the Issuer, as applicable, has notified
the Securities Intermediary of such termination in writing; and
(i) Notwithstanding anything else contained herein, the Depositor and the
Issuer agree that the Trust Account will be established only with the Securities
Intermediary or another institution meeting the requirements of this Section,
which by acceptance of its appointment as Securities Intermediary agrees
substantially as follows: (1) it will comply with Entitlement Orders related to
the Trust Account issued by the Indenture Trustee, as collateral agent, without
further consent by the Depositor or the Issuer, without further consent by the
Depositor; (2) until termination of the Issuer or discharge of the Indenture, it
will not enter into any other agreement related to such accounts pursuant to
which it agrees to comply with Entitlement Orders of any Person other than the
Indenture Trustee, as collateral agent; and (3) all assets delivered or credited
to it in connection with such account and all investments thereof will be
promptly credited to the applicable account.
(j) Notwithstanding the foregoing, the Issuer shall have the power,
revocable by the Indenture Trustee or by the Owner Trustee with the consent of
the Indenture Trustee, to instruct the Indenture Trustee, the Trust
Administrator and the Master Servicer to make withdrawals and payments from the
Trust Account for the purpose of permitting the Master Servicer, the Trust
Administrator or the Owner Trustee to carry out its respective duties hereunder
or permitting the Indenture Trustee to carry out its duties under the Indenture.
(k) Each of the Depositor and the Issuer agrees to take or cause to be
taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such
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further documents and instruments (including, without limitation, any financing
statements under the Relevant UCC or this Agreement) as may be necessary to
perfect the interests created by this Section in favor of the Issuer and the
Indenture Trustee and otherwise fully to effectuate the purposes, terms and
conditions of this Section. The Depositor shall:
(i) promptly execute, deliver and file any financing statements,
amendments, continuation statements, assignments, certificates and other
documents with respect to such interests and perform all such other acts as may
be necessary in order to perfect or to maintain the perfection of the Issuer's
and the Indenture Trustee's security interest in the Trust Account Property; and
(ii) make the necessary filings of financing statements or amendments
thereto within five days after the occurrence of any of the following: (1) any
change in its corporate name or any trade name or its jurisdiction of
organization; (2) any change in the location of its chief executive office or
principal place of business; and (3) any merger or consolidation or other change
in its identity or corporate structure and promptly notify the Issuer and the
Indenture Trustee of any such filings.
(iii) Neither the Depositor nor the Issuer shall organize under the
law of any jurisdiction other than the State under which each is organized as of
the Closing Date (whether changing its jurisdiction of organization or
organizing under an additional jurisdiction) without giving 30 days prior
written notice of such action to its immediate and mediate transferee, including
the Indenture Trustee. Before effecting such change, each of the Depositor or
the Issuer proposing to change its jurisdiction of organization shall prepare
and file in the appropriate filing office any financing statements or other
statements necessary to continue the perfection of the interests of its
immediate and mediate transferees, including the Indenture Trustee, in the Trust
Account Property. In connection with the transactions contemplated by the
Operative Agreements relating to the Trust Account Property, each of the
Depositor and the Issuer authorizes its immediate or mediate transferee,
including the Indenture Trustee, to file in any filing office any initial
financing statements, any amendments to financing statements, any continuation
statements, or any other statements or filings described in this Section 6.04.
None of the Securities Intermediary or any director, officer, employee or
agent of the Securities Intermediary shall be under any liability to the
Indenture Trustee or the Noteholders for any action taken; or not taken, in good
faith pursuant to this Agreement, or for errors in judgment; provided, however,
that this provision shall not protect the Securities Intermediary against any
liability to the Indenture Trustee or the Noteholders which would otherwise be
imposed by reason of the Securities Intermediary's willful misconduct, fraud,
bad faith or negligence in the performance of its obligations or duties
hereunder. The Securities Intermediary and any director, officer, employee or
agent of the Securities Intermediary 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 Securities Intermediary shall be
under no duty to inquire into or investigate the validity, accuracy or content
of such document. The Issuer shall indemnify the Securities Intermediary for and
hold it harmless against any loss, liability or expense arising out of or in
connection with this Agreement and carrying out its duties hereunder, including
the costs and expenses of defending itself against any claim of liability,
except in those cases where the Securities Intermediary has been guilty of
fraud, bad faith,
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negligence or willful misconduct. The foregoing indemnification shall survive
any termination of this Agreement or the resignation or removal of the
Securities Intermediary.
Section 6.05. Advances by Master Servicer and Servicer.
(a) Subject to Section 4.03(c), Advances shall be made in respect of each
Servicer Remittance Date as provided herein. If, on any Determination Date, the
Servicer determines that any Scheduled Payments due during the related Due
Period have not been received, such Servicer shall advance such amount to the
extent provided in Section 4.03(c) hereof. If any Servicer fails to remit
Advances required to be made under Section 4.03(c) hereof, the Master Servicer
shall itself make, or shall cause the successor Servicer to make, such Advance
on the Servicer Remittance Date immediately following such Determination Date.
If the Master Servicer determines that an Advance is required, it shall on the
Business Day immediately prior to the related Payment Date remit to the Trust
Administrator from its own funds (or funds advanced by the applicable Servicer)
for deposit in the Collection Account immediately available funds in an amount
equal to such Advance. The Master Servicer and the Servicer shall be entitled to
be reimbursed from the Collection Account, and the Servicer shall be entitled to
be reimbursed from its respective Custodial Account, for all Advances made by it
as provided in Section 4.02(e). Notwithstanding anything to the contrary herein,
in the event the Master Servicer determines in its reasonable judgment that an
Advance is a Nonrecoverable Advance, the Master Servicer shall be under no
obligation to make such Advance.
(b) In the event that the Master Servicer or Servicer fails for any reason
to make an Advance required to be made pursuant to this Section 6.05, the
Indenture Trustee, as successor Master Servicer, shall, on or before the related
Payment Date, deposit in the Collection Account an amount equal to the excess of
(a) Advances required to be made by the Master Servicer or the Servicer that
would have been deposited in such Collection Account over (b) the amount of any
Advance made by the Master Servicer or the Servicer with respect to such Payment
Date; provided, however, that the Indenture Trustee as successor Master
Servicer, or any other successor Master Servicer, shall be required to make such
Advance only if it is not prohibited by law from doing so and it has determined
that such Advance would be recoverable from amounts to be received with respect
to such Mortgage Loan, including late payments, Liquidation Proceeds, Insurance
Proceeds, or otherwise. The Indenture Trustee as successor Master Xxxxxxxx, or
any other successor Master Servicer, shall be entitled to be reimbursed from the
Collection Account for Advances made by it pursuant to this Section 6.05 as if
it were the Master Servicer.
Section 6.06. Pre-Funding Account.
(a) The Trust Administrator has heretofore established or caused to be
established and shall hereafter maintain or cause to be maintained a separate
account denominated the Pre-Funding Account, which is and shall continue to be
an Eligible Account in the name of the Trust Administrator and shall be
designated "Xxxxx Fargo Bank, N.A., as Trust Administrator of the Fieldstone
Mortgage Investment Trust, Series 2005-3 Pre-Funding Account." Any investment
earnings from the Pre-Funding Account will be paid to the Seller on the first
Business Day of the month following each Payment Date during the Pre-Funding
Period; provided, however, that if the final Subsequent Transfer Date occurs
after the Payment Date in a month, on such Subsequent Transfer Date, the Trust
Administrator shall (i) transfer the Excess Funding Amount
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from the Pre-Funding Account to the Collection Account, (ii) transfer any
investment earnings to the Seller as soon as practicable and (iii) close the
Pre-Funding Account. The amount on deposit in the related Subaccount of the
Pre-Funding Account shall be invested in Eligible Investments at the direction
of the Seller in accordance with the provisions of Section 4.02(j). All
investment earnings on funds on deposit in the Pre-Funding Account will be
treated as owned by, and will be taxable to, the Seller.
(b) On the Closing Date, the Seller will cause to be deposited (1)
$103,386,623.06 in the Pool 1 Subaccount and (2) $186,607,633.51 in the Pool 2
Subaccount, in each case from the sale of the Notes.
(c) On each Subsequent Transfer Date, (i) the Seller shall instruct the
Trust Administrator to withdraw from the Pre-Funding Account an amount equal to
100% of the aggregate Stated Principal Balances of the Subsequent Mortgage Loans
sold to the Trust on such Subsequent Transfer Date and (ii) the Trust
Administrator shall pay such amounts to or upon the order of the Seller with
respect to such transfer.
(d) If at the end of the Pre-Funding Period amounts still remain in the
Pre-Funding Account, the Trust Administrator shall withdraw such amounts,
exclusive of investment income, from the Pre-Funding Account on the immediately
following Payment Date and deposit such amounts in the Collection Account.
(e) Unless closed as provided in Section 6.06(a) above, the Pre-Funding
Account shall be closed at the close of business on the Payment Date immediately
following the end of the Pre-Funding Period.
Section 6.07. Establishment of Basis Risk Reserve Account.
(a) The Trust Administrator shall establish and maintain an Eligible
Account in its name in trust for the benefit of the Noteholders, the Basis Risk
Reserve Account.
(b) The Swap Counterparty shall deposit any Net Swap Receipts into the
Basis Risk Reserve Account as provided in the Swap Agreement. Amounts on deposit
in the Basis Risk Reserve Account shall remain uninvested.
ARTICLE VII
ADMINISTRATION OF THE AGREEMENTS
Section 7.01. Duties of the Trust Administrator.
(a) The Trust Administrator agrees to perform all of the duties of the
Issuer under the Depository Agreement. In addition to its duties performed under
the Depository Agreement, the Trust Administrator shall take all appropriate
action that is the duty of the Issuer to take with respect to the following
matters under the Trust Agreement, this Agreement and the Indenture:
(i) the duty to cause the Note Register to be kept if the Issuer
assumes the duties of Note Registrar, and to give the Indenture Trustee notice
of any appointment of a new
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Note Registrar and the location, or change in location, of the Note Register
(Section 2.04 of the Indenture);
(ii) the duty to cause the Certificate Register to be kept if the
Issuer assumes the duties of Certificate Registrar, and to give the Owner
Trustee notice of any appointment of a new Certificate Registrar and the
location, or change in location, of the Certificate Register (Section 3.03 of
the Trust Agreement);
(iii) causing the preparation of the Notes for execution by the Owner
Trustee upon the registration of any transfer or exchange of the Notes (Sections
2.04 and 2.05 of the Indenture);
(iv) causing the preparation of Definitive Notes in accordance with
the instructions of any Clearing Agency, the duty to attempt to locate a
qualified successor to the Clearing Agency, if necessary, and the preparation of
written notice to the Indenture Trustee of termination of the book-entry system
through the Clearing Agency (Section 2.12 of the Indenture);
(v) the maintenance of an office for registration of transfer or
exchange of Notes (Section 3.02 of the Indenture);
(vi) the maintenance of an office for registration of transfer or
exchange of the Ownership Certificate (Section 3.03 of the Trust Agreement);
(vii) the calculation of accrual of original issue discount and the
amortization of premium on the Notes (Section 3.03(v) of the Indenture);
(viii) upon written notice or actual knowledge thereof, the
notification to the Indenture Trustee and each Rating Agency of a Servicer Event
of Default or a Master Servicer Event of Default under this Agreement (Section
3.07(d) of the Indenture);
(ix) upon written notice or actual knowledge thereof, the delivery of
notice to the Indenture Trustee and each Rating Agency of each Indenture Event
of Default under the Indenture (Section 3.19 of the Indenture);
(x) the furnishing of the Indenture Trustee with the names and
addresses of Holders of Notes during any period when the Indenture Trustee is
not the Note Registrar (Section 7.01 of the Indenture);
(xi) causing the preparation of any financing statements and
continuation statements necessary to protect the Collateral (Section 3.05 of the
Indenture);
(xii) the preparation (but not the execution) of the annual Officer's
Certificate regarding the Issuer's compliance with the terms of the Indenture
(Section 3.09 of the Indenture);
(xiii) the delivery of notice to the Indenture Trustee and each Rating
Agency of each Indenture Event of Default under the Indenture (Section 3.19);
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(xiv) causing the preparation of an Officer's Certificate and the
obtaining of the Opinion of Counsel (which shall not be at the expense of the
Trust Administrator) with respect to any request by the Issuer to the Indenture
Trustee to take any action under the Indenture (Sections 4.01 and 11.01 of the
Indenture);
(xv) the compliance with any directive of the Indenture Trustee with
respect to the sale of the Collateral in a commercially reasonable manner if an
Indenture Event of Default shall have occurred and be continuing under the
Indenture (Section 5.04 of the Indenture);
(xvi) causing the preparation of an Issuer Request and Officer's
Certificate (and executing the same on behalf of the Issuer) and the obtaining
of an Opinion of Counsel (which shall not be at the expense of the Trust
Administrator), if necessary, for the release of the Collateral, as defined in
the Indenture (Section 8.03 of the Indenture);
(xvii) the mailing to the Noteholders of notices with respect to their
consent to any supplemental indentures (Sections 9.01, 9.02, 9.03 and 9.06 of
the Indenture); and
(xviii) any other duties expressly required to be performed by the
Trust Administrator under the Indenture or the Trust Agreement.
