Execution Copy
BEAR XXXXXXX ASSET BACKED SECURITIES I LLC,
Depositor
EMC MORTGAGE CORPORATION,
Sponsor
XXXXX FARGO BANK, N.A.,
Master Servicer and Securities Administrator
and
CITIBANK, N.A.,
Trustee
--------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2007
--------------------------------------
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
TABLE OF CONTENTS
Page
ARTICLE I.
DEFINITIONS
Section 1.01. Defined Terms...............................................2
ARTICLE II.
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Trust Fund...................................47
Section 2.02. Acceptance of the Mortgage Loans...........................49
Section 2.03. Representations, Warranties and Covenants of the Master
Servicer and the Sponsor...................................51
Section 2.04. Representations and Warranties of the Depositor............59
Section 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases..............................60
Section 2.06. Authentication and Delivery of Certificates................60
Section 2.07. Covenants of the Master Servicer...........................61
Section 2.08. Lost Mortgage Notes Indemnity..............................61
Section 2.09. Purposes and Powers of the Trust...........................61
ARTICLE III.
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS
Section 3.01. The Master Servicer........................................63
Section 3.02. REMIC-Related Covenants....................................63
Section 3.03. Monitoring of Servicers....................................64
Section 3.04. [Reserved].................................................65
Section 3.05. Power to Act; Procedures...................................65
Section 3.06. Due-on-Sale Clauses; Assumption Agreements.................66
Section 3.07. Release of Mortgage Files..................................66
Section 3.08. Documents, Records and Funds in Possession of the
Master Servicer To Be Held for Trustee.....................67
Section 3.09. Maintenance of Hazard Insurance............................67
Section 3.10. Presentment of Claims and Collection of Proceeds...........68
Section 3.11. Maintenance of the Primary Mortgage Insurance Policies.....68
Section 3.12. Custodian to Retain Possession of Certain Insurance
Policies and Documents.....................................68
Section 3.13. Realization Upon Defaulted Mortgage Loans..................69
Section 3.14. Compensation for the Servicers and the Master Servicer.....69
Section 3.15. REO Property...............................................69
Section 3.16. Annual Statement as to Compliance..........................70
Section 3.17. Assessments of Compliance and Attestation Reports..........70
Section 3.18. Reports Filed with Securities and Exchange Commission......72
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Section 3.19. [Reserved].................................................81
Section 3.20. Optional Purchase of Defaulted Mortgage Loans..............81
Section 3.21. [Reserved].................................................81
Section 3.22. Intention of the Parties and Interpretation................81
ARTICLE IV.
ACCOUNTS
Section 4.01. Protected Accounts.........................................82
Section 4.02. [Reserved].................................................82
Section 4.03. [Reserved].................................................82
Section 4.04. Distribution Account.......................................82
Section 4.05. Permitted Withdrawals and Transfers from the
Distribution Account.......................................84
Section 4.06. The Yield Maintenance Account and the Yield Maintenance
Agreements.................................................86
Section 4.07. The Final Maturity Reserve Account.........................87
Section 4.08. Class P Reserve Account....................................88
ARTICLE V.
DISTRIBUTIONS AND ADVANCES
BY THE MASTER SERVICER
Section 5.01. Advances...................................................90
Section 5.02. Compensating Interest Payments.............................90
Section 5.03. REMIC Distributions........................................91
Section 5.04. Distributions..............................................91
Section 5.04A. Allocation of Realized Losses..............................98
Section 5.05. Monthly Statements to Certificateholders..................100
Section 5.06. REMIC Designations and Allocations........................103
Section 5.07. Basis Risk Reserve Fund...................................108
ARTICLE VI.
THE CERTIFICATES
Section 6.01. The Certificates..........................................109
Section 6.02. Certificate Register; Registration of Transfer and
Exchange of Certificates..................................111
Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.........115
Section 6.04. Persons Deemed Owners.....................................115
Section 6.05. Access to List of Certificateholders' Names and
Addresses.................................................115
Section 6.06. Book-Entry Certificates...................................115
Section 6.07. Notices to Depository.....................................116
Section 6.08. Definitive Certificates...................................116
Section 6.09. Maintenance of Office or Agency...........................117
Section 6.10. Appointment of Paying Agent and Certificate Registrar.....117
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ARTICLE VII.
THE DEPOSITOR, THE MASTER SERVICER AND THE SPONSOR
Section 7.01. Respective Liabilities of the Depositor, the Master
Servicer and the Sponsor..................................118
Section 7.02. Merger or Consolidation of the Depositor, the Master
Servicer or the Sponsor...................................118
Section 7.03. Indemnification of the Trustee, the Master Servicer,
the Securities Administrator and Others...................118
Section 7.04. Limitation on Liability of the Depositor, the Sponsor,
the Master Servicer, the Securities Administrator and
Others....................................................119
Section 7.05. Limitation on Resignation of Master Servicer and Sponsor..120
Section 7.06. Errors and Omissions Insurance; Fidelity Bonds............120
ARTICLE VIII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 8.01. Events of Default.........................................121
Section 8.02. Trustee to Act; Appointment of Successor..................122
Section 8.03. Notification to Certificateholders........................123
ARTICLE IX.
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 9.01. Duties of Trustee and Securities Administrator............124
Section 9.02. Certain Matters Affecting the Trustee and the
Securities Administrator..................................125
Section 9.03. Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans............................127
Section 9.04. Trustee and Securities Administrator May Own
Certificates..............................................128
Section 9.05. Trustee's and Securities Administrator's Fees and
Expenses..................................................128
Section 9.06. Eligibility Requirements for Trustee, Securities
Administrator and Paying Agent............................128
Section 9.07. Insurance.................................................129
Section 9.08. Resignation and Removal of Trustee, Securities
Administrator and Paying Agent............................129
Section 9.09. Successor Trustee, Securities Administrator or Successor
Paying Agent..............................................130
Section 9.10. Merger or Consolidation of Trustee, Securities
Administrator or Paying Agent.............................131
Section 9.11. Appointment of Co-Trustee or Separate Trustee.............131
Section 9.12. Tax Matters...............................................132
ARTICLE X.
TERMINATION
Section 10.01. Termination upon Liquidation or Repurchase of the
Mortgage Loans............................................135
Section 10.02. Final Distribution on the Certificates....................135
Section 10.03. Additional Termination Requirements.......................136
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.................................................138
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Section 11.02. Recordation of Agreement; Counterparts....................139
Section 11.03. Governing Law.............................................139
Section 11.04. Intention of Parties......................................139
Section 11.05. Notices...................................................140
Section 11.06. Severability of Provisions................................141
Section 11.07. Assignment................................................141
Section 11.08. Limitation on Rights of Certificateholders................141
Section 11.09. Inspection and Audit Rights...............................142
Section 11.10. Certificates Nonassessable and Fully Paid.................142
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Exhibits
--------
Exhibit A-1 Form of Class A Certificates
Exhibit A-2 Form of Class I-B and Class II-M Certificates
Exhibit A-3 Form of Class I-PO Certificates
Exhibit A-4 Form of Class P Certificates
Exhibit A-5 Form of Class X Certificates
Exhibit A-6 Form of Class B-IO Certificates
Exhibit A-7 Form of Class R Certificates
Exhibit B Mortgage Loan Schedule
Exhibit C [Reserved]
Exhibit D Form of Transfer Affidavit
Exhibit E Form of Transferor Certificate
Exhibit F Form of Investment Letter (Non-Rule 144A)
Exhibit G Form of Rule 144A Investment Letter
Exhibit H Form of Request for Release
Exhibit I DTC Letter of Representations
Exhibit J Schedule of Mortgage Loans with Lost Notes
Exhibit K Form of Custodial Agreements
Exhibit L Servicing Criteria to be Addressed in Assessment of Compliance
Exhibit M-1 Form of Back-Up Certification
Exhibit M-2 Form of Certification for the Securities Administrator
Exhibit N Form of Yield Maintenance Agreements
Exhibit O Form 10-D, Form 8-K and Form 10-K Reporting Responsibilities
Exhibit P Form of Additional Disclosure Notice
Schedules
Schedule I Servicing Agreements
Schedule II Assignment, Assumptions and Recognition Agreements
Schedule III Yield Maintenance Agreements Projected Principal Balances
Schedule IV Coupon Strip Reserve Account Schedule
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POOLING AND SERVICING AGREEMENT, dated as of February 1, 2007,
among BEAR XXXXXXX ASSET BACKED SECURITIES I LLC, a Delaware limited liability
company, as depositor (the "Depositor"), EMC MORTGAGE CORPORATION, a Delaware
corporation, as sponsor (the "Sponsor"), XXXXX FARGO BANK, N.A., a national
banking association, as master servicer (in such capacity, the "Master
Servicer") and as securities administrator (in such capacity, the "Securities
Administrator") and CITIBANK, N.A., a national banking association, as trustee
(the "Trustee").
PRELIMINARY STATEMENT
The parties to this Agreement hereby create a common law trust
pursuant to the laws of the State of New York. The Depositor is the owner of the
Trust Fund that is hereby conveyed to the Trustee in return for the
Certificates. As provided herein, the Securities Administrator on behalf of the
Trustee shall make four separate real estate mortgage investment conduit (each a
"REMIC") elections with respect to the Trust Fund for Federal income tax
purposes.
The Trust Fund shall be named, and may be referred to as, the
"Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2." The Certificates issued
hereunder may be referred to as "Asset-Backed Certificates Series 2007-SD2"
(including for purposes of any endorsement or assignment of a Mortgage Note or
Mortgage).
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer, the Securities Administrator, the Sponsor
and the Trustee agree as follows:
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ARTICLE I.
DEFINITIONS
Section 1.01. Defined Terms.
In addition to those terms defined in Section 1.02, whenever
used in this Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
Accepted Master Servicing Practices: With respect to any
Mortgage Loan those customary mortgage servicing practices of prudent mortgage
servicing institutions that master service mortgage loans of the same type and
quality as such Mortgage Loan in the jurisdiction where the related Mortgaged
Property is located, to the extent applicable to the Master Servicer (except in
its capacity as successor to a Servicer) or to the Trustee (in its capacity, if
at all, as Successor Master Servicer).
Account: Each Protected Account, the Distribution Account, the
Final Maturity Reserve Account, the Basis Risk Reserve Fund, the Yield
Maintenance Account and the Class P Reserve Account.
Accrual Period: With respect to the Certificates (other than
the Class I-PO Certificates, the Adjustable Rate Certificates, the Class P
Certificates and the Residual Certificates) will be the calendar month
immediately preceding the calendar month in which a Distribution Date occurs.
All calculations of interest on such Certificates will be made on the basis of a
360-day year that consists of twelve 30-day months.
With respect to the Adjustable Rate Certificates and any
Distribution Date, the period from and including the preceding Distribution Date
(or, in the case of the first Distribution Date, from the Closing Date) to and
including the day prior to the current Distribution Date. All calculations of
interest on the Adjustable Rate Certificates (including the Interest Rate Cap)
will be made on the basis of the actual number of days elapsed in the related
Accrual Period and in a 360-day year.
Accrued Certificate Interest: With respect to the Group I
Certificates of any Class (other than the Class I-PO Certificates) on any
Distribution Date, is equal to the amount of interest accrued during the related
Accrual Period at the applicable Pass-Through Rate on the Certificate Principal
Balance or Notional Amount, as applicable, of such Certificate immediately prior
to such Distribution Date, less (1) in the case of a Group I Senior Certificate,
such Certificate's share of (a) Prepayment Interest Shortfalls on the related
Mortgage Loans, to the extent not covered by Compensating Interest paid by the
Servicer or the Master Servicer, (b) interest shortfalls on the related Mortgage
Loans resulting from the application of the Relief Act or similar state law and
(c) after the Cross-Over Date, the interest portion of any Realized Losses on
the related Mortgage Loans, and (2) in the case of a Group I Subordinate
Certificate, such Certificate's share of (a) Prepayment Interest Shortfalls on
the related Mortgage Loans, to the extent not covered by Compensating Interest
paid by the Servicer or the Master Servicer, (b) interest shortfalls on the
related Mortgage Loans resulting from the application of the Relief Act or
similar state law and (c) the interest portion of any Realized Losses on the
related Mortgage Loans. The Senior Percentage of Prepayment Interest Shortfalls
and interest shortfalls resulting from the application of the Relief Act will be
allocated among the Group I Senior Certificates in the related Certificate Group
in proportion to the amount of Accrued Certificate Interest that would have been
allocated thereto in the absence of such shortfalls. The applicable Subordinate
Percentage of Prepayment Interest Shortfalls and interest shortfalls resulting
from the application of the Relief Act will be allocated among the Group I
Subordinate Certificates in proportion to the amount of Accrued Certificate
Interest that would have been allocated thereto in the absence of such
shortfalls. Accrued Certificate Interest with respect to the Group I
Certificates (other than the Class I-PO Certificates) is calculated on the basis
of a 360-day year consisting
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of twelve 30-day months. No Accrued Certificate Interest will be payable with
respect to any Class of Certificates after the Distribution Date on which the
outstanding Certificate Principal Balance or Notional Amount, as applicable, of
such Certificate has been reduced to zero.
Actual Monthly Payments: For any Mortgage Loan in Loan Group
II and each Due Period, means the actual monthly payments of principal and
interest received during such month on such Mortgage Loan.
Additional Disclosure: As defined in Section 3.18 (a).
Additional Form 10-D Disclosure: As defined in Section
3.18 (a).
Additional Form 10-K Disclosure: As defined in Section
3.18 (a).
Adjustable Rate Certificates: The Class II-A Certificates and
the Class II-M Certificates.
Adjusted Rate Cap: With respect to each Class of Class II-A
Certificates and Class II-M Certificates, each Distribution Date and the related
Due Period, (A) the sum of (i) the scheduled Monthly Payments owed on the
related Mortgage Loans for such Due Period less the related Servicing Fees and
the related Master Servicing Fee and (ii) the Actual Monthly Payments received
in excess of such scheduled Monthly Payments, minus (B) the Coupon Strip, if
any, payable to the Final Maturity Reserve Account with respect to such
Distribution Date, expressed as a per annum rate calculated on the basis of the
aggregate Stated Principal Balance of the related Mortgage Loans for such Due
Period and further reflecting the accrual of interest on an actual/360 basis.
Advance: An advance of delinquent payments of principal (other
than in respect of delinquent payments of principal on any Simple Interest
Loans) or interest in respect of a Mortgage Loan required to be made by the
applicable Servicer pursuant to the related Servicing Agreement, or by the
Master Servicer pursuant to Section 5.01.
Agreement: This Pooling and Servicing Agreement and any and
all amendments or supplements hereto made in accordance with the terms herein.
Aggregate Subordinate Optimal Principal Amount: With respect
to Loan Group I, is the sum of each of the components of the definition of
Subordinate Optimal Principal Amount for all Sub-Loan Groups in such Loan Group.
Allocable Share: With respect to any class of Class I-B
Certificates on any Distribution Date, will equal such Class's pro rata share
(based on the Certificate Principal Balance of each Class entitled thereto) of
the Aggregate Subordinate Optimal Principal Amount; provided, however, that no
class of Class I-B Certificates (other than the class of Class I-B Certificates
with the lowest numerical designation) shall be entitled on any Distribution
Date to receive distributions pursuant to clauses (2), (3) and (5) of the
definition of Subordinate Optimal Principal Amount unless the Class Prepayment
Distribution Trigger for the related Class is satisfied for such Distribution
Date. Notwithstanding the foregoing, if on any Distribution Date the Certificate
Principal Balance of any class of Class I-B Certificates for which the related
Class Prepayment Distribution Trigger was satisfied on such Distribution Date is
reduced to zero, any amounts distributable to such Class pursuant to clauses
(2), (3) and (5) of the definition of Subordinate Optimal Principal Amount to
the extent of such Class's remaining Allocable Share, shall be distributed to
the remaining Classes of Class I-B Certificates in reduction of their respective
Certificate Principal Balances, sequentially, to the Class I-B Certificates, in
the order of their numerical class designations.
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Amount Held for Future Distribution: As to any Distribution
Date, the aggregate amount held in the Distribution Account at the close of
business on the immediately preceding Determination Date on account of (i) all
Scheduled Payments or portions thereof received in respect of the Mortgage Loans
due after the related Due Period and (ii) Principal Prepayments, Liquidation
Proceeds, Insurance Proceeds and Subsequent Recoveries received in respect of
such Mortgage Loans after the last day of the related Prepayment Period or
Liquidation Period, as applicable.
Annual Statement of Compliance: As defined in Section 3.16.
Applicable Written Notice: For purposes of Section 8.01,
written notice to the Master Servicer by the Trustee, the Securities
Administrator or the Depositor, or to the Trustee and the Master Servicer by the
Holders of Certificates evidencing not less than 25% of the Voting Rights
evidenced by the Certificates.
Applied Realized Loss Amount: With respect to any Distribution
Date and each Class of Group II Offered Certificates, the sum of the Realized
Losses with respect to the Mortgage Loans in Loan Group II, which have been
allocated in reduction of the Certificate Principal Balance of such Class of
Certificates pursuant to this Agreement. Realized Losses in respect of Loan
Group II in the aggregate shall equal the amount, if any, by which (i) the
aggregate Certificate Principal Balance of all of the Group II Certificates
(after all distributions of principal on such Distribution Date) exceeds (ii)
the aggregate Stated Principal Balance of all of the Mortgage Loans in Loan
Group II for such Distribution Date. Realized Losses in respect of Loan Group I
shall be allocated, first, the Class II-M-5 Certificates, the Class II-M-4
Certificates, the Class II-M-3 Certificates, the Class II-M-2 Certificates and
the Class II-M-1 Certificates, in that order, in each case until the respective
Certificate Principal Balance thereof has been reduced to zero, and then, to the
Class II-A-2 Certificates and the Class II-A-1 Certificates, in that order, in
each case until the Certificate Principal Balance of each such class has been
reduced to zero.
Appraised Value: With respect to any Mortgage Loan originated
in connection with a refinancing, the appraised value of the Mortgaged Property
based upon the appraisal made at the time of such refinancing or, with respect
to any other Mortgage Loan, the appraised value of the Mortgaged Property based
upon the appraisal made by a fee appraiser at the time of the origination of the
related Mortgage Loan.
Assessment of Compliance: As defined in Section 3.17.
Assumption Agreement: Any Assignment, Assumption and
Recognition Agreement or comparable document transferring or acknowledging the
transfer of a Servicing Agreement to the Trust set forth on Schedule II hereto.
Attesting Party: As defined in Section 3.17.
Attestation Report: As defined in Section 3.17.
Available Funds: With respect to any Distribution Date and
each Sub-Loan Group in Loan Group I, an amount equal to the aggregate of the
following amounts with respect to the Mortgage Loans in the related Sub-Loan
Group: (a) all previously undistributed payments on account of principal
(including the principal portion of Scheduled Payments, Principal Prepayments
and the principal portion of Net Liquidation Proceeds) and all previously
undistributed payments on account of interest received after the Cut-off Date
and on or prior to the related Determination Date, (b) any Advances and
Compensating Interest paid by the paid by the Servicer or the Master Servicer
with respect to such Distribution Date, (c) any reimbursed amount in connection
with losses on investments of deposits in
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certain eligible investments in respect of the Mortgage Loans in the related
Sub-Loan Group, and (d) any amount allocated from the Available Funds of another
Sub-Loan Group in accordance with Section 5.04(a)(I)(i)(F), except:
(i) all payments that were due on or before the Cut-off Date;
(ii) all Principal Prepayments and Liquidation Proceeds
received after the applicable Prepayment Period and the Liquidation Period,
respectively;
(iii) all payments, other than Principal Prepayments, that
represent early receipt of Scheduled Payments due on a date or dates subsequent
to the related Due Date;
(iv) amounts received on particular Mortgage Loans as late
payments of principal or interest and respecting which, and to the extent that,
there are any unreimbursed Advances;
(v) amounts of Advances determined to be Nonrecoverable
Advances;
(vi) any investment earnings on amounts on deposit in the
Distribution Account and amounts permitted to be withdrawn from the Distribution
Account pursuant to this Agreement;
(vii) amounts needed to pay the Servicing Fees, the Master
Servicing Fee or to reimburse the Servicer or the Master Servicer for amounts
due under the Servicing Agreement and this Agreement (allocated as provided in
Section 4.05(b)) to the extent such amounts have not been retained by, or paid
previously to, the Servicer or the Master Servicer;
(viii) amounts applied to pay any fees with respect to any
lender-paid primary mortgage insurance policy (allocated as provided in Section
4.05(b)); and
(ix) any expenses or other amounts (allocated as provided in
Section 4.05(b)) reimbursable to the Trustee, the Securities Administrator and
the Custodian pursuant to Section 4.05(a), Section 7.04 or Section 9.05.
Back-Up Certification: As defined in Section 3.18(a)(iii).
Balloon Loan: A Mortgage Loan, identified as such on the
Mortgage Loan Schedule, where the related Mortgage Note provides for lowered
payments of principal over the life of such Mortgage Loan and a larger payment
of principal than is usual at its stated maturity.
Bankruptcy Code: Title 11 of the United States Code.
Basis Risk Reserve Fund: The fund maintained as described in
Section 5.07.
Basis Risk Shortfall: As of any Distribution Date and for any
Class of Adjustable Rate Certificates, the excess of (i) the amount of Current
Interest that such Class would have been entitled to receive on such
Distribution Date had the applicable Pass-Through Rate been calculated without
regard to the Interest Rate Cap; over (ii) the sum of interest for such Class,
calculated at the applicable Interest Rate Cap for such Distribution Date, and
any amount paid to such Class in respect of interest under the Yield Maintenance
Agreement.
Basis Risk Shortfall Carry Forward Amount: As of any
Distribution Date and for any Class of Adjustable Rate Certificates, the sum of:
(i) if on such Distribution Date the applicable Pass-
5
Through Rate for such Class is based upon the applicable Interest Rate Cap, the
applicable Basis Risk Shortfall; and (ii) the Basis Risk Shortfall for all
previous Distribution Dates not previously paid (including interest accrued
thereon at the applicable Pass-Through Rate for the Accrual Period with respect
to each such prior Distribution Date), together with interest thereon at a rate
equal to the applicable Pass-Through Rate for such Distribution Date.
Book-Entry Certificates: Any of the Certificates that shall be
registered in the name of the Depository or its nominee, the ownership of which
is reflected on the books of the Depository or on the books of a person
maintaining an account with the Depository (directly, as a "Depository
Participant", or indirectly, as an indirect participant in accordance with the
rules of the Depository and as described in Section 6.06). As of the Closing
Date, each Class of Regular Certificates constitutes a Class of Book-Entry
Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday,
or (ii) a day on which banking institutions in The City of New York, New York,
or the States of Maryland, Minnesota or Texas, or, if different, the city in
which the Corporate Trust Office of the Trustee or the principal office of the
Securities Administrator, the Master Servicer or of a Servicer is located are
authorized or obligated by law or executive order to be closed.
Cede: Cede & Co., or its successors in interest.
Certificate: Any one of the certificates of any Class
executed and authenticated by the Certificate Registrar in substantially the
forms attached hereto as Exhibits A-1 through A-6.
Certificate Group: With respect to the Certificates, either
Sub-Loan Group I-1, Sub-Loan Group I-2 or Sub-Loan
Group I-3, as applicable.
Certificate Margin: Reference to any of the Class II-A-1
Margin, the Class II-A-2 Margin, the Class II-A-3 Margin, the Class II-M-1
Margin, the Class II-M-2 Margin, the Class II-M-3 Margin, the Class II-M-4
Margin or the Class II-M-5 Margin.
Certificate Owner: With respect to a Book-Entry Certificate,
the Person that is the beneficial owner of such Book-Entry Certificate.
Certificate Principal Balance: As to any Certificate (other
than any Class I-X Certificates, Class B-IO Certificates or Residual
Certificates) and as of any Distribution Date, the Initial Certificate Principal
Balance of such Certificate, increased by (i) (in the case of the Group II
Certificates) the amount of any Net Deferred Interest allocated thereto on such
Distribution Date and on any previous Distribution Dates, and (ii) any
Subsequent Recoveries allocated to such Class (other than an Interest-Only
Certificate) on previous Distribution Dates pursuant to Section 5.04A, reduced
by the sum of (i) all amounts distributed with respect to such Certificate in
reduction of the Certificate Principal Balance thereof on previous Distribution
Dates pursuant to Section 5.04, (ii) the principal portion of the Realized
Losses (other than Realized Losses resulting from Debt Service Reductions)
allocated to such Certificate on previous Distribution Dates, and (iii) solely
in the case of the Group I Subordinate Certificates, such Certificate's pro rata
share, if any, of the applicable Subordinate Certificate Writedown Amount for
previous Distribution Dates. References herein to the Certificate Principal
Balance of a Class of Certificates shall mean the Certificate Principal Balances
of all Certificates in such Class.
Certificate Register: The register maintained pursuant to
Section 6.02 hereof.
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Certificate Registrar: The Securities Administrator or any
successor certificate registrar appointed hereunder.
Certificate Registrar Office: The office of the Certificate
Registrar located at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000, Attention: BSABS 2007-SD2.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register (initially, Cede &
Co., as nominee for the Depository, in the case of any Book-Entry Certificates).
Certification Parties: As defined in Section 3.18(a)(iii)(D).
Certifying Person: As defined in Section 3.18(a)(iii)(D).
Class: All Certificates bearing the same Class designation as
set forth in Section 6.01 hereof.
Class A Certificates: The Class I-A Certificates and the
Class II-A Certificates, in the form of Exhibit A-1 hereto.
Class B-IO Distribution Amount: With respect to any
Distribution Date, the amount allocable to the Class B-IO Certificates as
provided in Section 5.04 and Section 5.06(d), for such Distribution Date and all
prior Distribution Dates, less the aggregate of all amounts distributed (or
deemed distributed) in accordance with Section 5.04 and Section 5.06(d) with
respect to the Class B-IO Certificates on prior Distribution Dates.
Class P Certificate: The Class I-P Certificates and the Class
II-P Certificates, in the form of Exhibit A-4 hereto.
Class Prepayment Distribution Trigger: A test, which shall be
satisfied for a class of Group I Subordinate Certificates for a Distribution
Date if the fraction (expressed as a percentage), the numerator of which is the
aggregate Certificate Principal Balance of such Class and each Class of Group I
Subordinate Certificates subordinate thereto, if any, and the denominator of
which is the Stated Principal Balances of all of the Mortgage Loans in Loan
Group I as of the related Due Date, equals or exceeds such percentage calculated
as of the Closing Date.
Class P Reserve Account: The reserve account established and
maintained by the Securities Administrator pursuant to Section 4.08.
Class R-I Certificate: Any Certificate designated as a "Class
R-I Certificate" on the face thereof, in substantially the form set forth in
Exhibit A-6 hereto, and evidencing ownership of the residual interest in REMIC I
and representing the right to the Percentage Interest of distributions provided
for the Class R-1 Certificate as set forth herein.
Class R-II Certificate: Any Certificate designated as a "Class
R-II Certificate" on the face thereof, in substantially the form set forth in
Exhibit A-6 hereto, and evidencing ownership of the residual interest in REMIC
II and representing the right to the Percentage Interest of distributions
provided for the Class R-2 Certificate as set forth herein.
Class R-III Certificate: Any Certificate designated as a
"Class R-III Certificate" on the face thereof, in substantially the form set
forth in Exhibit A-6 hereto, and evidencing ownership of the
7
residual interest in REMIC III and representing the right to the Percentage
Interest of distributions provided for the Class R-III Certificate as set forth
herein.
Class R-X Certificate: Any Certificate designated as a "Class
R-X Certificate" on the face thereof, in substantially the form set forth in
Exhibit A-6 hereto, and evidencing ownership of the residual interest in REMIC
IV and representing the right to the Percentage Interest of distributions
provided for the Class R-X Certificate as set forth herein.
Class I-A Certificates: The Class I-A-1 Certificates, Class
I-A-2 Certificates and Class I-A-3 Certificates.
Class I-A-1 Certificates: The Class I-A-1A Certificates and
Class I-A-1B Certificates.
Class I-A-2 Certificates: The Class I-A-2A Certificates and
Class I-A-2B Certificates.
Class I-A-3 Certificates: The Class I-A-3A Certificates and
Class I-A-3B Certificates.
Class I-B Certificates: The I-B-1 Certificates, Class I-B-2
Certificates, Class I-B-3 Certificates, Class I-B-4 Certificates, Class I-B-5
Certificates and Class I-B-6 Certificates.
Class I-P Certificate: Any Certificate designated as a "Class
I-P Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class I-P Certificates as set forth herein.
Class I-PO Certificate: Any Certificate designated as a "Class
I-PO Certificate" on the face thereof, in the form of Exhibit A-3 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class I-PO Certificates as set forth herein.
Class I-PO Certificate Cash Shortfall: For any Distribution
Date, the difference between (i) principal distributable to the Class I-PO
Certificates in accordance with priority third of clause (i)(A) under subsection
5.04(a)(I), and (ii) principal actually distributed to the Class I-PO
Certificates after giving effect to clause (iii) under subsection 5.04(a)(I).
Class I-PO Certificate Deferred Amount: As to each
Distribution Date through the Cross-Over Date, the aggregate of all amounts
allocable on such dates to the Class I-PO Certificates in respect of the
principal portion of Realized Losses in respect of Discount Mortgage Loans in
Sub-Loan Group I-1 and the Class I-PO Certificate Cash Shortfall and all amounts
previously allocated in respect of such losses and such shortfalls to the Class
I-PO Certificates, and not distributed on prior Distribution Dates.
Class I-PO Certificate Principal Distribution Amount: With
respect to each Distribution Date, an amount equal to
the sum of:
(i) the PO Percentage of all scheduled payments of principal
due on each Discount Mortgage Loan in Sub-Loan Group I-1 on the related
Due Date as specified in the amortization schedule at the time
applicable thereto (after adjustment for previous principal prepayments
but before any adjustment to such amortization schedule by reason of
any bankruptcy or similar proceeding or any moratorium or similar
waiver or grace period);
8
(ii) the PO Percentage of the stated principal balance of each
Discount Mortgage Loan in Sub-Loan Group I-1 which was the subject of a
prepayment in full received by a Servicer during the applicable
Prepayment Period;
(iii) the PO Percentage of all partial prepayments of
principal of each Discount Mortgage Loan in Sub-Loan Group I-1 received
during the applicable Prepayment Period;
(iv) the lesser of (a) the PO Percentage of the sum of (A) all
net Liquidation Proceeds allocable to principal on each Discount
Mortgage Loan in Sub-Loan Group I-1 which became a Liquidated Mortgage
Loan during the related Liquidation Period (other than a Discount
Mortgage Loan described in clause (B)) and (B) the stated principal
balance of each such Discount Mortgage Loan in Sub-Loan Group I-1
purchased by an insurer from the Trust during the related Prepayment
Period pursuant to the related primary mortgage insurance policy, if
any, or otherwise; and (b) the PO Percentage of the sum of (A) the
stated principal balance of each Discount Mortgage Loan in Sub-Loan
Group I-1 which became a Liquidated Mortgage Loan during the related
Prepayment Period (other than a Discount Mortgage Loan described in
clause (B)) and (B) the stated principal balance of each such Mortgage
Loan in Sub-Loan Group I-1 that was purchased by an insurer from the
Trust during the related Prepayment Period pursuant to the related
primary mortgage insurance policy, if any, or otherwise; and
(v) the PO Percentage of the sum of (a) the Stated Principal
Balance of each Discount Mortgage Loan in Sub-Loan Group I-1 which was
repurchased by the seller in connection with such Distribution Date and
(b) the difference, if any, between the Stated Principal Balance of a
Discount Mortgage Loan in Sub-Loan Group I-1 that has been replaced by
the seller with a substitute Discount Mortgage Loan pursuant to the
pooling and servicing agreement in connection with such Distribution
Date and the Stated Principal Balance of such substitute Discount
Mortgage Loan.
The Class I-PO Certificates shall be entitled to distributions from Sub-Loan
Group I-1 only.
Class II-A Certificates: The Class II-A-1 Certificates and
Class II-A-2 Certificates.
Class II-A Principal Distribution Amount: With respect to
any applicable Distribution Date, an amount equal to the excess, if any, of:
1. the aggregate Certificate Principal Balance of the
Class II-A Certificates immediately prior to such
Distribution Date over
2. the lesser of
I. the excess of
(a) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related Realized
Loss Period and Principal
Prepayments received during the
related Prepayment Period), over
(b) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related
9
Realized Loss Period and Principal
Prepayments received during the
related Prepayment Period)
multiplied by (i) on each
Distribution Date prior to the
Distribution Date in February 2013,
38.250% and (ii) on each
Distribution Date on and after the
Distribution Date in February 2013,
30.600%, and
II. the excess of
(a) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related Realized
Loss Period and Principal
Prepayments received during the
related Prepayment Period), over
(b) 0.50% of the aggregate Stated
Principal Balance of the Mortgage
Loans in Loan Group II as of the
Cut-off Date.
Class II-A-1 Certificate: Any Certificate designated as a
"Class II-A-1 Certificate" on the face thereof, in the form of Exhibit A-1
hereto, representing the right to its Percentage Interest of distributions
provided for the Class II-A-1 Certificates as set forth herein.
Class II-A-1 Margin: For any Distribution Date (i) on or prior
to the Optional Termination Date, 0.400% per annum and (ii) thereafter, 0.800%
per annum.
Class II-A-1 Pass-Through Rate: On any Distribution Date, the
least of (i) One-Month LIBOR for the related Accrual Period plus the Class
II-A-1 Margin for such Distribution Date, (ii) 11.50% per annum, and (iii) the
applicable Interest Rate Cap for such Distribution Date.
Class II-A-2 Certificate: Any Certificate designated as a
"Class II-A-2 Certificate" on the face thereof, in the form of Exhibit A-1
hereto, representing the right to its Percentage Interest of distributions
provided for the Class II-A-2 Certificates as set forth herein.
Class II-A-2 Margin: For any Distribution Date (i) on or prior
to the Optional Termination Date, 0.500% per annum and (ii) thereafter, 1.000%
per annum.