Notwithstanding the foregoing, the Seller shall undertake the duties of the
Issuer under the Indenture to cause the preparation of Issuer Orders (and
execute the same on behalf of the Issuer), and to obtain Opinions of Counsel
with respect to the execution of supplemental indentures and, if necessary, to
mail to the Noteholders notices with respect to their consent to such
supplemental indentures (Sections 9.01, 9.02, 9.03 and 9.06 of the Indenture).
(b) The Issuer will indemnify the Owner Trustee and the Trust
Administrator, and their respective agents for, and hold them harmless against,
any losses, liability or expense incurred without gross negligence or bad faith
on their part, arising out of or in connection with the acceptance or
administration of the transactions contemplated by the Trust Agreement, this
Agreement or the Swap Agreement, including the reasonable costs and expenses of
defending themselves against any claim or liability in connection with the
exercise or performance of any of their powers or duties under the Trust
Agreement, the Indenture or this Agreement.
(c) Subject to the penultimate paragraph of this Section 7.01, and in
accordance with the directions of the Owner Trustee, the Trust Administrator
shall perform or supervise the performance of such other activities in
connection with the Collateral (including the Operative Agreements) as are not
covered by any of the foregoing provisions and as are expressly requested in
writing by the Owner Trustee and are reasonably within the capability of the
Trust Administrator.
(d) In carrying out the foregoing duties or any of its other obligations
under this Agreement, the Trust Administrator may enter into transactions with
or otherwise deal with any of its Affiliates; provided, however, that the terms
of any such transactions or dealings shall be in accordance with any directions
received from the Issuer and shall be, in the Trust Administrator's opinion, no
less favorable to the Issuer than would be available from unaffiliated parties.
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In carrying out the foregoing duties or any of its other obligations under
this Agreement, the Trust Administrator shall be subject to the same standard of
care and have the same rights, indemnifications and immunities as the Indenture
Trustee under the Indenture, including, without limitation, the right to
reimbursement and indemnification on behalf of the Issuer from funds in the
Collection Account for all losses, costs and expenses of any kind or nature
(including without limitation attorneys' fees and disbursements) incurred by the
Trust Administrator (including without limitation in its various capacities as
Paying Agent, Certificate Paying Agent, Certificate Registrar and Note
Registrar) in connection with the performance of its duties hereunder or under
any other Operative Agreement.
The Trust Administrator in its capacity as the Certificate Registrar, and
upon a request received from the Owner Trustee, shall promptly notify the
Certificateholders of (i) any change in the Corporate Trust Office of the Owner
Trustee, (ii) any amendment to the Trust Agreement requiring notice be given to
the Certificateholders and (iii) any other notice required to be given to the
Certificateholders by the Owner Trustee under the Trust Agreement.
Section 7.02. Duties of the Trust Administrator With Respect to the
Indenture, the Trust Agreement and this Agreement.
(a) The Trust Administrator shall take all appropriate action that is the
duty of the Indenture Trustee to take with respect to the following matters
under the Indenture, the Trust Agreement and this Agreement:
(i) the duties of an authenticating agent for authentication of the
Notes (Sections 2.01, 2.02 and 2.11 of the Indenture);
(ii) the duties of Note Registrar to be kept (Sections 2.03, 2.04,
2.05 and 2.07 of the Indenture);
(iii) to provide notices and instructions to the Clearing Agency
(Section 2.10 of the Indenture);
(iv) the duties of Paying Agent (Sections 3.03, 4.01, 4.02 and 5.02 of
the Indenture); and
(v) the duties of agent or attorney-in-fact for the purposes of filing
financing and continuation statements for the Issuer (Section 3.05 of the
Indenture).
(b) The Issuer will indemnify the Owner Trustee and the Trust
Administrator, and their respective agents for, and hold them harmless against,
any losses, liability or expense incurred without gross negligence or bad faith
on their part, arising out of or in connection with the acceptance or
administration of the transactions contemplated by the Trust Agreement or this
Agreement, including the reasonable costs and expenses of defending themselves
against any claim or liability in connection with the exercise or performance of
any of their powers or duties under the Trust Agreement, the Indenture or this
Agreement.
Section 7.03. Records. The Trust Administrator shall maintain appropriate
books of account and records relating to services performed hereunder, which
books of account and
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records shall be accessible for inspection by the Issuer and the Depositor at
any time during normal business hours.
Section 7.04. Compensation. The Trust Administrator will perform the duties
and provide the services called for under Section 7.01 and 7.02 above for such
compensation as shall be agreed upon between the Trust Administrator and the
Master Servicer.
Section 7.05. Additional Information to be Furnished to the Issuer. The
Depositor shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
Section 7.06. Independence of the Trust Administrator. For all purposes of
this Agreement, the Trust Administrator shall be an independent contractor and
shall not be subject to the supervision of the Issuer or the Owner Trustee with
respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuer, the Trust
Administrator shall have no authority to act for or represent the Issuer or the
Owner Trustee in any way and shall not otherwise be deemed an agent of the
Issuer or the Owner Trustee.
Section 7.07. No Joint Venture. Nothing contained in this Agreement (i)
shall constitute the Trust Administrator or the Depositor, respectively, and
either of the Issuer or the Owner Trustee, as members of any partnership, joint
venture, association, syndicate, unincorporated business or other separate
entity, (ii) shall be construed to impose any liability as such on any of them
or (iii) shall be deemed to confer on any of them any express, implied or
apparent authority to incur any obligation or liability on behalf of the others.
Section 7.08. Other Activities of Trust Administrator and the Depositor.
Nothing herein shall prevent the Trust Administrator, the Depositor or their
respective Affiliates from engaging in other businesses or, in its sole
discretion, from acting in a similar capacity as an Trust Administrator for any
other person or entity even though such person or entity may engage in business
activities similar to those of the Issuer or the Owner Trustee.
Section 7.09. Resignation and Removal of Trust Administrator.
(a) Subject to Section 7.09(d) hereof, the Trust Administrator may resign
its duties hereunder by providing the Issuer with at least 60 days' prior
written notice.
(b) Subject to Section 7.09(d) hereof, the Issuer may remove the Trust
Administrator without cause by providing the Trust Administrator with at least
60 days' prior written notice.
(c) Subject to Section 7.09(d) hereof, the Issuer may remove the Trust
Administrator immediately upon written notice of termination from the Issuer to
the Trust Administrator if any of the following events shall occur:
(i) the Trust Administrator shall default in the performance of any of
its duties under this Agreement and, after notice of such default, shall not
cure such default within ten days (or, if such default cannot be cured in such
time, shall not give within ten days such assurance of cure as shall be
reasonably satisfactory to the Issuer); or
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(ii) a court having jurisdiction in the premises shall (x) enter a
decree or order for relief, which decree or order shall not have been vacated
within 60 days, in respect of the Trust Administrator in any involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or (y) appoint a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for the Trust Administrator or any
substantial part of its property, or (z) order the winding-up or liquidation of
the Trust Administrator's affairs; or
(iii) the Trust Administrator shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or similar official for
the Trust Administrator or any substantial part of its property, shall consent
to the taking of possession by any such official of any substantial part of its
property, shall make any general assignment for the benefit of creditors or
shall fail generally to pay its debts as they become due.
The Trust Administrator agrees that if any of the events specified in
clauses (ii) or (iii) of this Section 7.09(c) shall occur, it shall give written
notice thereof to the Issuer and the Indenture Trustee within seven days after
the occurrence of such event.
(d) No resignation or removal of the Trust Administrator pursuant to this
Section shall be effective until (i) a successor Trust Administrator shall have
been appointed by the Issuer in accordance with the Trust Agreement and (ii)
such successor Trust Administrator shall have agreed in writing to be bound by
the terms of this Agreement in the same manner as the Trust Administrator is
bound hereunder. If a successor Trust Administrator does not take office within
60 days after the retiring Trust Administrator resigns or is removed, the
resigning or removed Trust Administrator or the Issuer may petition any court of
competent jurisdiction for the appointment of a successor Trust Administrator.
(e) The appointment of any successor Trust Administrator shall be effective
only after receipt of a letter from each Rating Agency to the effect that such
proposed appointment will not cause a reduction or withdrawal of the then
current ratings of the Notes.
(f) Subject to Sections 7.09(d) and 7.09(e) above, the Trust Administrator
acknowledges that upon the appointment of a successor Master Servicer pursuant
to Section 8.01, the Trust Administrator shall immediately resign and such
successor Master Servicer shall automatically become the Trust Administrator
under this Agreement. Any such successor Master Servicer shall be required to
agree to assume the duties of the Trust Administrator under the terms and
conditions of this Agreement and the other Operative Agreements in its
acceptance of appointment as successor Master Servicer.
Section 7.10. Action upon Termination, Resignation or Removal of the Trust
Administrator. Promptly upon the effective date of termination of this Agreement
or the resignation or removal of the Trust Administrator pursuant to Section
7.09 hereof, the Trust Administrator shall be entitled to be paid all
reimbursable expenses, including any reasonable out-of-pocket attorneys' fees,
accruing to it to the date of such termination, resignation or removal. The
Trust Administrator shall forthwith upon such termination pursuant to Section
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7.09 deliver to the successor Trust Administrator all property and documents of
or relating to the Collateral then in the custody of the Trust Administrator, or
if this Agreement has been terminated, to the Depositor. In the event of the
resignation or removal of the Trust Administrator pursuant to Section 7.09, the
Trust Administrator shall cooperate with the Issuer and take all reasonable
steps requested to assist the Issuer in making an orderly transfer of the duties
of the Trust Administrator.
ARTICLE VIII
MASTER SERVICER EVENTS OF DEFAULT
Section 8.01. Master Servicer Events of Default; Indenture Trustee To Act;
Appointment of Successor.
(a) The occurrence of any one or more of the following events shall
constitute a "Master Servicer Event of Default":
(i) Any failure by the Master Servicer to furnish to the Trust
Administrator the Mortgage Loan data sufficient to prepare the reports described
in Section 5.09(a) which continues unremedied for a period of one (1) Business
Day after the date upon which written notice of such failure shall have been
given to such Master Servicer by the Indenture Trustee or the Trust
Administrator or to such Master Servicer and the Indenture Trustee by the
Holders of not less than 25% of the Class Principal Amount of each Class of
Notes affected thereby; 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 Agreement which continues
unremedied for a period of 30 days after 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 Indenture Trustee or the Trust Administrator or to the
Master Servicer and the Indenture Trustee by the Majority Noteholders; or
(iii) A decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Master Servicer, and such decree or
order shall have remained in force undischarged or unstayed for a period of 60
days or any Rating Agency reduces or withdraws or threatens to reduce or
withdraw the rating of the Notes because of the financial condition or loan
servicing capability of such Master Servicer; 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, voluntary liquidation or similar
proceedings of or relating to the Master Servicer or of or relating to all or
substantially all of its property; or
(v) The Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage of any
applicable insolvency or
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reorganization statute, make an assignment for the benefit of its creditors or
voluntarily suspend payment of its obligations; or
(vi) The Master Servicer shall be dissolved, or shall dispose of all
or substantially all of its assets, or consolidate with or merge into another
entity or shall permit another entity to consolidate or merge into it, such that
the resulting entity does not meet the criteria for a successor servicer as
specified in Section 5.26 hereof; or
(vii) If a representation or warranty set forth in Section 5.01 hereof
shall prove to be incorrect as of the time made in any respect that materially
and adversely affects the interests of the Noteholders, and the circumstance or
condition in respect of which such representation or warranty was incorrect
shall not have been eliminated or cured within 30 days after the date on which
written notice of such incorrect representation or warranty shall have been
given to the Master Servicer by the Indenture Trustee or the Trust
Administrator, or to the Master Servicer and the Indenture Trustee by the
Majority Noteholders; or
(viii) A sale or pledge of any of the rights of the Master Servicer
hereunder or an assignment of this Agreement by the Master Servicer or a
delegation of the rights or duties of the Master Servicer hereunder shall have
occurred in any manner not otherwise permitted hereunder and without the prior
written consent of the Indenture Trustee and the Majority Noteholders; or
(ix) The Master Servicer has notice or actual knowledge that the
Servicer at any time is not either an FNMA- or FHLMC- approved Seller/Servicer,
and the Master Servicer has not terminated the rights and obligations of such
Servicer under this Agreement and replaced the Servicer with an FNMA- or
FHLMC-approved servicer within 60 days of the date the Master Servicer receives
such notice or acquires such actual knowledge; or
(x) Any failure of the Master Servicer to remit to the Trust
Administrator any Advance required to be made to the Trust Administrator for the
benefit of Noteholders under the terms of this Agreement, which failure
continues unremedied as of the close of business on the Business Day prior to a
Payment Date.
If a Master Servicer Event of Default described in clauses (i) through (ix)
of this Section 8.01 shall occur, then, in each and every case, subject to
applicable law, so long as any such Master Servicer Event of Default shall not
have been remedied within any period of time prescribed by this Section 8.01,
the Indenture Trustee, by notice in writing to the Master Servicer may, and
shall, if so directed by the Majority Noteholders, terminate all of the rights
and obligations of the Master Servicer hereunder and in and to the Mortgage
Loans and the proceeds thereof. If a Master Servicer Event of Default described
in clause (x) of this Section 8.01 shall occur, then, in each and every case,
subject to applicable law, so long as such Master Servicer Event of Default
shall not have been remedied within the time period prescribed by clause (x) of
this Section 8.01, the Indenture Trustee, by notice in writing to the Master
Servicer, shall promptly terminate all of the rights and obligations of the
Master Servicer hereunder and in and to the Mortgage Loans and the proceeds
thereof. On or after the receipt by the Master Servicer of such written notice,
all authority and power of the Master Servicer, and only in its capacity as
Master Servicer under this Agreement, whether with respect to the Mortgage Loans
or otherwise,
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shall pass to and be vested in the Indenture Trustee pursuant to and under the
terms of this Agreement; and the Indenture Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the defaulting Master Servicer as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents or
otherwise. The defaulting Master Servicer agrees to cooperate with the Indenture
Trustee in effecting the termination of the defaulting Master Servicer's
responsibilities and rights hereunder as Master Servicer including, without
limitation, notifying the Servicers of the assignment of the master servicing
function and providing the Indenture Trustee or its designee all documents and
records in electronic or other form reasonably requested by it to enable the
Indenture Trustee or its designee to assume the defaulting Master Servicer's
functions hereunder and the transfer to the Indenture Trustee for administration
by it of all amounts which shall at the time be or should have been deposited by
the defaulting Master Servicer in the Collection Account maintained by such
defaulting Master Servicer and any other account or fund maintained with respect
to the Notes or thereafter received with respect to the Mortgage Loans. The
Master Servicer being terminated shall bear all reasonable out-of-pocket costs
of a master servicing transfer, including but not limited to those of the
Indenture Trustee, legal fees and expenses, accounting and financial consulting
fees and expenses, and costs of amending the Agreement, if necessary.
The Indenture Trustee shall be entitled to be reimbursed from the Master
Servicer (or by the Trust Estate, if the Master Servicer is unable to fulfill
its obligations hereunder) for all costs associated with the transfer of
servicing from the predecessor Master Servicer, including, without limitation,
any 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 the servicing data or otherwise to enable the Indenture
Trustee to master service the Mortgage Loans properly and effectively. If the
terminated Master Servicer does not pay such reimbursement within thirty (30)
days of its receipt of an invoice therefore, such reimbursement shall be an
expense of the Trust Estate and the Indenture Trustee shall be entitled to
withdraw such reimbursement from amounts on deposit in the Collection Account
pursuant to Section 5.07(c); provided that the terminated Master Servicer shall
reimburse the Trust Estate for any such expense incurred by the Trust Estate;
and provided, further, that the Indenture Trustee shall decide whether and to
what extent it is in the best interest of the Noteholders to pursue any remedy
against any party obligated to make such reimbursement.
Notwithstanding the termination of its activities as Master Servicer, each
terminated Master Servicer shall continue to be entitled to reimbursement to the
extent provided in Section 5.08 to the extent such reimbursement relates to the
period prior to such Master Servicer's termination.
If any Master Servicer Event of Default shall occur, of which a Responsible
Officer of the Indenture Trustee has actual knowledge, the Indenture Trustee
shall promptly notify each Rating Agency of the nature and extent of such Master
Servicer Event of Default. The Trust Administrator or the Master Servicer shall
immediately give written notice to the Indenture Trustee upon the Master
Servicer's failure to remit Advances on the date specified herein.
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(b) On and after the time the Master Servicer receives a notice of
termination from the Indenture Trustee pursuant to Section 8.01(a) or the
Indenture Trustee receives the resignation of the Master Servicer evidenced by
an Opinion of Counsel pursuant to Section 5.27, the Indenture Trustee, unless
another master servicer shall have been appointed, shall be the successor in all
respects to the Master Servicer in its capacity as such under this Agreement and
the transactions set forth or provided for herein and shall have all the rights
and powers and be subject to all the responsibilities, duties and liabilities
relating thereto and arising thereafter placed on the Master Servicer hereunder,
including the obligation to make Advances; provided, however, that any failure
to perform such duties or responsibilities caused by the Master Servicer's
failure to provide information required by this Agreement shall not be
considered a default by the Indenture Trustee hereunder. In addition, the
Indenture Trustee shall have no responsibility for any act or omission of the
Master Servicer prior to the issuance of any notice of termination and shall
have no liability relating to the representations and warranties of the Master
Servicer set forth in Section 5.01. In the Indenture Trustee's capacity as such
successor, the Indenture Trustee shall have the same limitations on liability
herein granted to the Master Servicer. As compensation therefor, the Indenture
Trustee shall be entitled to receive all compensation payable to the Master
Servicer under this Agreement.
(c) Notwithstanding the above, the Indenture Trustee may, if it shall be
unwilling to continue to so act, or shall, if it is unable to so act, appoint,
or petition a court of competent jurisdiction to appoint, any established
housing and home finance institution servicer, master servicer, servicing or
mortgage servicing institution having a net worth of not less than $15,000,000
and meeting such other standards for a successor master servicer as are set
forth in this Agreement, as the successor to such Master Servicer in the
assumption of all of the responsibilities, duties or liabilities of a master
servicer, like the Master Servicer. Such successor Master Servicer may be an
Affiliate of the Indenture Trustee; provided, however, that, unless such
Affiliate meets the net worth requirements and other standards set forth herein
for a successor master servicer, the Indenture Trustee, in its individual
capacity shall agree, at the time of such designation, to be and remain liable
to the Issuer and the Indenture Trustee for such Affiliate's actions and
omissions in performing its duties hereunder. In connection with such
appointment and assumption, the Indenture Trustee may make such arrangements for
the compensation of such successor out of payments on the Mortgage Loans as it
and such successor shall agree; provided, however, that no such compensation
shall be in excess of that permitted to the Master Servicer hereunder. The
Indenture Trustee and such successor shall take such actions, consistent with
this Agreement, as shall be necessary to effectuate any such succession and may
make other arrangements with respect to the servicing to be conducted hereunder
which are not inconsistent herewith. The Master Servicer shall cooperate with
the Indenture Trustee and any successor master servicer in effecting the
termination of the Master Servicer's responsibilities and rights hereunder
including, without limitation, notifying Servicers of the assignment of the
master servicing functions and providing the Indenture Trustee and successor
master servicer, as applicable, all documents and records in electronic or other
form reasonably requested by it to enable it to assume the Master Servicer's
functions hereunder and the transfer to the Indenture Trustee or such successor
master servicer, as applicable, all amounts or investment property which shall
at the time be or should have been deposited by the Master Servicer in the
Collection Account and any other account or fund maintained with respect to the
Notes or thereafter be received with respect to the Mortgage Loans. Neither the
Indenture Trustee nor any other successor master servicer shall be deemed to be
in default hereunder by
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reason of any failure to make, or any delay in making, any payment hereunder or
any portion thereof caused by (i) the failure of the Master Servicer to deliver,
or any delay in delivering, cash, documents or records to it, (ii) the failure
of the Master Servicer to cooperate as required by this Agreement, (iii) the
failure of the Master Servicer to deliver the Mortgage Loan data to the
Indenture Trustee as required by this Agreement or (iv) restrictions imposed by
any regulatory authority having jurisdiction over the Master Servicer.
Section 8.02. Additional Remedies of Indenture Trustee Upon Event of
Default. During the continuance of any Master Servicer Event of Default, so long
as such Master Servicer Event of Default shall not have been remedied, the
Indenture Trustee, in addition to the rights specified in Section 8.01, shall
have the right, in its own name and as trustee of an express trust, to take all
actions now or hereafter existing at law, in equity or by statute to enforce its
rights and remedies and to protect the interests, and enforce the rights and
remedies, of the Noteholders (including the institution and prosecution of all
judicial, administrative and other proceedings and the filings of proofs of
claim and debt in connection therewith). Except as otherwise expressly provided
in this Agreement, no remedy provided for by this Agreement shall be exclusive
of any other remedy, and each and every remedy shall be cumulative and in
addition to any other remedy, and no delay or omission to exercise any right or
remedy shall impair any such right or remedy or shall be deemed to be a waiver
of any Event of Default.
Section 8.03. Waiver of Defaults. The Majority Noteholders may, on behalf
of all Noteholders, waive any default or Master Servicer Event of Default by the
Master Servicer in the performance of its obligations hereunder, except that a
default in the making of any required deposit to the Collection Account that
would result in a failure of the Indenture Trustee to make any required payment
of principal of or interest on the Notes may only be waived with the consent of
100% of the affected Noteholders. Upon any such waiver of a past default, such
default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon except to the extent expressly so waived.
Section 8.04. Notification to Holders. Upon termination of the Master
Servicer or appointment of a successor to the Master Servicer, in each case as
provided herein, the Indenture Trustee shall promptly mail notice thereof by
first class mail to the Noteholders at their respective addresses appearing on
the applicable Register. The Indenture Trustee shall also, within 45 days after
the occurrence of any Master Servicer Event of Default known to the Indenture
Trustee, give written notice thereof to Noteholders, unless such Event of
Default shall have been cured or waived prior to the issuance of such notice and
within such 45-day period.
Section 8.05. Directions by Noteholders and Duties of Indenture Trustee
During Master Servicer Event of Default. During the continuance of any Master
Servicer Event of Default, the Majority Noteholders may direct the time, method
and place of conducting any proceeding for any remedy available to the Indenture
Trustee, or exercising any trust or power conferred upon the Indenture Trustee,
under this Agreement; provided, however, that the Indenture Trustee shall be
under no obligation to pursue any such remedy, or to exercise any of the trusts
or powers vested in it by this Agreement (including, without limitation, (i) the
conducting or defending of any administrative action or litigation hereunder or
in relation hereto and (ii) the terminating of
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the Master Servicer or any successor master servicer from its rights and duties
as master servicer hereunder) at the request, order or direction of any of the
Noteholders, unless such Noteholders shall have offered to the Indenture Trustee
reasonable security or indemnity against the cost, expenses and liabilities
which may be incurred therein or thereby; and, provided further, that, the
Indenture Trustee shall have the right to decline to follow any such direction
if the Indenture Trustee, in accordance with an Opinion of Counsel, determines
that the action or proceeding so directed may not lawfully be taken or if the
Indenture Trustee in good faith determines that the action or proceeding so
directed would involve it in personal liability for which it is not indemnified
to its satisfaction or be unjustly prejudicial to the non-assenting Noteholders.
Section 8.06. Action Upon Certain Failures of the Master Servicer and Upon
Master Servicer Event of Default. In the event that a Responsible Officer of the
Indenture Trustee or the Trust Administrator shall have actual knowledge of any
action or inaction of the Master Servicer that would become a Master Servicer
Event of Default upon the Master Servicer's failure to remedy the same after
notice, the Indenture Trustee or Trust Administrator, as applicable, shall give
notice thereof to the Master Servicer.
Section 8.07. Preparation of Reports.