Class II-A-2 Pass-Through Rate: On any Distribution Date, the
lesser of (i) One-Month LIBOR for the related Accrual Period plus the Class
II-A-2 Margin for such Distribution Date, (ii) 11.50% per annum, and (iii) the
applicable Interest Rate Cap for such Distribution Date.
Class B-IO Certificate: Any Certificate designated as a "Class
B-IO Certificate" on the face thereof, in the form of Exhibit A-6 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class B-IO Certificates herein.
Class II-M Certificates: The M-1 Certificates, Class II-M-2
Certificates, Class II-M-3 Certificates, Class II-M-4 Certificates and Class
II-M-5 Certificates.
Class II-M-1 Certificate: Any Certificate designated as a
"Class II-M-1 Certificate" on the face thereof, in the form of Exhibit A-2
hereto, representing the right to its Percentage Interest of distributions
provided for the Class II-M-1 Certificates as set forth herein.
10
Class II-M-1 Margin: For any Distribution Date (i) on or prior
to the Optional Termination Date, 0.420% per annum and (ii) thereafter, 0.630%
per annum.
Class II-M-1 Pass-Through Rate: For any Distribution Date, the
lesser of (i) One-Month LIBOR for the related Accrual Period plus the Class
II-M-1 Margin for such Distribution Date, (ii) 11.50% per annum, and (iii) the
applicable Interest Rate Cap for such Distribution Date.
Class II-M-1 Principal Distribution Amount: With respect to
any applicable Distribution Date, an amount equal to the excess, if any, of:
1. the Certificate Principal Balance of the Class II-M-1
Certificates immediately prior to such Distribution
Date over
2. the lesser of
I. the excess of
(a) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related Realized
Loss Period and Principal
Prepayments received during the
related Prepayment Period), over
(b) the sum of
(1) the aggregate Certificate
Principal Balance of the
Class II-A Certificates
(after taking into account
the payment of the Class
II-A Principal Distribution
Amount on such Distribution
Date), and
(2) the aggregate Stated
Principal Balance of the
Mortgage Loans in Loan
Group II as of the last day
of the related Due Period
(after reduction for
Realized Losses incurred
during the related Realized
Loss Period and Principal
Prepayments received during
the related Prepayment
Period) multiplied by (i)
on each Distribution Date
prior to the Distribution
Date in February 2013,
32.375% and (ii) on each
Distribution Date on and
after the Distribution Date
in February 2013, 25.900%,
and
II. the excess of
(a) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related Realized
Loss Period and Principal
Prepayments received during the
related Prepayment Period), over
(b) 0.50% of the aggregate Stated
Principal Balance of the Mortgage
Loans in Loan Group II as of the
Cut-off Date.
11
Class II-M-2 Certificate: Any Certificate designated as a
"Class II-M-2 Certificate" on the face thereof, in the form of Exhibit A-2
hereto, representing the right to its Percentage Interest of distributions
provided for the Class II-M-2 Certificates as set forth herein.
Class II-M-2 Margin: For any Distribution Date (i) on or prior
to the Optional Termination Date, 0.500% per annum and (ii) thereafter, 0.750%
per annum.
Class II-M-2 Pass-Through Rate: For any Distribution Date, the
lesser of (i) One-Month LIBOR for the related Accrual Period plus the Class
II-M-2 Margin for such Distribution Date, (ii) 11.50% per annum, and (iii) the
applicable Interest Rate Cap for such Distribution Date.
Class II-M-2 Principal Distribution Amount: With respect to
any applicable Distribution Date, an amount equal to the excess, if any, of:
1. the Certificate Principal Balance of the Class II-M-2
Certificates immediately prior to such Distribution
Date over
2. the lesser of
I. the excess of
(a) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related Realized
Loss Period and Principal
Prepayments received during the
related Prepayment Period), over
(b) the sum of
(1) the aggregate Certificate
Principal Balance of the
Class II-A Certificates
(after taking into account
the payment of the Class
II-A Principal Distribution
Amount on such Distribution
Date),
(2) the Certificate Principal
Balance of the Class II-M-1
Certificates (after taking
into account the payment of
the Class II-M-1 Principal
Distribution Amount on such
Distribution Date), and
(3) the aggregate Stated
Principal Balance of the
Mortgage Loans in Loan
Group II as of the last day
of the related Due Period
(after reduction for
Realized Losses incurred
during the related Realized
Loss Period and Principal
Prepayments received during
the related Prepayment
Period) multiplied by (i)
on each Distribution Date
prior to the Distribution
Date in February 2013,
26.875% and (ii) on each
Distribution Date on and
after the Distribution Date
in February 2013, 21.500%,
and
II. the excess of
12
(a) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related Realized
Loss Period and Principal
Prepayments received during the
related Prepayment Period), over
(b) 0.50% of the aggregate Stated
Principal Balance of the Mortgage
Loans in Loan Group II as of the
Cut-off Date.
Class II-M-3 Certificate: Any Certificate designated as a
"Class II-M-3 Certificate" on the face thereof, in the form of Exhibit A-2
hereto, representing the right to its Percentage Interest of distributions
provided for the Class II-M-3 Certificates as set forth herein.
Class II-M-3 Margin: For any Distribution Date (i) on or prior
to the Optional Termination Date, 0.800% per annum and (ii) thereafter, 1.200%
per annum.
Class II-M-3 Pass-Through Rate: For any Distribution Date, the
lesser of (i) One-Month LIBOR for the related Accrual Period plus the Class
II-M-3 Margin for such Distribution Date, (ii) 11.50% per annum, and (iii) the
applicable Interest Rate Cap for such Distribution Date.
Class II-M-3 Principal Distribution Amount: With respect to
any applicable Distribution Date, an amount equal to the excess, if any, of:
1. the Certificate Principal Balance of the Class II-M-3
Certificates immediately prior to such Distribution
Date over
2. the lesser of
I. the excess of
(a) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related Realized
Loss Period and Principal
Prepayments received during the
related Prepayment Period), over
(b) the sum of
(1) the aggregate Certificate
Principal Balance of the
Class II-A Certificates
(after taking into account
the payment of the Class
II-A Principal Distribution
Amount on such Distribution
Date),
(2) the Certificate Principal
Balance of the Class II-M-1
Certificates (after taking
into account the payment of
the Class II-M-1 Principal
Distribution Amount on such
Distribution Date),
(3) the Certificate Principal
Balance of the Class II-M-2
Certificates (after taking
into account the payment of
the
13
Class II-M-2 Principal
Distribution Amount on such
Distribution Date), and
(4) the aggregate Stated
Principal Balance of the
Mortgage Loans in Loan
Group II as of the last day
of the related Due Period
(after reduction for
Realized Losses incurred
during the related Realized
Loss Period and Principal
Prepayments received during
the related Prepayment
Period) multiplied by (i)
on each Distribution Date
prior to the Distribution
Date in February 2013,
17.750% and (ii) on each
Distribution Date on and
after the Distribution Date
in February 2013, 14.200%,
and
II. the excess of
(a) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related Realized
Loss Period and Principal
Prepayments received during the
related Prepayment Period), over
(b) 0.50% of the aggregate Stated
Principal Balance of the Mortgage
Loans in Loan Group II as of the
Cut-off Date.
Class II-M-4 Certificate: Any Certificate designated as a
"Class II-M-4 Certificate" on the face thereof, in the form of Exhibit A-2
hereto, representing the right to its Percentage Interest of distributions
provided for the Class II-M-4 Certificates as set forth herein.
Class II-M-4 Margin: For any Distribution Date (i) on or prior
to the Optional Termination Date, 1.000% per annum and (ii) thereafter, 1.500%
per annum.
Class II-M-4 Pass-Through Rate: For any Distribution Date, the
lesser of (i) One-Month LIBOR for the related Accrual Period plus the Class
II-M-4 Margin for such Distribution Date, (ii) 11.50% per annum, and (iii) the
applicable Interest Rate Cap for such Distribution Date.
Class II-M-4 Principal Distribution Amount: With respect to
any applicable Distribution Date, an amount equal to the excess, if any, of:
1. the Certificate Principal Balance of the Class II-M-4
Certificates immediately prior to such Distribution
Date over
2. the lesser of
I. the excess of
(a) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related Realized
Loss Period and Principal
Prepayments received during the
related Prepayment Period), over
14
(b) the sum of
(1) the aggregate Certificate
Principal Balance of the
Class II-A Certificates
(after taking into account
the payment of the Class
II-A Principal Distribution
Amount on such Distribution
Date),
(2) the Certificate Principal
Balance of the Class II-M-1
Certificates (after taking
into account the payment of
the Class II-M-1 Principal
Distribution Amount on such
Distribution Date),
(3) the Certificate Principal
Balance of the Class II-M-2
Certificates (after taking
into account the payment of
the Class II-M-2 Principal
Distribution Amount on such
Distribution Date),
(4) the Certificate Principal
Balance of the Class II-M-3
Certificates (after taking
into account the payment of
the Class II-M-3 Principal
Distribution Amount on such
Distribution Date), and
(5) the aggregate Stated
Principal Balance of the
Mortgage Loans in Loan
Group II as of the last day
of the related Due Period
(after reduction for
Realized Losses incurred
during the related Realized
Loss Period and Principal
Prepayments received during
the related Prepayment
Period) multiplied by (i)
on each Distribution Date
prior to the Distribution
Date in February 2013,
11.250% and (ii) on each
Distribution Date on and
after the Distribution Date
in February 2013, 9.000%,
and
II. the excess of
(a) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related Realized
Loss Period and Principal
Prepayments received during the
related Prepayment Period), over
(b) 0.50% of the aggregate Stated
Principal Balance of the Mortgage
Loans in Loan Group II as of the
Cut-off Date.
Class II-M-5 Certificate: Any Certificate designated as a
"Class II-M-5 Certificate" on the face thereof, in the form of Exhibit A-2
hereto, representing the right to its Percentage Interest of distributions
provided for the Class II-M-5 Certificates as set forth herein.
Class II-M-5 Margin: For any Distribution Date (i) on or prior
to the Optional Termination Date, 1.000% per annum and (ii) thereafter, 1.500%
per annum.
15
Class II-M-5 Pass-Through Rate: For any Distribution Date, the
lesser of (i) One-Month LIBOR for the related Accrual Period plus the Class
II-M-5 Margin for such Distribution Date, (ii) 11.50% per annum, and (iii) the
applicable Interest Rate Cap for such Distribution Date.
Class II-M-5 Principal Distribution Amount: With respect to
any applicable Distribution Date, an amount equal to the excess, if any, of:
1. the Certificate Principal Balance of the Class II-M-5
Certificates immediately prior to such Distribution
Date over
2. the lesser of
I. the excess of
(a) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related Realized
Loss Period and Principal
Prepayments received during the
related Prepayment Period), over
(b) the sum of
(1) the aggregate Certificate
Principal Balance of the
Class II-A Certificates
(after taking into account
the payment of the Class
II-A Principal Distribution
Amount on such Distribution
Date),
(2) the Certificate Principal
Balance of the Class II-M-1
Certificates (after taking
into account the payment of
the Class II-M-1 Principal
Distribution Amount on such
Distribution Date),
(3) the Certificate Principal
Balance of the Class II-M-2
Certificates (after taking
into account the payment of
the Class II-M-2 Principal
Distribution Amount on such
Distribution Date),
(4) the Certificate Principal
Balance of the Class II-M-3
Certificates (after taking
into account the payment of
the Class II-M-3 Principal
Distribution Amount on such
Distribution Date),
(5) the Certificate Principal
Balance of the Class II-M-4
Certificates (after taking
into account the payment of
the Class II-M-4 Principal
Distribution Amount on such
Distribution Date), and
(6) the aggregate Stated
Principal Balance of the
Mortgage Loans in Loan
Group II as of the last day
of the related Due Period
(after reduction for
Realized Losses incurred
during the related Realized
Loss Period and Principal
16
Prepayments received during
the related Prepayment
Period) multiplied by (i)
on each Distribution Date
prior to the Distribution
Date in February 2013,
8.750% and (ii) on each
Distribution Date on and
after the Distribution Date
in February 2013, 7.000%,
and
II. the excess of
(a) the aggregate Stated Principal
Balance of the Mortgage Loans in
Loan Group II as of the last day of
the related Due Period (after
reduction for Realized Losses
incurred during the related Realized
Loss Period and Principal
Prepayments received during the
related Prepayment Period), over
(b) 0.50% of the aggregate Stated
Principal Balance of the Mortgage
Loans in Loan Group II as of the
Cut-off Date.
Class II-P Certificate: Any Certificate designated as a "Class
II-P Certificate" on the face thereof, in the form of Exhibit A-4 hereto,
representing the right to its Percentage Interest of distributions provided for
the Class II-P Certificates as set forth herein.
Closing Date: March 15, 2007.
Code: The Internal Revenue Code of 1986, as amended,
including any successor or amendatory provisions.
Combined Loan-to-Value Ratio: The fraction, expressed as a
percentage, the numerator of which is the sum of (x) the original principal
balance of the related Mortgage Loan and (y) the outstanding principal balance
at the date of origination of the Mortgage Loan of any senior mortgage loan, and
the denominator of which is the Appraised Value of the related Mortgaged
Property.
Compensating Interest: With respect to any Mortgage Loan and
any Distribution Date, an amount, not to exceed the related Servicing Fee, to be
applied by the related Servicer pursuant to the related Servicing Agreement to
the payment of a Prepayment Interest Shortfall on such Mortgage Loan or by the
Master Servicer pursuant to Section 5.02 hereof.
Corporate Trust Office: The designated office of the Trustee
where at any particular time its corporate trust business with respect to this
Agreement shall be administered, which office at the date of the execution of
this Agreement is located at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Structured Finance Agency & Trust BSABS 2007-SD2, or at
such other address as the Trustee may designate from time to time. With respect
to the Certificate Registrar and the presentment of Certificates for
registration of transfer, exchange or final payment, Xxxxx Fargo Bank, N.A.,
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention:
Corporate Trust, BSABS 2007-SD2, and for all other purposes, X.X. Xxx 00,
Xxxxxxxx, Xxxxxxxx 00000 (or for overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx,
Xxxxxxxx, Xxxxxxxx 21045), Attention: Corporate Trust, BSABS 2007-SD2.
Coupon Strip: With respect to Loan Group II and any
Distribution Date occurring in or after March 2017, in which an amount is
payable to the Final Maturity Reserve Account pursuant to Section 4.07, an
amount, if any, equal to the lesser of (a) the product of (i) one-twelfth of
0.90%, and (ii) the Stated Principal Balance of the Mortgage Loans in Loan Group
II with original terms to maturity in
17
excess of 30 years at the beginning of the related Due Period, and (b) the
amount, if any, which when added to amounts on deposit on the Final Maturity
Reserve Account on such Distribution Date would equal the Final Maturity Reserve
Account Target.
Credit Enhancement Percentage: With respect to Loan Group II
and any Distribution Date, the percentage obtained by dividing (x) the sum of
(i) the aggregate Certificate Principal Balance of the Group II Subordinate
Certificates, plus (ii) any Overcollateralization Amount (in each case after
taking into account distribution of the Principal Distribution Amount on such
Distribution Date), by (y) the aggregate Stated Principal Balances of the
Mortgage Loans in Loan Group II as of the last day of the related Due Period
(after reduction for Realized Losses incurred during the related Realized Loss
Period and prepayments received during the related Prepayment Period).
Cross-Over Date: The Distribution Date on which the
Certificate Principal Balances of the Group I Subordinate Certificates are
reduced to zero.
Cumulative Loss Test: With respect to Loan Group II and any
Distribution Date on or after the Stepdown Date, a Cumulative Loss Test will be
deemed to have been violated if the aggregate of related Realized Losses
(reduced by the aggregate amount of Subsequent Recoveries) from the Closing Date
through the last day of the related Realized Loss Period with respect to the
Mortgage Loans in Loan Group II, as a percentage of the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group II as of the Cut-off Date,
exceed for Distribution Dates occurring:
DISTRIBUTION DATE LOSS PERCENTAGE
----------------- ---------------
March 2009 through February 2010................................ 1.25%
March 2010 through February 2011................................ 1.25% for the first month,
plus an additional 1/12th of
0.50% for each month
thereafter
March 2011 through February 2012................................ 1.75% for the first month,
plus an additional 1/12th of
0.25% for each month
thereafter
March 2012 through February 2013................................ 2.00% for the first month,
plus an additional 1/12th of
0.25% for each month
thereafter
March 2013 and each month thereafter............................ 2.25%
Current Interest: As of any Distribution Date, with respect to
each Class of Group II Offered Certificates, (i) the interest accrued on the
Certificate Principal Balance, during the related Accrual Period at the
applicable Pass-Through Rate plus any amount previously distributed with respect
to interest for such Certificate that has been recovered as a voidable
preference by a trustee in bankruptcy, minus, to the extent allocated to such
Class, (ii) the sum of (a) any Prepayment Interest Shortfall for such
Distribution Date, to the extent not covered by Compensating Interest, (b) any
shortfalls resulting from application of the Relief Act or similar state laws
during the related Due Period, and (c) any Net Deferred Interest for such
Distribution Date. For purposes of calculating Current Interest for any such
Class,
18
amounts specified in clause (ii) hereof for any such Distribution Date shall be
allocated first to the Class B-IO Certificates and the Residual Certificates in
reduction of amounts otherwise distributable to such Certificates on such
Distribution Date and then any excess shall be allocated to each Class of Group
II Certificates, pro rata, based on the respective amounts of interest accrued
pursuant to clause (i) hereof for each such Class on such Distribution Date.
Custodial Agreement: The Custodial Agreement, dated as of
March 15, 2007, among the Trustee, the Depositor, the Sponsor, the Master
Servicer, the Securities Administrator and the Custodian thereunder, as amended
or supplemented from time to time, in substantially the form of Exhibit K
hereto.
Custodian: Xxxxx Fargo Bank, N.A., as custodian on behalf of
the Trustee with respect to the Mortgage Loans and related Mortgage Files held
by Xxxxx Fargo Bank, N.A. pursuant to the Custodial Agreement
Cut-off Date: The close of business on February 1, 2007.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
unpaid principal balance thereof as of the close of business on the Cut-off Date
after application of all Principal Prepayments received prior to the Cut-off
Date and, except with respect to any Simple Interest Loans, scheduled payments
of principal due on or before the Cut-off Date, whether or not received but
without giving effect to any installments of principal received in respect of
Due Dates after the Cut-off Date. The aggregate Cut-off Date Principal Balance
of the Mortgage Loans is $350,840,007.38.
Deferred Interest: With respect to any negatively amortizing
Mortgage Loan, the excess of the amount of interest due on such negatively
amortizing Mortgage Loan over the interest portion of the scheduled payment due
thereon, which is permitted under the terms of the related Mortgage Note to be
added to the principal of the Mortgage Note.
Definitive Certificates: As defined in Section 6.06.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be
replaced by a Replacement Mortgage Loan.
Delinquency Test: With respect to Loan Group II and any
Distribution Date on or after the Stepdown Date, a Delinquency Test shall have
been violated if at any time, (x) the three-month rolling average of the percent
equivalent of a fraction, the numerator of which is the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group II that are 60 days or
more Delinquent or are in bankruptcy or foreclosure or are REO Properties, and
the denominator of which is the aggregate Stated Principal Balance of all of the
Mortgage Loans in Loan Group II as of the last day of the related Due Period
(after reduction for Realized Losses incurred during the related Realized Loss
Period and prepayments received during the related Prepayment period) equals or
exceeds (y) 34.00% of the Credit Enhancement Percentage.
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is not made pursuant to the terms of such Mortgage Loan by the close of
business on the day such payment is scheduled to be due. A Mortgage Loan is "30
days delinquent" if such payment has not been received by the close of business
on the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on.
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Denomination: With respect to the Certificates, the amount set
forth on the face thereof as, in the case of a Certificate having a Certificate
Principal Balance, the "Initial Principal Balance of this Certificate," and, in
the case of a Class I-X Certificate, as the "Initial Principal Balance
(Notional) of this Certificate."
Depositor: Bear Xxxxxxx Asset Backed Securities I LLC, a
Delaware limited liability company, or its successor in interest.
Depositor Information: As defined in Section 3.18(b).
Depository: The initial Depository shall be DTC, the nominee
of which is Cede, or any other organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The
Depository shall initially be the registered Holder of the Book-Entry
Certificates. The Depository shall at all times be a "clearing corporation" as
defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of
New York.
Depository Agreement: With respect to the Class of Book-Entry
Certificates, the agreement between the Trust and the initial Depository, dated
March 14, 2007, substantially in the form of Exhibit I.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: With respect to any Distribution Date and
Servicer, the date specified in the related Servicing Agreement.
Discount Mortgage Loan: A Sub-Loan Group I-1 Mortgage Loan
with a Net Mortgage Rate less than 5.500%.
Distribution Account: The separate Eligible Account created
and maintained by the Paying Agent pursuant to Section 4.04 in the name of the
Trustee for the benefit of the Certificateholders and designated "Citibank,
N.A., in trust for registered holders of Bear Xxxxxxx Asset Backed Securities
Trust 2007-SD2, Asset-Backed Certificates, Series 2007-SD2". Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.
Distribution Date: The 25th day of each calendar month after
the initial issuance of the Certificates, or if such 25th day is not a Business
Day, the next succeeding Business Day, commencing in March 2007.
DTC: The Depository Trust Company, or its successors in
interest.
Due Date: As to any Mortgage Loan (other than a Simple
Interest Loan), the date in each month on which the related Scheduled Payment is
due, as set forth in the related Mortgage Note, and with respect to any Simple
Interest Loans, the last day of the immediately preceding Prepayment Period, if
its Scheduled Payment is due during such Prepayment Period.
Due Period: With respect to any Distribution Date and any
Mortgage Loan (other than any Simple Interest Loan), the period from the second
day of the calendar month preceding the calendar month in which such
Distribution Date occurs through close of business on the first day of the
calendar
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month in which such Distribution Date occurs, and with respect to any Simple
Interest Loans, the calendar month immediately preceding the month in which such
Distribution Date occurs.
Eligible Account: Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company, the
long-term unsecured debt obligations and short-term unsecured debt obligations
of which (or, in the case of a depository institution or trust company that is
the principal subsidiary of a holding company, the debt obligations of such
holding company, but only if Xxxxx'x is not a Rating Agency) are rated by each
Rating Agency in one of its two highest long-term and its highest short-term
rating, respectively (or, if S&P is a Rating Agency, in its highest long-term
and one of its two highest short-term ratings, respectively,) at the time any
amounts are held on deposit therein, or (ii) an account or accounts in a
depository institution or trust company in which such accounts are insured by
the FDIC (to the limits established by the FDIC) and the uninsured deposits in
which accounts are otherwise secured such that, as evidenced by an Opinion of
Counsel delivered to the Trustee and to each Rating Agency, the
Certificateholders have a claim with respect to the funds in such account or a
perfected first priority security interest against any collateral (which shall
be limited to Permitted Investments) securing such funds that is superior to
claims of any other depositors or creditors of the depository institution or
trust company in which such account is maintained, or (iii) a trust account or
accounts maintained with the corporate trust department of a federal or state
chartered depository institution or trust company having capital and surplus of
not less than $50,000,000, acting in its fiduciary capacity or (iv) any other
account acceptable to the Rating Agencies. Eligible Accounts may bear interest,
and may include, if otherwise qualified under this definition, accounts
maintained with the Trustee, the Securities Administrator or the Master
Servicer.
EMC: EMC Mortgage Corporation, a Delaware corporation.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA Restricted Certificate: Each Class of Certificates other
than the Class A Certificates.
Event of Default: As defined in Section 8.01 hereof.
Excess Cashflow: With respect to Loan Group II and any
Distribution Date, an amount, if any, equal to the sum of (a) the Excess
Overcollateralization Amount and (b) the Remaining Excess Spread, in each case
for such Distribution Date.
Excess Liquidation Proceeds: To the extent not required by law
to be paid to the related Mortgagor, the excess, if any, of any Liquidation
Proceeds with respect to a Mortgage Loan over the Stated Principal Balance of
such Mortgage Loan and accrued and unpaid interest at the related Mortgage Rate
through the last day of the month in which the Mortgage Loan has been
liquidated.
Excess Overcollateralization Amount: With respect to Loan
Group II and any Distribution Date, the lesser of (i) Principal Funds and (ii)
the excess, if any, of the Overcollateralization Amount over the Specified
Overcollateralization Amount for such Distribution Date.
Excess Spread: With respect to Loan Group II and any
Distribution Date, the excess, if any, of (i) Interest Funds for such
Distribution Date over (ii) the sum of (a) Current Interest on the Group II
Certificates and (b) Interest Carry Forward Amounts on the Class II-A
Certificates for such Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
21
Extra Principal Distribution Amount: With respect to Loan
Group II and any Distribution Date, the lesser of (i) the excess, if any, of the
Specified Overcollateralization Amount for such Distribution Date over the
Overcollateralization Amount for such Distribution Date and (ii) the Excess
Spread for such Distribution Date.
Xxxxxx Xxx: Xxxxxx Xxx (also known as Federal National
Mortgage Association), or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.
Final Maturity Reserve Account: The separate trust account
established and maintained by the Securities Administrator pursuant to Section
4.07 hereof.
Final Maturity Reserve Account Target: On any Distribution
Date occurring in or after March 2017, an amount equal to the lesser of (a) the
product of (i) the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group II with original terms to maturity in excess of 30 years as of the
related Due Date, and (ii) a fraction, the numerator of which is 1.00 and the
denominator of which is 0.85, and (b) $866,836.13.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989.
Fiscal Quarter: December 1 through the last day of February,
March 1 through May 31, June 1 through August 31, or September 1 through
November 30, as applicable.
Fitch: Fitch Ratings.
Xxxxxxx Mac: Xxxxxxx Mac (also known as Federal Home Loan
Mortgage Corporation), or any successor thereto.
Gross Margin: With respect to each Mortgage Loan that bears an
adjustable rate of interest, the fixed percentage set forth in the related
Mortgage Note and indicated on the Mortgage Loan Schedule which percentage is
added to the related Index on each Interest Adjustment Date to determine
(subject to rounding, the Minimum Lifetime Mortgage Rate, the Maximum Lifetime
Mortgage Rate and the Periodic Rate Cap, each as applicable) the Mortgage Rate
until the next succeeding Interest Adjustment Date.
Group I Non-Offered Certificates: The Class I-B-4
Certificates, the Class I-B-5 Certificates, the Class I-B-6 Certificates and the
Class I-P Certificates.
Group I Senior Certificates: The Class I-A Certificates, the
Class I-PO Certificates and the Class I-X Certificates.
Group I Subordinate Certificates: The Class I-B Certificates.
Group II Non-Offered Certificates: The Class B-IO Certificates
and the Class II-P Certificates.
Group II Senior Certificates: The Class II-A Certificates.
Group II Subordinate Certificates: The Class II-M
Certificates.
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Indemnified Persons: The Trustee, the Master Servicer, the
Sponsor, the Depositor, the Custodian and the Securities Administrator and their
officers, directors, agents and employees and, with respect to the Trustee, any
separate co-trustee and its officers, directors, agents and employees.
Index: With respect to each Mortgage Loan that bears an
adjustable rate of interest, the index set forth in the related Mortgage Note
and indicated on the Mortgage Loan Schedule, by reference to which the related
Mortgage Rate will be adjusted from time to time.
Initial Certificate Principal Balance: With respect to any
Certificate, the Certificate Principal Balance of such Certificate or any
predecessor Certificate on the Closing Date.
Initial Overcollateralization Amount: $7,120,624.32.
Insurance Policy: With respect to any Mortgage Loan included
in the Trust Fund, any insurance policy, including all riders and endorsements
thereto in effect with respect to such Mortgage Loan, including any replacement
policy or policies for any such insurance policies.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans pursuant to any Insurance Policy, to the extent such proceeds are not
applied to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with the procedures that such Servicer would follow in
servicing mortgage loans held for its own account, in each case other than any
amount included in such Insurance Proceeds in respect of Insured Expenses and
exclusive of Subsequent Recoveries.
Insured Expenses: Expenses covered by an Insurance Policy or
any other insurance policy with respect to the Mortgage Loans.
Interest Carry Forward Amount: As of any Distribution Date and
with respect to each Class of Group II Offered Certificates, the sum of (i) the
excess of (a) the Current Interest for such Class with respect to prior
Distribution Dates over (b) the amount actually distributed to such Class with
respect to interest on such prior Distribution Dates and (ii) interest thereon
(to the extent permitted by applicable law) at the applicable Pass-Through Rate
for such Class for the related Accrual Period including the Accrual Period
relating to such Distribution Date.
Interest Determination Date: With respect to each Adjustable
Rate Certificate, for the first Accrual Period, March 13, 2007, and with respect
to any Accrual Period thereafter, the second LIBOR Business Day preceding the
commencement of such Accrual Period.
Interest Funds: With respect to Loan Group II and any
Distribution Date (i) the sum, without duplication, of the following amounts:
(a) all interest received during the related Due Period with respect to the
related Mortgage Loans less the related Servicing Fee, and Master Servicing Fee
referred to in clause (ii) of the definition thereof, (b) all Advances relating
to interest with respect to the related Mortgage Loans made on or prior to the
related Master Servicer Advance Date, (c) all Compensating Interest with respect
to the related Mortgage Loans and required to be remitted pursuant to the
related Servicing Agreement or this Agreement with respect to such Distribution
Date, (d) Liquidation Proceeds with respect to the related Mortgage Loans
collected during the related Liquidation Period (to the extent such Liquidation
Proceeds relate to interest), (e) all amounts relating to interest with respect
to each related Mortgage Loan repurchased by the Sponsor pursuant to Sections
2.02, 2.03 and 3.20, and (f) all amounts in respect of interest paid by EMC
pursuant to Section 10.01, in each case to the extent remitted by the Master
Servicer to the Distribution Account pursuant to this Agreement, minus (ii) all
amounts relating to interest reimbursed pursuant to Sections 4.05.
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Interest-Only Certificates: The Class I-X Certificates.
Interest Rate Adjustment Date: With respect to each Mortgage
Loan that bears an adjustable rate of interest, the date set forth in the
related Mortgage Note and indicated on the Mortgage Loan Schedule, on which the
related Mortgage Rate is subject to adjustment.
Interest Rate Cap: For any Distribution Date and the Group II
Offered Certificates, the excess of (A) the weighted average of the Net Mortgage
Rates of the Mortgage Loans in Loan Group II as of the first day of the related
Due Period, adjusted to reflect the accrual of interest based on the actual
number of days elapsed in the related Accrual Period divided by 360, over (B)
the Coupon Strip, if any, payable to the Final Maturity Reserve Account, divided
by the outstanding Stated Principal Balance of the related Mortgage Loans as of
the related Due Date prior to giving effect to any reduction in the Stated
Principal Balances of the related Mortgage Loans on such Due Date, multiplied by
12.
Latest Possible Maturity Date: For the Group I Certificates
and the Group II Certificates, the Distribution Date in February 2037. For
purposes of the Treasury Regulations under Code section 860A through 860G, the
latest possible maturity date of each regular interest issued by REMIC I, REMIC
II, REMIC III and REMIC IV shall be the Latest Possible Maturity Date.
LIBOR Business Day: Any day on which banks in the London,
England and New York City, U.S.A. are open and conducting transactions in
foreign currency and exchange.
Liquidated Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure, foreclosure sale, trustee's sale or other realization as provided
by applicable law governing the real property subject to the related Mortgage
and any security agreements and as to which the related Servicer has certified
to the Master Servicer during the prior calendar month that it has received all
amounts it expects to receive in connection with such liquidation.
Liquidation Period: With respect to any Distribution Date, the
related monthly or other period described in the related Servicing Agreement
pursuant to which any Liquidation Proceeds are collected and remitted on the
related Servicer Remittance Date.
Liquidation Proceeds: Amounts, other than Insurance Proceeds
and Subsequent Recoveries, received in connection with the partial or complete
liquidation of a Mortgage Loan, whether through trustee's sale, foreclosure sale
or otherwise, or in connection with any condemnation or partial release of a
Mortgaged Property and any other proceeds received with respect to an REO
Property, less the sum of related unreimbursed Advances, Servicing Fees and
Servicing Advances and all expenses of liquidation, including property
protection expenses and foreclosure and sale costs, including court and
reasonable attorney's fees.
Loan Group: Any of Loan Group I or Loan Group II.
Loan Group I: The pool of the Mortgage Loans consisting of the
Mortgage Loans included in Sub-Loan Group I-1, Sub-Loan Group I-2 and Sub-Loan
Group I-3.
Loan Group II: The pool of the Mortgage Loans consisting of
the Mortgage Loans included in Loan Group II.
Master Servicer: Xxxxx Fargo Bank, N.A., a national banking
association, in its capacity as master servicer hereunder, and its successors
and assigns.
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Master Servicer Advance Date: As to any Distribution Date, the
Business Day immediately preceding such Distribution Date.
Master Servicer Information: As defined in Section 3.18(b).
Master Servicing Fee: For any Distribution Date, the sum of
(i) all income and gain, net of losses, realized from any investment of funds in
the Distribution Account since the prior Distribution Date and (ii) with respect
to each Mortgage Loan, an amount equal to 1/12th of the Master Servicing Fee
Rate multiplied by the Stated Principal Balance of such Mortgage Loan as of the
close of business on the first day of the month immediately preceding the month
in which such Distribution Date occurs.
Master Servicing Fee Rate: For each Distribution Date, 0.015%
per annum of the aggregate Stated Principal Balance of the Mortgage Loans as of
the first day of the month immediately preceding such Distribution Date.
Maximum Lifetime Mortgage Rate: As to each Mortgage Loan that
bears an adjustable rate of interest, the rate, if any, set forth in the related
Mortgage Note and indicated on the Mortgage Loan Schedule, that is the maximum
level to which a Mortgage Rate can adjust in accordance with its terms,
regardless of the change in the applicable Index.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered with MERS on the MERS(R) System.
Minimum Lifetime Mortgage Rate: As to each Mortgage Loan that
bears an adjustable rate of interest, the rate, if any, set forth in the related
Mortgage Note and indicated on the Mortgage Loan Schedule, that is the minimum
level to which a Mortgage Rate can adjust in accordance with its terms,
regardless of the change in the applicable Index.