(a) The Depositor shall prepare or cause to be prepared the initial current
report on Form 8-K. Thereafter, within 15 days after each Payment Date, the
Trust Administrator shall, in accordance with industry standards customary for
securities similar to the Notes as required by the Exchange Act and the rules
and regulations of the Securities and Exchange Commission (the "Commission"),
file with the Commission via the Electronic Data Gathering and Retrieval System
(XXXXX), a Form 8-K with a copy of the statement to the Noteholders for such
Payment Date as an exhibit thereto. Prior to January 30, 2006, the Trust
Administrator shall, in accordance with industry standards applicable to the
Notes, file a Form 15 Suspension Notification with respect to the Issuer, if
applicable. Prior to March 31, 2006, and prior to March 31 in each succeeding
year so long as a Form 15 Suspension Notification has not been filed for the
prior calendar year, the Trust Administrator shall file (and the Master Servicer
will execute) a Form 10-K, in substance conforming to industry standards
applicable to the Notes, with respect to the Issuer. The Form 10-K shall include
the certification required pursuant to Rule 13a-14 under the Exchange Act, as
amended (the "Form 10-K Certification," which Form 10-K Certification shall be
signed by the Master Servicer). The Indenture Trustee and the Trust
Administrator shall have no liability for any delay in filing the Form 10-K due
to the failure of such party to timely sign the Form 10-K or Form 10-K
Certification. The Depositor hereby grants to the Master Servicer and the Trust
Administrator a limited power of attorney to execute and file each such document
on behalf of the Depositor. Such power of attorney shall continue until either
the earlier of (i) receipt by the Master Servicer and the Trust Administrator
from the Depositor of written termination of such power of attorney and (ii) the
termination of the Issuer. The Depositor agrees to promptly furnish to the Trust
Administrator, from time to time upon request, such further information,
reports, and financial statements within its control related to this Agreement
and the Mortgage Loans as the Depositor reasonably deems appropriate to prepare
and file all necessary reports with the Commission. The Trust Administrator
shall have no responsibility to file any items other than those specified in
this section.
139
(b) Each person (including their officers or directors) that signs any Form
10-K Certification shall be entitled to indemnification from the Trust Estate
for any liability or expense incurred by it in connection with such
certification, other than any liability or expense attributable to such Person's
own bad faith, negligence or willful misconduct. The provisions of this
subsection shall survive any termination of this Agreement and the resignation
or removal of such Person.
(c) To the extent that, following the Closing Date, the contents of Forms
8-K, 10-K or other Forms required by the Exchange Act and the Rules and
Regulations of the Commission and the time by which such Forms are required to
be filed, differs from the provisions of this Agreement, the parties hereto
hereby agree that each shall reasonably cooperate to amend the provisions of
this Agreement (in accordance with Section 10.03) in order to comply with such
amended reporting requirements and such amendment of this Agreement. Any such
amendment may result in the reduction of the reports filed by the Servicer under
the Exchange Act. Notwithstanding the foregoing, neither the Master Servicer nor
the Trust Administrator shall be obligated to enter into any amendment pursuant
to this Section that adversely affects its obligations and immunities under this
Agreement.
ARTICLE IX
TERMINATION
Section 9.01. Termination. The respective obligations and responsibilities
of the Master Servicer, the Trust Administrator, the Depositor, the Issuer, the
Servicer, the Subservicer and the Indenture Trustee created hereby (other than
obligations expressly stated to survive the termination of the Trust) shall
terminate on the day after the day on which the Notes are paid in full
(including payment pursuant to Section 9.02 below) (the "Termination Date").
Section 9.02. Termination Prior to Maturity Date; and Optional Redemption.
On any Payment Date on which the Aggregate Collateral Balance at the beginning
of the Due Period related to that Payment Date is less than 20% of the sum of
the Aggregate Collateral Balance as of the Closing Date, the Servicer acting
directly or through one or more Affiliates, shall have the option to purchase
the Mortgage Loans, any REO Property and any other property remaining in the
Trust for a price equal to the Redemption Price. The Master Servicer, the
Servicer and the Subservicer will be reimbursed from the Redemption Price for
any outstanding Advances, Servicing Advances and unpaid Servicing Administration
Fees and other amounts not previously reimbursed pursuant to the provisions of
this Agreement, as applicable, and the Trust Administrator, the Owner Trustee
and the Indenture Trustee shall be reimbursed for any previously unreimbursed
amounts for which they are entitled to be reimbursed pursuant to this Agreement,
the Indenture or the Trust Agreement, as applicable. If such option is
exercised, the Trust will be terminated resulting in a mandatory redemption of
the Notes. The Servicer shall deliver written notice of its intention to
exercise such option to the Issuer, the Trust Administrator, the Indenture
Trustee and the Master Servicer not less than 15 days prior to the applicable
Payment Date. If the Servicer fails to exercise such option prior to the Stepup
Date, the Interest Rate for each Class of Notes will be increased as set forth
in the table in the Preliminary Statement herein beginning on the Stepup Date
and for each Payment Date thereafter. The Servicer shall deliver written notice
of its intention to exercise such option to the
140
Issuer, the Indenture Trustee and the Master Servicer not less than ten days
prior to the applicable Payment Date.
In connection with such purchase, the Servicer shall remit to the Trust
Administrator all amounts then on deposit in the Custodial Account in respect of
the related Total Remittance Amount for deposit to the Collection Account, which
deposit shall be deemed to have occurred immediately preceding such purchase.
Promptly following any such purchase pursuant to paragraph (a) of this
Section, the Indenture Trustee or the applicable Custodian shall release the
Mortgage Files to the purchaser of such Mortgage Loans pursuant to this Section
10.02, or otherwise upon its order.
Section 9.03. Certain Notices upon Final Payment. The Master Servicer or
the Trust Administrator, as applicable, shall give the Issuer, the Indenture
Trustee, the Owner Trustee, each Rating Agency, each Noteholder and the
Depositor at least 30 days' prior written notice of the date on which the Trust
is expected to terminate in accordance with Section 9.01, or the date on which
the Notes will be redeemed in accordance with Section 9.02. Not later than the
fifth Business Day in the Due Period in which the final payment in respect to
the Notes is payable to the Noteholders, the Indenture Trustee shall mail to the
Noteholders a notice specifying the procedures with respect to such final
payment. The Trust Administrator on behalf of the Indenture Trustee shall give a
copy of such notice to each Rating Agency at the time such notice is given to
Noteholders. Following the final payment thereon, such Notes shall become void,
no longer outstanding and no longer evidence any right or interest in the
Mortgage Loans, the Mortgage Files or any proceeds of the foregoing.
Section 9.04. Beneficiaries. This Agreement will inure to the benefit of
and be binding upon the parties hereto, the Noteholders, and their respective
successors and permitted assigns. No other Person will have any right or
obligation hereunder. Notwithstanding anything to the contrary herein, the Swap
Counterparty is an express third party beneficiary of this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01. Binding Nature of Agreement; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 10.02. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or written,
of any nature whatsoever with respect to the subject matter hereof. The express
terms hereof control and supersede any course of performance and/or usage of the
trade inconsistent with any of the terms hereof.
Section 10.03. Amendment.
141
(a) This Agreement may be amended from time to time by the parties hereto
and the Holder of the Ownership Certificate and with the prior written consent
of the Swap Counterparty (but only to the extent such amendment materially
adversely affects the amounts, priority or timing of payments under the Swap
Agreement and for so long as the Swap Agreement is in effect), without notice to
or the consent of any of the Holders of the Notes, (i) to cure any ambiguity,
(ii) to cause the provisions herein to conform to or be consistent with or in
furtherance of the statements made with respect to the Notes, the Trust or this
Agreement in any Offering Document, or to correct or supplement any provision
herein which may be inconsistent with any other provisions herein or in any
other Operative Agreement, to make any other provisions with respect to matters
or questions arising under this Agreement, (iii) to make any other provision
with respect to matters or questions arising under this Agreement or (iv) to
add, delete, or amend any provisions to the extent necessary or desirable to
comply with any requirements imposed by the Code or ERISA and applicable
regulations. No such amendment effected pursuant to the preceding sentence
shall, as evidenced by an Opinion of Counsel (which shall be an expense of the
party requesting such amendment and shall not be an expense of the Trust),
adversely affect the status of the Notes as debt for federal income tax purposes
and will not result in an entity level tax on the Trust nor shall such amendment
effected pursuant to clause (iii) of such sentence adversely affect in any
material respect the interests of any Holder, nor shall such amendment be with
respect to Section 6.02 or the definitions of "Interest Funds," "Principal
Funds" or "Monthly Excess Cashflow" without the prior written consent of the
Swap Counterparty; provided, however, that all outstanding payments under the
Swap Agreement have been made. Prior to entering into any amendment without the
consent of Holders pursuant to this paragraph, the Indenture Trustee may require
an Opinion of Counsel (at the expense of the party requesting such amendment) to
the effect that such amendment is permitted under this paragraph. Any such
amendment shall be deemed not to adversely affect in any material respect any
Holder, if the Indenture Trustee receives written confirmation from each Rating
Agency that such amendment will not cause such Rating Agency to reduce the then
current rating assigned to the Notes.
(b) This Agreement may also be amended from time to time by the parties
hereto and with the prior written consent of the Swap Counterparty (but only to
the extent such amendment materially adversely affects the amounts, priority or
timing of payments under the Swap Agreement and for so long as the Swap
Agreement is in effect), with the consent of the Noteholders representing
66 2/3% Voting Interests for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders; provided, however, that no
such amendment may (i) reduce in any manner the amount of, or delay the timing
of, payments which are required to be paid on any Class of Notes or under the
Swap Agreement, without the consent of the Noteholders of such Class or the Swap
Counterparty, respectively, or (ii) reduce the aforesaid percentages of Class
Principal Amount of Notes, the Holders of which are required to consent to any
such amendment without the consent of the Holders of 100% of the Class Principal
Amount of the Notes. For purposes of this paragraph, references to "Holder" or
"Holders" shall be deemed to include, in the case of Book-Entry Notes, the
related Note Owners; provided further, however, that no such amendment may be
made with respect to Section 6.02(b) or (c) or the definition of "Interest
Funds" without the prior written consent of the Swap Counterparty but only for
so long as the Swap Agreement is in effect.
142
(c) Promptly after the execution of any such amendment, the Indenture
Trustee shall furnish written notification of the substance of such amendment to
each Holder, the Depositor and to each Rating Agency.
(d) It shall not be necessary for the consent of Holders under this Section
10.03 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of the execution
thereof by Holders shall be subject to such reasonable regulations as the
Indenture Trustee may prescribe.
Section 10.04. Acts of Noteholders. Except as otherwise specifically
provided herein, whenever Noteholder action, consent or approval is required
under this Agreement, such action, consent or approval shall be deemed to have
been taken or given on behalf of, and shall be binding upon, all Noteholders if
the Majority Noteholders agree to take such action or give such consent or
approval.
Section 10.05. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement, or a memorandum thereof if permitted under
applicable law, is subject to recordation in all appropriate public offices for
real property records in all of the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Depositor on direction and at the expense of Holders of
not less than 66-2/3% of the Note Principal Balance of the Notes and of the
Holder of the Ownership Certificate requesting such recordation, but only when
accompanied by an Opinion of Counsel to the effect that such recordation
materially and beneficially affects the interests of the Noteholders, or is
necessary for the administration or servicing of the Mortgage Loans.
Section 10.06. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED
IN NEW YORK (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW
WHICH SHALL APPLY HERETO).
Section 10.07. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed by
overnight courier, addressed as follows or delivered by facsimile (or such other
address as may hereafter be furnished to the other party by like notice):
(i) if to the Seller:
Fieldstone Investment Corporation
00000 Xxxxxx Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Senior Vice President--Investment Portfolio
Telephone: (000) 000-0000
143
Facsimile: (000) 000-0000
with a copy to:
Fieldstone Mortgage Investment Corporation
00000 Xxxxxx Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Legal Department
(ii) if to the Servicer:
Fieldstone Servicing Corp.
00000 Xxxxxx Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Senior Vice President-- Investment Portfolio
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(iii) if to the Subservicer:
JPMorgan Chase Bank, National Association
000 Xxxx Xxxxxx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000
(iv) if to the Master Servicer:
Xxxxx Fargo Bank, N.A.
P.O. Box 98
Columbia, Maryland 21046
Attention: Fieldstone 2005-3
(or in the case of overnight deliveries,
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000)
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(v) if to the Trust Administrator:
Xxxxx Fargo Bank, N.A.
P.O. Box 98
Columbia, Maryland 21046
Attention: Fieldstone 2005-3
(or in the case of overnight deliveries,
0000 Xxx Xxxxxxxxx Xxxx
144
Columbia, Maryland 21045)
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(vi) if to the Indenture Trustee:
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
(vii) if to the Depositor:
Fieldstone Mortgage Investment Corporation
00000 Xxxxxx Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(viii) if to the Issuer:
Fieldstone Mortgage Investment Trust, Series 2005-3
c/o U.S. Bank Trust National Association
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
(ix) if to the Swap Counterparty:
Bank of America, N.A.
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxx
All demands, notices and communications to a party hereunder shall be in
writing and shall be deemed to have been duly given when delivered to such party
at the relevant address, facsimile number or electronic mail address set forth
above or at such other address, facsimile number or electronic mail address as
such party may designate from time to time by written notice in accordance with
this Section 10.07.
Section 10.08. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way
145
affect the validity or enforceability of the other provisions of this Agreement
or of the Notes or the rights of the Holders thereof.
Section 10.09. Indulgences; No Waivers. Neither the failure nor any delay
on the part of a party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
Section 10.10. Headings Not To Affect Interpretation. The headings
contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.
Section 10.11. Benefits of Agreement. Nothing in this Agreement or in the
Notes, express or implied, shall give to any Person, other than the parties to
this Agreement and their successors hereunder and the Holders of the Notes, any
benefit or any legal or equitable right, power, remedy or claim under this
Agreement. Notwithstanding the foregoing, the Owner Trustee and the Swap
Counterparty shall each be an express third-party beneficiary of this Agreement.
Section 10.12. Special Notices to the Rating Agencies.
(a) The Seller shall give prompt notice to each Rating Agency and the Swap
Counterparty of the occurrence of any of the following events of which it has
notice:
(i) any amendment to this Agreement pursuant to Section 10.03; and
(ii) the making of a final payment hereunder.
(b) All notices to the Rating Agencies provided for by this Section shall
be in writing and sent by first class mail, telecopy or overnight courier, as
follows:
if to Fitch:
Fitch Ratings
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax no.: (000) 000-0000
if to Moody's:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax no.: (000) 000-0000
146
if to S&P:
Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax no.: (000) 000-0000
(c) The Trust Administrator shall make available to the Rating Agencies
each report prepared pursuant to Section 5.09.
Section 10.13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute one and the same instrument.
Section 10.14. Execution by the Issuer. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by U.S. Bank Trust National Association, not individually or personally but
solely as Owner Trustee of the Issuer, in the exercise of the powers and
authority conferred and vested in it as trustee, (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 U.S. Bank Trust National Association but is made and intended for
the purpose of binding only the Issuer, (c) nothing herein contained shall be
construed as creating any liability on U.S. Bank Trust National Association,
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 U.S. Bank Trust National Association
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 document.
147
IN WITNESS WHEREOF, the parties hereto have caused their names to be signed
hereto by their respective officers hereunto duly authorized as of the day and
year first above written.
FIELDSTONE MORTGAGE INVESTMENT TRUST,
SERIES 2005-3, as Issuer
By: U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely as Owner
Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
FIELDSTONE MORTGAGE INVESTMENT CORPORATION,
as Depositor
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
HSBC BANK USA, NATIONAL ASSOCIATION, not
in its individual capacity but solely as Indenture
Trustee
By: /s/ Xxxxx Xxxxx
--------------------------------------------------
Name: Xxxxx Xxxxx
Title: Assistant Vice President
XXXXX FARGO BANK, N.A.,
as Trust Administrator and Master Servicer
By: /s/ Xxx Xxxxx
--------------------------------------------------
Name: Xxx Xxxxx
Title: Vice President
I-1
FIELDSTONE SERVICING CORP.,
as Servicer
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxxxx
--------------------------------------------------
Name: Xxxxxxx Xxxxx
Title: Assistant Vice President
FIELDSTONE INVESTMENT CORPORATION, as Seller
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Senior Vice President
I-2
STATE OF MINNESOTA )
: ss.:
COUNTY OF XXXXXX )
On this ___ day of November, 2005, before me, personally appeared Xxxxxxx X.
Xxxxxxxx, known to me to be a Vice President of U.S. Bank Trust National
Association, a National Banking Assoc. that executed the within instrument, and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/ Xxxxx Xxxxxxx
--------------------------------------------------
Notary Public
[NOTARIAL SEAL]
I-3
STATE OF MARYLAND )
: ss.:
COUNTY OF XXXXXX )
On the __ day of November, 2005, before me, personally appeared Xxxx
Xxxxxxx, known to me to be a President of Fieldstone Mortgage Investment
Corporation, a corporation that executed the within instrument and also known to
me to be the person who executed it on behalf of said corporation, and
acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxxx Xxxxx
--------------------------------------------------
Notary Public
[NOTARIAL SEAL]
I-4
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the 18th day of November 2005 before me, a Notary Public in and for said
State, personally appeared Xxxxx Xxxxx, known to me to be a AVP of HSBC Bank
USA, National Association, a national banking association that executed the
within instrument and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxx Xxxxxxx
--------------------------------------------------
Notary Public
[NOTARIAL SEAL]
I-5
STATE OF MARYLAND )
: ss.:
COUNTY OF XXXX XXXXXXX )
On the 23rd day of November, 2005, before me, a Notary Public in and for
the State of Maryland, personally appeared Xxx Xxxxx, known to me to be a Vice
President of Xxxxx Fargo Bank, National Association, the banking association
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------------
Notary Public
[NOTARIAL SEAL]
I-6
STATE OF MARYLAND )
: ss.:
COUNTY OF XXXXXX )
On the __ day of November 2005 before me, a Notary Public in and for said
State, personally appeared Xxxx Xxxxxxx known to me to be a Vice President of
Fieldstone Servicing Corp., a corporation that executed the within instrument
and also known to me to be the person who executed it on behalf of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxxx Xxxxx
--------------------------------------------------
Notary Public
[NOTARIAL SEAL]
I-7
STATE OF CALIFORNIA )
: ss.:
COUNTY OF SAN DIEGO )
On the 18th day of November 2005 before me, a Notary Public in and for said
State, personally appeared Xxxxxxx Xxxxx known to me to be a Assistant Vice
President of JPMorgan Chase Bank, National Association, a national banking
association that executed the within instrument and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------------
Notary Public
[NOTARIAL SEAL]
I-1
STATE OF MARYLAND )
: ss.:
COUNTY OF XXXXXX )
On the __ day of November 2005 before me, a Notary Public in and for said
State, personally appeared Xxxx Xxxxxxx known to me to be a Sr. Vice President
of Fieldstone Servicing Corp., a corporation that executed the within instrument
and also known to me to be the person who executed it on behalf of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ Xxxxxxx Xxxxx
--------------------------------------------------
Notary Public
[NOTARIAL SEAL]
EXHIBIT A-1
FORM OF INITIAL CERTIFICATION
__________________
Date
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Fieldstone Mortgage Investment Corporation
00000 Xxxxxx Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention:
Re: Transfer and Servicing Agreement (the "Transfer and Servicing
Agreement") dated as of November 1, 2005 by and among Fieldstone
Mortgage Investment Corporation, as Depositor, HSBC Bank USA, National
Association, as Indenture Trustee, Xxxxx Fargo Bank, N.A., as Trust
Administrator and Master Servicer, Fieldstone Mortgage Investment
Trust, Series 2005-3, as Issuer, Fieldstone Servicing Corp., as
Servicer, JPMorgan Chase Bank, National Association, as Subservicer,
and Fieldstone Investment Corporation, as Seller
Ladies and Gentlemen:
In accordance with Section 2.02(a) of the Transfer and Servicing Agreement,
subject to review of the contents thereof, the undersigned, as Custodian, hereby
certifies that it has received the documents listed in Section 2.0 1(b) of the
Transfer and Servicing Agreement for each Mortgage File pertaining to each
Mortgage Loan listed on Schedule A, to the Transfer and Servicing Agreement,
subject to any exceptions noted on Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined herein shall
have the respective meanings assigned to them in the Transfer and Servicing
Agreement. This certificate is subject in all respects to the terms of Section
2.02 of the Transfer and Servicing Agreement and the sections cross-referenced
therein.
[Custodian]
By:
------------------------------------
Name:
Title:
A-1
EXHIBIT A-2
FORM OF INTERIM CERTIFICATION
__________________
Date
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Fieldstone Mortgage Investment Corporation
00000 Xxxxxx Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention:
Re: Transfer and Servicing Agreement (the "Transfer and Servicing
Agreement") dated as of November 1, 2005 by and among Fieldstone
Mortgage Investment Corporation, as Depositor, HSBC Bank USA, National
Association, as Indenture Trustee, Xxxxx Fargo Bank, N.A., as Trust
Administrator and Master Servicer, Fieldstone Mortgage Investment
Trust, Series 2005-3, as Issuer, Fieldstone Servicing Corp., as
Servicer, JPMorgan Chase Bank, National Association, as Subservicer,
and Fieldstone Investment Corporation, as Seller
Ladies and Gentlemen:
In accordance with Section 2.02(b) of the Transfer and Servicing Agreement,
the undersigned, as Custodian, hereby certifies that as to each Mortgage Loan
listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full
or listed on Schedule I hereto) it (or its custodian) has received the
applicable documents listed in Section 2.01(b) of the Transfer and Servicing
Agreement.
The undersigned hereby certifies that as to each Mortgage Loan identified
on the Mortgage Loan Schedule, other than any Mortgage Loan listed on Schedule I
hereto, it has reviewed the documents identified above and has determined that
each such document appears regular on its face and appears to relate to the
Mortgage Loan identified in such document.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Transfer and Servicing Agreement. This
certificate is qualified in all respects by the terms of said Transfer and
Servicing Agreement including, but not limited to, Section 2.02(b).
[Custodian]
By:
------------------------------------
Name:
Title:
A-2-1
EXHIBIT A-3
FORM OF FiNAL CERTIFICATION
__________________
Date
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Fieldstone Mortgage Investment Corporation
00000 Xxxxxx Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention:
Re: Transfer and Servicing Agreement (the "Transfer and Servicing
Agreement") dated as of November 1, 2005 by and among Fieldstone
Mortgage Investment Corporation, as Depositor, HSBC Bank USA, National
Association, as Indenture Trustee, Xxxxx Fargo Bank, N.A., as Trust
Administrator and Master Servicer, Fieldstone Mortgage Investment
Trust, Series 2005-3, as Issuer, Fieldstone Servicing Corp., as
Servicer, JPMorgan Chase Bank, National Association, as Subservicer,
and Fieldstone Investment Corporation, as Seller
Ladies and Gentlemen:
In accordance with Section 2.02(d) of the Transfer and Servicing Agreement,
the undersigned, as Custodian on behalf of the Indenture Trustee, hereby
certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or listed on Schedule I hereto) it
(or its custodian) has received the applicable documents listed in Section
2.01(b) of the Transfer and Servicing Agreement.
The undersigned hereby certifies that as to each Mortgage Loan identified
on the Mortgage Loan Schedule, other than any Mortgage Loan listed on Schedule I
hereto, it has reviewed the documents listed above and has determined that each
such document appears to be complete and, based on an examination of such
documents, the information set forth in the Mortgage Loan Schedule is correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Transfer and Servicing Agreement. This
certificate is qualified in all respects by the terms of said Transfer and
Servicing Agreement.
[Custodian]
By:
------------------------------------
Name:
Title:
A-3-1
EXHIBIT A-4
FORM OF ENDORSEMENT
Pay to the order of HSBC Bank USA, National Association, as indenture
trustee (the "Indenture Trustee") under the Transfer and Servicing Agreement
dated as of November 1, 2005 by and among Fieldstone Mortgage Investment
Corporation, as Depositor, the Indenture Trustee, Xxxxx Fargo Bank, N.A., as
Trust Administrator and Master Servicer, Fieldstone Mortgage Investment Trust,
Series 2005-3, as Issuer, Fieldstone Servicing Corp., as Servicer, JPMorgan
Chase Bank, National Association, as Subservicer, and Fieldstone Investment
Corporation, as Seller, relating to Fieldstone Mortgage Investment Trust, Series
2005-3 Mortgage-Backed Notes, without recourse.
----------------------------------------
[current signatory on note]
By:
------------------------------------
Name:
Title:
A-4-1
EXHIBIT B-1
FORM OF SWAP AGREEMENT
B-1-1
EXHIBIT B-2
[RESERVED]
B-2-1
EXHIBIT C
FORM OF LOST NOTE AFFIDAVIT
I, _____________________________, being duly sworn, do hereby state under
oath that:
1. I, as __________________ of ___________________________ (the "Company"), am
authorized to make this Affidavit on behalf of the Company.
2. The Company received the following described mortgage note (the "Note"):
Loan No.:
Xxxxxxxx(s):
Original Principal Amount:
from the Borrower(s) to secure a Deed of Trust/Mortgage (the "Deed of
Trust/Mortgage") dated ______________ from the Borrower(s) to the Company.