MOM Loan: Any Mortgage Loan as to which, at origination
thereof, MERS acts as the mortgagee, solely as nominee for the originator of
such Mortgage Loan and its successors and assigns.
Monthly Statement: The statement delivered to the
Certificateholders pursuant to Section 5.05.
Moody's: Xxxxx'x Investors Service, Inc.
Mortgage: The mortgage, deed of trust or other instrument
creating a first lien on or first priority ownership interest, or creating a
second lien on or second priority ownership interest, as applicable, in an
estate in fee simple in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01
hereof pertaining to a particular Mortgage Loan and any additional documents
delivered to the Custodian on behalf of the Trustee to be added to the Mortgage
File pursuant to this Agreement.
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Mortgage Loans: Such of the mortgage loans transferred and
assigned to the Trustee pursuant to the provisions hereof, as from time to time
are held as a part of the Trust Fund (including any REO Property), the mortgage
loans so held being identified in the Mortgage Loan Schedule, notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property. Any
mortgage loan that was intended by the parties hereto to be transferred to the
Trust Fund as indicated by such Mortgage Loan Schedule which is in fact not so
transferred for any reason including, without limitation, a breach of the
representation contained in Section 2.03(b)(v) hereof, shall continue to be a
Mortgage Loan hereunder until the Purchase Price with respect thereto has been
paid to the Trust Fund. The term Mortgage Loan shall not include any Liquidated
Loan.
Mortgage Loan Purchase Price: The price, calculated as set
forth in Section 10.01, to be paid in connection with the repurchase of the
Mortgage Loans pursuant to Section 10.01.
Mortgage Loan Schedule: The list of Mortgage Loans (as from
time to time amended by the Master Servicer to reflect the deletion of Deleted
Mortgage Loans and the addition of Replacement Mortgage Loans pursuant to the
provisions of this Agreement) transferred to the Trustee as part of the Trust
Fund and from time to time subject to this Agreement. The initial Mortgage Loan
Schedule is attached hereto as Exhibit B and sets forth the following
information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Servicer thereof;
(iii) the Mortgage Rate in effect as of the Cut-off Date;
(iv) the Master Servicing Fee Rate;
(v) the related Servicing Fee Rate;
(vi) the Net Mortgage Rate in effect as of the Cut-off
Date;
(vii) the stated maturity date;
(viii) the original principal balance;
(ix) the stated original term;
(x) the next payment date as of the Cut-off Date;
(xi) the monthly payment as of the Cut-off Date;
(xii) the remaining term as of the Cut-off Date;
(xiii) the property type;
(xiv) if it is a first or second lien on the related
Mortgaged Property;
(xv) if applicable, that such Mortgage Loan is a Balloon
Loan;
(xvi) whether interest accrues at a fixed rate, and
otherwise, the applicable Index (with respect to adjustable rate
Mortgage Loans);
26
(xvii) the Gross Margin, if applicable;
(xviii) the intervals between Interest Adjustment Dates, if
applicable;
(xix) the next succeeding Interest Adjustment Date, if
applicable, as of the Cut-off Date;
(xx) the Periodic Rate Cap, if applicable;
(xxi) the Minimum Lifetime Mortgage Rate, if applicable;
(xxii) the Maximum Lifetime Mortgage Rate, if applicable;
(xxiii) the Combined Loan-to-Value Ratio as of the Cut-off
Date;
(xxiv) [Reserved];
(xxv) the Cut-off Date Principal Balance;
(xxvi) if applicable, that such Mortgage Loan is a Simple
Interest Loan;
(xxvii) if applicable, that such Mortgage Loan provides for
negative amortization; and
(xxviii) the MIN with respect to each Mortgage Loan registered
on the MERS(R) System.
Such schedule shall also set forth the total of the amounts described under
(xxv) above for all of the Mortgage Loans.
Mortgage Note: The original executed note or other evidence of
indebtedness of a Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne by a Mortgage
Note.
Mortgaged Property: The underlying property securing a
Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Net Deferred Interest: With respect to the Mortgage Loans in
Loan Group II, on any Distribution Date, means the amount of Deferred Interest
on the related Mortgage Loans during the related Due Period net of Principal
Prepayments in full, partial Principal Prepayments, Net Liquidation Proceeds,
Repurchase Proceeds and scheduled principal payments, in that order, in each
case with respect to Loan Group II, included in the related available funds for
such Distribution Date and available to be distributed on the related
Certificates on that Distribution Date.
With respect to any Class of Group II Senior Certificates and
Group II Subordinate Certificates as of any Distribution Date, means an amount
equal to the product of (1) the excess, if any, of (a) the Pass-Through Rate for
such Class of Certificates, over (b) the Adjusted Rate Cap for such Class of
Certificates for such Distribution Date, (2) the Certificate Principal Balance
of such Class of Certificates immediately prior to such Distribution Date, and
(3) the actual number of days in such Accrual Period divided by 360.
27
Net Interest Shortfalls: With respect to Loan Group I and any
Distribution Date, the sum of Prepayment Interest Shortfalls on the related
Mortgage Loans, to the extent not covered by Compensating Interest, and interest
shortfalls on the related Mortgage Loans resulting from the application of the
Relief Act or similar state law, in each case with respect to such Distribution
Date.
Net Mortgage Rate: As to each Mortgage Loan, and at any time,
the per annum rate equal to the Mortgage Rate less the sum of the related
Servicing Fee Rate and the Master Servicing Fee Rate.
NIM Issuer: Any entity established as the issuer of NIM
Securities.
NIM Securities: Any debt securities secured or otherwise
backed by some or all of the Non-Offered Certificates.
NIM Trustee: The trustee for any NIM Securities.
Non-Book-Entry Certificate: Any Certificate other than a
Book-Entry Certificate.
Non-Offered Certificates: The Group I Non-Offered
Certificates, the Group II Non-Offered Certificates, or the Residual
Certificates.
Non-PO Percentage: (a) With respect to each Mortgage Loan in
Loan Group I that is a Discount Mortgage Loan, the related Net Mortgage Rate
divided by 5.500%, and (b) with respect to each Mortgage Loan in Loan Group I
that is not a Discount Mortgage Loan, 100%.
Nonrecoverable Advance: Any portion of an Advance previously
made or proposed to be made by the Master Servicer that, in the good faith
judgment of the Master Servicer, will not or, in the case of a proposed advance,
would not, be ultimately recoverable by it from the related Mortgagor, related
Liquidation Proceeds or otherwise.
Notional Amount: The Notional Amount of the Class I-X
Certificates immediately prior to any Distribution Date, is equal to the
aggregate State Principal Balance of the Sub-Loan Group I-3 Mortgage Loans with
a Net Mortgage Rate greater than or equal to 6.500% per annum.
Offered Certificates: The Senior Certificates, the Group I
Subordinate Certificates (other than Group I Non-Offered Certificates) and the
Group II Subordinate Certificates (other than Group II Non-Offered
Certificates).
Officer's Certificate: A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a Vice
President (however denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one of the assistant treasurers or assistant secretaries of the
Depositor, EMC or the Master Servicer (or any other officer customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with a
particular subject) or (ii), if provided for in this Agreement, signed by a
Servicing Officer, as the case may be, and delivered to the Depositor, the
Sponsor, the Securities Administrator, the Master Servicer and/or the Trustee,
as the case may be, as required by this Agreement.
One-Month LIBOR: With respect to any Accrual Period, the rate
determined by the Securities Administrator on the related Interest Determination
Date on the basis of the rate for U.S. dollar deposits for one month that
appears on Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such
28
Interest Determination Date. If such rate does not appear on such page (or such
other page as may replace that page on that service, or if such service is no
longer offered, such other service for displaying One-Month LIBOR or comparable
rates as may be reasonably selected by the Securities Administrator), One-Month
LIBOR for the applicable Accrual Period will be the Reference Bank Rate. If no
such quotations can be obtained by the Securities Administrator and no Reference
Bank Rate is available, One-Month LIBOR will be One-Month LIBOR applicable to
the preceding Accrual Period. The establishment of One-Month LIBOR on each
Determination Date by the Securities Administrator and the Securities
Administrator's calculation of the rate of interest applicable to the
Certificates bearing interest based on One-Month LIBOR shall, in the absence of
manifest error, be conclusive and binding.
Opinion of Counsel: A written opinion of counsel, who may be
counsel for the Depositor or the Master Servicer, reasonably acceptable to each
addressee of such opinion; provided that with respect to Section 7.05 or 11.01,
or the interpretation or application of the REMIC Provisions, such counsel must
(i) in fact be independent of the Depositor and the Master Servicer, (ii) not
have any direct financial interest in the Depositor or the Master Servicer or in
any affiliate of either, and (iii) not be connected with the Depositor or the
Master Servicer as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
Optional Termination: The termination of either Loan Group I
or Loan Group II as a result of the purchase of all of the Mortgage Loans in the
related Loan Group and any related REO Property pursuant to the last sentence of
Section 10.01 hereof.
Optional Termination Date: With respect to each Loan Group,
the Distribution Date on which the Stated Principal Balance of all of the
Mortgage Loans in the related Loan Group, and the Appraised Value of all related
REO Properties, at the time of repurchase is equal to or less than 10% of the
aggregate Cut-off Date Principal Balance of all of the Mortgage Loans in the
related Loan Group.
Original Group I Subordinate Principal Balance: The aggregate
Certificate Principal Balance of the Group I Subordinate Certificates as of the
Closing Date.
Original Value: The value of the property underlying a
Mortgage Loan based on an appraisal.
Originator: Any of the entities which either originated or
acquired a Mortgage Loan and transferred such Mortgage Loan to the Sponsor.
OTS: The Office of Thrift Supervision.
Outstanding: With respect to the Certificates as of any date
of determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(a) Certificates theretofore canceled by the Certificate
Registrar or delivered to the Certificate Registrar
for cancellation; and
(b) Certificates in exchange for which or in lieu of
which other Certificates have been executed and
delivered by the Certificate Registrar pursuant to
this Agreement.
Outstanding Mortgage Loan: As of any date of determination, a
Mortgage Loan with a Stated Principal Balance greater than zero that was not the
subject of a Principal Prepayment in full, and that did not become a Liquidated
Loan, prior to the end of the related Prepayment Period.
29
Overcollateralization Amount: With respect to Loan Group II
and any Distribution Date, the excess, if any, of (i) the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group II as of the last day of
the related Due Period (after reduction for Realized Losses incurred during the
related Realized Loss Period and prepayments received during the related
Prepayment Period), over (ii) the sum of the Certificate Principal Balances of
the Group II Offered Certificates (after taking into account the payment of
principal other than any Extra Principal Distribution Amount on such
Certificates) on such Distribution Date.
Overcollateralization Floor: With respect to Loan Group II and
any date of determination, 0.50% of the aggregate Cut-off Date Principal Balance
of the Mortgage Loans in Loan Group II.
Ownership Interest: As to any Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
Pass-Through Rate: With respect to each Class of Certificates,
other than the Class I-PO Certificates, the Class P Certificates, the Class B-IO
Certificates and the Residual Certificates, the applicable interest rate for
each such Class as set forth in Section 6.01. The Class I-PO Certificates, the
Class P Certificates, the Class B-IO Certificates and the Residual Certificates
do not accrue interest and do not have a Pass-Through Rate.
Paying Agent: The Securities Administrator and any successor
paying agent appointed hereunder.
Percentage Interest: With respect to any Certificate of a
specified Class, the Percentage Interest set forth on the face thereof or the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of such Class.
Periodic Rate Cap: As to each Mortgage Loan that bears an
adjustable rate of interest, the rate, if any, set forth in the related Mortgage
Note and indicated on the Mortgage Loan Schedule, that is the maximum adjustment
that can be made to a Mortgage Rate on each Interest Adjustment Date in
accordance with its terms, regardless of the change in the applicable Index.
Permitted Investments: At any time, any one or more of the
following obligations and securities:
(i) obligations of the United States or any agency thereof,
provided such obligations are backed by the full faith and credit of
the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as will not result in the downgrading or withdrawal of the
ratings then assigned to the Certificates by each Rating Agency, as
evidenced in writing;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating of
each Rating Agency, or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency, as evidenced in writing;
30
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any
state thereof and subject to supervision and examination by federal
and/or state banking authorities (including the Trustee, the Securities
Administrator and the Master Servicer in their commercial banking
capacity), provided that the commercial paper and/or long term
unsecured debt obligations of such depository institution or trust
company are then rated one of the two highest long-term and the highest
short-term ratings of each such Rating Agency for such securities, or
such lower ratings as will not result in the downgrading or withdrawal
of the rating then assigned to the Certificates by any Rating Agency,
as evidenced in writing;
(v) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation containing, at the time of the
issuance of such agreements, such terms and conditions as will not
result in the downgrading or withdrawal of the rating then assigned to
the Certificates by each Rating Agency, as evidenced in writing;
(vi) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (v) above;
(vii) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the
two highest short term ratings of each Rating Agency (except if the
Rating Agency is Moody's, such rating will be the highest commercial
paper rating of Moody's for any such securities), or such lower rating
as will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by each Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency;
(viii) interests in any money market fund (including any such
fund managed or advised by the Trustee, the Master Servicer, the
Securities Administrator or any affiliate thereof) which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the highest applicable short term
rating by each Rating Agency rating such fund (and, so long as S&P is a
Rating Agency, the long term ratings must be either AAAm or AAAm-G), or
such lower rating as will not result in the downgrading or withdrawal
of the ratings then assigned to the Certificates by each Rating Agency,
as evidenced in writing;
(ix) short term investment funds sponsored by any trust
company or banking association incorporated under the laws of the
United States or any state thereof (including any such fund managed or
advised by the Trustee, the Securities Administrator or the Master
Servicer or any affiliate thereof) which on the date of acquisition has
been rated by each Rating Agency in their respective highest applicable
rating category or such lower rating as will not result in the
downgrading or withdrawal of the ratings then assigned to the
Certificates by each Rating Agency, as evidenced in writing; and
(x) such other investments having a specified stated maturity
and bearing interest or sold at a discount acceptable to each Rating
Agency and as will not result in the downgrading or withdrawal of the
rating then assigned to the Certificates by any Rating Agency, as
evidenced by a signed writing delivered by each Rating Agency;
provided, that no such instrument shall be a Permitted
Investment if such instrument (i) evidences the right to receive interest only
payments with respect to the obligations underlying such
31
instrument, (ii) is purchased at a premium or (iii) is purchased at a deep
discount; provided further that no such instrument shall be a Permitted
Investment (A) if such instrument evidences principal and interest payments
derived from obligations underlying such instrument and the interest payments
with respect to such instrument provide a yield to maturity of greater than 120%
of the yield to maturity at par of such underlying obligations, or (B) if it may
be redeemed at a price below the purchase price (the foregoing clause (B) not to
apply to investments in units of money market funds pursuant to clause (vii)
above); provided further that no amount beneficially owned by any REMIC
(including, without limitation, any amounts collected by the Master Servicer but
not yet deposited in the Distribution Account) may be invested in investments
(other than money market funds) treated as equity interests for Federal income
tax purposes, unless the Master Servicer shall receive an Opinion of Counsel, at
the expense of the Master Servicer, to the effect that such investment will not
adversely affect the status of any such REMIC as a REMIC under the Code or
result in imposition of a tax on any such REMIC. Permitted Investments that are
subject to prepayment or call may not be purchased at a price in excess of par.
Permitted Transferee: Any person other than (i) the United
States, any State or political subdivision thereof, or any agency or
instrumentality of any of the foregoing, (ii) a foreign government,
International Organization or any agency or instrumentality of either of the
foregoing, (iii) an organization (except certain farmers' cooperatives described
in section 521 of the Code) that is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in section 860E(c)(1) of
the Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) a
Person that is not a citizen or resident of the United States, a corporation,
partnership (other than a partnership that has any direct or indirect foreign
partners) or other entity (treated as a corporation or a partnership for federal
income tax purposes), created or organized in or under the laws of the United
States, any state thereof or the District of Columbia, an estate whose income
from sources without the United States is includible in gross income for United
States federal income tax purposes regardless of its connection with the conduct
of a trade or business within the United States, or a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trust or and (vi) any other Person
so designated by the Trustee based upon an Opinion of Counsel (which shall not
be an expense of the Trustee) that states that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are Outstanding.
The terms "United States," "State" and "International Organization" shall have
the meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of the Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not selected by
such government unit.
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.
PO Percentage: (a) With respect to each Mortgage Loan in Loan
Group I that is a Discount Mortgage Loan, 5.500% minus the related Net Mortgage
Rate, divided by 5.500%, and (b) with respect to each Mortgage Loan in Loan
Group I that is not a Discount Mortgage Loan, 0%.
Prepayment Assumption: The applicable rate of prepayment, as
described in the Prospectus Supplement relating to each Class of Offered
Certificates.
32
Prepayment Charge: Any prepayment premium, penalty or charge
payable by a Mortgagor in connection with any Principal Prepayment on a Mortgage
Loan pursuant to the terms of the related Mortgage Note.
Prepayment Charge Loan: Any Mortgage Loan for which a
Prepayment Charge may be assessed and to which such Prepayment Charge the Class
P Certificates are entitled, as indicated on the Mortgage Loan Schedule.
Prepayment Interest Shortfall: With respect to any
Distribution Date, for each Mortgage Loan that was the subject of a partial
Principal Prepayment or a Principal Prepayment in full during the related
Prepayment Period, or that became a Liquidated Loan during the prior calendar
month (other than a Principal Prepayment in full resulting from the purchase of
a Mortgage Loan pursuant to Section 2.02, 2.03, 3.20 or 10.01 hereof), the
amount, if any, by which (i) one month's interest at the applicable Net Mortgage
Rate on the Stated Principal Balance of such Mortgage Loan immediately prior to
such prepayment (or liquidation) or in the case of a partial Principal
Prepayment on the amount of such prepayment (or Liquidation Proceeds) exceeds
(ii) the amount of interest paid or collected in connection with such Principal
Prepayment or such Liquidation Proceeds.
Prepayment Period: With respect to any Distribution Date and
the Mortgage Loans serviced by a related Servicer, the monthly or other related
period preceding such Distribution Date described in the related Servicing
Agreement pursuant to which any prepayments on such Mortgage Loans are
determined with respect to such Distribution Date.
Primary Mortgage Insurance Policy: Any primary mortgage
guaranty insurance policy issued in connection with a Mortgage Loan which
provides compensation to a Mortgage Note holder in the event of default by the
obligor under such Mortgage Note or the related security instrument, if any or
any replacement policy therefor through the related Accrual Period for such
Class relating to a Distribution Date.
Principal Distribution Amount: With respect to Loan Group II
and any Distribution Date, an amount equal to (x) the Principal Funds for such
Distribution Date plus (y) any Extra Principal Distribution Amount for such
Distribution Date minus (z) any Excess Overcollateralization Amount for such
Distribution Date.
Principal Funds: With respect to Loan Group II and any
Distribution Date, (i) the sum, without duplication of (a) all scheduled
principal (or with respect to any Simple Interest Loans, actual principal)
collected during the related Due Period, (b) all Advances (except with respect
to any Simple Interest Loans) relating to principal made on or before the Master
Servicer Advance Date, (c) Principal Prepayments exclusive of Prepayment Charges
collected during the related Prepayment Period, (d) the Stated Principal Balance
of each related Mortgage Loan that was repurchased by the Sponsor pursuant to
Sections 2.02, 2.03 or 3.20, (e) the aggregate of all Substitution Adjustment
Amounts for the related Determination Date in connection with the substitution
of related Mortgage Loans pursuant to Section 2.03(c), (f) amounts in respect of
principal paid by the Depositor pursuant to Section 10.01 and (g) all
Liquidation Proceeds collected during the related Liquidation Period (to the
extent such Liquidation Proceeds relate to principal), less all non-recoverable
Advances relating to principal reimbursed during the related Liquidation Period
and all Subsequent Recoveries received during the related Liquidation Period and
minus (ii) the sum of (a) all amounts relating to principal or not allocable to
either interest or principal reimbursed pursuant to Section 4.05, and (b) the
amount of any Principal Prepayments in full, partial Principal Prepayments, Net
Liquidation Proceeds, Repurchase Proceeds and scheduled principal payments, in
that order, included in collections for the related Due Period that are applied
as Interest Funds in connection with any Deferred Interest with respect to such
Due Period.
33
Principal Prepayment: Any Mortgagor payment or other recovery
of (or proceeds with respect to) principal on a Mortgage Loan (including loans
purchased or repurchased under Sections 2.02, 2.03, 3.20 and 10.01 hereof) that
is received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest due on any date or dates
in any month or months subsequent to the month of prepayment. Partial Principal
Prepayments shall be applied by the Master Servicer or the applicable Servicer,
as appropriate, in accordance with the terms of the related Mortgage Note.
Projected Principal Balance: With respect to each Yield
Maintenance Agreement for each applicable Distribution Date, the respective
amount set forth on Schedule III hereto.
Prospectus Supplement: The Prospectus Supplement dated March
14, 2007 relating to the public offering of the Offered Certificates, as amended
and supplemented.
Protected Account: An account established and maintained by
each Servicer with respect to receipts on the Mortgage Loans and REO Property
serviced by such Servicer in accordance with the related Servicing Agreement.
Protected Party: As defined in Section 7.04 hereof.
PUD: A Planned Unit Development.
Purchase Price: With respect to any Mortgage Loan (x) required
to be repurchased by the Sponsor pursuant to Section 2.02 or 2.03 hereof or (y)
that the Sponsor has a right to purchase pursuant to Section 3.20 hereof, an
amount equal to the sum of (i) 100% of the outstanding principal balance of the
Mortgage Loan as of the date of such purchase plus (ii) accrued interest thereon
at the applicable Mortgage Rate through the first day of the month in which the
Purchase Price is to be distributed to Certificateholders plus (iii) in the case
of a repurchase of such Mortgage Loan resulting from breach of the
representation or warranty contained in Section 2.03(b)(vii)(Q) or
2.03(b)(vii)(S), any costs or damages incurred by the Trust in connection with
the violation by such Mortgage Loan of any predatory or abusive lending law,
reduced by (iv) any portion of the Servicing Fee, Servicing Advances and
Advances payable to the purchaser of the Mortgage Loan.
Rating Agency: Each of S&P and Fitch, in the case of Group I
Certificates; and each of S&P and Moody's, in the case of Group II Certificates.
If any such organization or its successor is no longer in existence, "Rating
Agency" shall be a nationally recognized statistical rating organization, or
other comparable Person, designated by the Depositor, notice of which
designation shall be given to the Trustee. References herein to a given rating
category of a Rating Agency shall mean such rating category without giving
effect to any modifiers.
Realized Loss: With respect to each Liquidated Loan, an amount
(not less than zero or more than the Stated Principal Balance of the Mortgage
Loan) as of the date of such liquidation, equal to (i) the Stated Principal
Balance of such Liquidated Loan as of the date of such liquidation, minus (ii)
the Liquidation Proceeds, if any, received in connection with such liquidation
during the month in which such liquidation occurs, to the extent applied as
recoveries of principal of the Liquidated Loan.
Realized Loss Period: With respect to a Distribution Date, the
monthly or other related period preceding such Distribution Date described in
the related Servicing Agreement pursuant to which any Realized Losses are
determined with respect to such Distribution Date.
34
Record Date: With respect to the Adjustable Rate Certificates
and any Distribution Date, so long as such Certificates are Book-Entry
Certificates, the Business Day preceding such Distribution Date, and otherwise,
the close of business on the last Business Day of the month preceding the month
in which such Distribution Date occurs. With respect to each Class of
Certificates (other than the Adjustable Rate Certificates) and (a) the first
Distribution Date, the Closing Date, and (b) with respect to any other
Distribution Date, the close of business on the last Business Day of the month
immediately preceding the month in which such Distribution Date occurs.
Reference Bank Rate: With respect to the Adjustable Rate
Certificates and any Accrual Period, the arithmetic mean (rounded upwards, if
necessary, to the nearest whole multiple of 0.03125%) of the offered rates for
United States dollar deposits for one month that are quoted by the Reference
Banks as of 11:00 a.m., New York City time, on the related Interest
Determination Date to prime banks in the London interbank market for a period of
one month in amounts approximately equal to the aggregate Certificate Principal
Balance of all Adjustable Rate Certificates on such Interest Determination Date,
provided that at least two such Reference Banks provide such rate. If fewer than
two offered rates appear, the Reference Bank Rate will be the arithmetic mean
(rounded upwards, if necessary, to the nearest whole multiple of 0.03125%) of
the rates quoted by one or more major banks in New York City, selected by the
Securities Administrator, as of 11:00 a.m., New York City time, on such date for
loans in U.S. dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Certificate Principal Balance of
the Certificates which bear an adjustable rate of interest on such Interest
Determination Date.
Reference Banks: Barclays Bank PLC, Citibank, N.A. and
Deutsche Bank AG, provided that if any of the foregoing banks are not suitable
to serve as a Reference Bank, then any leading banks selected by the Securities
Administrator which are engaged in transactions in Eurodollar deposits in the
international Eurocurrency market (i) with an established place of business in
London, England, (ii) not controlling, under the control of or under common
control with the Depositor, the Sponsor, the Master Servicer or any affiliate
thereof and (iii) which have been designated as such by the Securities
Administrator.
Regular Certificate: Any Certificate other than a Residual
Certificate.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
Relief Act: The Servicemembers Civil Relief Act, as amended,
or any similar state or local law.
Remaining Excess Spread: With respect to Loan Group II and any
Distribution Date, the Excess Spread less any Extra Principal Distribution
Amount, in each case for such Distribution Date.
REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code.
REMIC I: The segregated pool of assets described in Section
5.06(a).
REMIC I Certificates: The REMIC I Regular Interests and the
Class R-I Certificate.
35
REMIC I Regular Interests: As defined in Section 5.06(b)(i).
REMIC II: The segregated pool of assets consisting of the
REMIC I regular interests and constituting a REMIC hereunder.
REMIC II Certificates: The REMIC II Regular Interests and the
Class R-II Certificate.
REMIC II Regular Interests: As defined in Section 5.06(b)(ii).
REMIC III: The segregated pool of assets consisting of the
REMIC II regular interests and constituting a REMIC hereunder.
REMIC III Certificates: The REMIC III Regular Interests and
the Class R-III Certificate.
REMIC III Regular Interests: As defined in Section
5.06(b)(iii).
REMIC IV: The segregated pool of assets consisting of the
REMIC III Class P Certificates and constituting a REMIC hereunder.
REMIC IV Certificates: The REMIC IV Class P Regular Interest
and the Class R-X Certificate.
REMIC IV Regular Interest: As defined in Section 5.06(b)(iv).
REMIC Opinion: An Opinion of Counsel, to the effect that the
proposed action described therein would not, under the REMIC Provisions, (i)
cause either REMIC I, REMIC II, REMIC III or REMIC IV to fail to qualify as a
REMIC while any regular interest in any such REMIC is outstanding, (ii) result
in a tax on prohibited transactions or (iii) constitute a taxable contribution
after the Startup Day.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and proposed, temporary and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
Remittance Report: As defined in Section 4.05(c).
REO Property: A Mortgaged Property acquired by a Servicer
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Mortgage Loan: A Mortgage Loan or Mortgage Loans
in the aggregate substituted by the Sponsor for a Deleted Mortgage Loan, which
must, on the date of such substitution, as confirmed in a Request for Release,
(i) have a Stated Principal Balance, after deduction of the principal portion of
the Scheduled Payment due in the month of substitution, not in excess of, and
not less than 90% of the Stated Principal Balance of the Deleted Mortgage Loan;
(ii) have a Mortgage Rate not less than or more than 1% per annum higher than
the Mortgage Rate of the Deleted Mortgage Loan; (iii) have the same or higher
credit quality characteristics than that of the Deleted Mortgage Loan; (iv) have
a Combined Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan;
(v) have a remaining term to maturity no greater than (and not more than one
year less than) that of the Deleted Mortgage Loan; (vi) not permit conversion of
the Mortgage Rate from a fixed rate to a variable rate; (vii) provide
36
for a Prepayment Charge on terms substantially similar to those of the
Prepayment Charge, if any, of the Deleted Mortgage Loan; (viii) have the same
lien priority as the Deleted Mortgage Loan; (ix) constitute the same occupancy
type as the Deleted Mortgage Loan or be owner occupied; (x) be current in
payment of principal and interest as of the date of substitution; (xi) have
payment terms that do not vary in any material respect from the payment terms of
the Mortgage Loan for which it is to be substituted; (xii) if the Deleted
Mortgage Loan bears an adjustable rate of interest, have a Gross Margin,
Periodic Rate Cap and Maximum Lifetime Mortgage Rate no less than those of the
Deleted Mortgage Loan, have the same Index and interval between Interest
Adjustment Dates, and a Minimum Lifetime Mortgage Rate no lower than that of
such Deleted Mortgage Loan; and (xiii) comply with each representation and
warranty set forth in Section 2.03 hereof.
Reportable Event: As defined in Section 3.18(a)(ii).
Request for Release: The Request for Release to be submitted
by the Sponsor, a Servicer or the Master Servicer to the Custodian,
substantially in the form of Exhibit H. Each Request for Release furnished to
the Custodian by the Sponsor, a Servicer or the Master Servicer shall be in
duplicate and shall be executed by a Servicing Officer (or, if furnished
electronically to the Custodian, shall be deemed to have been sent and executed
by a Servicing Officer) of the Sponsor, the Servicer or the Master Servicer, as
applicable.
Required Insurance Policy: With respect to any Mortgage Loan,
any insurance policy that is required to be maintained from time to time under
this Agreement or the related Servicing Agreement.
Residual Certificates: The Class R-I Certificate, Class R-II
Certificate, Class R-III Certificate and Class R-X Certificate.
Responsible Officer: With respect to the Trustee, any Vice
President, any Assistant Vice President, the Secretary, any Assistant Secretary,
any Trust Officer with specific responsibility for the transaction contemplated
hereby or other officers of the Trustee specified by the Trustee, as to whom,
with respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc.
Xxxxxxxx-Xxxxx Act: The Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations of the Commission promulgated thereunder (including any
interpretation thereof by the Commission's staff).
Xxxxxxxx-Xxxxx Certification: As defined in Section
3.18(a)(iii)(D).
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, N.A., in its
capacity as securities administrator hereunder, and its successors and assigns.
Securities Administrator Fee: For any Distribution Date, a fee
payable to the Securities Administrator by the Master Servicer out of its own
funds in such capacity as they may separately agree.
37
Securities Administrator Information: As defined in Section
3.18(b).
Senior Certificates: The Group I Senior Certificates and the
Group II Senior Certificates.
Senior Optimal Principal Amount: With respect to each Sub-Loan
Group included in Loan Group I and each Distribution Date, will be an amount
equal to the sum of the following (but in no event greater than the aggregate
Certificate Principal Balance of the related Certificate Group immediately prior
to such Distribution Date):
(1) the Senior Percentage of the Non-PO Percentage of the
principal portion of all monthly payments due on the Mortgage Loans in
the related Sub-Loan Group on the related Due Date, as specified in the
amortization schedule at the time applicable thereto (after adjustment
for previous principal prepayments but before any adjustment to such
amortization schedule by reason of any bankruptcy or similar proceeding
or any moratorium or similar waiver or grace period if the Distribution
Date occurs prior to a Cross-Over Date);
(2) the Senior Prepayment Percentage of the Non-PO Percentage
of the Stated Principal Balance of each Mortgage Loan in the related
Sub-Loan Group which was the subject of a prepayment in full received
by a Servicer during the applicable Prepayment Period;
(3) the Senior Prepayment Percentage of the Non-PO Percentage
of the amount of all partial prepayments allocated to principal
received during the applicable Prepayment Period in respect of Mortgage
Loans in the related Sub-Loan Group;
(4) the lesser of (a) the Senior Prepayment Percentage of the
Non-PO Percentage of the sum of (i) all Net Liquidation Proceeds
allocable to principal received in respect of each Mortgage Loan in the
related Sub-Loan Group that became a Liquidated Mortgage Loan during
the related Liquidation Period (other than Mortgage Loans described in
the immediately following clause (ii)) and all Subsequent Recoveries
received in respect of each Liquidated Mortgage Loan in the related
Sub-Loan Group during the related Due Period and (ii) the Stated
Principal Balance of each such Mortgage Loan in the related Sub-Loan
Group purchased by an insurer from the Trust during the related
Prepayment Period pursuant to the related primary mortgage insurance
policy, if any, or otherwise; and (b) the Senior Percentage of the
Non-PO Percentage of the sum of (i) the Stated Principal Balance of
each Mortgage Loan in the related Sub-Loan Group which became a
Liquidated Mortgage Loan during the related Prepayment Period (other
than the Mortgage Loans described in the immediately following clause
(ii)) and all Subsequent Recoveries received in respect of each
Liquidated Mortgage Loan in the related Sub-Loan Group during the
related Due Period and (ii) the Stated Principal Balance of each such
Mortgage Loan in the related Sub-Loan Group that was purchased by an
insurer from the Trust during the related Prepayment Period pursuant to
the related primary mortgage insurance policy, if any or otherwise;
(5) any amount allocated to the Available Funds of the related
Sub-Loan Group in accordance with clauses (E) and (F) under subsection
5.04(a)(I)(i); and
(6) the Senior Prepayment Percentage of the Non-PO Percentage
of the sum of (a) the Stated Principal Balance of each Mortgage Loan in
the related Sub-Loan Group which was repurchased by the Sponsor in
connection with such Distribution Date and (b) the excess, if any, of
the Stated Principal Balance of a Mortgage Loan in the related Sub-Loan
Group that has been replaced by the Sponsor with a substitute Mortgage
Loan pursuant to this Agreement in
38
connection with such Distribution Date over the Stated Principal
Balance of such substitute Mortgage Loan.