3. The Company represents and warrants that it has not canceled, altered,
assigned, or hypothecated the Note.
4. The original Note, a true and correct copy of which is attached hereto, was
not located after a thorough and diligent search, and based thereon, the
Company declares the Note lost.
5. This Affidavit is intended to be relied on by the Indenture Trustee and its
successors and assigns.
6. The Company has assigned all of its right, title and interest in the Note
and the Deed of Trust/Mortgage to the Indenture Trustee and agrees
immediately and without further consideration to surrender the original
Note to the Indenture Trustee or its successor and assigns if such original
Note ever comes into the Company's possession, custody, or power.
7. The Company further agrees to indemnify and hold harmless the Indenture
Trustee and its successors and assigns from any and all loss, liability,
costs, damages, reasonable attorneys' fees and expenses without limitation
in connection with or arising out of the representations, warranties, and
agreements made in this Affidavit and any claim of any nature made by any
entity with respect to the Note.
8. The Company agrees and acknowledges that this Affidavit may be presented as
evidence of the Note, whether in any proceeding or action with respect
thereto or otherwise, and hereby authorizes such use of this Affidavit.
9. The representations, warranties, and agreements herein shall bind the
undersigned and its successors and assigns, and shall inure to the benefit
of the Indenture Trustee and its successors and assigns.
C-1
EXECUTED THIS ______ day of ____________, 200_ on behalf of _______________
----------------------------
By:
Its:
STATE OF __________________ )
) ss:
COUNTY OF _________________ )
On the _____ day of ______________, 200___, before me,
_____________________, a notary public in and for said State, personally
appeared ___________________________ personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is subscribed to
the within instrument and acknowledged to me that he/she executed the same in
his/her authorized capacity, and that by his/her signature on the instrument,
the person, or the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
---------------------
Notary Public
My Commission Expires:
C-2
EXHIBIT D
CUSTODIAL AGREEMENT
D-1
EXHIBIT E
CUSTODIAL ACCOUNT LETTER AGREEMENT
________________________
To: ____________________
____________________
____________________
(the "Depository")
As Subservicer under the Transfer and Servicing Agreement dated as of
November 1, 2005 by and among Fieldstone Mortgage Investment Corporation, as
Depositor, you, as Indenture Trustee, Xxxxx Fargo Bank, N.A., as Trust
Administrator and Master Servicer, Fieldstone Mortgage Investment Trust, Series
2005-3, as Issuer, Fieldstone Servicing Corp., as Servicer, JPMorgan Chase Bank,
National Association, as Subservicer and Fieldstone Investment Corporation, as
Seller (the "Transfer and Servicing Agreement"), we hereby authorize and request
you to establish an account as a Custodial Account pursuant to Section 3.03 of
the Transfer and Servicing Agreement, designated as "Xxxxx Fargo Bank, N.A. in
trust for HSBC Bank USA, National Association, as Indenture Trustee for the
Fieldstone Mortgage Investment Trust, Series 2005-3." All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Subservicer. This letter is submitted to you in duplicate. Please execute and
return one original to us.
JPMorgan Chase Bank, National Association
Subservicer
By:
-----------------------------------------
Name:
Title:
Date:
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number _______________, at the office
of the Depository indicated above, and agrees to honor withdrawals on such
account as provided above.
---------------------------------------------
Depository
By:
-----------------------------------------
Name:
Title:
Date:
E-1
EXHIBIT F
ESCROW ACCOUNT LETTER AGREEMENT
_____________ ____, ______
To: ____________________
____________________
____________________
(the "Depository")
As Subservicer under the Transfer and Servicing Agreement dated as of
November 1, 2005 by and among Fieldstone Mortgage Investment Corporation, as
Depositor, you, as Indenture Trustee, Xxxxx Fargo Bank, N.A., as Trust
Administrator and Master Servicer, Fieldstone Mortgage Investment Trust, Series
2005-3, as Issuer, Fieldstone Servicing Corp., as Servicer, JPMorgan Chase Bank,
National Association, as Subservicer and Fieldstone Investment Corporation, as
Seller (the "Transfer and Servicing Agreement"), we hereby authorize and request
you to establish an account, as an Escrow Account pursuant to Section 3.05 of
the Transfer and Servicing Agreement, to be designated as "Xxxxx Fargo Bank,
N.A. in trust for HSBC Bank USA, National Association, as Indenture Trustee for
the Fieldstone Mortgage Investment Trust, Series 2005-3." All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Subservicer. This letter is submitted to you in duplicate. Please execute and
return one original to us.
JPMorgan Chase Bank, National Association,
Subservicer
By:
-----------------------------------------
Name:
Title:
Date:
F-1
The undersigned, as Depository, hereby certifies that the above described
account has been established under Account Number ______, at the office of the
Depository indicated above, and agrees to honor withdrawals on such account as
provided above.
---------------------------------------------
Depository
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Date:
---------------------------------------
F-2
EXHIBIT G-1
FORM OF MONTHLY REMITTANCE ADVICE
FIELD NAME DESCRIPTION FORMAT
---------- ----------- ------
INVNUM INVESTOR LOAN NUMBER Number no decimals
SERVNUM SERVICER LOAN NUMBER, REQUIRED Number no decimals
BEGSCHEDBAL BEGINNING SCHEDULED BALANCE FOR SCHED/SCHED Number two decimals
BEGINNING TRAIL BALANCE FOR ACTUAL/ACTUAL,
REQUIRED
SCHEDPRIN SCHEDULED PRINCIPAL AMOUNT FOR SCHEDULED/SCHEDULED Number two decimals
ACTUAL PRINCIPAL COLLECTED FOR ACTUAL/ACTUAL,
REQUIRED, .00 IF NO COLLECTIONS
CURT1 CURTAILMENT 1 AMOUNT, .00 IF NOT APPLICABLE Number two decimals
CURT1DATE CURTAILMENT 1 DATE, BLANK IF NOT APPLICABLE DD-MM-YY
CURTIADJ CURTAILMENT 1 ADJUSTMENT, .00 IF NOT APPLICABLE Number two decimals
CURT2 CURTAILMENT 2 AMOUNT, .00 IF NOT APPLICABLE Number two decimals
CURT2DATE CURTAILMENT 2 DATE, BLANK IF NOT APPLICABLE DD-MM-YY
CURT2ADJ CURTAILMENT 2 ADJUSTMENT, .00 IF NOT APPLICABLE Number two decimals
LIQPRIN PAYOFF, LIQUIDATION PRINCIPAL, .00 IF NOT APPLICABLE Number two decimals
OTHPRIN OTHER PRINCIPAL, .00 IF NOT APPLICABLE Number two decimals
PRINREMIT TOTAL PRINCIPAL REMITTANCE AMOUNT, .00 IF NOT APPLICABLE Number two decimals
INTREMIT NET INTEREST REMIT, INCLUDE PAYOFF INTEREST, Number two decimals
.00 IF NOT APPLICABLE
TOTREMIT TOTAL REMITTANCE AMOUNT, .00 IF NOT APPLICABLE Number two decimals
ENDSCHEDBAL ENDING SCHEDULED BALANCE FOR SCHEDULED/SCHEDULED Number two decimals
ENDING TRIAL BALANCE FOR ACTUAL/ACTUAL
.00 IF PAID OFF, LIQUIDATED OR FULL CHARGEOFF
ENDACTBAL ENDING TRIAL BALANCE Number two decimals
.00 IF PAID OFF, LIQUIDATED OR FULL CHARGEOFF
ENDDUEDATE ENDING ACTUAL DUE DATE, NOT LAST PAID INSTALLMENT DD-MM-YY
ACTCODE 60 IF PAID OFF, BLANK IF NOT APPLICABLE Number no decimals
ACTDATE ACTUAL PAYOFF DATE, BLANK IF NOT APPLICABLE DD-MM-YY
G-1-1
INTRATE INTEREST RATE, REQUIRED Number seven decimals
Example .0700000 for 7.00%
SFRATE. SERVICING ADMINISTRATION FEE RATE, REQUIRED Number seven decimals
Example .0025000 for .25%
PTRATE PASS THRU RATE, REQUIRED Number seven decimals
Example .0675000 for 6.75%
PIPMT P&I CONSTANT, REQUIRED .00 IF PAID OFF Number two decimals
G-1-2
EXHIBIT G-2
STANDARD LAYOUT FOR MONTHLY DEFAULTED LOAN REPORT
1. Deal Identifier by Loan
2. SBO Loan Number
3. Loan Number
4. Investor Loan Number
5. Street Address
6. City
7. State
8. Zip Code
9. Original Loan Amount
10. Origination Date
11. First Payment Date
12. Current Loan Amount
13. Current Interest Rate
14. Current P&I Payment Amount
15. [Reserved]
16. [Reserved]
17. Next Rate Adjustment Date
18. Next Payment Adjustment Date
19. Loan Term
20. Loan Type
21. [Reserved]
22. Product Type
23. Property Type
24. Ownership Code
25. Actual Due Date
26. Delinquency Status
27. [Reserved]
28. FC Flag
29. Date Loan Reinstated
30. FC Suspended Date
31. Reason Suspended
32. FC Start Date (referral date)
33. Actual Notice of Intent Date
34. Actual First Legal Date
35. [Reserved]
36. Date F/C Sale Scheduled
37. Foreclosure Actual Sale Date
38. Actual Redemption End Date
39. Occupancy Status
40. Occupancy Status Date
41. Actual Eviction Start Date
42. Actual Eviction Complete Date
43. Loss Mit Workstation Status
G-2-1
44. Loss Mit Flag
45. Loss Mit Type
46. Loss Mit Start Date
47. Loss Mit Approval Date
48. Loss Mit Removal Date
49. REO Flag
50. Actual REO Start Date
51. REO List Date
52. REO List Price
53. Date REO Offer Received
54. Date REO Offer Accepted
55. REO Scheduled Close Date
56. REO Actual Closing Date
57. REO Net Sales proceeds
58. REO Sales Price
59. Paid Off Code
60. Paid in Full Date
61. MI Certificate Number
62. [Reserved]
63. [Reserved]
64. [Reserved]
65. [Reserved]
66. [Reserved]
67. [Reserved]
68. [Reserved]
69. [Reserved]
70. [Reserved]
71. [Reserved]
72. Actual Claim Filed Date
73. Actual Claim Amount Filed
74. Claim Amount Paid
75. Claim Funds Received Date
76. Realized Gain or Loss
77. BK Flag
78. Bankruptcy Chapter
79. Actual Bankruptcy Start Date
80. Actual Payment Plan Start Date
81. Actual Payment Plan End Date
82. Date POC Filed
83. Date Filed Relief/Dismissal
84. Relief/Dismissal Hearing Date
85. Date Relief/Dismissal Granted
86. Post Petition Due Date
87. Prepayment Flag
88. Prepayment Waived
89. Prepayment Premium Collected
G-2-2
90. Partial Prepayment Amount Collected
91. Prepayment Expiration Date
92. Origination Value Date
93. Origination Value Source
94. Original Value Amount
95. FC Valuation Amount
96. FC Valuation Source
97. FC Valuation Date
98. REO Value Source
99. REO Value(As-is)
100. REO Repaired Value
101. REO Value Date
102. Investor/Security Billing Date Sent
Table: Delinquency
Name Type Max Character Size
---- ---- ------------------
Servicer Loan # Number 10
Investor Loan # Number 10
Servicer Investor # Text 3
Borrower Name Text 20
Address Text 30
State Text 2
Zip Text 5
Due Date Date/Time 8
Loan Type Text 8
BK Filed Date Date/Time 8
BK Chapter Text 6
BK Case Number Text 30 Maximum
Post Petition Due Date/Time 8
Motion for Relief Date/Time 8
Lift of Stay Date/Time 8
BK Discharge/Dismissal Date Date/Time 8
Loss Mit Approval Date Date/Time 8
Loss Mit Type Text 5
Loss Mit Code Number 2
Loss Mit Estimated Completion Date Date/Time 8
Loss Mit Actual Completion Date Date/Time 8
FC Approval Date Date/Time 8
File Referred to Attorney Date/Time 8
NOD Date/Time 8
Complaint Filed Date/Time 8
Scheduled Sale Date Date/Time 8
Actual Sale Date Date/Time 8
F/C Sale Amount Currency 8
Eviction Start Date Date/Time 8
G-2-3
Eviction Completed Date Date/Time 8
List Price Currency 8
List Date Date/Time 8
Accepted Offer Price Currency 8
Accepted Offer Date Date/Time 8
Estimated REO Closing Date Date/Time 8
Actual REO Sale Date Date/Time 8
Occupant Code Text 10
Property Condition Code Text 2
Property Inspection Date Date/Time 8
Property Value Date Date/Time 8
Current Property Value Currency 8
Repaired Property Value Currency 8
Current LTV Currency 8
FNMA Delinquent Status Code Text 2
FNMA Delinquent Reason Code Text 3
If applicable:
MI Cancellation Date Date/Time 8
MI Claim Filed Date Date/Time 8
MI Claim Amount Currency 8
MI Claim Reject Date Date/Time 8
MI Claim Resubmit Date Date/Time 8
MI Claim Paid Date Date/Time 8
MI Claim Amount Paid Currency 8
Pool Claim Filed Date Date/Time 8
Pool Claim Amount Currency 8
Pool Claim Reject Date Date/Time 8
Pool Claim Paid Date Date/Time 8
Pool Claim Amount Paid Currency 8
Pool Claim Resubmit Date Date/Time 8
FHA Part A Claim Filed Date Date/Time 8
FHA Part A Claim Amount Currency 8
FHA Part A Claim Paid Date Date/Time 8
FHA Part A Claim Paid Amount Currency 8
FHA Part B Claim Filed Date Date/Time 8
FHA Part B Claim Amount Currency 8
FHA Part B Claim Paid Date Date/Time 8
FHA Part B Claim Paid Amount Currency 8
VA Claim Filed Date Date/Time 8
VA Claim Paid Date Date/Time 8
VA Claim Paid Amount Currency 8
The Loss Mit Type field should show the approved Loss Mitigation
arrangement. The following are acceptable:
o ASUM- Approved Assumption
G-2-4
o BAP- Borrower Assistance Program
o CO- Charge Off
o DIL- Deed-in-Lieu
o FFA- Formal Forbearance Agreement
o MOD- Loan Modification
o PRE- Pre-Sale
o SS- Short Sale
o MISC- Anything else approved by the PMI or Pool Insurer
[Master Servicer and Trust Administrator] will accept alternative Loss
Mitigation Types to those above, provided that they are consistent with industry
standards. If Loss Mitigation Types other than those above are used, the
Servicer must supply [Master Servicer and Trust Administrator] with a
description of each of the Loss Mitigation Types prior to sending the file.
G-2-5
The Occupant Code field should show the current status of the property. The
acceptable codes are:
o Mortgagor
o Tenant
o Unknown
o Vacant
The Property Condition field should show the last reported condition of the
property. The acceptable codes are:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
The FNMA Delinquent Reason Code field should show the Reason for Default.
The following FNMA Delinquency Reason Codes to be used are below.
Delinquency Code Delinquency Description
---------------- -----------------------
001 FNMA-Death of principal mortgagor
002 FNMA-Illness of principal mortgagor
003 FNMA-Illness of mortgagor's family member
004 FNMA-Death of mortgagor's family member
005 FNMA-Marital difficulties
006 FNMA-Curtailment of income
007 FNMA-Excessive Obligation
008 FNMA-Abandonment of property
009 FNMA-Distant employee transfer
011 FNMA-Property problem
012 FNMA-Inability to sell property
013 FNMA-Inability to rent property
014 FNMA-Military Service
015 FNMA-Other
016 FNMA-Unemployment
017 FNMA-Business failure
019 FNMA-Casualty loss
022 FNMA-Energy environment costs
G-2-6
023 FNMA-Servicing problems
026 FNMA-Payment adjustment
027 FNMA-Payment dispute
029 FNMA-Transfer of ownership pending
030 FNMA-Fraud
031 FNMA-Unable to contact borrower
INC FNMA-Incarceration
The FNMA Delinquent Status Code field should show the Status of Default.
The following FNMA Delinquency Status Codes to be used are below.
Status Code Status Description
----------- ------------------
09. Forbearance
17 Pre-foreclosure Sale Closing Plan Accepted
24 Government Seizure
26 Refinance
27 Assumption
28 Modification
29 Charge-Off
30 Third Party Sale
31 Probate
32 Military Indulgence
43 Foreclosure Started
44 Deed-in-Lieu Started
49 Assignment Completed
61 Second Lien Considerations
62 Veteran's Affairs-No Bid
63 Veteran's Affairs-Refund
64 Veteran's Affairs-Buydown
65 Chapter 7 Bankruptcy
66 Chapter 11 Bankruptcy
67 Chapter 13 Bankruptcy
G-2-7
EXHIBIT G-3
FORM 332 REALIZED LOSS REPORT
XXXXX FARGO BANK, N.A.
Purpose
To provide the Servicer with a form for the calculation of any Realized
Loss (or gain) as a result of a Mortgage Loan having been foreclosed and
Liquidated.
Distribution
The Servicer will prepare the form in duplicate and send the original
together with evidence of conveyance of title and appropriate supporting
documentation to the Master Servicer with the Monthly Accounting Reports which
supports the Mortgage Loan's removal from the Mortgage Loan Activity Report. The
Servicer will retain the duplicate for its own records.
Due Date
With respect to any liquidated Mortgage Loan, the form will be submitted to
the Master Servicer no later than the date on which statements are due to the
Master Servicer under Section 4.02 of this Agreement (the "Statement Date") in
the month following receipt of final liquidation proceeds and supporting
documentation relating to such liquidated Mortgage Loan; provided, that if such
Statement Date is not at least 30 days after receipt of final liquidation
proceeds and supporting documentation relating to such liquidated Mortgage Loan,
then the form will be submitted on the first Statement Date occurring after the
30th day following receipt of final liquidation proceeds and supporting
documentation.
Preparation Instructions
The numbers on the form correspond with the numbers listed below.
1. The actual Unpaid Principal Balance of the Mortgage Loan.
2. The Total Interest Due less the aggregate amount of servicing fee that
would have been earned if all delinquent payments had been made as agreed.
3-7. Complete as necessary. All line entries must be supported by copies of
appropriate statements, vouchers, receipts, canceled checks, etc., to
document the expense. Entries not properly documented will not be
reimbursed to the Servicer.
8. Accrued Servicing Fees based upon the Stated Principal Balance of the
Mortgage Loan as calculated on a monthly basis.
10. The total of lines 1 through 9.
G-3-1
Credits
11-17. Complete as necessary. All line entries must be supported by copies of
the appropriate claims forms, statements, payment checks, etc. to document
the credit. If the Mortgage Loan is subject to a Bankruptcy Deficiency, the
difference between the Unpaid Principal Balance of the Note prior to the
Bankruptcy Deficiency and the Unpaid Principal Balance as reduced by the
Bankruptcy Deficiency should be input on line 16.
18. The total of lines 11 through 17.
Total Realized Loss (or Amount of Any Gain)
19. The total derived from subtracting line 18 from 10. If the amount
represents a realized gain, show the amount in parenthesis (_).
G-3-2
XXXXX FARGO BANK, N.A.
CALCULATION OF REALIZED LOSS
________________________________________________________________________________
[______________________] Trust: ___________________________
Prepared by: _______________ Date:______________
Phone: ___________________
----------------- ------------- ----------------
Servicer Loan No. Servicer Name Servicer Address
----------------- ------------- ----------------
[Master Servicer and Trust Administrator]
Loan No. ______________________________
Borrower's Name:
Property
Address:
Liquidation and Acquisition Expenses:
Actual Unpaid Principal Balance of Mortgage Loan $_______________(1)
Interest accrued at Net Rate ________________(2)
Attorney's Fees ________________(3)
Taxes ________________(4)
Property Maintenance ________________(5)
MI/Hazard Insurance Premiums ________________(6)
Hazard Loss Expenses ________________(7)
Accrued Servicing Fees ________________(8)
Other (itemize) ________________(9)
________________________________________ $__________________
________________________________________ ___________________
________________________________________ ___________________
________________________________________ ___________________
Total Expenses $______________(10)
Credits:
Escrow Balance $______________(11)
HIP Refund _______________(12)
Rental Receipts _______________(13)
Hazard Loss Proceeds _______________(14)
Primary Mortgage Insurance Proceeds _______________(15)
Proceeds from Sale of Acquired Property _______________(16)
Other (itemize) _______________(17)
________________________________________ ___________________
________________________________________ ___________________
Total Credits______________________________________ $______________(18)
Total Realized Loss (or of Gain) $______________(19)
Data must be submitted to [Master Servicer and Trust Administrator] in an Excel
spreadsheet format with fixed field names and data type. The Excel spreadsheet
should be used as a template consistently every month when submitting data for
all loans that are 60 days + delinquent and/or in bankruptcy, foreclosure or
REO.
G-3-3
EXHIBIT H
FORM OF BACK-UP CERTIFICATION
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
[Name and address of
master servicer]
Re: [name of securitization]
JPMorgan Chase Bank, National Association, as Subservicer hereby certifies
to the Seller, the Master Servicer, the Indenture Trustee, the Trust
Administrator and the Servicer that:
1. To our knowledge, the information in the Annual Statement of Compliance,
the Annual Independent Public Accountant's Servicing Report and all servicing
reports, officer's certificates and other information relating to the servicing
of the Mortgage Loans submitted to the Master Servicer 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 such reports;
2. To our knowledge, the servicing information required to be provided to
the Master Servicer by the Servicer under the Transfer and Servicing Agreement
has been provided to the Master Servicer;
3. Based upon the review required by the Transfer and Servicing Agreement,
and except as disclosed in the Annual Statement of Compliance or the Annual
Independent Public Accountant's Servicing Report, the Subservicer has, as of the
last day of the period covered by such reports fulfilled the obligations of the
Servicer under the Transfer and Servicing Agreement; and
4. The Subservicer has disclosed to the Master Servicer all significant
deficiencies relating to the Subservicer's compliance with the minimum servicing
standards in accordance with a review conducted in compliance with the Uniform
Single Attestation Program for Mortgage Bankers or similar standard as set forth
in the Transfer and Servicing Agreement.
Capitalized terms used but not defined herein have the meanings ascribed to
them in the Transfer and Servicing Agreement, dated as of November 1, 2005 (the
"Servicing Agreement"), among Fieldstone Mortgage Investment Trust, Series
2005-3, as issuer (the "Issuer"), Fieldstone
H-1
Mortgage Investment Corporation, as depositor (the "Depositor"), HSBC Bank USA,
National Association, as indenture trustee (the "Indenture Trustee"), Fieldstone
Servicing Corp., as servicer (the "Servicer"), Fieldstone Investment
Corporation, as seller (the "Seller"), JPMorgan Chase Bank, National
Association, as Subservicer (the "Subservicer") and Xxxxx Fargo Bank, N.A., as
master servicer (the "Master Servicer") and trust administrator (the "Trust
Administrator").
JPMorgan Chase Bank, National
Association, as Subservicer
By:
------------------------------------
Name:
Title:
Date:
H-2
EXHIBIT I
FORM OF SUBSEQUENT TRANSFER AGREEMENT
SUBSEQUENT TRANSFER AGREEMENT (the "Agreement"), dated as of ______, 200_
by and among Fieldstone Investment Corporation (the "Seller"), Fieldstone
Mortgage Investment Corporation (the "Depositor)", Fieldstone Mortgage
Investment Trust, Series 2005-3 (the "Trust"), HSBC Bank USA, National
Association (the "Indenture Trustee") and Xxxxx Fargo Bank, N.A. (the "Trust
Administrator") pursuant to the Transfer and Servicing Agreement referred to
below.
WITNESSETH:
WHEREAS, pursuant to a Transfer and Servicing Agreement (the "Transfer and
Servicing Agreement"), dated as of November 1, 2005, among the Seller, the
Depositor, the Trust, the Indenture Trustee and the Trust Administrator, the
Seller wishes to convey the Subsequent Mortgage Loans (as defined below) to the
Depositor, the Depositor wishes to convey the Subsequent Mortgage Loans to the
Trust, and the Trust wishes to acquire the same for the consideration set forth
in Section IV below; and
WHEREAS, the Seller shall timely deliver to the Indenture Trustee, Trust
Administrator and Depositor an Addition Notice related to such conveyance as
required by Section 2.04 of the Transfer and Servicing Agreement;
NOW THEREFORE, the Seller, the Depositor, the Trust, the Indenture Trustee
and the Trust Administrator hereby agree as follows:
Section I. Capitalized terms used herein shall have the meanings ascribed
to them in the Transfer and Servicing Agreement unless otherwise defined.
"Subsequent Mortgage Loans" shall mean, for purposes of this
Agreement, the Subsequent Mortgage Loans listed in the Subsequent Mortgage
Loan Schedule attached hereto as Schedule I.
"Subsequent Transfer Date" shall mean, with respect to the Subsequent
Mortgage Loans transferred hereby, the date hereof.