Senior Percentage: With respect to each Certificate Group
related to a Sub-Loan Group in Loan Group I and any Distribution Date, is the
lesser of (a) 100% and (b) the percentage obtained by dividing the Certificate
Principal Balance of the Group I Senior Certificates (other than the Class I-X
and Class I-PO certificates) in the related Certificate Group by the aggregate
Stated Principal Balance of the Mortgage Loans in the related Sub-Loan Group in
Loan Group I (other than the PO Percentage thereof with respect to the related
Discount Mortgage Loans) as of the beginning of the related Due Period. The
initial Group I Senior Percentage for each Certificate Group related to a
Sub-Loan Group in Loan Group I will be equal to approximately 83.95%.
Senior Prepayment Percentage: The Senior Prepayment Percentage
for the Group I Senior Certificates (other than the Class I-X and Class I-PO
Certificates) of each Certificate Group related to a Sub-Loan Group in Loan
Group I, on any Distribution Date occurring during the periods set forth below
will be as follows:
Period (dates inclusive) Senior Prepayment Percentage
--------------------------- --------------------------------------------
March 2007 - February 2012 100%
March 2012 - February 2013 Senior Percentage for the related Senior
Certificates plus 70% of the Subordinate
Percentage for the related Sub-Loan Group.
March 2013 - February 2014 Senior Percentage for the related Senior
Certificates plus 60% of the Subordinate
Percentage for the related Sub-Loan Group.
March 2014 - February 2015 Senior Percentage for the related Senior
Certificates plus 40% of the Subordinate
Percentage for the related Sub-Loan Group.
March 2015 - February 2016 Senior Percentage for the related Senior
Certificates plus 20% of the Subordinate
Percentage for the related Sub-Loan Group.
March 2016 and thereafter Senior Percentage for the related senior
certificates.
No scheduled reduction to the Senior Prepayment Percentage for
the related Certificate Group shall be made as of any Distribution Date unless,
as of the last day of the month preceding such Distribution Date (1) the
aggregate Stated Principal Balance of the Mortgage Loans in all Sub-Loan Groups
in Loan Group I delinquent 60 days or more (including for this purpose any such
Mortgage Loans in foreclosure and such Mortgage Loans with respect to which the
related Mortgaged Property has been acquired by the Trust) averaged over the
last six months, as a percentage of the aggregate Certificate Principal Balance
of the Group I Subordinate Certificates does not exceed 50% and (2) cumulative
Realized Losses on the Mortgage Loans in all Sub-Loan Groups in Loan Group I do
not exceed (a) 30% of the aggregate Certificate Principal Balance of the
Original Group I Subordinate Principal Balance if such Distribution Date occurs
between and including March 2012 and February 2013, (b) 35% of the Original
Group I Subordinate Principal Balance if such Distribution Date occurs between
and including March 2013 and February 2014, (c) 40% of the Original Group I
Subordinate Principal Balance if such Distribution Date occurs between and
including March 2014 and February 2015, (d) 45% of the Original Group I
Subordinate Principal Balance if such Distribution Date occurs between and
including March
39
2015 and February 2016, and (e) 50% of the Original Group I Subordinate
Principal Balance if such Distribution Date occurs during or after March 2016.
Notwithstanding the foregoing, if on any Distribution Date,
the percentage, the numerator of which is the aggregate Certificate Principal
Balance of the Group I Senior Certificates (other than the Class I-X
Certificates) immediately preceding such Distribution Date, and the denominator
of which is the Stated Principal Balance of the Mortgage Loans in Loan Group I
as of the beginning of the related Due Period, exceeds such percentage as of the
Cut-off Date, then the Senior Prepayment Percentage with respect to all the
Group I Senior Certificates for such Distribution Date will equal 100%.
Servicer: Each of EMC Mortgage Corporation, Xxxxx Fargo Bank,
N.A. and GMAC Mortgage LLC, in each case pursuant to the applicable Servicing
Agreement, and their respective permitted successors and assigns.
Servicer Remittance Date: With respect to each Mortgage Loan
and related Servicer, the date set forth in the related Servicing Agreement,
when the related Servicer is required to remit funds in the related Protected
Account to the Master Servicer.
Servicing Agreement: Any servicing agreement set forth on
Schedule I hereto, including the related Assumption Agreement.
Servicing Advances: All customary, reasonable and necessary
"out of pocket" costs and expenses (including reasonable legal fees) incurred in
the performance by a Servicer of its servicing obligations under the related
Servicing Agreement, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, and including any
expenses incurred in relation to any such proceedings that result from a
Mortgage Loan being registered in the MERS(R) System, (iii) the management and
liquidation of any REO Property (including, without limitation, realtor's
commissions) and (iv) compliance with any obligations under a Servicing
Agreement or Section 3.09 hereof to cause insurance to be maintained.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time, or those
Servicing Criteria otherwise mutually agreed to by EMC, the Master Servicer, the
Securities Administrator and the applicable Servicer in response to evolving
interpretations of Regulation AB and incorporated into a revised Exhibit L.
Servicing Fee: As to each Mortgage Loan and any Distribution
Date, an amount equal to 1/12th of the Servicing Fee Rate multiplied by the
Stated Principal Balance of such Mortgage Loan as of the close of business on
the first day of the month immediately preceding the month in which such
Distribution Date occurs or, in the event of any payment of interest that
accompanies a Principal Prepayment in full during the related Due Period made by
the Mortgagor immediately prior to such prepayment, interest at the Servicing
Fee Rate on the Stated Principal Balance of such Mortgage Loan for the period
covered by such payment of interest.
Servicing Fee Rate: With respect to each Mortgage Loan, the
per annum rate set forth in the Mortgage Loan Schedule under the heading
"Servicing Fee."
Servicing Officer: Any officer of a Servicer or the Master
Servicer involved in, or responsible for, the administration and servicing or
master servicing of the Mortgage Loans, as to which evidence reasonably
acceptable to the Custodian or the Trustee, as applicable, of due authorization,
by such party has been furnished from time to time to the Custodian or the
Trustee, as applicable.
40
Significance Estimate: With respect to any Distribution Date,
and in accordance with Item 1115 of Regulation AB, shall be an amount determined
based on the reasonable good-faith estimate by the Depositor of the aggregate
maximum probable exposure of the outstanding Group II Offered Certificates to
the Yield Maintenance Agreements.
Significance Percentage: With respect to any Distribution
Date, and in accordance with Item 1115 of Regulation AB, shall be an percentage
equal to the Significance Estimate divided by the aggregate outstanding
Certificate Principal Balance of the Group II Offered Certificates, prior to the
distribution of the related Principal Distribution Amount on such Distribution
Date.
Simple Interest Loan: A Mortgage Loan that provides for daily
accrual of interest and is identified as such on the Mortgage Loan Schedule.
None of the Mortgage Loans is a Simple Interest Loan.
Specified Overcollateralization Amount: With respect to Loan
Group II and any Distribution Date:
(i) prior to the Stepdown Date, 3.50% of the aggregate
Stated Principal Balance of the Mortgage Loans in
Loan Group II as of the Cut-off Date,
(ii) on or after the Stepdown Date, provided a Trigger
Event is not in effect, the greater of:
(x) the product of (a) on each Distribution Date
prior to the Distribution Date in February
2013, 8.75%, and on each Distribution Date
on or after the Distribution Date in
February 2013, 7.00%, and (b) the aggregate
Stated Principal Balance of the Mortgage
Loans in Loan Group II as of the last day of
the related Due Period (after reduction for
Realized Losses incurred during the related
Realized Loss Period and prepayments
received during the related Prepayment
Period), and
(y) the Overcollateralization Floor; or
(iii) on and after the Stepdown Date, and if a Trigger
Event is in effect, the Specified
Overcollateralization Amount for the immediately
preceding Distribution Date.
Sponsor: EMC, in its capacity as seller of the Mortgage Loans
to the Depositor.
Startup Day: The startup day, within the meaning of Section
860G(a)(9), for each REMIC formed hereunder shall be the Closing Date.
Stated Principal Balance: With respect to any Mortgage Loan or
related REO Property and any Distribution Date, the Cut-off Date Principal
Balance thereof, plus with respect to any negatively amortizing Mortgage Loan,
the amount of any Net Deferred Interest added to the principal balance thereof,
minus the sum of (i) the principal portion of the Scheduled Payments due (or,
with respect to any Simple Interest Loans, the principal portion of payments
actually received) with respect to such Mortgage Loan during each related Due
Period ending prior to such Distribution Date (and other than with respect to
any Simple Interest Loans irrespective of any delinquency in their payment),
(ii) all Principal Prepayments with respect to such Mortgage Loan received prior
to or during the related Prepayment Period, and all Liquidation Proceeds to the
extent applied by the related Servicer as recoveries of principal in accordance
with Section 3.13 with respect to such Mortgage Loan, that were received by the
41
related Servicer prior to or during the related Liquidation Period, and (iii)
any Realized Losses on such Mortgage Loan incurred during the related Realized
Loss Period. The Stated Principal Balance of a Liquidated Loan equals zero.
Stepdown Date: With respect to Loan Group II and any
Distribution Date, the earlier to occur of:
(i) the Distribution Date on which the aggregate
Certificate Principal Balance of the Class II-A
Certificates has been reduced to zero; and
(ii) the later to occur of
(x) the Distribution Date occurring in March
2010, and
(y) the first Distribution Date for which the
aggregate Certificate Principal Balance of
the Group II Subordinate Certificates plus
the Overcollateralization Amount for such
Distribution Date divided by the sum of the
Stated Principal Balances of the Mortgage
Loans in Loan Group II as of the end of the
related Due Period (after reduction for
Realized Losses incurred during the related
Realized Loss Period and prepayments
received during the related Prepayment
Period) is greater than or equal to (A) on
each Distribution Date prior to the
Distribution Date in February 2013, 38.250%,
and (B) on each distribution date on and
after the distribution date in February
2013, 30.600%.
Strike Rate: With respect to the Yield Maintenance Agreements,
as set forth in Schedule III hereto.
Subcontractor: Any vendor, subcontractor or other Person that
is not responsible for the overall servicing of Mortgage Loans but performs one
or more discrete functions identified in Item 1122(d) of Regulation AB with
respect to Mortgage Loans under the direction or authority of any Servicer (or a
Subservicer of any Servicer), the Master Servicer, the Custodian or the
Securities Administrator.
Sub-Loan Group: Either Sub-Loan Group I-1, Sub-Loan Group I-2,
Sub-Loan Group I-3, Sub-Loan Group II-1, Sub-Loan Group II-2 or Sub-Loan Group
II-3, as applicable.
Sub-Loan Group I-1: With respect to the Mortgage Loans, the
pool of Mortgage Loans identified in the Mortgage Loan Schedule as composing
Sub-Loan Group I-1. With respect to the Certificates, the Class I-A-1A
Certificates, the Class I-A-1B Certificates and the Class I-PO Certificates.
Sub-Loan Group I-2: With respect to the Mortgage Loans, the
pool of Mortgage Loans identified in the Mortgage Loan Schedule as composing
Sub-Loan Group I-2. With respect to the Certificates, the Class I-A-2A
Certificates and the Class I-A-2B Certificates.
Sub-Loan Group I-3: With respect to the Mortgage Loans, the
pool of Mortgage Loans identified in the Mortgage Loan Schedule as composing
Sub-Loan Group I-3. With respect to the Certificates, the Class I-A-3A
Certificates, the Class I-A-3B Certificates and the Class I-X Certificates.
Sub-Loan Group I-1 Fraction: With respect to any Mortgage Loan
in Loan Group I with a Net Mortgage Rate of greater than or equal to 5.500% per
annum and less than 6.000% per annum, a
42
fraction, (x) the numerator of which is equal to 6.000% minus the Net Mortgage
Rate of such Mortgage Loan, and (y) the denominator of which is equal to 0.500%.
Sub-Loan Group I-2A Fraction: With respect to any Mortgage
Loan in Loan Group I with a Net Mortgage Rate of greater than or equal to 5.500%
per annum and less than 6.000% per annum, a fraction, (x) the numerator of which
is equal to Net Mortgage Rate minus 5.500% of such Mortgage Loan, and (y) the
denominator of which is equal to 0.500%.
Sub-Loan Group I-2B Fraction: With respect to any Mortgage
Loan in Loan Group I with a Net Mortgage Rate of greater than or equal to 6.000%
per annum and less than 6.500% per annum, a fraction, (x) the numerator of which
is equal to 6.500% minus the Net Mortgage Rate of such Mortgage Loan, and (y)
the denominator of which is equal to 0.500%.
Sub-Loan Group I-3 Fraction: With respect to any Mortgage Loan
in Loan Group I with a Net Mortgage Rate of greater than or equal to 6.000% per
annum and less than 6.500% per annum, a fraction, (x) the numerator of which is
equal to the Net Mortgage Rate of such Mortgage Loans minus 6.000%, and (y) the
denominator of which is equal to 0.500%.
Subordinate Certificates: The Group I Subordinate Certificates
and the Group II Subordinate Certificates.
Subordinate Certificate Writedown Amount: With respect to the
Group I Subordinate Certificates, the amount by which (x) the sum of the
Certificate Principal Balances of the Group I Certificates (after giving effect
to the distribution of principal and the allocation of Realized Losses in
reduction of the Certificate Principal Balances of the Group I Certificates on
such Distribution Date) exceeds (y) the Stated Principal Balances of the
Mortgage Loans in Loan Group I on the Due Date related to such Distribution
Date.
Subordinate Optimal Principal Amount: With respect to any
Sub-Loan Group of Loan Group I and each Distribution Date will be an amount
equal to the sum of the following (but in no event greater than the aggregate
Certificate Principal Balance of the Group I Subordinate Certificates
immediately prior to such Distribution Date):
(1) the related Subordinate Percentage of the Non-PO
Percentage of the principal portion of all Monthly Payments due on each
Mortgage Loan in the related Sub-Loan Group on the related Due Date, as
specified in the amortization schedule at the time applicable thereto
(after adjustment for previous principal prepayments but before any
adjustment to such amortization schedule by reason of any bankruptcy or
similar proceeding or any moratorium or similar waiver or grace
period);
(2) the related Subordinate Prepayment Percentage of the
Non-PO Percentage of the Stated Principal Balance of each Mortgage Loan
in the related Sub-Loan Group which was the subject of a prepayment in
full received by a Servicer during the applicable Prepayment Period;
(3) the related Subordinate Prepayment Percentage of the
Non-PO Percentage of the amount all partial prepayments of principal
received in respect of Mortgage Loans in the related Sub-Loan Group
during the applicable Prepayment Period;
(4) the excess, if any, of (a) the Net Liquidation Proceeds
allocable to principal received in respect of each Mortgage Loan in the
related Sub-Loan Group that became a Liquidated Mortgage Loan during
the related Liquidation Period and all Subsequent Recoveries
43
received in respect of each Liquidated Mortgage Loan during the
related Due Period over (b) the sum of the amounts distributable to
the holders of the Group I Senior Certificates in the related
Certificate Group pursuant to clause (4) of the definition of "Senior
Optimal Principal Amount" and "Class I-PO Certificate Principal
Distribution Amount" on such Distribution Date;
(5) the related Subordinate Prepayment Percentage of the
Non-PO Percentage of the sum of (a) the Stated Principal Balance of
each Mortgage Loan in the related Sub-Loan Group which was repurchased
by the sponsor in connection with such Distribution Date and (b) the
difference, if any, between the Stated Principal Balance of a Mortgage
Loan in the related Sub-Loan Group that has been replaced by the
sponsor with a substitute Mortgage Loan pursuant to the Mortgage Loan
purchase agreement in connection with such Distribution Date and the
Stated Principal Balance of such substitute Mortgage Loan; and
(6) on the Distribution Date on which the aggregate
Certificate Principal Balance of the Group I Senior Certificates (other
than the Class I-X and Class I-PO certificates) in the related
Certificate Group have all been reduced to zero, 100% of the Senior
Optimal Principal Amount for such Group I Senior Certificates.
Subordinate Percentage: As of any Distribution Date and with
respect to any Sub-Loan Group included in Loan Group I, equals 100% minus the
related Senior Percentage for the related Certificate Group.
Subordinate Prepayment Percentage: As of any Distribution Date
and with respect to any Sub-Loan Group included in Loan Group I, will equal 100%
minus the Senior Prepayment Percentage for the Senior Certificates in the
related Certificate Group.
Subsequent Recovery: The recovery of any amount (including the
release of surplus funds held to cover expenses) in respect of a Liquidated Loan
after a Realized Loss has been allocated with respect thereto to one or more
Classes of Certificates.
Subservicer: Any Person that (i) services Mortgage Loans on
behalf of any Servicer or that is engaged by the Master Servicer or Securities
Administrator, and (ii) is responsible for the performance (whether directly or
through subservicers or Subcontractors) of a substantial portion of the material
servicing functions required to be performed under this Agreement, any related
Servicing Agreement or any subservicing agreement that are identified in Item
1122(d) of Regulation AB.
Sub-Servicing Letter Agreement: The letter agreement, dated
March 15, 2007, among EMC, as servicer, Xxxxx Fargo Bank, N.A., as subservicer
and the Master Servicer, providing for the allocation of certain fees and
reimbursements identified therein.
Substitution Adjustment Amount: The meaning ascribed to such
term pursuant to Section 2.03(c).
Successor Master Servicer: The meaning ascribed to such term
pursuant to Section 8.01.
Tax Matters Person: The person designated as "tax matters
person" in the manner provided under Treasury regulation ss. 1.860F-4(d) and
temporary Treasury regulation ss. 301.6231(a)(7)-1T. The holder of the greatest
Percentage Interest in a Class of Residual Certificates shall be the Tax Matters
Person for the related REMIC. The Securities Administrator, or any successor
thereto or assignee thereof shall serve as tax administrator hereunder and as
agent for the related Tax Matters Person.
44
Termination Costs: The costs and expenses related to the
termination of any Servicer, the appointment of a successor servicer or the
transfer and assumption of servicing with respect to the related Servicing
Agreement, including, without limitation, the items set forth in Section
3.03(c).
Transfer Affidavit: As defined in Section 6.02(c).
Transfer: Any direct or indirect transfer or sale of any
Ownership Interest in a Certificate.
Trigger Event: With respect to Loan Group II and any
Distribution Date, a violation of either the Cumulative Loss Test or the
Delinquency Test.
Trust or Trust Fund: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest accruing and principal due
(or in the case of any Simple Interest Loan, received) with respect thereto
after the Cut-off Date to the extent not applied in computing the Cut-off Date
Principal Balance thereof; (ii) the Distribution Account, the Yield Maintenance
Account, the Final Maturity Reserve Account and the Basis Risk Reserve Fund and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the mortgagee's
rights under the Insurance Policies with respect to the Mortgage Loans; (v) the
Servicing Agreements and Assumption Agreements; (vi) rights under the Yield
Maintenance Agreements; and (vii) all proceeds of the foregoing, including
proceeds of conversion, voluntary or involuntary, of any of the foregoing into
cash or other liquid property.
Trustee: Citibank, N.A., a national banking association, not
in its individual capacity, but solely in its capacity as trustee for the
benefit of the Certificateholders under this Agreement, and any successor
thereto, and any corporation or national banking association resulting from or
surviving any consolidation or merger to which it or its successors may be a
party and any successor trustee as may from time to time be serving as successor
trustee hereunder.
Trustee Fee: As to any Distribution Date, a fee payable to the
Trustee by the Master Servicer out of its own funds in such amount as they may
separately agree.
Unpaid Applied Realized Loss Amount: As of any Distribution
Date, and each Class of Group II Offered Certificates, the excess of (i) the
Applied Realized Loss Amount for such Class over (ii) the sum of all
distributions on such Class in reduction of the Applied Realized Loss Amount and
any Subsequent Recoveries allocated to such Class, in each case, on all previous
Distribution Dates.
Voting Rights: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions hereunder. Voting Rights shall be allocated (i) 96% to the
Certificates (other than the Class I-X Certificates, Class P Certificates, Class
B-IO Certificates and the Residual Certificates), (ii) 1% to the Class I-X
Certificates, (iii) 1% to the Class P Certificates, (iv) 1% to the Class B-IO
Certificates, and (v) 1% to the Residual Certificates, with the allocation among
the Certificates to be in proportion to the Certificate Principal Balance of
each Class relative to the Certificate Principal Balance of all other such
Classes. Voting Rights will be allocated among the Certificates of each Class of
Certificates, in accordance with their respective Percentage Interests.
WFB: Xxxxx Fargo Bank, N.A., in its capacity as a Servicer of
the Mortgage Loans and its successor and assigns in such capacity.
45
Yield Maintenance Account: The separate Eligible Account
created and maintained by the Paying Agent pursuant to Section 4.06 in the name
of the Trustee primarily for the benefit of the Holders of the Adjustable Rate
Certificates and designated "Citibank, N.A., in trust for registered holders of
the Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset-Backed
Certificates, Series 2007-SD2." The Yield Maintenance Account shall not
constitute an asset of any REMIC hereunder.
Yield Maintenance Agreements: With respect to the Adjustable
Rate Certificates, the respective yield maintenance agreements with reference
numbers FXNCC9305, XXXXX0000, FXNCC9307, FXNCC9308, FXNCC9309 and FXNCC93012,
each dated as of March 15, 2007, between the Yield Maintenance Provider and the
Trustee on behalf of the Trust, together with any scheduling, confirmations or
other agreements related thereto, attached hereto as Exhibit N.
Yield Maintenance Payment: (i) With respect to the Yield
Maintenance Agreement related to the Class II-A Certificates and any
Distribution Date through the Distribution Date in January 2012, an amount equal
to the product of (A) the actual number of days in the applicable Accrual Period
divided by 360, and (B) the product of (a) the per annum rate equal to the
excess, if any, of (x) the lesser of (i) One-Month LIBOR and (ii) 11.50% per
annum, over (y) the applicable Strike Rate and (b) the lesser of (x) the
aggregate Certificate Principal Balance of the Class II-A Certificates and (y)
the Projected Principal Balance for such Certificates, in each case for such
Distribution Date.
(ii) With respect to the Yield Maintenance Agreements related
to each Class of Class II-M Certificates and any Distribution Date through the
Distribution Date in January 2012, the amount equal to the product of (A) the
actual number of days in the applicable Accrual Period divided by 360, and (B)
the product of (a) the per annum rate equal to the excess, if any, of (x) the
lesser of (i) One-Month LIBOR and (ii) 11.50% per annum, over (y) the applicable
Strike Rate and (b) the lesser of (x) the Certificate Principal Balance of the
related Class of Class II-M Certificates and (y) the Projected Principal Balance
for such Class of Certificates, in each case for such Distribution Date.
Yield Maintenance Provider: Bear Xxxxxxx Financial Products
Inc. or any successor in interest.
46
ARTICLE II.
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01. Conveyance of Trust Fund.
The Sponsor hereby sells, transfers, assigns, sets over and
otherwise conveys to the Depositor, without recourse, all the right, title and
interest of the Sponsor in and to the assets in the Trust Fund.
The Sponsor has entered into this Agreement in consideration
for the purchase of the Mortgage Loans by the Depositor and has agreed to take
the actions specified herein.
The Depositor, concurrently with the execution and delivery
hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to the
Trustee for the use and benefit of the Certificateholders, without recourse, all
the right, title and interest of the Depositor in and to the Trust Fund.
In connection with any such transfer and assignment, the
Depositor has delivered to or caused to be delivered to, and deposited with, the
Custodian the following documents or instruments with respect to each Mortgage
Loan so assigned:
(i) the original Mortgage Note, including any riders thereto,
endorsed without recourse (A) to the order of "Citibank, N.A., as
Trustee for certificateholders, of Bear Xxxxxxx Asset Backed Securities
Trust 2007-SD2, Asset Backed Certificates, Series 2007-SD2, without
recourse", or in blank, or (B) in the case of a Mortgage Loan
registered on the MERS(R) System, in blank and, in each case, showing
to the extent available to the Sponsor an unbroken chain of
endorsements from the original payee thereof to the Person endorsing it
to the Trustee,
(ii) the original Mortgage and, if the related Mortgage Loan
is a MOM Loan, noting the presence of the MIN and language indicating
that such Mortgage Loan is a MOM Loan, which shall have been recorded
(or if the original is not available, a copy), with evidence of such
recording indicated thereon (or if clause (x) in the proviso below
applies, shall be in recordable form),
(iii) unless the Mortgage Loan is registered on the MERS(R)
System, the assignment (either an original or a copy, which may be in
the form of a blanket assignment if permitted in the jurisdiction in
which the Mortgaged Property is located) to the Trustee of the
Mortgage, in recordable form, with respect to each Mortgage Loan in the
name of "Citibank, N.A., as Trustee for certificateholders of Bear
Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset Backed
Certificates, Series 2007-SD2" or in blank,
(iv) an original or a copy of all intervening assignments of
the Mortgage, if any, to the extent available to the Sponsor , with
evidence of recording thereon,
(v) the original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title
insurance, if available, or a copy thereof, or, in the event that such
original title insurance policy is unavailable, a photocopy thereof, or
in lieu thereof, a current lien search on the related Mortgaged
Property and
47
(vi) originals or copies of all available assumption,
modification or substitution agreements, if any;
provided, however, that the assignment of the Mortgage to the
Trustee will not be required to be submitted for recording with respect to any
Mortgage Loan: (a) if the Trustee and the Custodian shall have received an
Opinion of Counsel addressed to the Trustee to the effect that the recordation
of the assignment to the Trustee of the Mortgage securing a particular Mortgage
Note is not necessary to perfect the security interest of the Trustee in such
Mortgage, (b) such recordation is not required by the Rating Agencies or (c) if
MERS is identified on the Mortgage or on a properly recorded assignment of the
Mortgage as the mortgagee of record solely as nominee for the Sponsor and its
successors and assigns;
and provided, further, however, that in lieu of the foregoing,
the Depositor may deliver, or cause to be delivered, the following documents,
under the circumstances set forth below: (x) if any Mortgage, assignment thereof
to the Trustee or intervening assignments thereof have been delivered or are
being delivered to recording offices for recording and have not been returned in
time to permit their delivery as specified above, the Depositor may deliver, or
cause to be delivered, a true copy thereof with a certification by the
applicable Servicer or the title company issuing the commitment for title
insurance, on the face of such copy, substantially as follows: "Certified to be
a true and correct copy of the original, which has been transmitted for
recording"; and (y) in lieu of the Mortgage Notes relating to the Mortgage Loans
identified in the list set forth in Exhibit J, the Depositor may deliver, or
cause to be delivered, a lost note affidavit (or a blanket lost note affidavit
covering some or all of the Mortgage Loans in Exhibit J) and a copy of the
original note, if available; and provided, further, however, that in the case of
Mortgage Loans which have been prepaid in full after the Cut-off Date and prior
to the Closing Date, the Depositor, in lieu of delivering the above documents,
may cause the Sponsor to, and the Sponsor shall, (i) deposit or cause to be
deposited on the Closing Date all amounts paid in respect of such Mortgage Loans
(to the extent required to be remitted by the related Servicers pursuant to
their Servicing Agreements) into the Distribution Account or (ii) deliver to the
Custodian on the Closing Date a certification of an authorized officer of the
Sponsor stating that the Sponsor will deposit or cause to be deposited all such
amounts on or before Business Day immediately preceding the first Distribution
Date, in which case the Sponsor shall so deposit or cause to be deposited such
amounts into the Distribution Account on or before such Business Day immediately
preceding the first Distribution Date.
In the case of the documents referred to in clause (x) above,
the Depositor shall deliver, or cause to be delivered, such documents to the
Custodian promptly after they are received. The Sponsor shall cause, at its
expense, the Mortgage and intervening assignments, if any, and to the extent
required in accordance with the foregoing, the assignment of the Mortgage to the
Trustee to be submitted for recording promptly after the Closing Date. In the
event that the Sponsor, the Depositor or the Master Servicer gives written
notice to the Trustee (a) that recording of the assignment of the Mortgage to
the Trustee is required to protect the right, title and interest of the Trustee
on behalf of the Certificateholders in and to any Mortgage Loan, (b) a court
recharacterizes the sale of the Mortgage Loans as a financing, or (c) as a
result of any change in or amendment to the laws of a State in which recording
was not effected or any applicable political subdivision thereof, or any change
in official position regarding application or interpretation of such laws,
including a holding by a court of competent jurisdiction, such recording is so
required, the Sponsor shall submit or cause to be submitted for recording as
specified above or, should the Sponsor fail to perform such obligations, the
Trustee (or the Custodian on its behalf) shall cause each such previously
unrecorded assignment to be submitted for recording as specified above at the
expense of the Trust pursuant to Section 9.05. In the event a Mortgage File is
released to the Master Servicer or a Servicer as a result of the Master
Servicer's or a Servicer's having completed a Request for Release, the Trustee
shall, if not so completed, complete, or cause the Custodian to complete, the
assignment of the related Mortgage in the manner specified in clause (iii)
above.
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In connection with the assignment of any Mortgage Loans
registered on the MERS(R) System, the Sponsor further agrees that it will cause,
at the Sponsor's own expense, within 30 days after the Closing Date, the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the Sponsor to
the Depositor and by the Depositor to the Trustee in accordance with this
Agreement for the benefit of the Certificateholders by including (or deleting,
in the case of Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files (a) the code in the field which identifies the
specific Trustee, (b) the code in the field "Pool Field" which identifies the
series of the Certificates issued in connection with such Mortgage Loans and (c)
a code that provides the Custodian with access to such Mortgage Loans. The
Sponsor further agrees that it will not, and will not permit any Servicer or the
Master Servicer to, and the Master Servicer agrees that it will not, alter the
codes referenced in this paragraph with respect to any Mortgage Loan during the
term of this Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of this Agreement.
Since the mortgage loans permitted to be purchased pursuant to
this Agreement are limited to (i) the Mortgage Loans purchased hereunder on the
Closing Date and (ii) any Replacement Mortgage Loans purchased hereafter
pursuant to the provisions of this Agreement, and the Sponsor has made the
representations and warranties contained herein with respect to all such
Mortgage Loans, including the representations and warranties contained in
Section 2.03(b)(vii)(Q) and (S) of this Agreement, that, as of the Closing Date
or date of substitution, as applicable, no Mortgage Loan is a "high cost home",
"covered", "high risk home" or "predatory" loan under any applicable federal,
state or local law,, it is agreed and understood by the Depositor, the Sponsor
and the Trustee that it is not intended that any mortgage loan be purchased
hereunder that is a "High-Cost Home Loan" as defined in the New Jersey Home
Ownership Security Act of 2002, a "High-Cost Home Loan" as defined in the New
Mexico Home Loan Protection Act, a "High Cost Home Mortgage Loan" as defined in
the Massachusetts Predatory Home Loan Practices Act of 2004 or a "High-Cost Home
Loan" as defined in the Indiana High Cost Home Loan Law of 2005.
Section 2.02. Acceptance of the Mortgage Loans.
(a) The Trustee acknowledges receipt based on receipt by the
Custodian of, subject to the further review and the exceptions the Custodian
notes pursuant to the procedures described below, the documents (or certified
copies thereof) delivered to the Custodian pursuant to Section 2.01 and declares
that it holds and will continue to hold directly or through the Custodian those
documents and any amendments, replacements or supplements thereto and all other
assets of the Trust Fund delivered to the Custodian on its behalf in trust for
the use and benefit of all present and future Holders of the Certificates. On
the Closing Date, the Custodian will deliver to the Sponsor, the Depositor and
the Trustee an initial certification in the form annexed as Exhibit One to the
Custodial Agreement confirming whether or not it has received the Mortgage File
for each Mortgage Loan, but without review of such Mortgage File, except to the
extent necessary to confirm whether such Mortgage File contains the original
Mortgage Note or a lost note affidavit in lieu thereof. No later than 90 days
after the Closing Date, the Custodian agrees pursuant to the Custodial
Agreement, for the benefit of the Certificateholders, to review each Mortgage
File delivered to it and to execute and deliver, or cause to be executed and
delivered, to the Sponsor, the Depositor and to the Trustee an interim
certification substantially in the form annexed as Exhibit Two to the Custodial
Agreement. In conducting such review, the Custodian on behalf of the Trustee
will ascertain whether all required documents have been executed and received
and whether those documents relate, determined on the basis of the Mortgagor
name, original principal balance and loan number, to the Mortgage Loans
identified in Exhibit B to this Agreement, as supplemented (provided, however,
that with respect to those documents described in clauses (iv) and (vi) of the
fourth paragraph of Section 2.01, such obligations shall extend only to
documents actually delivered pursuant to such clauses). In performing any such
review, the Custodian on behalf of the Trustee and in accordance with the
Custodial Agreement may conclusively rely on the purported due execution and
genuineness of any
49
such document and on the purported genuineness of any signature thereon. If the
Custodian finds any document constituting part of the Mortgage File not to have
been executed or received, or to be unrelated to the Mortgage Loans identified
in Exhibit B or to appear to be defective on its face, the Custodian shall
include such information in the exception report attached to such interim
certification. The Sponsor shall correct or cure any such defect or, if prior to
the end of the second anniversary of the Closing Date, the Sponsor may
substitute for the related Mortgage Loan a Replacement Mortgage Loan, which
substitution shall be accomplished in the manner and subject to the conditions
set forth in Section 2.03 or shall deliver to the Trustee and the Custodian an
Opinion of Counsel, addressed to the Trustee and the Custodian, at the Sponsor's
expense, to the effect that such defect does not materially or adversely affect
the interests of Certificateholders in such Mortgage Loan within 90 days from
the date of notice from the Custodian of the defect and if the Sponsor fails to
correct or cure the defect or deliver such opinion within such period, the
Sponsor will, subject to Section 2.03, within 90 days from the notification of
the Custodian purchase such Mortgage Loan at the Purchase Price; provided,
however, that if such defect relates solely to the inability of the Sponsor to
deliver the Mortgage, assignment thereof to the Trustee, or intervening
assignments thereof with evidence of recording thereon because such documents
have been submitted for recording and have not been returned by the applicable
jurisdiction, the Sponsor shall not be required to purchase such Mortgage Loan
if the Sponsor delivers such documents promptly upon receipt, but in no event
later than 360 days after the Closing Date.
(b) No later than 180 days after the Closing Date, the
Custodian on behalf of the Trustee and in accordance with the Custodial
Agreement will review, for the benefit of the Certificateholders, the Mortgage
Files and will execute and deliver or cause to be executed and delivered to the
Sponsor, the Depositor and to the Trustee, a final certification substantially
in the form annexed as Exhibit Three to the Custodial Agreement. In conducting
such review, the Custodian will ascertain whether each document required to be
recorded has been returned from the recording office with evidence of recording
thereon and the Custodian has received either an original or a copy thereof, as
required in Section 2.01 (provided, however, that with respect to those
documents described in clauses (iv) and (vi) of the fourth paragraph of Section
2.01, such obligations shall extend only to documents actually delivered
pursuant to such clauses). If the Custodian finds any document with respect to a
Mortgage Loan has not been received, or to be unrelated, determined on the basis
of the Mortgagor name, original principal balance and loan number, to the
Mortgage Loans identified in Exhibit B or to appear defective on its face, the
Custodian shall note such defect in the exception report attached to the final
certification and shall promptly notify the Sponsor. The Sponsor shall correct
or cure any such defect or, if prior to the end of the second anniversary of the
Closing Date, the Sponsor may substitute for the related Mortgage Loan a
Replacement Mortgage Loan, which substitution shall be accomplished in the
manner and subject to the conditions set forth in Section 2.03 or shall deliver
to the Trustee and the Custodian an Opinion of Counsel, addressed to the Trustee
and the Custodian, at the Sponsor's expense, to the effect that such defect does
not materially or adversely affect the interests of Certificateholders in such
Mortgage Loan within 90 days from the date of notice from the Custodian of the
defect and if the Sponsor is unable within such period to correct or cure such
defect, or to substitute the related Mortgage Loan with a Replacement Mortgage
Loan or to deliver such opinion, the Sponsor shall, subject to Section 2.03,
within 90 days from the notification of the Custodian, purchase such Mortgage
Loan at the Purchase Price; provided, however, that if such defect relates
solely to the inability of the Sponsor to deliver the Mortgage, assignment
thereof to the Trustee or intervening assignments thereof with evidence of
recording thereon, because such documents have not been returned by the
applicable jurisdiction, the Sponsor shall not be required to purchase such
Mortgage Loan, if the Sponsor delivers such documents promptly upon receipt, but
in no event later than 360 days after the Closing Date.
(c) In the event that a Mortgage Loan is purchased by the
Sponsor in accordance with subsections 2.02(a) or (b) above or Section 2.03, the
Sponsor shall remit the applicable Purchase Price to the Paying Agent for
deposit in the Distribution Account and shall provide written notice to the
50
Paying Agent and Trustee detailing the components of the Purchase Price, signed
by a Servicing Officer. Upon deposit of the Purchase Price in the Distribution
Account and receipt of a Request for Release, the Trustee will release or notify
the Custodian which, upon receipt of such notice from the Trustee, shall release
to the Sponsor the related Mortgage File and the Trustee shall execute and
deliver all instruments of transfer or assignment, without recourse,
representation or warranty, furnished to it by the Sponsor, as are necessary to
vest in the Sponsor title to and rights under the Mortgage Loan. Such purchase
shall be deemed to have occurred on the date on which the deposit into the
Distribution Account was made or if the Custodian is then acting, the date on
which notice of the deposit of the Purchase Price into the Distribution Account
was received by the Custodian from the Securities Administrator or Paying Agent.
The Trustee shall promptly notify the Rating Agencies of such repurchase. The
obligation of the Sponsor to cure, repurchase or substitute for any Mortgage
Loan as to which a defect in a constituent document exists shall be the sole
remedy respecting such defect available to the Certificateholders or to the
Trustee on their behalf.
(d) The Sponsor shall deliver to the Custodian, and the
Trustee agrees to accept or to cause the Custodian to accept, the Mortgage Note
and other documents constituting the Mortgage File with respect to any
Replacement Mortgage Loan, which the Custodian will review as provided in
subsections 2.02(a) and 2.02(b), provided, that the Closing Date referred to
therein shall instead be the date of delivery of the Mortgage File with respect
to each Replacement Mortgage Loan.
(e) Until all amounts distributable in respect of the
Certificates have been distributed in full and the Master Servicer has otherwise
fulfilled its respective obligations under this Agreement, the Trustee, or the
Custodian acting on its behalf, shall retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions of this
Agreement.
Section 2.03. Representations, Warranties and Covenants of the
Master Servicer and the Sponsor.
(a) The Master Servicer hereby represents and warrants to the
Depositor, the Securities Administrator and the Trustee as follows, as of the
Closing Date:
(i) It is duly organized and is validly existing and in
good standing as a national banking association organized under the
laws of the United States, and is duly authorized and qualified to
transact any and all business contemplated by this Agreement to be
conducted by it in any state in which a Mortgaged Property is located
or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to service the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(ii) It has the full corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this
Agreement and has duly authorized by all necessary corporate action on
its part the execution, delivery and performance of this Agreement; and
this Agreement, assuming the due authorization, execution and delivery
hereof by the other parties hereto, constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its
terms, except that (a) the enforceability hereof may be limited by
bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
51
(iii) The execution and delivery of this Agreement by it,
the servicing of the Mortgage Loans by it under this Agreement, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
are in its ordinary course of business and will not (A) result in a
material breach of any term or provision of its charter or by-laws or
(B) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of
any other material agreement or instrument to which it is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to it of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it; and it is not in breach or violation of any material indenture
or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it
which breach or violation may materially impair its ability to perform
or meet any of its obligations under this Agreement.
(iv) It or one or more of its affiliates is an approved
servicer of conventional mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac
and is a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to sections 203 and 211 of the National Housing
Act.
(v) No litigation is pending or, to the best of its
knowledge, threatened, against it that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or
its ability to service the Mortgage Loans or to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(vi) No consent, approval, authorization or order of any
court or governmental agency or body is required for its execution,
delivery and performance of, or compliance with, this Agreement or the
consummation of the transactions contemplated hereby, or if any such
consent, approval, authorization or order is required, it has obtained
the same.
(b) The Sponsor hereby represents and warrants to the
Depositor, the Securities Administrator, the Master Servicer and the Trustee as
follows, as of the Closing Date:
(i) The Sponsor is duly organized as a Delaware
corporation and is validly existing and in good standing under the laws
of the State of Delaware and is duly authorized and qualified to
transact any and all business contemplated by this Agreement to be
conducted by the Sponsor in any state in which a Mortgaged Property is
located or is otherwise not required under applicable law to effect
such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its
ability to enforce each Mortgage Loan, to sell the Mortgage Loans in
accordance with the terms of this Agreement and to perform any of its
other obligations under this Agreement in accordance with the terms
hereof.
(ii) The Sponsor has the full corporate power and
authority to sell each Mortgage Loan, and to execute, deliver and
perform, and to enter into and consummate the transactions contemplated
by this Agreement and has duly authorized by all necessary corporate
action on the part of the Sponsor the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the
Sponsor, enforceable against the Sponsor in accordance with its terms,
except that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
52
(iii) The execution and delivery of this Agreement by the
Sponsor, the sale of the Mortgage Loans by the Sponsor under this
Agreement, the consummation of any other of the transactions
contemplated by this Agreement, and the fulfillment of or compliance
with the terms hereof are in the ordinary course of business of the
Sponsor and will not (A) result in a material breach of any term or
provision of the charter or by-laws of the Sponsor or (B) materially
conflict with, result in a material breach, violation or acceleration
of, or result in a material default under, the terms of any other
material agreement or instrument to which the Sponsor is a party or by
which it may be bound, or (C) constitute a material violation of any
statute, order or regulation applicable to the Sponsor of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Sponsor; and the Sponsor is not in breach or
violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body
having jurisdiction over it which breach or violation may materially
impair the Sponsor's ability to perform or meet any of its obligations
under this Agreement.
(iv) The Sponsor is an approved seller of conventional
mortgage loans for Xxxxxx Mae or Xxxxxxx Mac and is a mortgagee
approved by the Secretary of Housing and Urban Development pursuant to
sections 203 and 211 of the National Housing Act.
(v) No litigation is pending or, to the best of the
Sponsor's knowledge, threatened, against the Sponsor that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Sponsor to sell
the Mortgage Loans or to perform any of its other obligations under
this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any
court or governmental agency or body is required for the execution,
delivery and performance by the Sponsor of, or compliance by the
Sponsor with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Sponsor has obtained the same.
(vii) With respect to each Mortgage Loan as of the Closing
Date (unless otherwise expressly provided):
A. the information set forth in the Mortgage Loan
Schedule hereto is true and correct in all material respects;
B. immediately prior to the transfer to the
Depositor, the Sponsor was the sole owner of beneficial title and
holder of each Mortgage and Mortgage Note relating to the Mortgage
Loans and is conveying the same free and clear of any and all
liens, claims, encumbrances, participation interests, equities,
pledges, charges or security interests of any nature and the
Sponsor has full right and authority to sell or assign the same
pursuant to this Agreement;
C. each Mortgage Loan at the time it was made
complied in all material respects with all applicable laws and
regulations, including, without limitation, usury, equal credit
opportunity, disclosure and recording laws and all applicable
predatory, abusive and fair lending laws; and each Mortgage Loan
has been serviced in all material respects in accordance with all
applicable laws and regulations, including, without limitation,
usury, equal credit opportunity, disclosure and recording laws and
all applicable anti-predatory lending laws and the terms of the
related Mortgage Note, the Mortgage and other loan documents;
53
D. there is no monetary default existing under any
Mortgage or the related Mortgage Note and there is no material
event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a
default, breach or event of acceleration; and neither the Sponsor,
any of its affiliates nor any servicer of any related Mortgage
Loan has taken any action to waive any default, breach or event of
acceleration; and no foreclosure action is threatened or has been
commenced with respect to the Mortgage Loan;
E. the terms of the Mortgage Note and the Mortgage
have not been impaired, waived, altered or modified in any
respect, except by written instruments which have been recorded or
will be recorded, if necessary, (i) if required by law in the
jurisdiction where the Mortgaged Property is located, or (ii) to
protect the interests of the Trustee on behalf of the
Certificateholders;
F. no selection procedure reasonably believed by
the Sponsor to be adverse to the interests of the
Certificateholders was utilized in selecting the Mortgage Loans;
G. each Mortgage is a valid and enforceable first
on the property securing the related Mortgage Note and each
Mortgaged Property is owned by the Mortgagor in fee simple (except
with respect to common areas in the case of condominiums, PUDs and
de minimis PUDs) or by leasehold for a term longer than the term
of the related Mortgage, subject only to (i) the lien of current
real property taxes and assessments, (ii) covenants, conditions
and restrictions, rights of way, easements and other matters of
public record as of the date of recording of such Mortgage, such
exceptions being acceptable to mortgage lending institutions
generally or specifically reflected in the appraisal obtained in
connection with the origination of the related Mortgage Loan or
referred to in the lender's title insurance policy delivered to
the originator of the related Mortgage Loan and (iii) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to
be provided by such Mortgage;
H. there is no mechanics' lien or claim for work,
labor or material affecting the premises subject to any Mortgage
which is or may be a lien prior to, or equal with, the lien of
such Mortgage except those which are insured against by the title
insurance policy referred to in xiii below;
I. there was no delinquent tax or assessment lien
against the property subject to any Mortgage, except where such
lien was being contested in good faith and a stay had been granted
against levying on the property;
J. there is no valid offset, defense or
counterclaim to any Mortgage Note or Mortgage, including the
obligation of the Mortgagor to pay the unpaid principal and
interest on such Mortgage Note;
K. the physical property subject to any Mortgage is
free of material damage and is in good repair and there is no
proceeding pending or threatened for the total or partial
condemnation of any Mortgaged Property;
L. the Mortgaged Property and all improvements
thereon comply with all requirements of any applicable zoning and
subdivision laws and ordinances;
M. with respect to any first lien Mortgage Loans,
a lender's title insurance
54
policy (on an ALTA or CLTA form) or binder, or other assurance of
title customary in the relevant jurisdiction therefor in a form
acceptable to Xxxxxx Xxx or Xxxxxxx Mac, was issued on the date
that each Mortgage Loan was created by a title insurance company
which, to the best of the Sponsor's knowledge, was qualified to do
business in the jurisdiction where the related Mortgaged Property
is located, insuring the Sponsor and its successors and assigns
that the Mortgage is a first priority lien on the related
Mortgaged Property in the original principal amount of the
Mortgage Loan. The Sponsor is the sole insured under such lender's
title insurance policy, and such policy, binder or assurance is
valid and remains in full force and effect, and each such policy,
binder or assurance shall contain all applicable endorsements
including a negative amortization endorsement, if applicable; with
respect to any junior lien Mortgage Loan, other than any piggyback
loan that has an initial principal amount less than or equal to
$200,000, (a) a lender's title insurance policy or binder, or
other assurance of title customary in the relevant jurisdiction
therefore in a form acceptable to Xxxxxx Xxx or Xxxxxxx Mac, was
issued on the date that each Mortgage Loan was created by a title
insurance company which, to the best of the Sponsor's knowledge,
was qualified to do business in the jurisdiction where the related
Mortgaged Property is located, insuring the related seller and its
successors and assigns; and the Sponsor is the sole insured under
such lender's title insurance policy, and such policy, binder or
assurance is valid and remains in full force and effect, and each
such policy, binder or assurance shall contain all applicable
endorsements including a negative amortization endorsement, if
applicable, or (b) a lien search was conducted at the time of
origination with respect to the related Mortgaged Property;
N. at the time of origination, each Mortgaged
Property was the subject of an appraisal which conformed to the
underwriting requirements of the originator of the Mortgage Loan
and, the appraisal is in a form acceptable to Xxxxxx Mae or FHLMC;
O. the improvements on each Mortgaged Property
securing a Mortgage Loan are insured (by an insurer which is
acceptable to the Sponsor) against loss by fire and such hazards
as are covered under a standard extended coverage endorsement in
the locale in which the Mortgaged Property is located, in an
amount which is not less than the lesser of the maximum insurable
value of the improvements securing such Mortgage Loan or the
outstanding principal balance of the Mortgage Loan, but in no
event in an amount less than an amount that is required to prevent
the Mortgagor from being deemed to be a co-insurer thereunder; if
the improvement on the Mortgaged Property is a condominium unit,
it is included under the coverage afforded by a blanket policy for
the condominium project; if upon origination of the related
Mortgage Loan, the improvements on the Mortgaged Property were in
an area identified as a federally designated flood area, a flood
insurance policy is in effect in an amount representing coverage
not less than the least of (i) the outstanding principal balance
of the Mortgage Loan, (ii) the restorable cost of improvements
located on such Mortgaged Property or (iii) the maximum coverage
available under federal law; and each Mortgage obligates the
Mortgagor thereunder to maintain the insurance referred to above
at the Mortgagor's cost and expense;
P. each Mortgage Loan constitutes a "qualified
mortgage" under Section 860G(a)(3)(A) of the Code and Treasury
Regulation Section 1.860G-2(a)(1), (2), (4), (5), (6), (7) and (9)
without reliance on the provisions of Treasury Regulation Section
1.860G-2(a)(3) or Treasury Regulation Section 1.860G-2(f)(2) or
any other provision that would allow a Mortgage Loan to be treated
as a "qualified mortgage" notwithstanding its failure to meet the
requirements of Section 860G(a)(3)(A) of the Code and Treasury
Regulation Section 1.860G-2(a)(1), (2), (4), (5), (6), (7) and
(9);
55
Q. none of the Mortgage Loans are (a) loans subject
to 12 CFR Part 226.31, 12 CFR Part 226.32 or 12 CFR Part 226.34 of
Regulation Z, the regulation implementing TILA, which implements
the Home Ownership and Equity Protection Act of 1994, as amended
or (b) "high cost home," "covered" (excluding home loans defined
as "covered home loans" in the New Jersey Home Ownership Security
Act of 2002 that were originated between November 26, 2003 and
July 7, 2004), "high risk home" or "predatory" loans under any
applicable state, federal or local law (or a similarly classified
loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees).;
R. the information set forth in Schedule A of the
Prospectus Supplement with respect to the Mortgage Loans is true
and correct in all material respects;
S. no Mortgage Loan (a) is a "high cost loan" or
"covered loan" as applicable (as such terms are defined in the
version of Standard & Poor's LEVELS(R) Glossary in effect as of
the date hereof, Appendix E, attached hereto as Exhibit 6 or (b)
was originated on or after October 1, 2002 through March 6, 2003
and is governed by the Georgia Fair Lending Act;
T. each Mortgage Loan was originated in accordance
with the underwriting guidelines of the related originator;
U. each original Mortgage has been recorded or is
in the process of being recorded in accordance with the
requirements of Section 2.01 this Agreement in the appropriate
jurisdictions wherein such recordation is required to perfect the
lien thereof for the benefit of the Trust Fund; V. the related
Mortgage File contains each of the documents and instruments
listed in Section 2.01 this Agreement, subject to any exceptions,
substitutions and qualifications as are set forth in such Section;
W. the Mortgage Loans are currently being serviced
in accordance with accepted servicing practices; and
X. with respect to each Mortgage Loan that has a
prepayment penalty feature, each such prepayment penalty is
enforceable and will be enforced by the Sponsor and each
prepayment penalty is permitted pursuant to federal, state and
local law. No Mortgage Loan will impose a prepayment penalty for a
term in excess of five years from the date such Mortgage Loan was
originated, and such prepayment penalty is at least equal to the
lesser of (A) the maximum amount permitted under applicable law
and (B) six months interest at the related Mortgage Interest Rate
on the amount prepaid in excess of 20% of the original principal
balance of such Mortgage Loan.
(c) Upon discovery by any of the parties hereto of a breach of
a representation or warranty set forth in Section 2.03(b)(vii) that materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt written notice thereof
to the other parties. The Sponsor hereby covenants with respect to the
representations and warranties set forth in Section 2.03(b)(vii), that within 90
days of the discovery of a breach of any representation or warranty set forth
therein that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, it shall cure such breach in all
material respects and, if such breach is not so cured, (i) if such 90-day period
expires prior to the second anniversary of the Closing
56
Date, remove such Mortgage Loan (a "Deleted Mortgage Loan") from the Trust Fund
and substitute in its place a Replacement Mortgage Loan, in the manner and
subject to the conditions set forth in this Section; or (ii) repurchase the
affected Mortgage Loan or Mortgage Loans from the Trustee at the Purchase Price
in the manner set forth below; provided that any such substitution pursuant to
(i) above or repurchase pursuant to (ii) above shall not be effected prior to
the delivery to the Trustee, with a copy to the Custodian, of an Opinion of
Counsel if required by Section 2.05 hereof and any such substitution pursuant to
(i) above shall not be effected prior to the additional delivery to the Trustee,
with a copy to the Custodian, of a Request for Release. For purposes of this
section, any breach of a representation or warranty set forth in paragraphs (Q)
and (S) of Section 2.03(b)(vii), shall be deemed to materially and adversely
affect the interests of the Certificateholders in the related Mortgage Loan. The
Sponsor shall promptly reimburse the Master Servicer and the Trustee for any
expenses reasonably incurred by the Master Servicer or the Trustee in respect of
enforcing the remedies for such breach. To enable the Master Servicer to amend
the Mortgage Loan Schedule, the Sponsor shall, unless it cures such breach in a
timely fashion pursuant to this Section 2.03, promptly notify the Master
Servicer whether it intends either to repurchase, or to substitute for, the
Mortgage Loan affected by such breach. With respect to the representations and
warranties in Section 2.03(b)(vii) that are made to the best of the Sponsor's
knowledge, if it is discovered by any of the Depositor, the Master Servicer, the
Sponsor, the Securities Administrator or the Trustee that the substance of such
representation and warranty is inaccurate and such inaccuracy materially and
adversely affects the value of the related Mortgage Loan, notwithstanding the
Sponsor's lack of knowledge with respect to the substance of such representation
or warranty, the Sponsor shall nevertheless be required to cure, substitute for
or repurchase the affected Mortgage Loan in accordance with the foregoing.
With respect to any Replacement Mortgage Loan or Loans, the
Sponsor shall deliver to the Custodian on behalf of the Trustee for the benefit
of the Certificateholders such documents and agreements as are required by
Section 2.01. No substitution will be made in any calendar month after the
Determination Date for such month. Scheduled Payments due with respect to
Replacement Mortgage Loans in the Due Period related to the Distribution Date on
which such proceeds are to be distributed shall not be part of the Trust Fund
and will be retained by the Sponsor. For the month of substitution, except with
respect to any Simple Interest Loans, distributions to Certificateholders will
include the Scheduled Payment due on any Deleted Mortgage Loan for the related
Due Period (and with respect to any Simple Interest Loans, payments of principal
actually received during such Due Period) and thereafter the Sponsor shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Replacement Mortgage Loan or Loans and the Master
Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee and the
Custodian. Upon such substitution, the Replacement Mortgage Loan or Loans shall
be subject to the terms of this Agreement in all respects, and the Sponsor shall
be deemed to have made with respect to such Replacement Mortgage Loan or Loans,
as of the date of substitution, the representations and warranties set forth in
Section 2.03(b)(vii) with respect to such Mortgage Loan. Upon any such
substitution and the deposit to the Distribution Account of the amount required
to be deposited therein in connection with such substitution as described in the
following paragraph, the Custodian on behalf of the Trustee shall release to the
Sponsor the Mortgage File relating to such Deleted Mortgage Loan and held for
the benefit of the Certificateholders and shall execute and deliver at the
Sponsor's direction such instruments of transfer or assignment as have been
prepared by the Sponsor, in each case without recourse, representation or
warranty, as shall be necessary to vest in the Sponsor, or its respective
designee, title to the Trustee's interest in any Deleted Mortgage Loan
substituted for pursuant to this Section 2.03.
For any month in which the Sponsor substitutes one or more
Replacement Mortgage Loans for a Deleted Mortgage Loan, the Master Servicer will
determine the amount (if any) by which the
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aggregate principal balance of all the Replacement Mortgage Loans as of the date
of substitution is less than the Stated Principal Balance (after application of
the principal portion of the Scheduled Payment due in the month of substitution,
except the actual payment received with respect to any Simple Interest Loans) of
such Deleted Mortgage Loan. An amount equal to the aggregate of such
deficiencies, described in the preceding sentence for any Distribution Date
(such amount, the "Substitution Adjustment Amount") shall be remitted to the
Securities Administrator for deposit into the Distribution Account by the
Sponsor delivering such Replacement Mortgage Loan on the Determination Date for
the Distribution Date relating to the Prepayment Period during which the related
Mortgage Loan became required to be purchased or replaced hereunder.
In the event that the Sponsor shall have repurchased a
Mortgage Loan, the Purchase Price therefor shall be deposited in the
Distribution Account pursuant to Section 4.04 on the Determination Date for the
Distribution Date in the month following the month during which the Sponsor
became obligated to repurchase or replace such Mortgage Loan and upon such
deposit of the Purchase Price, the delivery of an Opinion of Counsel if required
by Section 2.05 and the receipt of a Request for Release, the Custodian on
behalf of the Trustee shall release the related Mortgage File held for the
benefit of the Certificateholders to the Sponsor, and the Trustee shall execute
and deliver at such Person's direction the related instruments of transfer or
assignment prepared by the Sponsor, in each case without recourse,
representation or warranty, as shall be necessary to transfer title from the
Trustee for the benefit of the Certificateholders and transfer the Trustee's
interest to the Sponsor to any Mortgage Loan purchased pursuant to this Section
2.03. It is understood and agreed that the obligation under this Agreement of
the Sponsor to cure, repurchase or replace any Mortgage Loan as to which a
breach has occurred and is continuing shall constitute the sole remedy against
the Sponsor respecting such breach available to Certificateholders, the
Depositor or the Trustee.
In connection with any repurchase or substitution of a
Mortgage Loan or the cure of a breach of a representation or warranty set forth
in Section 2.02 or this Section 2.03, the Sponsor shall promptly furnish to the
Securities Administrator and the Trustee an officer's certificate, signed by a
duly authorized officer of the Sponsor to the effect that such repurchase,
substitution or cure has been made in accordance with the terms and conditions
of this Agreement and that all conditions precedent to such repurchase,
substitution or cure have been satisfied, including the delivery to the
Securities Administrator of the Purchase Price or Substitution Adjustment
Amount, as applicable, for deposit into the Distribution Account, together with
copies of any Opinion of Counsel required to be delivered pursuant to this
Agreement and the related Request for Release, on which the Securities
Administrator and the Trustee may rely. Solely for purposes of the Securities
Administrator providing an Assessment of Compliance, upon receipt of such
documentation, the Securities Administrator shall approve such repurchase,
substitution or cure as applicable, and which approval shall consist solely of
the Securities Administrator's receipt of such documentation and deposits.
(d) The representations and warranties set forth in Section
2.03 hereof shall survive delivery of the respective Mortgage Files to the
Custodian on behalf of the Trustee for the benefit of the Certificateholders.
Section 2.03.(A) Assignment of Interests in the Servicing Agreements.
To the extent not provided for in the related Assumption
Agreements, the Sponsor hereby assigns to the Depositor who concurrently with
the execution and delivery of this Agreement assigns to the Trustee, on behalf
of the Certificateholders, all of their respective right, title and interest in
the Servicing Agreements and, if applicable, the Assumption Agreements,
including but not limited to the Sponsor's rights pursuant to the Servicing
Agreements (noting that the Sponsor has retained the right in the event of
breach of the representations, warranties and covenants, if any, with respect to
the Mortgage
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Loans under the related Servicing Agreement to enforce the provisions thereof
and to seek all or any available remedies); provided that the Sponsor shall
retain the right to terminate a Servicer, other than EMC as a Servicer, without
cause to the extent set forth in the related Servicing Agreement.
Section 2.04. Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Master
Servicer, the Securities Administrator and the Trustee as follows, as of the
date hereof and as of the Closing Date:
(i) The Depositor is duly organized and is validly existing as
a limited liability company in good standing under the laws of the
State of Delaware and has full power and authority necessary to own or
hold its properties and to conduct its business as now conducted by it
and to enter into and perform its obligations under this Agreement.
(ii) The Depositor has the full power and authority to
execute, deliver and perform, and to enter into and consummate the
transactions contemplated by, this Agreement and has duly authorized,
by all necessary action on its part, the execution, delivery and
performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties
hereto, constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor in accordance with its
terms, subject, as to enforceability, to (i) bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting creditors'
rights generally and (ii) general principles of equity, regardless of
whether enforcement is sought in a proceeding in equity or at law.
(iii) The execution and delivery of this Agreement by the
Depositor, the consummation of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of the Depositor and will not
(A) result in a material breach of any term or provision of the
certificate of formation or limited liability company agreement of the
Depositor or (B) materially conflict with, result in a material breach,
violation or acceleration of, or result in a material default under,
the terms of any other material agreement or instrument to which the
Depositor is a party or by which it may be bound or (C) constitute a
material violation of any statute, order or regulation applicable to
the Depositor of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Depositor; and the
Depositor is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Depositor's ability to perform or
meet any of its obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Depositor to
perform its obligations under this Agreement in accordance with the
terms hereof.
(v) No consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Depositor of, or compliance by the Depositor
with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval, authorization or
order is required, the Depositor has obtained the same.
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(vi) The Depositor has filed all reports required to be filed
by Section 13 or Section 15(d) of the Exchange Act during the preceding
12 months (or for such shorter period that the Depositor was required
to file such reports) and it has been subject to such filing
requirements for the past 90 days.
The Depositor hereby represents and warrants to the Trustee as
of the Closing Date, following the transfer of the Mortgage Loans to it by the
Sponsor, the Depositor had good title to the Mortgage Loans free and clear of
all liens, claims and encumbrances, and the related Mortgage Notes were subject
to no offsets, claims, defenses or counterclaims.
It is understood and agreed that the representations and
warranties set forth in the immediately preceding paragraph shall survive
delivery of the Mortgage Files to the Custodian on behalf of the Trustee to the
Trustee. Upon discovery by the Depositor or the Trustee of a breach of such
representations and warranties, the party discovering such breach shall give
prompt written notice to the others and to each Rating Agency.
Section 2.05. Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.
(a) Notwithstanding any contrary provision of this Agreement,
with respect to any Mortgage Loan that is not in default or as to which default
is not imminent, no repurchase or substitution pursuant to Sections 2.02 or 2.03
shall be made unless the Sponsor delivers to the Trustee, with a copy to the
Custodian, an Opinion of Counsel, addressed to the Trustee, to the effect that
such repurchase or substitution would not (i) result in the imposition of the
tax on "prohibited transactions" of REMIC I, REMIC II, REMIC III or REMIC IV or
contributions after the Closing Date, as defined in sections 860F(a)(2) and
860G(d) of the Code, respectively or (ii) cause either REMIC I, REMIC II, REMIC
III or REMIC IV to fail to qualify as a REMIC at any time that any Certificates
are outstanding. Any Mortgage Loan as to which repurchase or substitution was
delayed pursuant to this paragraph shall be repurchased or the substitution
therefor shall occur (subject to compliance with Sections 2.02 or 2.03) upon the
earlier of (a) the occurrence of a default or imminent default with respect to
such Mortgage Loan and (b) receipt by the Trustee, with a copy to the Custodian,
of an Opinion of Counsel addressed to the Trustee to the effect that such
repurchase or substitution, as applicable, will not result in the events
described in clause (i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, the Sponsor, the Master
Servicer, the Custodian or the Trustee that any Mortgage Loan does not
constitute a "qualified mortgage" within the meaning of section 860G(a)(3) of
the Code, the party discovering such fact shall promptly (and in any event
within 5 Business Days of discovery) give written notice thereof to the other
parties. In connection therewith, the Sponsor, at its option, shall either (i)
substitute, if the conditions in Section 2.03(c) with respect to substitutions
are satisfied, a Replacement Mortgage Loan for the affected Mortgage Loan, or
(ii) repurchase the affected Mortgage Loan within 90 days of such discovery in
the same manner as it would a Mortgage Loan for a breach of representation or
warranty contained in Section 2.03. The Trustee shall reconvey to the Sponsor
the Mortgage Loan to be released pursuant hereto, and the Custodian shall
deliver the related Mortgage File, in the same manner, and on the same terms and
conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty contained in Section 2.03.
Section 2.06. Authentication and Delivery of Certificates.
The Trustee acknowledges the transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, the
Certificate Registrar has executed, authenticated and delivered, to or upon the
order of the Depositor, the Certificates in authorized denominations evidencing
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the entire ownership of the Trust Fund. The Trustee agrees to hold the Trust
Fund and exercise the rights referred to above for the benefit of all present
and future Holders of the Certificates and to perform the duties set forth in
this Agreement, to the end that the interests of the Holders of the Certificates
may be adequately and effectively protected.
Section 2.07. Covenants of the Master Servicer.
The Master Servicer covenants to the Depositor, the Securities
Administrator and the Trustee as follows:
(a) it shall comply in the performance of its obligations
under this Agreement;
(b) no written information, certificate of an officer,
statement furnished in writing (other than annual compliance certificates and
annual accountants' reports of the Servicers delivered by the Master Servicer
pursuant to Section 3.18) or written report prepared by the Master Servicer
pursuant to this Agreement and delivered, in the case of the Master Servicer, to
the Securities Administrator, the Depositor, any affiliate of the Depositor or
the Trustee will contain any untrue statement of a material fact or omit to
state a material fact necessary to make the information, certificate, statement
or report not misleading; and
(c) it shall (in the case of the Master Servicer, only in its
capacity as successor servicer pursuant to a Servicing Agreement) accurately and
fully provide information regarding payment performance of the Mortgagors to the
nationally recognized credit repositories, to the extent such reporting remains
customary and prudent in the servicing of mortgage loans similar to the Mortgage
Loans. Nothing in this Section shall derogate from the obligation of the Master
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Master Servicer to provide
access as provided in this Section as a result of such obligation shall not
constitute a breach of this Section.
Section 2.08. Lost Mortgage Notes Indemnity.
With respect to each Mortgage Loan for which the Sponsor has delivered
a lost note affidavit in lieu of an original Mortgage Note, the Sponsor does
hereby agree to defend, indemnify, and hold harmless the Trust Fund and the
Trustee, from and against any and all losses or damages, together with all
reasonable costs, charges and expenses (whether or not a lawsuit is filed),
incurred as a result of (i) the inability to enforce the related Mortgage Note
according to its terms, (ii) any claim, demand, suit, cause of action or
proceeding by a third party arising out of a Servicer's, the Master Servicer's
or the Trustee's inability to enforce the related Mortgage Note according to its
terms due to the lack of an original Mortgage Note, or (iii) the inability to
receive any related Insurance Proceeds, Liquidation Proceeds or other amounts
due to the lack of an original Mortgage Note. Upon demand from a Servicer, the
Master Servicer or the Trustee, the Sponsor shall remit to the Master Servicer
for deposit into the Distribution Account all amounts constituting lost
principal with respect to such Mortgage Loan to be treated as a Principal
Prepayment, and reimburse such Servicer, the Master Servicer or the Trustee, as
applicable, for all costs and expenses incurred in connection with such lost
Mortgage Note.
Section 2.09. Purposes and Powers of the Trust.
The purpose of the common law trust, as created hereunder, is to engage
in the following activities:
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(a) acquire and hold the Mortgage Loans and the other assets of the
Trust Fund and the proceeds therefrom;
(b) to issue the Certificates sold to the Depositor in exchange for
the Mortgage Loans;
(c) to make payments on the Certificates;
(d) to engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and
(e) subject to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of the Trust Fund
and the making of distributions to the Certificateholders.
The Trust is hereby authorized to engage in the foregoing
activities. The Trustee shall not cause the Trust to engage in any activity
other than in connection with the foregoing or other than as required or
authorized by the terms of this Agreement while any Certificate is outstanding,
and this Section 2.08 may not be amended, without the consent of the
Certificateholders evidencing more than 50% of the aggregate voting rights of
the Certificates.
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ARTICLE III.
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS
Section 3.01. The Master Servicer.
The Master Servicer shall supervise, monitor and oversee the
obligation of the Servicers to service and administer their respective Mortgage
Loans in accordance with the terms of the applicable Servicing Agreement and
shall have full power and authority to do any and all things which it may deem
necessary or desirable in connection with such master servicing and
administration. In performing its obligations hereunder, the Master Servicer
shall act in a manner consistent with Accepted Master Servicing Practices.