"Subsequent Cut-off Date" shall mean, with respect to the Subsequent
Mortgage Loans transferred hereby, [________].
Section II. Subsequent Mortgage Loan Schedule. The Subsequent Mortgage Loan
Schedule attached hereto as Schedule I is a supplement to the Initial Mortgage
Loan Schedule attached as Schedule A to the Transfer and Servicing Agreement.
The Mortgage Loans listed in the Subsequent Mortgage Loan Schedule constitute
the Subsequent Mortgage Loans to be transferred pursuant to this Agreement on
the Subsequent Transfer Date.
[Signature Page One to Fieldstone 2005-3 Transfer and Servicing Agreement]
Section III. Transfer of Subsequent Mortgage Loans. As of the related
Cut-off Date, subject to and upon the terms and conditions set forth in Sections
2.01,2.02, 2.04, 3.01, 3.02 and 3.03 of the Transfer and Servicing Agreement and
set forth in this Agreement, the Seller hereby irrevocably sells, transfers,
assigns, sets over and otherwise conveys to the Depositor and the Depositor
hereby irrevocably sells, transfers, assigns, sets over and otherwise conveys to
the Trust without recourse other than as expressly provided herein and in the
Transfer and Servicing Agreement, all the right, title and interest of the
Seller and the Depositor in and to the (i) Subsequent Mortgage Loans including
the related Stated Principal Balance as of the subsequent Cut-off Date, all
interest accruing thereon after the Subsequent Cut-off Date, and all collections
in respect of principal received after the Subsequent Cut-off Date; (ii)
property which secured a Subsequent Mortgage Loan and which is acquired by
foreclosure or in lieu of foreclosure; (iii) interest of the Seller in any
insurance policies in respect of the Subsequent Mortgage Loans; and (iv) all
proceeds of any of the foregoing.
Section IV. Representations and Warranties of the Seller and the Depositor.
(a) The Seller and the Depositor hereby represent and warrant to the Trust for
the benefit of the Certificateholders that the representations and warranties of
the Seller and the Depositor set forth in Sections, (b) and (c) of the Transfer
and Servicing Agreement are true and correct with respect to the Seller and the
Subsequent Mortgage Loans as of the Subsequent Transfer Date.
(b) The Seller hereby represents and warrants that (i) the aggregate of the
Stated Principal Balances of the Subsequent Mortgage Loans listed on the
Subsequent Mortgage Loan Schedule and conveyed to the Trust pursuant to this
Agreement as of the Subsequent Cut-off Date is $_____________and (ii) the
conditions precedent for the transfer of Subsequent Mortgage Loans set forth in
Section 2.04 of the Transfer and Servicing Agreement have been satisfied as of
the Subsequent Transfer Date.
(c) The Seller and the Depositor hereby represent and warrant that neither
the Seller nor the Depositor is (i) insolvent and will not be rendered insolvent
by the transfer of Subsequent Mortgage Loans pursuant to this Agreement or (ii)
aware of any pending insolvency.
Section V. Counterparts. This Agreement may be executed in two or more
counterparts (and by different parties in separate counterparts), each of which
shall be an original but all of which together shall constitute one and the same
instrument.
Section VI. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws without regard to conflict of laws principles applied
in New York (other than Section 5-1401 of the New York General Obligations Law
which shall apply hereto).
Section VII. Execution by the Issuer. It is expressly understood and agreed
by the parties hereto that (a) this Agreement is executed and delivered by U.S.
Bank Trust National Association, not individually or personally but solely as
Owner Trustee of the Issuer, in the exercise of the powers and authority
conferred and vested in it as trustee, (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 U.S.
Bank Trust
[Signature Page One to Fieldstone 2005-3 Transfer and Servicing Agreement]
National Association but is made and intended for the purpose of binding only
the Issuer, (c) nothing herein contained shall be construed as creating any
liability on U.S. Bank Trust National Association, 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 U.S. Bank Trust National Association 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 document.
[Signature Page One to Fieldstone 2005-3 Transfer and Servicing Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their respective officers thereunto authorized as of the date first
written above.
FIELDSTONE MORTGAGE INVESTMENT
TRUST, SERIES 2005-3,
as Issuer
BY: U.S. BANK TRUST NATIONAL
ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
By:
------------------------------------
Name:
Title:
FIELDSTONE MORTGAGE INVESTMENT
CORPORATION,
as Depositor
By:
------------------------------------
Name:
Title:
HSBC BANK USA, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
By:
------------------------------------
Name:
Title:
XXXXX FARGO BANK, N.A.,
as Trust Administrator and Master
Servicer
By:
------------------------------------
Name:
Title:
[Signature Page One to Fieldstone 2005-3 Transfer and Servicing Agreement]
FIELDSTONE SERVICING CORP.,
as Servicer
By:
------------------------------------
Name:
Title:
JPMORGAN CHASE BANK, NATIONAL
ASSOCIATION,
as Subservicer
By:
------------------------------------
Name:
Title:
FIELDSTONE INVESTMENT CORPORATION,
as Seller
By:
------------------------------------
Name:
Title:
[Signature Page Two to Fieldstone 2005-3 Transfer and Servicing Agreement]
STATE OF MINNESOTA )
: ss.:
COUNTY OF XXXXXX )
On this ___ day of November, 2005, before me, personally appeared
______________, known to me to be a ______________ of U.S. Bank Trust National
Association, a _________________________ that executed the within instrument,
and also known to me to be the person who executed it on behalf of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF MARYLAND )
: ss.:
COUNTY OF XXXXXX )
On the _____ day of November, 2005, before me, personally appeared
___________, known to me to be a _______________ of Fieldstone Mortgage
Investment Corporation, a corporation that executed the within instrument and
also known to me to be the person who executed it on behalf of said corporation,
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the _____ of November 2005 before me, a Notary Public in and for
said State, personally appeared ____________, known to me to be a
_______________ of HSBC Bank USA, National Association, a national banking
association that executed the within instrument and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF MARYLAND )
: ss.:
CITY OF BALTIMORE )
On the __ day of November 2005, before me, a notary public in and for said
State, personally appeared __________________________, known to me to be a
____________ of Xxxxx Fargo Bank, N.A., a national banking association that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
STATE OF MARYLAND )
: ss.:
COUNTY OF XXXXXX )
On the __ of November 2005 before me, a Notary Public in and for said
State, personally appeared _______________ known to me to be a ________ of
Fieldstone Servicing Corp., a corporation that executed the within instrument
and also known to me to be the person who executed it on behalf of said
corporation, and acknowledged to me that such corporation executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF CALIFORNIA )
: ss.:
COUNTY OF SAN DIEGO )
On the __ of November 2005 before me, a Notary Public in and for said
State, personally appeared _____________ known to me to be a _________________
of JPMorgan Chase Bank, National Association, a national banking association
that executed the within instrument and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
[NOTARIAL SEAL]
STATE OF MARYLAND )
: ss.:
COUNTY OF XXXXXX )
On the __ of November 2005 before me, a Notary Public in and for said
State, personally appeared _______________ known to me to be a _____________ of
Fieldstone Investment Corporation, a corporation that executed the within
instrument and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
[NOTARIAL SEAL]
I-1
EXHIBIT J
SUBSEQUENT MORTGAGE LOAN CRITERIA
The obligation of the Trust to purchase Subsequent Mortgage Loans during
the Pre-Funding Period is subject to the following requirements:
o such Subsequent Mortgage Loan may not be more than one calendar month
contractually delinquent as of the related Subsequent Cut-off Date;
o such Subsequent Mortgage Loan may not have a final maturity date later
than January 1, 2036;
o the remaining term to stated maturity of such Subsequent Mortgage Loan
will not exceed 30 years;
o such Subsequent Mortgage Loan will have a Mortgage Rate not less than
6.000% per annum;
o such Subsequent Mortgage Loan will not have an original loan-to-value
ratio greater than 100%;
o such Subsequent Mortgage Loan will have a principal balance not
greater than $1,200,000;
o such Subsequent Mortgage Loan will be secured by a first or second
lien on a Mortgaged Property; and
o such Subsequent Mortgage Loan will be otherwise acceptable to the
Rating Agencies.
Following the purchase of such Subsequent Mortgage Loans by the Trust, the
mortgage pool and each Mortgage Group will have the following characteristics
(based upon the characteristics of the (a) Initial Mortgage Loans as of the
Initial Cut-off Date and (b) Subsequent Mortgage Loans as of the related
Subsequent Cut-off Date):
Mortgage Pool
o a weighted average current Mortgage Rate of at least 7.25% per annum;
o a weighted average remaining term to stated maturity of less than 360
months;
o a weighted average original loan-to-value ratio of not more than
82.50%;
o a weighted average Credit Score of at least 649; and
o no more than 10.00% of the Mortgage Loans by Aggregate Loan Balance at
the end of the Pre-Funding Period will be used for cash-out
refinances.
J-1
Group 1
o a weighted average current Mortgage Rate of at least 7.35% per annum;
o a weighted average remaining term to stated maturity of less than 360
months;
o a weighted average original loan-to-value ratio of not more than
81.50%; and
o no more than 15.00% of the Group 1 Mortgage Loans by Aggregate Loan
Balance at the end of the Pre-Funding Period will be used for cash-out
refinances.
Group 2
o a weighted average current Mortgage Rate of at least 7.20% per annum;
o a weighted average remaining term to stated maturity of less than 360
months;
o a weighted average original loan-to-value ratio of not more than
83.10%; and
o no more than 8.00% of the Group 1 Mortgage Loans by Aggregate Loan
Balance at the end of the Pre-Funding Period will be used for cash-out
refinances.
J-2
EXHIBIT K
XXXXXX XXX GUIDE NO. 95-19
Reference
o Selling This announcement amends the guide(s) indicated.
o Servicing Please keep it for reference until we issue a formal
change.
Subject "Full-File" Reporting to Credit Repositories
Part IV, Section 107, of the servicing Guide currently requires servicers
to report only 90-day delinquencies to the four major credit repositories. To
ensure that the repositories have up-to-date information for both servicing and
origination activity, we have decided to begin requiring -- as of the month
ending March 31, 1996 -- servicers to provide the credit repositories a
"full-file" status report for the mortgages they service for us.
"Full-file" reporting requires that servicers submit a monthly report to
each of the credit repositories to describe the exact status for each mortgage
they service for us. The status reported generally should be the one in effect
as of the last business day of each month. Servicers may, however, use a
slightly later cut-off date -- for example, at the end of the first week of a
month -- to assure that payment corrections, returned checks, and other
adjustments related to the previous month's activity can be appropriately
reflected in their report for that month. Statuses that must be reported for any
given mortgage include the following: new origination, current, delinquent (30-,
60-, 90-days, etc.), foreclosed, and charged-off. (The credit repositories will
provide the applicable codes for reporting these statuses to them.) A listing of
each of the major repositories to which "full-file" status reports must be sent
is attached.
Servicers are responsible for the complete and accurate reporting of
mortgage status information to the repositories and for resolving any disputes
that arise about the information they report. Servicers must respond promptly to
any inquiries from borrowers regarding specific mortgage status information
about them that was reported to the credit repositories.
Servicers should contact their Customer Account Team in their lead Xxxxxx
Xxx regional office if they have any questions about this expanded reporting
requirement.
Xxxxxx X. Xxxxxxxxx
Senior Vice President - Mortgage and Lender Standards
11/20/95
K-1
XXXXXX XXX GUIDE 95-19
ATTACHMENT I
ANNOUNCEMENT
Major Credit Repositories
A "full-file" status report for each mortgage serviced for Xxxxxx Xxx must
be sent to the following repositories each month (beginning with the month
ending March 31, 1996):
Company Telephone Number
------- ----------------
Consumer Credit Associates, Inc. Call (000) 000-0000, either extension
000 Xxxxxxxxxxxx Xxxxxx, Xxxxx 000 150, 101, or 112, for all inquiries.
Houston, Texas 77079-2903
Equifax Members that have an account number may
call their local sales representative for
all inquiries; lenders that need to set up
an account should call (800) 000- 0000 and
select the customer assistance option.
TRW Information Systems & Services Call (000) 000-0000 for all inquiries,
601 TRW Parkway current members should select option 3;
Allen, Texas 75002 lenders that need to set up an account
should select Option 4.
Trans Union Corporation Call (000) 000-0000 to get the name of the
555 West Xxxxx local bureau to contact about setting up an
Chicago, Illinois 60661 account or obtaining other information.
Attachment 1
SCHEDULE A
MORTGAGE LOAN SCHEDULE
Schedule A-1
SCHEDULE A-1
Schedule A-1-1