Furthermore, the Master Servicer shall oversee and consult with each such
Servicer as necessary from time-to-time to carry out the Master Servicer's
obligations hereunder, shall receive and review all reports, information and
other data provided to the Master Servicer by each such Servicer and shall cause
each such Servicer to perform and observe the covenants, obligations and
conditions to be performed or observed by such Servicer under the applicable
Servicing Agreement. The Master Servicer shall independently and separately
monitor each such Servicer's servicing activities with respect to each related
Mortgage Loan, reconcile the results of such monitoring with such information
provided in the previous sentence on a monthly basis and coordinate corrective
adjustments to such Servicers' and the Master Servicer's records, and based on
such reconciled and corrected information, prepare the statements specified in
Section 5.04(c) and any other information and statements required hereunder. The
Master Servicer shall reconcile the results of its Mortgage Loan monitoring with
the actual remittances of each such Servicer to its Protected Account pursuant
to the applicable Servicing Agreement. The Master Servicer shall be entitled to
conclusively rely on the Mortgage Loan data provided by the related Servicer and
shall have no liability for any errors in such Mortgage Loan data.
In addition to the foregoing, in connection with a
modification of any Mortgage Loan by a Servicer, if the Master Servicer is
unable to enforce the obligations of such Servicer with respect to such
modification, the Master Servicer shall notify the Depositor of such Servicer's
failure to comply with the terms of the related Servicing Agreement. If the
related Servicing Agreement requires the approval of the Master Servicer for a
modification to a Mortgage Loan, the Master Servicer shall approve such
modification if, based upon its receipt of written notification from the related
Servicer outlining the terms of such modification and appropriate supporting
documentation, the Master Servicer determines that the modification is permitted
under the terms of the related Servicing Agreement and that any conditions to
such modification set forth in the related Servicing Agreement have been
satisfied. Furthermore, if the related Servicing Agreement requires the
oversight and monitoring of loss mitigation measures with respect to the related
Mortgage Loans, the Master Servicer will monitor any loss mitigation procedure
or recovery action related to a defaulted Mortgage Loan (to the extent it
receives notice of such from the related Servicer) and confirm that such loss
mitigation procedure or recovery action is initiated, conducted and concluded in
accordance with any timeframes and any other requirements set forth in the
related Servicing Agreement, and the Master Servicer shall notify the Depositor
in any case in which the Master Servicer believes that such Servicer is not
complying with such timeframes and/or other requirements.
Section 3.02. REMIC-Related Covenants.
For as long as each REMIC shall exist, the Trustee, the
Securities Administrator and the Master Servicer shall act in accordance
herewith to assure continuing treatment of such REMIC as a REMIC, and shall
comply with any directions of the Sponsor, the Depositor, any Servicer, the
Securities Administrator or the Master Servicer to assure such continuing
treatment. In particular, the Trustee, the Securities Administrator and the
Master Servicer shall not (a) sell or permit the sale of all or any portion
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of the Mortgage Loans or of any investment of deposits in an Account unless such
sale is as a result of a repurchase of the Mortgage Loans pursuant to this
Agreement or the Trustee and the Securities Administrator have received a REMIC
Opinion, addressed to the Trustee and the Securities Administrator and prepared
at the expense of the Trust Fund; and (b) other than with respect to a
substitution pursuant to a Servicing Agreement or Section 2.04 of this
Agreement, as applicable, accept any contribution to any REMIC after the Startup
Day without receipt of a REMIC Opinion addressed to the Trustee.
Section 3.03. Monitoring of Servicers.
(a) The Master Servicer shall be responsible for reporting to
the Securities Administrator, the Depositor and the Sponsor the non-compliance
by each Servicer with its duties under the related Servicing Agreement. In the
review of each such Servicer's activities, the Master Servicer may rely upon an
officer's certificate of such Servicer with regard to such Servicer's compliance
with the terms of its Servicing Agreement. In the event that the Master
Servicer, in its judgment, determines that any such Servicer should be
terminated in accordance with its Servicing Agreement, or that a notice should
be sent pursuant to such Servicing Agreement with respect to the occurrence of
an event that, unless cured, would constitute grounds for such termination, the
Master Servicer shall notify the Sponsor, the Depositor and the Trustee thereof
and the Master Servicer (or EMC, if the activities relate to WFB as Servicer)
shall issue such notice or take such other action as it deems appropriate.
(b) Subject to the preceding paragraph, the Master Servicer,
on behalf of the Trustee and the Certificateholders, shall enforce the
obligations of each Servicer under the related Servicing Agreement, and, in the
event that any such Servicer fails to perform its obligations in accordance with
the related Servicing Agreement, then either EMC (if such defaulting Servicer is
WFB) or the Master Servicer (if such defaulting Servicer is any Servicer other
than WFB), shall terminate the rights and obligations of the defaulting Servicer
thereunder and act as successor servicer of the related Mortgage Loans or cause
the Trustee to enter into a new Servicing Agreement with a successor servicer
selected by either EMC (if the defaulting Servicer is WFB) or by the Master
Servicer (if the defaulting Servicer is any Servicer other than WFB) (which new
Servicing Agreement shall, in any case, have terms generally in accordance with
the terms of the terminated Servicing Agreement); provided, however, it is
understood and acknowledged by the parties hereto that there will be a period of
transition (not to exceed 90 days) before the actual servicing functions can be
fully transferred to such successor servicer. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Servicing
Agreements and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as the Master Servicer, in
its good faith business judgment, would require were it the owner of the related
Mortgage Loans. Except as contemplated by subsection (c) below, the Master
Servicer shall pay the costs of such enforcement at its own expense, provided
that the Master Servicer shall not be required to prosecute or defend any legal
action except to the extent that the Master Servicer shall have received
reasonable indemnity for its costs and expenses in pursuing such action. Without
limiting the generality of the foregoing, WFB shall reimburse EMC for all
Termination Costs associated with a termination of WFB as Servicer. To the
extent that any Termination Costs with respect to WFB are not fully and timely
reimbursed by WFB, EMC shall be entitled to reimbursement of such Termination
Costs from its Protected Account.
(c) EMC shall reimburse the Master Servicer for the costs and
expenses of the Master Servicer related to the termination of EMC as a Servicer,
appointment of a successor servicer or the transfer and assumption of servicing
by the Master Servicer with respect to the related Servicing Agreement,
including, without limitation, (i) all legal costs and expenses and all due
diligence costs and expenses associated with an evaluation of the potential
termination of EMC as a result of an event of default by such Servicer and (ii)
all costs and expenses associated with the complete transfer of servicing,
including all servicing files and all servicing data and the completion,
correction or manipulation of such
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servicing data as may be required by the successor servicer to correct any
errors or insufficiencies in the servicing data or otherwise to enable the
successor servicer to service the Mortgage Loans in accordance with the related
Servicing Agreement. To the extent that any Termination Costs with respect to a
terminated Servicer pursuant to the related Servicing Agreement are not fully
and timely reimbursed by such terminated Servicer, the Master Servicer shall be
entitled to reimbursement of such Termination Costs from the Distribution
Account.
(d) The Master Servicer shall require each Servicer to comply
with the remittance requirements and other obligations set forth in the related
Servicing Agreement, including any related Assumption Agreement. In addition,
the Master Servicer shall enforce the obligation of each Servicer to comply with
any limitations on modifications of the applicable Mortgage Loans set forth in
the applicable Servicing Agreement and related Assumption Agreement, including
any percentage limitation on the related Mortgage Loans that may be subject to a
modification, to the extent the Master Servicer is notified in writing of any
such modification by a Servicer, and any limitations on reimbursements for any
Advance or Servicing Advance made in connection with a modification of a related
Mortgage Loan which have been added to the Stated Principal Balance of such
Mortgage Loan, to the extent that the related Servicer reports any such
reimbursement to the Master Servicer. The Master Servicer shall enforce the
obligation of each Servicer pursuant to the related Servicing Agreement to
provide it with an Assessment of Compliance and Attestation Report pursuant to
Section 3.18.
(e) If the Master Servicer or EMC assumes the servicing with
respect to any of the Mortgage Loans, it shall not be liable for losses of the
predecessor Servicer or any acts or omissions of the predecessor Servicer and it
will not assume liability for the representations and warranties of any Servicer
that it replaces.
Section 3.04. [Reserved].
Section 3.05. Power to Act; Procedures.
The Master Servicer shall master service the Mortgage Loans
and shall have full power and authority, subject to the REMIC Provisions and the
provisions of Article X hereof, to do any and all things that it may deem
necessary or desirable in connection with the master servicing and
administration of such Mortgage Loans, including but not limited to the power
and authority (i) to execute and deliver, on behalf of the Certificateholders
and the Trustee, customary consents or waivers and other instruments and
documents, (ii) to consent to transfers of any Mortgaged Property and
assumptions of the Mortgage Notes and related Mortgages, (iii) to collect any
Insurance Proceeds and Liquidation Proceeds and (iv) to effectuate foreclosure
or other conversion of the ownership of the Mortgaged Property securing any
Mortgage Loan, in each case, in accordance with the provisions of the related
Servicing Agreement, including any related Assumption Agreement. The Trustee
shall furnish the Master Servicer, upon written request from a Servicing
Officer, with any powers of attorney empowering it or any Servicer to execute
and deliver instruments of satisfaction or cancellation, or of partial or full
release or discharge, and to foreclose upon or otherwise liquidate Mortgaged
Property, and to appeal, prosecute or defend in any court action relating to the
Mortgage Loans or the Mortgaged Property, in accordance with the applicable
Servicing Agreement and this Agreement, and the Trustee shall execute and
deliver such other documents, as the Master Servicer may request, to enable it
to master service and administer the Mortgage Loans and carry out its duties
hereunder, in each case in accordance with Accepted Master Servicing Practices
(and the Trustee shall have no liability for the use or misuse of any such
powers of attorney by the Master Servicer or any Servicer). If the Master
Servicer or the Trustee has been advised that it is likely that the laws of the
state in which action is to be taken prohibit such action if taken in the name
of the Trustee or that the Trustee would be adversely affected under the "doing
business" or tax laws of such state if such action is taken in its name, the
Master Servicer shall join with the Trustee in the
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appointment of a co-trustee pursuant to Section 9.11 hereof. In the performance
of its duties hereunder, the Master Servicer shall be an independent contractor
and shall not, except in those instances where it is taking action in the name
of the Trustee, be deemed to be the agent of the Trustee.
The Trustee and the Securities Administrator shall each
execute and deliver to related Servicer and the Master Servicer any court
pleadings, requests for trustee's sale or other documents necessary or desirable
to (i) the foreclosure or trustee's sale with respect to a Mortgaged Property;
(ii) any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or related Mortgage; (iii) obtain a deficiency judgment against
the Mortgagor; or (iv) enforce any other rights or remedies provided by the
Mortgage Note or related Mortgage or otherwise available at law or equity.
Section 3.06. Due-on-Sale Clauses; Assumption Agreements.
To the extent provided in the applicable Servicing Agreement,
for any Mortgage Loans that contain enforceable due-on-sale clauses, the Master
Servicer shall cause the related Servicer to enforce such clauses in accordance
with the applicable Servicing Agreement. If applicable law prohibits the
enforcement of a due-on-sale clause or such clause is otherwise not enforced in
accordance with such applicable Servicing Agreement, and, as a consequence, a
Mortgage Loan is assumed, the original Mortgagor may be released from liability
in accordance with the applicable Servicing Agreement.
Section 3.07. Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage
Loan, or the receipt by the Master Servicer or any Servicer of a notification
that payment in full has been escrowed in a manner customary for such purposes
for payment to Certificateholders on the next Distribution Date, such Servicer
will, or if it does not, the Master Servicer may, if required under the
applicable Servicing Agreement, promptly furnish to the Custodian on behalf of
the Trustee two copies of a certification substantially in the form of Exhibit H
hereto signed by a Servicing Officer or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from a
Servicing Officer (which certification shall include a statement to the effect
that all amounts received in connection with such payment that are required to
be deposited in the Protected Account maintained by the Master Servicer (as
successor servicer) or the applicable Servicer pursuant to its Servicing
Agreement have been or will be so deposited or escrowed) and shall request that
the Custodian on behalf of the Trustee deliver to the Master Servicer or the
applicable Servicer, as appropriate, the related Mortgage File. Upon receipt of
such certification and request, the Custodian on behalf of the Trustee shall
promptly release the related Mortgage File to the Master Servicer or the
applicable Servicer, as appropriate, and neither the Custodian nor the Trustee
shall have any further responsibility with regard to such Mortgage File. Upon
any such payment in full, the Master Servicer and each Servicer is authorized,
to give, as agent for the Trustee, as the mortgagee under the Mortgage that
secured the Mortgage Loan, an instrument of satisfaction (or assignment of
mortgage without recourse) regarding the Mortgaged Property subject to the
Mortgage, which instrument of satisfaction or assignment, as the case may be,
shall be delivered to the Person or Persons entitled thereto against receipt
therefor of such payment, it being understood and agreed that no expenses
incurred in connection with such instrument of satisfaction or assignment, as
the case may be, shall be chargeable to the Protected Account.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan and in accordance with the applicable Servicing
Agreement, the Trustee shall execute such documents as shall be prepared and
furnished to the Trustee by a Servicer or the Master Servicer (in form
reasonably acceptable to the Trustee) and as are necessary to the prosecution of
any such proceedings. The Custodian on behalf of the Trustee shall, upon the
request of a Servicer or the Master Servicer, and delivery to the Custodian on
behalf of the Trustee, of two copies of a request for release
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signed by a Servicing Officer substantially in the form of Exhibit H (or in a
mutually agreeable electronic format which will, in lieu of a signature on its
face, originate from a Servicing Officer), release the related Mortgage File
held in its possession or control to the Servicer or the Master Servicer, as
applicable. Such trust receipt shall obligate the Servicer or the Master
Servicer to return the Mortgage File to the Custodian on behalf of the Trustee,
when the need therefor by the Servicer or the Master Servicer no longer exists
unless the Mortgage Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
Mortgage File shall be released by the Custodian on behalf of the Trustee, to
the Servicer or the Master Servicer.
Section 3.08. Documents, Records and Funds in Possession of the
Master Servicer To Be Held for Trustee.
(a) The Master Servicer and each Servicer (to the extent
required by the related Servicing Agreement) shall transmit to the Trustee or
Custodian such documents and instruments coming into the possession of the
Master Servicer or such Servicer from time to time as are required by the terms
hereof, or in the case of the Servicers, in accordance with the applicable
Servicing Agreement, to be delivered to the Trustee or the Custodian. Any funds
received by the Master Servicer or a Servicer in respect of any Mortgage Loan or
which otherwise are collected by the Master Servicer or a Servicer as
Liquidation Proceeds or Insurance Proceeds in respect of any Mortgage Loan shall
be held for the benefit of the Trustee and the Certificateholders subject to, in
the case of the Master Servicer, the Master Servicer's right to retain or
withdraw from the Distribution Account the Master Servicing Fee and other
amounts provided in this Agreement and to the right of each Servicer to retain
its Servicing Fee and other amounts as provided in the applicable Servicing
Agreement. The Master Servicer shall, and, to the extent provided in the
applicable Servicing Agreement, shall cause each Servicer to, provide access to
information and documentation regarding the Mortgage Loans to the Trustee, the
Securities Administrator and their respective agents and accountants at any time
upon reasonable request and during normal business hours, and to
Certificateholders that are savings and loan associations, banks or insurance
companies, the 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 in respect of any Mortgage Loans,
whether from the collection of principal and interest payments or from
Liquidation Proceeds or Insurance Proceeds, shall be held by the Master Servicer
for and on behalf of the Trustee and the Certificateholders and shall be and
remain the sole and exclusive property of the Trustee; provided, however, that
the Master Servicer and each Servicer shall be entitled to setoff against, and
deduct from, any such funds any amounts that are properly due and payable to the
Master Servicer or such Servicer under this Agreement or the applicable
Servicing Agreement.
Section 3.09. Maintenance of Hazard Insurance.
(a) For each Mortgage Loan, the Master Servicer shall enforce
any obligation of a Servicer under the related Servicing Agreement to maintain
or cause to be maintained hazard insurance in accordance with the provisions of
the related Servicing Agreement.
(b) Pursuant to Section 4.01, any amounts collected by the
Master Servicer, or by any Servicer, under any Insurance Policies (other than
amounts to be applied to the restoration or repair of the property subject to
the related Mortgage or released to the Mortgagor in accordance with the
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applicable Servicing Agreement) shall be deposited into the Distribution
Account, subject to withdrawal pursuant to Section 4.05. Any cost incurred by
the Master Servicer or any such Servicer in maintaining any such insurance if
the Mortgagor defaults in its obligation to do so shall be added to the amount
owing under the Mortgage Loan where the terms of the Mortgage Loan so permit;
provided, however, that the addition of any such cost shall not be taken into
account for purposes of calculating the distributions to be made to
Certificateholders and shall be recoverable by the Master Servicer or such
Servicer pursuant to Section 4.05.
Section 3.10. Presentment of Claims and Collection of Proceeds.
The Master Servicer shall (to the extent provided in the
applicable Servicing Agreement) cause the related Servicer to prepare and
present on behalf of the Trustee and the Certificateholders all claims under the
Insurance Policies and take such actions (including the negotiation, settlement,
compromise or enforcement of the insured's claim) as shall be necessary to
realize recovery under such Insurance Policies. Any proceeds disbursed to the
Master Servicer (or disbursed to a Servicer and remitted to the Master Servicer)
in respect of such Insurance Policies shall be promptly deposited in the
Distribution Account upon receipt, except that any amounts realized that are to
be applied to the repair or restoration of the related Mortgaged Property as a
condition precedent to the presentation of claims on the related Mortgage Loan
to the insurer under any applicable Insurance Policy need not be so deposited
(or remitted).
Section 3.11. Maintenance of the Primary Mortgage Insurance
Policies.
(a) The Master Servicer shall not take, or authorize any
Servicer, to the extent such action is prohibited under the applicable Servicing
Agreement, to take, any action that would result in noncoverage under any
applicable Primary Mortgage Insurance Policy of any loss which, but for the
actions of the Master Servicer or such Servicer, would have been covered
thereunder. The Master Servicer shall use its best efforts to cause each such
Servicer (to the extent required under the related Servicing Agreement) to keep
in force and effect (to the extent that the Mortgage Loan requires the Mortgagor
to maintain such insurance), Primary Mortgage Insurance applicable to each
Mortgage Loan in accordance with the provisions of the related Servicing
Agreement. The Master Servicer shall not, and shall not authorize any Servicer,
to the extent required under the related Servicing Agreement, to cancel or
refuse to renew any such Primary Mortgage Insurance Policy that is in effect at
the date of the initial issuance of the Mortgage Note and is required to be kept
in force hereunder except in accordance with the provisions of the related
Servicing Agreement.
(b) The Master Servicer agrees to present, or to cause each
Servicer to the extent required under the related Servicing Agreement to
present, on behalf of the Trustee and the Certificateholders, claims to the
insurer under any Primary Mortgage Insurance Policies and, in this regard, to
take such reasonable action as shall be necessary to permit recovery under any
Primary Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to Section 4.01, any amounts collected by the Master Servicer or any
such Servicer under any Primary Mortgage Insurance Policies shall be deposited
in the Distribution Account, subject to withdrawal pursuant to Section 4.05.
Section 3.12. Custodian to Retain Possession of Certain Insurance
Policies and Documents.
The Custodian shall, on behalf of the Trustee, retain
possession and custody of the originals (to the extent available) of any Primary
Mortgage Insurance Policies, or certificate of insurance if applicable, and any
certificates of renewal as to the foregoing as may be issued from time to time.
Until all amounts distributable in respect of the Certificates have been
distributed in full and the Master
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Servicer otherwise has fulfilled its obligations under this Agreement, the
Custodian, on behalf of the Trustee, shall also retain possession and custody of
each Mortgage File in accordance with and subject to the terms and conditions of
this Agreement and the Custodial Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Custodian, on behalf of the Trustee,
upon the execution or receipt thereof the originals of any Primary Mortgage
Insurance Policies, any certificates of renewal, and such other documents or
instruments that constitute portions of the Mortgage File that come into the
possession of the Master Servicer from time to time.
Section 3.13. Realization Upon Defaulted Mortgage Loans.
The Master Servicer shall cause each Servicer to the extent
required under the related Servicing Agreement, to foreclose upon, repossess or
otherwise comparably convert the ownership of Mortgaged Properties securing such
of the Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments, all
in accordance with the terms of the applicable Servicing Agreement, including
any related Assumption Agreement.
Section 3.14. Compensation for the Servicers and the Master
Servicer.
Servicing compensation in the form of any prepayment charges
and penalties (other than the Prepayment Charges with respect to the Prepayment
Charge Loans), assumption fees, tax service fees, fees for statement of account
payoff or late payment charges collected by any Servicer shall be retained by
such Servicer and shall not be remitted to the Master Servicer for deposit in
the Distribution Account. In accordance with Section 4.05, the Master Servicer
shall be entitled to pay itself the Master Servicing Fee in respect of
remittances from Servicers prior to deposit in the Distribution Account or to
withdraw such portion of the Master Servicing Fee from the Distribution Account.
The Master Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as specifically provided in this Agreement.
Pursuant to Article IV, all income and gain realized from any investment of
funds in the Distribution Account shall be for the benefit of the Master
Servicer.
Section 3.15. REO Property.
(a) In the event the Trust Fund acquires ownership of any REO
Property in respect of any related Mortgage Loan, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee, on behalf of the
Certificateholders. The Master Servicer shall, to the extent provided in the
applicable Servicing Agreement, cause the applicable Servicer to sell any REO
Property as expeditiously as possible and in accordance with the provisions of
this Agreement and the related Servicing Agreement. Pursuant to its efforts to
sell such REO Property, the Master Servicer shall cause such applicable Servicer
to protect and conserve such REO Property in the manner and to the extent
required by the applicable Servicing Agreement, subject to the REMIC Provisions.
(b) The Master Servicer shall, to the extent required by the
related Servicing Agreement, cause the applicable Servicer to deposit all funds
collected and received in connection with the operation of any REO Property into
the related Protected Account.
(c) The Master Servicer and such applicable Servicer, upon the
final disposition of any REO Property, shall be entitled to reimbursement for
any related unreimbursed Advances, unreimbursed Servicing Advances or Servicing
Fees from Liquidation Proceeds received in connection with the final disposition
of such REO Property; provided, that any such unreimbursed Advances or Servicing
Fees as well as any unpaid Servicing Fees may be reimbursed or paid, as the case
may be, prior to final disposition, out of any net rental income or other net
amounts derived from such REO Property.
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Section 3.16. Annual Statement as to Compliance.
The Master Servicer and the Securities Administrator shall
deliver (or otherwise make available) to the Depositor and the Securities
Administrator not later than March 15th of each calendar year beginning in 2008,
an Officer's Certificate (an "Annual Statement of Compliance") stating, as to
each signatory thereof, that (i) a review of the activities of each such party
during the preceding calendar year and of its performance under this Agreement
has been made under such officer's supervision and (ii) to the best of such
officer's knowledge, based on such review, such party has fulfilled all of its
obligations under this Agreement in all material respects throughout such year,
or, if there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature and
status of the cure provisions thereof. Such Annual Statement of Compliance shall
contain no restrictions or limitations on its use. The Master Servicer shall
enforce the obligations of each Servicer, to the extent set forth in the related
Servicing Agreement, to deliver a similar Annual Statement of Compliance by that
Servicer to the Depositor and the Securities Administrator as described above as
and when required with respect to the Master Servicer. In the event that certain
servicing responsibilities with respect to any Mortgage Loan have been delegated
by the Master Servicer, the Securities Administrator or a Servicer to a
Subservicer or Subcontractor, each such entity shall cause such Subservicer or
Subcontractor (and with respect to each Servicer, the Master Servicer shall
enforce the obligation of such Servicer to the extent required under the related
Servicing Agreement) to deliver a similar Annual Statement of Compliance by such
Subservicer or Subcontractor to the Depositor and the Securities Administrator
as described above as and when required with respect to the Master Servicer or
the related Servicer (as the case may be).
Failure of the Master Servicer to comply with this Section
3.16 (including with respect to the timeframes required herein) shall be deemed
an Event of Default, and at the written direction of the Depositor the Trustee
shall, in addition to whatever rights the Trustee may have under this Agreement
and at law or equity or to damages, including injunctive relief and specific
performance, upon notice immediately terminate all of the rights and obligations
of the Master Servicer under this Agreement and in and to the Mortgage Loans and
the proceeds thereof without compensating the Master Servicer for the same.
Failure of the Securities Administrator to comply with this Section 3.16
(including with respect to the timeframes required in this Section) which
failure results in a failure to timely file the related Form 10-K, shall be
deemed a default and the Trustee at the written direction of the Depositor
shall, in addition to whatever rights the Trustee may have under this Agreement
and at law or equity or to damages, including injunctive relief and specific
performance, upon notice immediately terminate all of the rights and obligations
of the Securities Administrator under this Agreement and in and to the Mortgage
Loans and the proceeds thereof without compensating the Securities Administrator
for the same. This paragraph shall supersede any other provision in this
Agreement or any other agreement to the contrary.
In the event the Master Servicer, the Securities
Administrator, any Servicer or any subservicer or subcontractor engaged by
either such party is terminated or resigns pursuant to the terms of this
Agreement, or any other applicable agreement in the case of a Servicer, a
subservicer or subcontractor, as the case may be, such party shall provide an
Annual Statement of Compliance pursuant to this Section 3.16 or to the related
section of such other applicable agreement, as the case may be, as to the
performance of its obligations with respect to the period of time it was subject
to this Agreement or such other applicable agreement, as the case may be,
notwithstanding any such termination or resignation.
Section 3.17. Assessments of Compliance and Attestation Reports.
Pursuant to Rules 13a-18 and 15d-18 of the Exchange Act and
Item 1122 of Regulation AB, each of the Master Servicer, the Securities
Administrator and the Custodian (to the extent set forth in this Section and the
Custodial Agreement) (each, an "Attesting Party") shall deliver (or otherwise
make
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available) to the Master Servicer, the Securities Administrator and the
Depositor on or before March 15th of each calendar year beginning in 2008, a
report regarding such Attesting Party's assessment of compliance (an "Assessment
of Compliance") with the Servicing Criteria during the preceding calendar year.
The Assessment of Compliance, as set forth in Regulation AB, must contain the
following:
(a) A statement by an authorized officer of such Attesting
Party of its authority and responsibility for assessing compliance with
the Servicing Criteria applicable to the related Attesting Party;
(b) A statement by an authorized officer that such Attesting
Party used the Servicing Criteria attached as Exhibit L hereto, and
which will also be attached to the Assessment of Compliance, to assess
compliance with the Servicing Criteria applicable to the related
Attesting Party;
(c) An assessment by such officer of the related Attesting
Party's compliance with the applicable Servicing Criteria for the
period consisting of the preceding calendar year, including disclosure
of any material instance of noncompliance with respect thereto during
such period, which assessment shall be based on the activities such
Attesting Party performs with respect to asset-backed securities
transactions taken as a whole involving the related Attesting Party,
that are backed by the same asset type as the Mortgage Loans;
(d) A statement that a registered public accounting firm has
issued an attestation report on the related Attesting Party's
Assessment of Compliance for the period consisting of the preceding
calendar year; and
(e) A statement as to which of the Servicing Criteria, if any,
are not applicable to the related Attesting Party, which statement
shall be based on the activities such Attesting Party performs with
respect to asset-backed securities transactions taken as a whole
involving such Attesting Party, that are backed by the same asset type
as the Mortgage Loans.
Such report at a minimum shall address each of the Servicing Criteria
specified on Exhibit L hereto which are indicated as applicable to the related
Attesting Party.
On or before March 15th of each calendar year beginning in 2008, each
Attesting Party shall furnish to the Master Servicer, the Depositor and the
Securities Administrator a report (an "Attestation Report") by a registered
public accounting firm that attests to, and reports on, the Assessment of
Compliance made by the related Attesting Party, as required by Rules 13a-18 and
15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, which Attestation
Report must be made in accordance with standards for attestation reports issued
or adopted by the Public Company Accounting Oversight Board.
The Master Servicer shall enforce the obligation of each Servicer to
deliver to the Securities Administrator, the Master Servicer and the Depositor,
as applicable, an Assessment of Compliance and Attestation Report as and when
provided in the related Servicing Agreement. Each of the Master Servicer and the
Securities Administrator shall cause, and the Master Servicer shall enforce the
obligation (as and when provided in the related Servicing Agreement) of each
Servicer to cause, any Subservicer and each Subcontractor (to the extent such
Subcontractor is determined by the related Servicer, the Master Servicer or the
Securities Administrator, as applicable, to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB) that is engaged by
such Servicer, the Master Servicer or the Securities Administrator, as
applicable, to deliver to the Securities Administrator, the Master Servicer and
the Depositor an Assessment of Compliance and Attestation Report as and when
provided above. Such Assessment of Compliance, as to any Subservicer or
Subcontractor, shall at a minimum address the
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applicable Servicing Criteria specified on Exhibit L hereto which are indicated
as applicable to any "primary servicer" to the extent such Subservicer or
Subcontractor is performing any servicing function for the party who engages it
and to the extent such party is not itself addressing the Servicing Criteria
related to such servicing function in its own Assessment of Compliance. The
Securities Administrator shall confirm that each of the Assessments of
Compliance delivered to it, taken as a whole, address all of the Servicing
Criteria and taken individually address the Servicing Criteria for each party as
set forth in Exhibit L and notify the Depositor of any exceptions.
Notwithstanding the foregoing, as to any Subcontractor, an Assessment of
Compliance is not required to be delivered unless it is required as part of a
Form 10-K with respect to the Trust Fund.
The Custodian (to the extent set forth in the Custodial Agreement)
shall deliver to the Master Servicer, the Securities Administrator and the
Depositor an Assessment of Compliance and Attestation Report, as and when
provided above, which shall at a minimum address each of the Servicing Criteria
specified on Exhibit L hereto which are indicated as applicable to a
"custodian". Notwithstanding the foregoing, an Assessment of Compliance or
Attestation Report is not required to be delivered by the Custodian unless it is
required as part of a Form 10-K with respect to the Trust Fund.
Failure of the Master Servicer to comply with this Section 3.17
(including with respect to the timeframes required herein) shall, constitute an
Event of Default, and at the written direction of the Depositor the Trustee
shall, in addition to whatever rights the Trustee may have under this Agreement
and at law or equity or to damages, including injunctive relief and specific
performance, upon notice immediately terminate all of the rights and obligations
of the Master Servicer under this Agreement and in and to the Mortgage Loans and
the proceeds thereof without compensating the Master Servicer for the same (but
subject to the Master Servicer's rights to payment of any Master Servicing
Compensation and reimbursement of all amounts for which it is entitled to be
reimbursed prior to the date of termination). Failure of the Securities
Administrator to comply with this Section 3.17 (including with respect to the
timeframes required in this Section) which failure results in a failure to
timely file the related Form 10-K, shall, constitute a default and at the
written direction of the Depositor, the Trustee shall, in addition to whatever
rights the Trustee may have under this Agreement and at law or equity or to
damages, including injunctive relief and specific performance, upon notice
immediately terminate all of the rights and obligations of the Securities
Administrator under this Agreement and in and to the Mortgage Loans and the
proceeds thereof without compensating the Securities Administrator for the same
(but subject to the Securities Administrator's right to reimbursement of all
amounts for which it is entitled to be reimbursed prior to the date of
termination). This paragraph shall supersede any other provision in this
Agreement or any other agreement to the contrary.
In the event the Master Servicer, the Securities Administrator, the
Custodian, the Servicer or any subservicer or subcontractor engaged by any such
party is terminated, assigns its rights and obligations under, or resigns
pursuant to, the terms of the Agreement, the related Custodial Agreement, or any
other applicable agreement in the case of a Servicer, subservicer or
subcontractor, as the case may be, such party shall provide an Assessment of
Compliance and cause to be provided an Attestation Report pursuant to this
Section 3.17 or to the related section of such other applicable agreement, as
the case may be, as to performance of its obligations with respect to the period
of time it was subject to this Agreement or such other applicable agreement, as
the case may be, notwithstanding any such termination, assignment or
resignation.
Section 3.18. Reports Filed with Securities and Exchange
Commission.
(a) (i) (A) Within 15 days after each Distribution Date, the
Securities Administrator shall, in accordance with industry standards, prepare
and file with the Commission via the Electronic Data Gathering and Retrieval
System ("XXXXX"), a Distribution Report on Form 10-D, signed by the Master
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Servicer, with a copy of the Monthly Statement to be furnished by the Securities
Administrator to the Certificateholders for such Distribution Date; provided
that, the Securities Administrator shall have received no later than five (5)
calendar days after the related Distribution Date, all information required to
be provided to the Securities Administrator as described in clause (a)(iv)
below. Any disclosure that is in addition to the Monthly Statement and that is
required to be included on Form 10-D ("Additional Form 10-D Disclosure") shall
be, pursuant to the paragraph immediately below, reported by the parties set
forth on Exhibit O to the Securities Administrator and the Depositor and
approved for inclusion by the Depositor, and the Securities Administrator will
have no duty or liability for any failure hereunder to determine or prepare any
Additional Form 10-D Disclosure absent such reporting (other than in the case
where the Securities Administrator is the reporting party as set forth in
Exhibit O) and approval.
(B) Within five (5) calendar days after the related
Distribution Date, (i) the parties set forth in Exhibit O shall be required to
provide, and the Master Servicer shall enforce the obligations of each Servicer
(to the extent provided in the related Servicing Agreement) to provide, pursuant
to Section 3.18(a)(iv) below, to the Securities Administrator and the Depositor,
to the extent known by a responsible officer thereof, in XXXXX-compatible
format, or in such other form as otherwise agreed upon by the Securities
Administrator and the Depositor and such party, the form and substance of any
Additional Form 10-D Disclosure, if applicable, and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-D Disclosure on Form 10-D. The Depositor
shall be responsible for any reasonable fees and expenses assessed or incurred
by the Securities Administrator in connection with including any Additional Form
10-D Disclosure on Form 10-D pursuant to this Section.
(C) After preparing the Form 10-D, the Securities
Administrator shall forward electronically a copy of the
Form 10-D to the Depositor (in the case of any Additional 10-D Disclosure and
otherwise if requested by the Depositor) and the Master Servicer for review.
Within two Business Days after receipt of such copy, but no later than the 12th
calendar day after the Distribution Date (provided that, the Securities
Administrator forwards a copy of the Form 10-D no later than the 10th calendar
day after the Distribution Date), the Depositor shall notify the Securities
Administrator in writing (which may be furnished electronically) of any changes
to or approval of such Form 10-D. In the absence of receipt of any written
changes or approval, the Securities Administrator shall be entitled to assume
that such Form 10-D is in final form and the Securities Administrator may
proceed with the execution and filing of the Form 10-D. No later than the 13th
calendar day after the related Distribution Date, a duly authorized officer of
the Master Servicer shall sign the Form 10-D and, in the case where the Master
Servicer and the Securities Administrator are not affiliated, return an
electronic or fax copy of such signed Form 10-D (with an original executed hard
copy to follow by overnight mail) to the Securities Administrator. If a Form
10-D cannot be filed on time or if a previously filed Form 10-D needs to be
amended, the Securities Administrator shall follow the procedures set forth in
Section 3.18(a)(v)(B). Promptly (but no later than one (1) Business Day) after
filing with the Commission, the Securities Administrator shall make available on
its internet website a final executed copy of each Form 10-D filed by the
Securities Administrator. The signing party at the Master Servicer can be
contacted as set forth in Section 11.05. Form 10-D requires the registrant to
indicate (by checking "yes" or "no") that it (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. The Depositor shall notify the Securities Administrator in writing, no
later than the fifth calendar day after the related Distribution Date with
respect to the filing of a report on Form 10-D if the answer to the questions
should be "no". The Securities Administrator shall be entitled to rely on the
representations in Section 2.04(vi) and in any such notice in preparing,
executing and/or filing any such report. The parties to this Agreement
acknowledge that the performance by the Master Servicer and the Securities
Administrator of their respective duties under Sections 3.18(a)(i) and (v)
related to the timely preparation, execution and filing of Form 10-D is
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contingent upon such parties strictly observing all applicable deadlines in the
performance of their duties under such Sections. Neither the Master Servicer nor
the Securities Administrator shall have any liability for any loss, expense,
damage, claim arising out of or with respect to any failure to properly prepare,
execute and/or timely file such Form 10-D, where such failure results from a
party's failure to deliver on a timely basis, any information from such party
needed to prepare, arrange for execution or file such Form 10-D, not resulting
from its own negligence, bad faith or willful misconduct.
(ii) (A) Within four (4) Business Days after the
occurrence of an event requiring disclosure on Form 8-K (each such event, a
"Reportable Event"), the Securities Administrator shall prepare and file, at the
direction of the Depositor, on behalf of the Trust, any Form 8-K, as required by
the Exchange Act; provided that, the Depositor shall file the initial Form 8-K
in connection with the issuance of the Certificates. Any disclosure or
information related to a Reportable Event or that is otherwise required to be
included on Form 8-K ("Form 8-K Disclosure Information") shall be, pursuant to
the paragraph immediately below, reported by the parties set forth on Exhibit O
to the Securities Administrator and the Depositor and approved for inclusion by
the Depositor, and the Securities Administrator will have no duty or liability
for any failure hereunder to determine or prepare any Form 8-K Disclosure
Information absent such reporting (other than in the case where the Securities
Administrator is the reporting party as set forth in Exhibit O) and approval.
(B) For so long as the Trust is subject to the
Exchange Act reporting requirements, no later than the close
of business on the 2nd Business Day after the occurrence of a Reportable Event
(i) the parties set forth in Exhibit O shall be required pursuant to Section
3.18(a)(iv) below to provide, and the Master Servicer will enforce the
obligations of each Servicer (to the extent provided in the related Servicing
Agreement) to provide, to the Securities Administrator and the Depositor, to the
extent known by a responsible officer thereof, in XXXXX-compatible format, or in
such other form as otherwise agreed upon by the Securities Administrator and the
Depositor and such party, the form and substance of any Form 8-K Disclosure
Information, if applicable, and (ii) the Depositor shall approve, as to form and
substance, or disapprove, as the case may be, the inclusion of the Form 8-K
Disclosure Information on Form 8-K. The Depositor shall be responsible for any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Form 8-K Disclosure Information
on Form 8-K pursuant to this Section.
(C) After preparing the Form 8-K, the Securities
Administrator shall forward electronically a copy of the
Form 8-K to the Depositor and the Master Servicer for review. No later than the
close of business New York City time on the 3rd Business Day after the
Reportable Event, or in the case where the Master Servicer and Securities
Administrator are affiliated, no later than noon New York City time on the 4th
Business Day after the Reportable Event, a duly authorized officer of the Master
Servicer shall sign the Form 8-K and, in the case where the Master Servicer and
the Securities Administrator are not affiliated, return an electronic or fax
copy of such signed Form 8-K (with an original executed hard copy to follow by
overnight mail) to the Securities Administrator. Promptly, but no later than the
close of business on the 3rd Business Day after the Reportable Event (provided
that, the Securities Administrator forwards a copy of the Form 8-K no later than
noon New York time on the third Business Day after the Reportable Event), the
Depositor shall notify the Securities Administrator in writing (which may be
furnished electronically) of any changes to or approval of such Form 8-K. In the
absence of receipt of any written changes or approval, the Securities
Administrator shall be entitled to assume that such Form 8-K is in final form
and the Securities Administrator may proceed with the execution and filing of
the Form 8-K. If a Form 8-K cannot be filed on time or if a previously filed
Form 8-K needs to be amended, the Securities Administrator shall follow the
procedures set forth in Section 3.18(a)(v)(B). Promptly (but no later than one
(1) Business Day) after filing with the Commission, the Securities Administrator
shall make available on its internet website a final executed copy of each Form
8-K filed by the Securities Administrator. The signing party at the Master
Servicer can be contacted as
74
set forth in Section 11.05. The parties to this Agreement acknowledge that the
performance by Master Servicer and the Securities Administrator of their
respective duties under this Section 3.18(a)(ii) related to the timely
preparation, execution and filing of Form 8-K is contingent upon such parties
strictly observing all applicable deadlines in the performance of their duties
under this Section 3.18(a)(ii). Neither the Master Servicer nor the Securities
Administrator shall have any liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare, execute
and/or timely file such Form 8-K, where such failure results from a party's
failure to deliver on a timely basis, any information from such party needed to
prepare, arrange for execution or file such Form 8-K, not resulting from its own
negligence, bad faith or willful misconduct.
(iii) (A) Within 90 days after the end of each fiscal year
of the Trust, with respect to which the Trust is subject to the Exchange Act
reporting requirements, or such earlier date as may be required by the Exchange
Act (the "10-K Filing Deadline") (it being understood that the fiscal year for
the Trust ends on December 31st of each year), commencing in March 2008, the
Securities Administrator shall prepare and file on behalf of the Trust a Form
10-K, in form and substance as required by the Exchange Act. Each such Form 10-K
shall include the following items, in each case to the extent they have been
delivered to the Securities Administrator within the applicable time frames set
forth in this Agreement, (I) an annual compliance statement for each Servicer,
the Master Servicer, the Securities Administrator and any Subservicer or
Subcontractor, as applicable, as described under Section 3.16, (II)(A) the
annual reports on assessment of compliance with Servicing Criteria for each
Servicer, the Master Servicer, each Subservicer and Subcontractor participating
in the servicing function, the Securities Administrator and the Custodian, as
described under Section 3.17, and (B) if any such report on assessment of
compliance with Servicing Criteria described under Section 3.17 identifies any
material instance of noncompliance, disclosure identifying such instance of
noncompliance, or if any such report on assessment of compliance with Servicing
Criteria described under Section 3.17 is not included as an exhibit to such Form
10-K, disclosure that such report is not included and an explanation why such
report is not included, (III)(A) the registered public accounting firm
attestation report for the Master Servicer, each Servicer, the Securities
Administrator, each Subservicer, each Subcontractor, as applicable, and the
Custodian, as described under Section 3.17, and (B) if any registered public
accounting firm attestation report described under Section 3.17 identifies any
material instance of noncompliance, disclosure identifying such instance of
noncompliance, or if any such registered public accounting firm attestation
report is not included as an exhibit to such Form 10-K, disclosure that such
report is not included and an explanation why such report is not included, and
(IV) a Xxxxxxxx-Xxxxx Certification as described in Section 3.18(a)(iii)(D)
below (provided, however, that the Securities Administrator, at its discretion,
may omit from the Form 10-K any annual compliance statement, assessment of
compliance or attestation report that is not required to be filed with such Form
10-K pursuant to Regulation AB). Any disclosure or information in addition to
(I) through (IV) above that is required to be included on Form 10-K ("Additional
Form 10-K Disclosure") shall be, pursuant to the paragraph immediately below,
reported by the parties set forth on Exhibit O to the Securities Administrator
and the Depositor and approved for inclusion by the Depositor, and the
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure absent
such reporting (other than in the case where the Securities Administrator is the
reporting party as set forth in Exhibit O) and approval.
(B) No later than March 15th of each year that the
Trust is subject to the Exchange Act reporting requirements, commencing in 2008,
(i) the parties set forth in Exhibit O shall be required to provide, and the
Master Servicer shall enforce the obligations of each Servicer (to the extent
provided in the related Servicing Agreement) to provide, pursuant to Section
3.18(a)(iv) below to the Securities Administrator and the Depositor, to the
extent known by a responsible officer thereof, in XXXXX-compatible format, or in
such other form as otherwise agreed upon by the Securities Administrator and the
Depositor and such party, the form and substance of any Additional Form 10-K
75
Disclosure, if applicable, and (ii) the Depositor will approve, as to form and
substance, or disapprove, as the case may be, the inclusion of the Additional
Form 10-K Disclosure on Form 10-K. The Depositor shall be responsible for any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-K Disclosure
on Form 10-K pursuant to this Section.
(C) After preparing the Form 10-K, the Securities
Administrator shall forward electronically a copy of the
Form 10-K to the Depositor (only in the case where such Form 10-K includes
Additional Form 10-K Disclosure and otherwise if requested by the Depositor) and
the Master Servicer for review. Within three Business Days after receipt of such
copy, but no later than March 25th (provided that, the Securities Administrator
forwards a copy of the Form 10-K no later than the third Business Day prior to
March 25th), the Depositor shall notify the Securities Administrator in writing
(which may be furnished electronically) of any changes to or approval of such
Form 10-K. In the absence of receipt of any written changes or approval, the
Securities Administrator shall be entitled to assume that such Form 10-K is in
final form and the Securities Administrator may proceed with the execution and
filing of the Form 10-K. No later than the close of business Eastern Standard
time on the 4th Business Day prior to the 10-K Filing Deadline, an officer of
the Master Servicer in charge of the master servicing function shall sign the
Form 10-K and, in the case where the Master Servicer and the Securities
Administrator are not affiliated, return an electronic or fax copy of such
signed Form 10-K (with an original executed hard copy to follow by overnight
mail) to the Securities Administrator. If a Form 10-K cannot be filed on time or
if a previously filed Form 10-K needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 3.18(a)(v)(B).
Promptly (but no later than one (1) Business Day) after filing with the
Commission, the Securities Administrator shall make available on its internet
website a final executed copy of each Form 10-K filed by the Securities
Administrator. The signing party at the Master Servicer can be contacted as set
forth in Section 11.05. Form 10-K requires the registrant to indicate (by
checking "yes" or "no") that it (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. The
Depositor shall notify the Securities Administrator in writing, no later than
March 15th with respect to the filing of a report on Form 10-K, if the answer to
the questions should be "no". The Securities Administrator shall be entitled to
rely on the representations in Section 2.04(vi) and in any such notice in
preparing, executing and/or filing any such report. The parties to this
Agreement acknowledge that the performance by the Master Servicer and the
Securities Administrator of their respective duties under Sections 3.18(a)(iii)
and (iv) related to the timely preparation, execution and filing of Form 10-K is
contingent upon such parties strictly observing all applicable deadlines in the
performance of their duties under such Sections and Sections 3.16 and Section
3.17. Neither the Master Servicer nor the Securities Administrator shall have
any liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare, execute and/or timely file such Form
10-K, where such failure results from a party's failure to deliver, on a timely
basis, any information from any other party hereto needed to prepare, arrange
for execution or file such Form 10-K, not resulting from its own negligence, bad
faith or willful misconduct.
(D) Each Form 10-K shall include a certification (the
"Xxxxxxxx-Xxxxx Certification") required to be included therewith pursuant to
the Xxxxxxxx-Xxxxx Act which shall be signed by the Certifying Person and
delivered to the Securities Administrator no later than March 15th of each year
in which the Trust is subject to the reporting requirements of the Exchange Act.
The Master Servicer shall cause each Servicer, and any Subservicer or
Subcontractor engaged by it, to provide to the Person who signs the
Xxxxxxxx-Xxxxx Certification (the "Certifying Person"), by March 10th of each
year in which the Trust is subject to the reporting requirements of the Exchange
Act (or such other date specified in the related Servicing Agreement) and
otherwise within a reasonable period of time upon request, a certification
(each, a "Back-Up Certification"), in the form attached hereto as Exhibit M-1,
76
upon which the Certifying Person, the entity for which the Certifying Person
acts as an officer, and such entity's officers, directors and Affiliates
(collectively with the Certifying Person, "Certification Parties") can
reasonably rely. In addition, in the case where the Master Servicer and the
Securities Administrator are not affiliated, the Securities Administrator shall
sign a Back-Up Certification substantially in the form of Exhibit M-2; provided,
however, that the Securities Administrator shall not be required to undertake an
analysis of any accountant's report attached as an exhibit to the Form 10-K. An
officer of the Master Servicer in charge of the master servicing function shall
serve as the Certifying Person on behalf of the Trust. Such officer of the
Certifying Person can be contacted as set forth in Section 11.05.
(iv) With respect to any Additional Form 10-D Disclosure,
Additional Form 10-K Disclosure or any Form 8-K Disclosure Information
(collectively, the "Additional Disclosure") relating to the Trust Fund, the
Securities Administrator's obligation to include such Additional Information in
the applicable Exchange Act report is subject to receipt from the entity that is
indicated in Exhibit O as the responsible party for providing that information,
if other than the Securities Administrator, as and when required as described in
Section 3.18(a)(i) through (iii) above. Such Additional Disclosure shall be
accompanied by a notice substantially in the form of Exhibit P. Each of the
Master Servicer, the Sponsor, the Securities Administrator and the Depositor
hereby agrees to notify and provide, and the Master Servicer agrees to enforce
the obligations (to the extent provided in the related Servicing Agreement) of
each Servicer to notify and provide, to the extent known to the Master Servicer,
the Sponsor, the Securities Administrator and the Depositor, all Additional
Disclosure relating to the Trust Fund, with respect to which such party is
indicated in Exhibit O as the responsible party for providing that information.
The Depositor shall be responsible for any reasonable fees and expenses assessed
or incurred by the Securities Administrator in connection with including any
Additional Disclosure information pursuant to this Section.
Within five Business Days prior to each Distribution Date of
each year that the Trust is subject to the Exchange Act reporting requirements,
the Depositor shall make available to the Securities Administrator the related
Significance Estimate and the Securities Administrator shall use such
information to calculate the related Significance Percentage. If the
Significance Percentage meets either of the threshold levels detailed in Item
1115(b)(1) or 1115(b)(2) of Regulation AB, the Securities Administrator shall
deliver written notification to the Depositor and the Yield Maintenance Provider
to that effect, which notification shall include a request that the Yield
Maintenance Provider provide Regulation AB information to the Depositor in
accordance with the Yield Maintenance Agreement. The Depositor shall request
from the Yield Maintenance Provider any information required under Regulation AB
to the extent required under the Yield Maintenance Agreement. The Depositor will
be obligated pursuant to the Yield Maintenance Agreement to provide to the
Securities Administrator any information that may be required to be included in
any Form 10-D, Form 8-K or Form 10-K, relating to the Yield Maintenance
Agreement, or written notification instructing the Securities Administrator that
such Additional Disclosure regarding the Yield Maintenance Provider is not
necessary for such Distribution Date. The Depositor shall be responsible for any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Disclosure information
pursuant to this Section.
So long as the Depositor is subject to the filing requirements
of the Exchange Act with respect to the Trust Fund, the Trustee shall notify the
Securities Administrator and the Depositor of any bankruptcy or receivership
with respect to the Trustee or of any proceedings of the type described under
Item 1117 of Regulation AB that have occurred as of the related Due Period,
together with a description thereof, no later than the date on which such
information is required of other parties hereto as set forth under this Section
3.18. In addition, the Trustee shall notify the Securities Administrator and the
Depositor of any affiliations or relationships that develop after the Closing
Date between the Trustee and the Depositor, the Sponsor, the Securities
Administrator, the Master Servicer, the Yield Maintenance
77
Provider or the Custodian of the type described under Item 1119 of Regulation
AB, together with a description thereof, no later than March 15 of each year
that the Trust is subject to the Exchange Act reporting requirements, commencing
in 2008. Should the identification of any of the Depositor, the Sponsor, the
Securities Administrator, the Master Servicer, the Yield Maintenance Provider or
the Custodian change, the Depositor shall promptly notify the Trustee.
(v) (A) On or prior to January 30th of the first year in
which the Securities Administrator is able to do so under applicable law, the
Securities Administrator shall prepare and file a Form 15 relating to the
automatic suspension of reporting in respect of the Trust under the Exchange
Act.
(B) In the event that the Securities Administrator is
unable to timely file with the Commission all or any
required portion of any Form 8-K, 10-D or 10-K required to be filed by this
Agreement because required disclosure information was either not delivered to it
or delivered to it after the delivery deadlines set forth in this Agreement or
for any other reason, the Securities Administrator shall promptly notify the
Depositor and the Master Servicer. In the case of Form 10-D and 10-K, the
Depositor, the Master Servicer and the Securities Administrator shall cooperate
to prepare and file a Form 12b-25 and a 10-DA and 10-KA as applicable, pursuant
to Rule 12b-25 of the Exchange Act. In the case of Form 8-K, the Securities
Administrator will, upon receipt of all required Form 8-K Disclosure Information
and upon the approval and direction of the Depositor, include such disclosure
information on the next Form 10-D. In the event that any previously filed Form
8-K, 10-D or 10-K needs to be amended, and such amendment relates to any
Additional Disclosure, the Securities Administrator shall notify the Depositor
and the parties affected thereby and such parties will cooperate to prepare any
necessary Form 8-K, 10-DA or 10-KA. Any Form 15, Form 12b-25 or any amendment to
Form 8-K, 10-D or 10-K shall be signed by an appropriate officer of the Master
Servicer. The parties hereto acknowledge that the performance by the Master
Servicer and the Securities Administrator of their respective duties under this
Section 3.18(a)(v) related to the timely preparation, execution and filing of
Form 15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent
upon the Master Servicer and the Depositor timely performing their duties under
this Section. Neither the Master Servicer nor the Securities Administrator shall
have any liability for any loss, expense, damage or claim arising out of or with
respect to any failure to properly prepare, execute and/or timely file any such
Form 15, Form 12b-25 or any amendments to Form 8-K, 10-D or 10-K, where such
failure results from a party's failure to deliver on a timely basis, any
information from such party needed to prepare, arrange for execution or file
such Form 15, Form 12b-25 or any amendments to Form 8-K, 10-D or 10-K, not
resulting from its own negligence, bad faith or willful misconduct.
The Depositor agrees to promptly furnish to the Securities
Administrator, from time to time upon request, such further information, reports
and financial statements within its control related to this Agreement or the
Mortgage Loans as the Securities Administrator reasonably deems appropriate to
prepare and file all necessary reports with the Commission. The Securities
Administrator shall have no responsibility to file any items other than those
specified in this Section 3.18; provided, however, the Securities Administrator
shall cooperate with the Depositor in connection with any additional filings
with respect to the Trust Fund as the Depositor deems necessary under the
Exchange Act. Fees and expenses incurred by the Securities Administrator in
connection with this Section 3.18 shall not be reimbursable from the Trust Fund.
(b) The Securities Administrator shall indemnify and hold
harmless the Depositor and the Master Servicer and each of its officers,
directors and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
Securities Administrator's obligations under Sections 3.16, 3.17 and 3.18 or the
Securities Administrator's negligence, bad faith or willful misconduct in
connection therewith. In addition, the Securities Administrator shall indemnify
and
78
hold harmless the Depositor and the Master Servicer and each of their respective
officers, directors and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in any Back-Up Certification, any Annual Statement of Compliance, any Assessment
of Compliance or any Additional Disclosure provided by the Securities
Administrator on its behalf or on behalf of any Subservicer or Subcontractor
engaged by the Securities Administrator pursuant to Section 3.16, 3.17 or 3.18
(the "Securities Administrator Information"), or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading; provided, by way of clarification, that this
paragraph shall be construed solely by reference to the Securities Administrator
Information and not to any other information communicated in connection with the
Certificates, without regard to whether the Securities Administrator Information
or any portion thereof is presented together with or separately from such other
information.
The Depositor shall indemnify and hold harmless the Securities
Administrator and the Master Servicer and each of its officers, directors and
affiliates from and against any losses, damages, penalties, fines, forfeitures,
reasonable and necessary legal fees and related costs, judgments and other costs
and expenses arising out of or based upon a breach of the obligations of the
Depositor under Sections 3.16, 3.17 and 3.18 or the Depositor's negligence, bad
faith or willful misconduct in connection therewith. In addition, the Depositor
shall indemnify and hold harmless the Master Servicer, the Securities
Administrator and each of their respective officers, directors and affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any Additional Disclosure provided
by the Depositor that is required to be filed pursuant to this Section 3.18 (the
"Depositor Information"), or (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; provided, by way of clarification, that this paragraph shall be
construed solely by reference to the Depositor Information that is required to
be filed and not to any other information communicated in connection with the
Certificates, without regard to whether the Depositor Information or any portion
thereof is presented together with or separately from such other information.
The Master Servicer shall indemnify and hold harmless the
Securities Administrator and the Depositor and each of its respective officers,
directors and affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon a breach of the
obligations of the Master Servicer under Sections 3.16, 3.17 and 3.18 or the
Master Servicer's negligence, bad faith or willful misconduct in connection
therewith. In addition, the Master Servicer shall indemnify and hold harmless
the Depositor and each of its officers, directors and affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon (i) any untrue statement or alleged untrue
statement of any material fact contained in any Annual Statement of Compliance,
any Assessment of Compliance or any Additional Disclosure provided by the Master
Servicer on its behalf or on behalf of any Subservicer or Subcontractor engaged
by the Master Servicer pursuant to Section 3.16, 3.17 or 3.18 (the "Master
Servicer Information"), or (ii) any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; provided, by way of clarification, that this paragraph shall be
construed solely by reference to the Master Servicer Information and not to any
other information communicated in connection with the Certificates, without
regard to whether the Master Servicer Information or any portion thereof is
presented together with or separately from such other information.
79
If the indemnification provided for herein is unavailable or
insufficient to hold harmless the Depositor, the Securities Administrator or the
Master Servicer, as applicable, then the defaulting party, in connection with
any conduct for which it is providing indemnification under this Section
3.18(b), agrees that it shall contribute to the amount paid or payable by the
other parties as a result of the losses, claims, damages or liabilities of the
other party in such proportion as is appropriate to reflect the relative fault
and the relative benefit of the respective parties.
The indemnification provisions set forth in this Section
3.18(b) shall survive the termination of this Agreement or the termination of
any party to this Agreement.
(c) Failure of the Master Servicer to comply with this
Section 3.18 (including with respect to the timeframes required herein) shall,
constitute an Event of Default, and at the written direction of the Depositor
the Trustee shall, in addition to whatever rights the Trustee may have under
this Agreement and at law or equity or to damages, including injunctive relief
and specific performance, upon notice immediately terminate all of the rights
and obligations of the Master Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof without compensating the Master Servicer
for the same (but subject to the Master Servicer rights to payment of any Master
Servicing Compensation and reimbursement of all amounts for which it is entitled
to be reimbursed prior to the date of termination). Failure of the Securities
Administrator to comply with this Section 3.18 (including with respect to the
timeframes required in this Section) which failure results in a failure to
timely file the related Form 8-K, 10-D or 10-K, shall, at the written direction
of the Depositor, constitute a default and the Trustee shall, in addition to
whatever rights the Trustee may have under this Agreement and at law or equity
or to damages, including injunctive relief and specific performance, upon notice
immediately terminate all of the rights and obligations of the Securities
Administrator under this Agreement and in and to the Mortgage Loans and the
proceeds thereof without compensating the Securities Administrator for the same
(but subject to the Securities Administrator's right to reimbursement of all
amounts for which it is entitled to be reimbursed prior to the date of
termination). This paragraph shall supersede any other provision in this
Agreement or any other agreement to the contrary. In connection with the
termination of the Master Servicer or the Securities Administrator pursuant to
this Section 3.18(d), the Trustee shall be entitled to reimbursement of all
costs and expenses associated with such termination to the extent set forth in
Section 9.05. Notwithstanding anything to the contrary in this Agreement, no
Event of Default by the Master Servicer or default by the Securities
Administrator shall have occurred with respect to any failure to properly
prepare, execute and/or timely file any report on Form 8-K, Form 10-D or Form
10-K, any Form 15 or Form 12b-25 or any amendments to Form 8-K, 10-D or 10-K,
where such failure results from any party's failure to deliver, on a timely
basis, any information from such party needed to prepare, arrange for execution
or file any such report, Form or amendment, and does not result from its own
negligence, bad faith or willful misconduct.
(d) Notwithstanding the provisions of Section 11.01,
this Section 3.18 may be amended without the consent of the Certificateholders.
(e) Any report, notice or notification to be delivered by
the Master Servicer or the Securities Administrator to the Depositor pursuant to
this Section 3.18, may be delivered via email to XxxXXXxxxxxxxxxxxx@xxxx.xxx or,
in the case of a notification, telephonically by calling Reg AB Compliance
Manager at 000-000-0000.
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Section 3.19. [Reserved].
Section 3.20. Optional Purchase of Defaulted Mortgage Loans.
Beginning on the first Business Day of the Fiscal Quarter
immediately following the date on which a Mortgage Loan has become at least 91
days delinquent, EMC, in its sole discretion, shall have the right to elect (by
written notice sent to the Trustee, with a copy to the Master Servicer and the
applicable Servicer) to purchase for its own account from the Trust Fund any
such Mortgage Loan at a price equal to the Purchase Price. The Purchase Price
for any Mortgage Loan purchased hereunder shall be deposited in the Distribution
Account, and the Trustee, upon receipt of a Request for Release from EMC, shall
release or cause the Custodian to release to EMC, the related Mortgage File and
shall execute and deliver such instruments of transfer or assignment prepared by
EMC, in each case without recourse, representation or warranty as shall be
necessary to vest in EMC any Mortgage Loan released pursuant hereto and EMC
shall succeed to all the Trust's right, title and interest in and to such
Mortgage Loan and all security and documents related thereto. Such assignment
shall be an assignment outright and not for security. EMC shall thereupon own
such Mortgage Loan, and all security and documents, free of any further
obligation to the Trustee or the Certificateholders with respect thereto.
Notwithstanding the foregoing, any such optional right of repurchase by EMC
hereunder with respect to a delinquent Mortgage Loan shall, if unexercised,
terminate on the earlier of (i) the date on which such delinquency has been
cured or (ii) the last Business Day of such Fiscal Quarter immediately following
the date on which such Mortgage Loan became 91 days delinquent, provided
however, that such optional right of repurchase shall be reinstated if (a) in
the case of clause (i), the related Mortgage Loan shall thereafter again have
become 91 or more days delinquent and (b) in the case of clause (ii), such
delinquency shall have been subsequently cured and the related Mortgage Loan
shall thereafter again become 91 or more days delinquent in any subsequent
Fiscal Quarter. In either event, the purchase option shall again become
exercisable on the first day of the Fiscal Quarter immediately following the
date on which the related Mortgage Loan again becomes at least 91 days
delinquent.
Section 3.21. [Reserved].
Section 3.22. Intention of the Parties and Interpretation.
Each of the parties acknowledges and agrees that the purpose
of Sections 3.16, 3.17 and 3.18 of this Agreement is to facilitate compliance by
the Sponsor, the Depositor, the Securities Administrator and the Master Servicer
with the provisions of Regulation AB. Therefore, each of the parties agrees that
(a) the obligations of the parties hereunder shall be interpreted in such a
manner as to accomplish that purpose, (b) the parties' obligations hereunder
will be supplemented and modified as necessary to be consistent with any such
amendments, interpretive advice or guidance, convention or consensus among
active participants in the asset-backed securities markets, advice of counsel,
or otherwise in respect of the requirements of Regulation AB, (c) the parties
shall comply with reasonable requests made by the Sponsor, the Depositor, the
Master Servicer or the Securities Administrator for delivery of additional or
different information as the Sponsor, the Depositor, the Master Servicer or the
Securities Administrator may determine in good faith is necessary to comply with
the provisions of Regulation AB, and (d) no amendment of this Agreement shall be
required to effect any such changes in the obligations of the parties to this
transaction as are necessary to accommodate evolving interpretations of the
provisions of Regulation AB.
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ARTICLE IV.
ACCOUNTS
Section 4.01. Protected Accounts.
(a) The Master Servicer shall enforce the obligation of each
Servicer to establish and maintain a Protected Account in accordance with the
applicable Servicing Agreement, with records to be kept with respect thereto on
a Mortgage Loan by Mortgage Loan basis, into which Protected Accounts shall be
deposited daily (or as of such other time specified in the related Servicing
Agreement) all collections of principal and interest on any Mortgage Loan and
with respect to any REO Property received by a Servicer, including Principal
Prepayments, Insurance Proceeds, Liquidation Proceeds, and advances made from
such Servicer's own funds (less Servicing Fees as permitted by such applicable
Servicing Agreement in the case of any such Servicer) and all other amounts to
be deposited in the Protected Account pursuant to the related Servicing
Agreement.
(b) [Reserved].
(c) Subject to this Article IV, on or before each Servicer
Remittance Date, the Master Servicer shall (if acting as successor servicer to a
Servicer), or shall cause the related Servicer to withdraw or shall cause to be
withdrawn from the Protected Accounts and immediately remit or cause to be
remitted to the Securities Administrator for deposit into the Distribution
Account, amounts representing the following collections and payments (other than
with respect to principal of or interest on the Mortgage Loans due on or before
the Cut-off Date) with respect to each Mortgage Loan serviced by it:
(i) Scheduled Payments on the Mortgage Loans received or any
related portion thereof advanced by the related Servicers pursuant to
the Servicing Agreements which were due on or before the related Due
Date, net of the amount thereof comprising the Servicing Fees;
(ii) full Principal Prepayments, with respect to such Mortgage
Loans in the related Prepayment Period, and any Liquidation Proceeds
and Subsequent Recoveries received by the Servicers with respect to
such Mortgage Loans during the related period set forth in the
respective Servicing Agreement, net of the amount thereof comprising
the Servicing Fees;
(iii) partial Principal Prepayments received by the Servicers
for such Mortgage Loans in the related Prepayment Period; and
(iv) any amount to be used as an Advance and any payments of
Compensating Interest.
Section 4.02. [Reserved].
Section 4.03. [Reserved].
Section 4.04. Distribution Account.
(a) The Paying Agent shall establish and maintain in the name
of the Trustee, for the benefit of the Certificateholders, the Distribution
Account as a segregated trust account or accounts. The Securities Administrator
will deposit in the Distribution Account, as identified by the Securities
Administrator and as received by the Securities Administrator, the following:
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(i) Any amounts withdrawn from a Protected Account and
remitted to the Master Servicer for deposit to the Distribution Account
pursuant to Section 4.01(c);
(ii) Any Advances and any payments of Compensating
Interest which were not otherwise deposited in a Protected Account;
(iii) Any Insurance Proceeds, Liquidation Proceeds or
Subsequent Recoveries received by or on behalf of the Master Servicer
or which were not otherwise deposited in a Protected Account;
(iv) The Purchase Price with respect to any Mortgage
Loans purchased by the Sponsor pursuant to Sections 2.02, 2.03 or
3.20;
(v) Any amounts required to be deposited with respect to
losses on investments of deposits in the Distribution Account; and
(vi) Any other amounts received by or on behalf of the
Master Servicer or the Trustee and required to be deposited in the
Distribution Account pursuant to this Agreement.
(b) All amounts deposited to the Distribution Account shall be
held by the Paying Agent in the name of the Trustee in trust for the benefit of
the Certificateholders in accordance with the terms and provisions of this
Agreement. The requirements for crediting the Distribution Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of (i) prepayment or late payment
charges or assumption, tax service, statement account or payoff, substitution,
satisfaction, release and other like fees and charges and (ii) the items
enumerated in Subsections 4.05(a)(i), (ii), (iii), (iv), (vi), (vii), (viii),
(ix) and (xi) need not be remitted by the Securities Administrator (or remitted
to the Securities Administrator by the related Servicer) for deposit to the
Distribution Account. In the event that the Securities Administrator shall
deposit or cause to be deposited to the Distribution Account any amount not
required to be credited thereto, the Securities Administrator, upon receipt of a
written request therefor signed by a Servicing Officer of the Master Servicer,
shall promptly transfer such amount to the Master Servicer, any provision herein
to the contrary notwithstanding.
(c) The Distribution Account shall constitute an Eligible
Account of the Trust Fund segregated on the books of the Paying Agent and held
by the Paying Agent in a financial institution located in the State of the
Corporate Trust Office or in the State of New York, and the Distribution Account
and the funds deposited therein shall not be subject to, and shall be protected
from, all claims, liens, and encumbrances of any creditors or depositors of the
Paying Agent, the Trustee, the Securities Administrator or the Master Servicer
(whether made directly, or indirectly through a liquidator or receiver of the
Paying Agent, the Trustee, the Securities Administrator or the Master Servicer).
The amount at any time credited to the Distribution Account shall be (i) fully
insured by the FDIC to the maximum coverage provided thereby or (ii) invested in
the name of the Trustee, or its nominee, for the benefit of the
Certificateholders, in such Permitted Investments, or deposited in demand
deposits with such depository institutions, as directed in writing by the Master
Servicer. In the absence of such direction, amounts will remain uninvested. All
Permitted Investments shall mature or be subject to redemption or withdrawal on
or before, and shall be held until, the next succeeding Distribution Date if the
obligor for such Permitted Investment is the Paying Agent or, if such obligor is
any other Person, the Business Day preceding such Distribution Date. All
investment earnings on amounts on deposit in the Distribution Account shall be
for the account of the Master Servicer. The Master Servicer shall be permitted
to withdraw or receive distribution of any and all investment earnings from the
Distribution Account on each Distribution Date. If there is any loss on a
Permitted Investment or demand deposit, the Master Servicer shall deposit the
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amount of the loss in the Distribution Account. With respect to the Distribution
Account and the funds deposited therein, the Securities Administrator shall take
such action as may be necessary to ensure that the Certificateholders shall be
entitled to the priorities afforded to such a trust account (in addition to a
claim against the estate of the Trustee) as provided by 12 U.S.C. ss. 92a(e),
and applicable regulations pursuant thereto, if applicable, or any applicable
comparable state statute applicable to state chartered banking corporations.
Section 4.05. Permitted Withdrawals and Transfers from the
Distribution Account.
(a) The Paying Agent will, from time to time on demand of the
Master Servicer or the Securities Administrator, make or cause to be made such
withdrawals or transfers from the Distribution Account as the Master Servicer
has designated for such transfer or withdrawal pursuant to the Servicing
Agreements or as the Securities Administrator has instructed hereunder for the
following purposes (limited in the case of amounts due the Master Servicer to
those not withheld from the Distribution Account in accordance with Section
4.04(b), and in the case of amounts due to any Servicer to those not withdrawn
from its Protected Account in accordance with the related Servicing Agreement):
(i) to reimburse the Master Servicer or any Servicer for any
Advance, the right of the Master Servicer or a Servicer to
reimbursement pursuant to this subclause (i) being limited to amounts
received on a particular Mortgage Loan (including, for this purpose,
the Purchase Price therefor, Insurance Proceeds and Liquidation
Proceeds) which represent late payments or recoveries of the principal
of or interest on such Mortgage Loan respecting which such Advance or
advance was made;
(ii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds or Liquidation Proceeds relating to a particular
Mortgage Loan for amounts expended by the Master Servicer or such
Servicer in good faith in connection with the restoration of the
related Mortgaged Property which was damaged not covered by any
Insurance Policy, including any hazard insurance or in connection with
the liquidation of such Mortgage Loan;
(iii) to reimburse the Master Servicer or any Servicer from
Insurance Proceeds relating to a particular Mortgage Loan for insured
expenses incurred with respect to such Mortgage Loan and to reimburse
the Master Servicer or such Servicer from Liquidation Proceeds from a
particular Mortgage Loan for liquidation expenses incurred with respect
to such Mortgage Loan; provided that the related Servicer shall not be
entitled to reimbursement for liquidation expenses with respect to a
Mortgage Loan to the extent that (i) any amounts with respect to such
Mortgage Loan were paid as Excess Liquidation Proceeds pursuant to
clause (xi) of this Subsection (a) to such Servicer; and (ii) such
liquidation expenses were not included in the computation of such
Excess Liquidation Proceeds;
(iv) to pay the Master Servicer or any Servicer, as
appropriate, from Liquidation Proceeds or Insurance Proceeds received
in connection with the liquidation of any Mortgage Loan, the amount
which it or such Servicer would have been entitled to receive under
subclause (xi) of this Section 4.05(a) as servicing compensation on
account of each defaulted scheduled payment on such Mortgage Loan if
paid in a timely manner by the related Mortgagor;
(v) to pay the Master Servicer or any Servicer from the
Purchase Price for any Mortgage Loan, the amount which it or such
Servicer would have been entitled to receive under subclause (xi) of
this subsection (a) as servicing compensation;
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(vi) to reimburse the Master Servicer or any Servicer for
unreimbursed Servicing Advances made pursuant to the applicable
Servicing Agreement, the right to reimbursement pursuant to this
subclause being limited to amounts received on the related Mortgage
Loan (including, for this purpose, the Purchase Price therefor,
Insurance Proceeds and Liquidation Proceeds) which represent late
recoveries of the payments for which such Servicing Advances were made;
(vii) to reimburse the Master Servicer or any Servicer for any
unreimbursed Advance or any Servicing Advance, from collections, after
a Realized Loss has been allocated with respect to the related Mortgage
Loan, if the Advance or Servicing Advance has not been reimbursed
pursuant to clause (i) or (vi);
(viii) to pay any Master Servicing Fee not previously
reimbursed or withheld by the Master Servicer from funds prior to
distribution in the Distribution Account;
(ix) to reimburse the Master Servicer, the Trustee, the
Custodian, the Sponsor or the Securities Administrator for their
respective expenses, costs and liabilities incurred by and reimbursable
to it pursuant to Sections 3.03, 7.03, 7.04, 9.05 and 11.02, as
applicable;
(x) to pay to the related Servicer, as additional
compensation, any Excess Liquidation Proceeds with respect to a
Mortgage Loan to the extent not retained by the related Servicer;
(xi) from collections, to reimburse or pay any Servicer or the
Master Servicer any such amounts as are due thereto under the
applicable Servicing Agreement and have not been retained by or paid to
the Servicer, to the extent provided in the related Servicing
Agreement;
(xii) from collections, to reimburse the Trustee, the
Securities Administrator or the Custodian for expenses, costs and
liabilities incurred by or reimbursable to it pursuant to this
Agreement;
(xiii) to remove amounts deposited in error;
(xiv) notwithstanding any other provision of this Section
4.05(a), from collections with respect to principal only, to reimburse
a Servicer for the interest portion of any Advances and any Servicing
Advances made in connection with a Mortgage Loan modified pursuant to
the related Servicing Agreement, to the extent that such portion of
Advances or Servicing Advances have been added to the Stated Principal
Balance of the Mortgage Loan during the related Due Period;
(xv) to clear and terminate the Distribution Account pursuant
to Section 10.01.
(b) The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
accounting for any reimbursement from the Distribution Account pursuant to
subclauses (i) through (xii), inclusive, or with respect to any such amounts
which would have been covered by such subclauses had the amounts not been
retained by the Master Servicer without being deposited in the Distribution
Account under Section 4.04(b). Reimbursements made pursuant to clauses (vii),
(ix), (xi) and (xii) above will be allocated between the Loan Groups or Sub-Loan
Groups, as applicable, pro rata based on the aggregate Stated Principal Balances
of the Mortgage Loans in each Loan Group or Sub-Loan Group, as applicable.
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(c) On or before 5:00 p.m. Central time on the fifth Business
Day immediately preceding each Distribution Date the Master Servicer shall
deliver to the Securities Administrator with respect to all Mortgage Loans, a
report in the form of a computer readable magnetic tape (or by such other means
as the Master Servicer and the Securities Administrator may agree from time to
time) containing such data and information, as agreed to by the Master Servicer
and the Securities Administrator such as to permit the Securities Administrator
to prepare the Monthly Statement to Certificateholders and to direct the Paying
Agent in writing to make the required distributions for the related Distribution
Date (the "Remittance Report"). On each Distribution Date, based solely on the
applicable Remittance Report, the Paying Agent shall distribute Interest Funds
and Principal Funds in the Distribution Account to the Holders of the
Certificates in accordance with Section 5.04(a).
Section 4.06. The Yield Maintenance Account and the Yield
Maintenance Agreements.
The Depositor hereby directs the Trustee to execute and
deliver the Yield Maintenance Agreements on behalf of the Trust Fund and
authorizes the Trustee to perform its obligations thereunder on behalf of the
Trust Fund in accordance with the terms of each such Yield Maintenance
Agreement. Amounts payable by the Trust Fund on the Closing Date pursuant to the
Yield Maintenance Agreements shall be paid by the Sponsor. The Trustee in its
individual capacity shall have no responsibility for any of the undertakings,
agreements or representations with respect to the Yield Maintenance Agreements,
including, without limitation, for making any payments thereunder.
The Paying Agent shall establish and maintain in the name of
the Trustee, for the benefit of the Adjustable Rate Certificateholders, the
Yield Maintenance Account as a segregated trust account. The Yield Maintenance
Account will be part of the Trust but not part of any REMIC created hereunder
and any payments to the Adjustable Rate Certificates of Yield Maintenance
Payments will not be payments with respect to a "regular interest" in a REMIC
within the meaning of Code Section 860G(a)(1). For federal income tax purposes,
the Class B-IO Certificateholders shall be treated as the owners of the Yield
Maintenance Account.
The Paying Agent will invest funds deposited in the Yield
Maintenance Account as directed by the Class B-IO Certificateholders in writing
in Permitted Investments with a maturity date (i) no later than the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from the Yield Maintenance Account pursuant to this Agreement, if a Person other
than the Paying Agent or an Affiliate of the Paying Agent manages or advises
such Permitted Investment, or (ii) no later than the date on which such funds
are required to be withdrawn from the Yield Maintenance Account pursuant to this
Agreement, if the Paying Agent or an Affiliate of the Paying Agent manages or
advises such Permitted Investment. If no written direction with respect to such
Permitted Investment shall be received by the Paying Agent from the Class B-IO
Certificateholders, then funds in the Yield Maintenance Account shall remain
uninvested. All income and gain realized from investment of funds deposited in
the Yield Maintenance Account shall be for the sole and exclusive benefit of the
Class B-IO Certificateholders and shall be remitted by the Paying Agent to the
Class B-IO Certificateholders on the next Distribution Date. The Class B-IO
Certificateholders shall deposit in the Yield Maintenance Account the amount of
any net loss incurred in respect of any such Permitted Investment immediately
upon realization of such loss, without any right of reimbursement therefor.
Any Yield Maintenance Payments received by the Paying Agent
from the Yield Maintenance Provider shall be deposited by the Paying Agent into
the Yield Maintenance Account. On the Distribution Date immediately succeeding
its receipt thereof, the Paying Agent shall distribute from the Yield
Maintenance Payments on deposit in the Yield Maintenance Account in respect of
the Yield Maintenance Agreements, to the Adjustable Rate Certificates, the
related amounts payable to such Class
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for such Distribution Date, in the following order of priority, in each case to
the extent of the related amounts available:
first, (i) from amounts received under the Yield Maintenance
Agreement related to the Class II-A Certificates, to the Holders of each Class
of Class II-A Certificates, pro rata, and (ii) from amounts received under the
applicable Yield Maintenance Agreement related to the respective Class of Class
II-M Certificates, to the Holders of the related Class II-M Certificates, the
payment of any related Basis Risk Shortfall Carry Forward Amount for such
Distribution Date, to the extent not covered by Excess Cashflow for such
Distribution Date;
second, (i) from any remaining amounts received under the
Yield Maintenance Agreement related to the Class II-A Certificates, to the
Holders of each Class of Class II-A Certificates, pro rata, and (ii) from any
remaining amounts received under the applicable Yield Maintenance Agreement
related to the respective Class of Class II-M Certificates, to the Holders of
the related Class II-M Certificates, the payment of any Current Interest and
Interest Carry Forward Amount for each such Class to the extent not covered by
Interest Funds or Excess Cashflow on such Distribution Date;
third, from any aggregate excess amounts received under all
Yield Maintenance Agreements, (i) to the Holders of each Class of Class II-A
Certificates, pro rata, and thereafter (ii) sequentially, to the Class II-M-1,
Class II-M-2, Class II-M-3, Class II-M-4 and Class II-M-5 Certificates, in that
order, to the extent not paid pursuant to clauses first or second above; and
fourth, from any remaining amounts, to the Holders of the
Class B-IO Certificates.
Section 4.07. The Final Maturity Reserve Account.
No later than the Closing Date, the Paying Agent shall
establish and maintain in the name of the Holders of the Group II Offered
Certificates, the Final Maturity Reserve Account as a segregated trust account.
The Final Maturity Reserve Account constitutes an "outside reserve fund" within
the meaning of Treasury Regulation ss. 1.860G-2(h) and is not an asset of the
REMICs. The Class B-IO Certificateholders shall be the owners of the Final
Maturity Reserve Account, and for all federal tax purposes, amounts transferred
by the REMICs to the Final Maturity Reserve Account shall be treated as amounts
distributed by the REMICs to the Class B-IO Certificateholders. The Paying Agent
shall keep records that accurately reflect the funds on deposit in the Final
Maturity Reserve Account.
The Paying Agent will invest funds deposited in the Final
Maturity Reserve Account as directed by the Class B-IO Certificateholders in
writing in Permitted Investments with a maturity date (i) no later than the
Business Day immediately preceding the date on which such funds are required to
be withdrawn from the Final Maturity Reserve Account pursuant to this Agreement,
if a Person other than the Paying Agent or an Affiliate of the Paying Agent
manages or advises such Permitted Investment, or (ii) no later than the date on
which such funds are required to be withdrawn from the Final Maturity Reserve
Account pursuant to this Agreement, if the Paying Agent or an Affiliate of the
Paying Agent manages or advises such Permitted Investment. If no written
direction with respect to such Permitted Investment shall be received by the
Paying Agent from the Class B-IO Certificateholders, then funds in the Final
Maturity Reserve Account shall remain uninvested. All income and gain realized
from investment of funds deposited in the Final Maturity Reserve Account shall
be for the sole and exclusive benefit of the Class B-IO Certificateholders and
shall be remitted by the Paying Agent to the Class B-IO Certificateholders on
the next Distribution Date. The Class B-IO Certificateholders shall deposit in
the Final Maturity Reserve Account their pro rata share of the amount of any net
loss incurred in respect of any such Permitted Investment immediately upon
realization of such loss, without any right of reimbursement therefor.
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If, on the Distribution Date occurring in March 2017, or on
any Distribution Date thereafter, any Class of Group II Offered Certificates are
outstanding, and the aggregate Stated Principal Balance of the Mortgage Loans in
Loan Group II with original terms of maturity in excess of 30 years is greater
than or equal to the related scheduled amount set forth in Schedule IV to this
Agreement with respect to such Distribution Date, then the Securities
Administrator shall deposit into the Final Maturity Reserve Account, from
available funds with respect to Loan Group II for such Distribution Date, prior
to any distributions to the Group II Offered Certificates, the related Coupon
Strip for such Distribution Date, in accordance with the payment priority set
forth in paragraph first of subsection 5.04(a)(II)(i).
If, on any Distribution Date occurring after the Distribution
Date in March 2017, any amounts on deposit in the Final Maturity Reserve Account
exceed the lesser of (i) the aggregate Certificate Principal Balance of the
Group II Offered Certificates as of such date, and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group II with original terms to
maturity in excess of 30 years as of such date, an amount equal to such excess
shall be shall be distributed by the Securities Administrator to the Class B-IO
Certificates on such Distribution Date as a part of the Class B-IO Distribution
Amount.
On the earlier of the Distribution Date occurring in February
2037 and the Distribution Date on which the final distribution of payments from
the Mortgage Loans in Loan Group II and the other assets in the Trust with
respect to Loan Group II is expected to be made, funds on deposit in the Final
Maturity Reserve Account shall be distributed to the Group II Offered
Certificates in the following order of priority and the Final Maturity Reserve
Account shall be closed:
first, to each Class of Class II-A Certificates, pro rata in
accordance with their outstanding Certificate Principal Balances, until the
Certificate Principal Balance of each such Class is reduced to zero;
second, to the Class II-M-1, Class II-M-2, Class II-M-3, Class
II-M-4 and Class II-M-5 Certificates, sequentially, in that order, until the
Certificate Principal Balance of each such Class is reduced to zero, after
giving effect to principal distributions on such Distribution Date;
third, to each Class of Class II-A and Class II-M
Certificates, any Current Interest for each such Class remaining unpaid after
giving effect to distributions of related available funds on such Distribution
Date in accordance with the payment priorities set forth in Section
5.04(a)(II)(i); and
fourth, to the Class B-IO Certificates, any remaining amount.
Section 4.08. Class P Reserve Account.
(a) No later than the Closing Date, the Securities
Administrator shall establish and maintain in the name of the Holders of the
Class P Certificates, the Class P Reserve Fund as a segregated trust account. On
the Closing Date, the Depositor shall deposit $100 into the Class P Reserve
Account, with respect to each Class of Class P Certificates, which amount shall
be transferred to the Distribution Account for distribution to the Class P
Certificates, pro rata, on the initial Distribution Date. Funds on deposit in
the Class P Reserve Account shall be held in trust by the Securities
Administrator for the Holders of the related Class P Certificates. The Class P
Reserve Account will not represent an interest in any REMIC.
(b) Any amount on deposit in the Class P Reserve Account shall
be held uninvested. On the Business Day prior to each Distribution Date, the
Securities Administrator shall withdraw the amount then on deposit in the Class
P Reserve Account received in respect of Prepayment Charge Loans
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in Loan Group I and Loan Group II, respectively, and deposit such amount into
the Distribution Account to be distributed to the Holders of the related Class
I-P Certificates and Class II-P Certificates in accordance with Section
5.04(a)(I)(iv) and Section 5.04(a)(II)(iv), respectively. In addition, on the
earlier of (x) the Business Day prior to the Distribution Date on which all the
assets of a Loan Group are repurchased as described in Section 10.01 and (y) the
Business Day prior to the Distribution Date occurring in December 2010, in the
case of Loan Group I, and February 2010, in the case of Loan Group II, the
Securities Administrator shall withdraw the amount on deposit in the Class P
Reserve Account, deposit such amount into the Distribution Account and
distribute such amount to the related Class P Certificates on such Distribution
Date in accordance with Section 5.04(a)(I)(iv) and Section 5.04(a)(II)(iv) and,
following such withdrawal, the Class P Reserve Account shall be closed.
(c) The Class P Reserve Account constitutes an "outside
reserve fund" within the meaning of Treasury Regulation ss. 1.860G-2(h) and is
not an asset of the REMICs.
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ARTICLE V.
DISTRIBUTIONS AND ADVANCES
BY THE MASTER SERVICER
Section 5.01. Advances.
Except with respect to any Simple Interest Loans, for which no
Advances of principal are required to be made, if the related Servicer was
required to make an Advance pursuant to the related Servicing Agreement and
failed to make such Advance, in full or in part, the Master Servicer, in its
capacity as successor servicer (or another appointed successor servicer, or EMC,
in its capacity as successor servicer, if the defaulting servicer is WFB), will
make such Advance, to the extent not otherwise paid by the related Servicer, for
deposit into the Distribution Account. Each such Advance shall be remitted to
the Distribution Account on or before the Master Servicer Advance Date in
immediately available funds. The Master Servicer shall be obligated to make any
such Advance only to the extent that such advance would not be a Nonrecoverable
Advance. If the Master Servicer shall have determined that it has made a
Nonrecoverable Advance or that a proposed Advance or a lesser portion of such
Advance would constitute a Nonrecoverable Advance, the Master Servicer shall
deliver (i) to the Securities Administrator for the benefit of the
Certificateholders funds constituting the remaining portion of such Advance, if
applicable, and (ii) to the Depositor, each Rating Agency, the Trustee and the
Securities Administrator an Officer's Certificate setting forth the basis for
such determination.
In lieu of making all or a portion of such Advance from its
own funds, the Master Servicer may cause to be made an appropriate entry in its
records relating to the Distribution Account that any Amount Held for Future
Distributions has been used by the Master Servicer in discharge of its
obligation to make any such Advance. Any funds so applied shall be replaced by
the Master Servicer by deposit in the Distribution Account, no later than the
close of business on the Business Day immediately preceding the Distribution
Date on which such funds are required to be distributed pursuant to this
Agreement.
The Master Servicer shall be entitled to be reimbursed from
the Distribution Account for all Advances of its own funds made pursuant to this
Section as provided in Section 4.05. The obligation to make Advances with
respect to any Mortgage Loan shall continue until such Mortgage Loan is paid in
full or the related Mortgaged Property or related REO Property has been
liquidated or until the purchase or repurchase thereof (or substitution
therefor) from the Trust Fund pursuant to any applicable provision of this
Agreement, except as otherwise provided in this Section 5.01.
Subject to and in accordance with the provisions of Article
VIII hereof, in the event of a failure by the Master Servicer to make an Advance
pursuant to this Section 5.01, then the Trustee, as Successor Master Servicer,
shall be obligated to make such Advance.
Section 5.02. Compensating Interest Payments.
The Master Servicer shall deposit into the Distribution
Account, no later than the close of business on the Business Day immediately
preceding such Distribution Date, an amount equal to the aggregate amount of
Compensating Interest required to be paid by a Servicer pursuant to the related
Servicing Agreement for such Distribution Date, that is not so paid by such
Servicer; provided that such amount with respect to all Servicers in the
aggregate, shall not exceed the Master Servicing Fee for such Distribution Date;
and in case of such deposit, the Master Servicer shall not be entitled to any
recovery or reimbursement in respect of any such payment.
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Section 5.03. REMIC Distributions.
On each Distribution Date the Securities Administrator, shall
allocate distributions to the REMIC I Regular Interests, the REMIC II Regular
Interests, the REMIC III Regular Interests and the REMIC IV Regular Interests,
in accordance with Section 5.06 hereof.
Section 5.04. Distributions.
(a) On each Distribution Date, the Paying Agent will make
distributions on the Certificates as follows:
I. Distributions on the Group I Certificates.
(i) Interest and principal (as applicable) on the
Certificates of each Certificate Group in Loan Group I will be
distributed by the Paying Agent monthly on each Distribution Date,
commencing in March 2007, in an amount equal to the Available Funds for
the related Sub-Loan Group on deposit in the Distribution Account in
respect of each Sub-Loan Group in Loan Group I for such Distribution
Date. On each Distribution Date, the Paying Agent will withdraw from
the Distribution Account the Available Funds with respect to each
Sub-Loan Group in Loan Group I for such Distribution Date and apply
such amounts as follows:
(A) On each Distribution Date, the Available Funds for
Sub-Loan Group I-1 will be distributed to the Class I-A-1A
Certificates, Class I-A-1B Certificates and Class I-PO Certificates as
follows:
first, to the Class I-A-1A and Class I-A-1B
Certificates, the Accrued Certificate Interest on
each such Class for such Distribution Date, pro rata,
based on the Accrued Certificate Interest owed to
each such class; provided, however, that Accrued
Certificate Interest on the Class I-A-1A and Class
I-A-1B Certificates is subject to reduction in the
event of certain Net Interest Shortfalls and the
interest portion of Realized Losses on the Sub-Loan
Group I-1 Mortgage Loans allocable thereto, as set
forth in clause (iii) below and Section 5.04A;
second, to the Class I-A-1 and Class I-A-1B
Certificates, any Accrued Certificate Interest
thereon remaining undistributed from previous
Distribution Dates, pro rata, based on the
undistributed Accrued Certificate Interest owed to
each such Class, to the extent of remaining Available
Funds for Sub-Loan Group I-1;
third, to the Class I-A-1 and Class I-A-1B
Certificates, in reduction of their Certificate
Principal Balances, the Senior Optimal Principal
Amount with respect to Sub-Loan Group I-1 for such
Distribution Date, pro rata, based on their
respective Certificate Principal Balances, to the
extent of remaining Available Funds for Sub-Loan
Group I-1, until each such Certificate Principal
Balance has been reduced to zero;
fourth, to the Class I-PO Certificates, the
Class I-PO Certificate Principal Distribution Amount
for such Distribution Date, to the extent of
remaining Available Funds for Sub-Loan Group I-1,
until the Certificate Principal Balance thereof has
been reduced to zero; and
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fifth, to the Class I-PO Certificates, the
Class I-PO Certificate Deferred Amount, to the extent
of remaining Available Funds for Sub-Loan Group I-1,
provided, that (i) on any Distribution Date,
distributions pursuant to this priority fifth shall
not exceed the excess, if any, of (x) Available Funds
for Sub-Loan Group I-1 remaining after giving effect
to distributions pursuant to priority first through
fourth above over (y) the sum of the amount of
Accrued Certificate Interest for such Distribution
Date and Accrued Certificate Interest remaining
undistributed from previous Distribution Dates on all
classes of Group I Subordinate Certificates then
outstanding, (ii) such distributions shall not reduce
the Certificate Principal Balance of the Class I-PO
Certificates and (iii) no distribution will be made
in respect of the Class I-PO Certificate Deferred
Amount on or after the Cross-over Date.
(B) On each distribution date, the Available Funds for
Sub-Loan Group I-2 will be distributed to the Class I-A-2A and Class I-A-2B
Certificates as follows:
first, to the Class I-A-2A and Class I-A-2B
Certificates, the Accrued Certificate Interest on
each such Class for such Distribution Date, pro rata,
based on the Accrued Certificate Interest owed to
each such Class; provided, however, that Accrued
Certificate Interest on the Class I-A-2A and Class
I-A-2B Certificates is subject to reduction in the
event of certain Net Interest Shortfalls and the
interest portion of Realized Losses on the Sub-Loan
Group I-2 Mortgage Loans allocable thereto, as set
forth in clause (iii) below and Section 5.04A;
second, to the Class I-A-2A and Class I-A-2B
Certificates, any Accrued Certificate Interest on
each such Class remaining undistributed from previous
Distribution Dates, pro rata, based on the
undistributed Accrued Certificate Interest owed to
each such Class, to the extent of remaining Available
Funds for Sub-Loan Group I-2; and
third, to the Class I-A-2A and Class I-A-2B
Certificates, in reduction of their respective
Certificate Principal Balances, the Senior Optimal
Principal Amount with respect to Sub-Loan Group I-2
for such Distribution Date, pro rata, based on their
respective Certificate Principal Balances, to the
extent of remaining Available Funds for Sub-Loan
Group I-2, until each such Certificate Principal
Balance has been reduced to zero.
(C) On each distribution date, the Available Funds for
Sub-Loan Group I-3 will be distributed to the Class I-A-3A, Class
I-A-3B and Class I-X Certificates as follows:
first, to the Class I-A-3A, Class I-A-3B and
Class I-X Certificates, the Accrued Certificate
Interest on each such Class for such Distribution
Date, pro rata, based on the Accrued Certificate
Interest owed to each such Class; provided, however,
that Accrued Certificate Interest on the I-A-3A,
Class I-A-3B and Class I-X Certificates is subject to
reduction in the event of certain Net Interest
Shortfalls and the interest portion of Realized
Losses on Sub-Loan Group I-3 Mortgage Loans allocable
thereto, as set forth in clause (iii) below and
Section 5.04A;
second, to the I-A-3A, Class I-A-3B and
Class I-X Certificates, any Accrued Certificate
Interest thereon remaining undistributed from
previous
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Distribution Dates, pro rata, based on the
undistributed Accrued Certificate Interest owed to
each such Class, to the extent of remaining Available
Funds for Sub-Loan Group I-3; and
third, to the I-A-3A and Class I-A-3B
Certificates, in reduction of their respective
Certificate Principal Balances, the Senior Optimal
Principal Amount with respect to Sub-Loan Group I-3
for such Distribution Date, pro rata, based on their
respective Certificate Principal Balances, to the
extent of remaining Available Funds for Sub-Loan
Group I-3, until each such Certificate Principal
Balance has been reduced to zero.
(D) Except as provided in clauses (E) and (F) below, on
each Distribution Date on or prior to the Distribution Date on which
the Certificate Principal Balances of the Group I Subordinate
Certificates are reduced to zero, such date being referred to herein as
the Cross-Over Date, an amount equal to the remaining Available Funds
for all Sub-Loan Groups in Loan Group I after the distributions set
forth in clauses (A) through (C) above, will be distributed,
sequentially, to the Class I-B-1, Class I-B-2, Class I-B-3, Class
I-B-4, Class I-B-5 and Class I-B-6 Certificates, in that order, in each
case up to an amount equal to and in the following order: (a) the
Accrued Certificate Interest thereon for such Distribution Date, (b)
any Accrued Certificate Interest thereon remaining undistributed from
previous Distribution Dates, and (c) such Class's Allocable Share for
such Distribution Date, in each case, to the extent of the remaining
Available Funds for Loan Group I.
(E) On each Distribution Date prior to the Cross-Over
Date but after the reduction of the aggregate Certificate Principal
Balance of the Group I Senior Certificates (other than the Class I-X
and Class I-PO Certificates) in any Certificate Group or Groups to
zero, the remaining Certificate Groups will be entitled to receive in
reduction of their Certificate Principal Balances, pro rata, based upon
the aggregate Certificate Principal Balance of the Group I Senior
Certificates in each Certificate Group immediately prior to such
Distribution Date, in addition to any Principal Prepayments related to
such remaining Senior Certificates' respective Sub-Loan Group allocated
to such Group I Senior Certificates, 100% of the Principal Prepayments
on any Mortgage Loan in the Sub-Loan Group or Groups relating to the
fully paid Certificate Group or Groups. Such amounts allocated to the
Group I Senior Certificates shall be treated as part of the Available
Funds for the related Sub-Loan Group and distributed as part of the
related Senior Optimal Principal Amount in accordance with the
priorities set forth in clause third in each of clauses (A) through (C)
above, in reduction of the Certificate Principal Balances thereof.
(F) If on any Distribution Date on which the aggregate
Certificate Principal Balance of the Group I Senior Certificates (other
than the Class I-X and Class I-PO Certificates) in a Certificate Group
would be greater than the aggregate Stated Principal Balance of the
Mortgage Loans in its related Sub-Loan Group and any Group I
Subordinate Certificates are still outstanding, in each case, after
giving effect to distributions to be made on such Distribution Date,
(i) 100% of amounts otherwise allocable to the Group I Subordinate
Certificates in respect of principal will be distributed to such Group
I Senior Certificates in reduction of the Certificate Principal
Balances thereof, until the aggregate Certificate Principal Balance of
such Group I Senior Certificates is equal to the aggregate Stated
Principal Balance of the Mortgage Loans in the related Sub-Loan Group,
and (ii) the Accrued Certificate Interest otherwise allocable to the
Group I Subordinate Certificates on such Distribution Date will be
reduced and distributed to the related Group I Senior Certificates
(other than the Class I-PO Certificates), to the extent of any amount
due and unpaid on such Group I Senior Certificates, in an amount equal
to the Accrued Certificate Interest for such Distribution Date on the
excess of (x) the aggregate Certificate
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Principal Balance of such Group I Senior Certificates over (y) the
aggregate Stated Principal Balance of the Mortgage Loans in the related
Sub-Loan Group. Any such reduction in the Accrued Certificate Interest
on the Group I Subordinate Certificates will be allocated first to the
Group I Subordinate Certificates in reverse order of their respective
numerical designations, commencing with the Class I-B-6 Certificates.
If there exists more than one undercollateralized Certificate Group on
a Distribution Date, amounts distributable to such undercollateralized
Certificate Groups pursuant to this clause will be allocated among such
undercollateralized Certificate Groups, pro rata, based upon the amount
by which their respective aggregate Certificate Principal Balances
exceed the aggregate Stated Principal Balance of the Mortgage Loans in
their respective Sub-Loan Groups.
(G) If, after distributions have been made pursuant to
priorities first and second of clauses (A) through (C) above on any
Distribution Date, the remaining Available Funds for any Sub-Loan Group
in Loan Group I is less than the Senior Optimal Principal Amount for
that Sub-Loan Group plus, in the case of Sub-Loan Group I-1, the Class
I-PO Certificate Principal Distribution Amount, the Senior Optimal
Principal Amount for that Sub-Loan Group and, in the case of Sub-Loan
Group I-1, the Class I-PO Certificate Principal Distribution Amount,
shall be reduced by that amount, and the remaining Available Funds for
that Sub-Loan Group will be distributed as principal among the related
Classes of Group I Senior Certificates (other than the Class I-X
Certificates), pro rata, based on their respective Certificate
Principal Balances. Notwithstanding any reduction in principal
distributable to the Class I-PO Certificates pursuant to this clause,
the principal balance of the Class I-PO Certificates shall be reduced
not only by principal so distributed but also by the difference between
(i) principal distributable to the Class I-PO Certificates in
accordance with priority fourth of clause (A) above, and (ii) principal
actually distributed to the Class I-PO Certificates after giving effect
to this clause (such difference for the Class I-PO Certificates, the
"Class I-PO Certificate Cash Shortfall"). The Class I-PO Certificate
Cash Shortfall for the Class I-PO Certificates with respect to any
Distribution Date will be added to the Class I-PO Certificate Deferred
Amount.
(ii) No Accrued Certificate Interest will be payable with
respect to any Class of Group I Certificates after the Distribution
Date on which the Certificate Principal Balance or Notional Amount of
such Certificate has been reduced to zero.
(iii) If on any Distribution Date the Available Funds for
any Sub-Loan Group in Loan Group I is less than Accrued Certificate
Interest on the related Group I Senior Certificates for that
Distribution Date, prior to reduction for Net Interest Shortfalls and
the interest portion of Realized Losses on the related Mortgage Loans
allocable thereto, the shortfall will be allocated among the Holders of
each Class of related Group I Senior Certificates (other than the Class
I-PO Certificates) in proportion to the respective amounts of Accrued
Certificate Interest for that Distribution Date that would have been
allocated thereto in the absence of such Net Interest Shortfalls and/or
Realized Losses for such Distribution Date. In addition, the amount of
any such interest shortfalls with respect to the Mortgage Loans in the
related Sub-Loan Group will constitute unpaid Accrued Certificate
Interest and will be distributable to Holders of the related Group I
Certificates entitled to such amounts on subsequent Distribution Dates,
to the extent of the Available Funds for the related Sub-Loan Group
remaining after current interest distributions as set forth in clauses
(A) through (C) above. Any such amounts so carried forward will not
bear interest. Any interest shortfalls will not be offset by a
reduction in the servicing compensation of the Servicer or otherwise,
except to the limited extent described in the following paragraph with
respect to Prepayment Interest Shortfalls.
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(iv) On each Distribution Date, all amounts transferred
from the Class P Reserve Account representing Prepayment Charges in
respect of the Prepayment Charge Loans in Loan Group I received during
the related Prepayment Period will be withdrawn from the Distribution
Account and distributed by the Paying Agent to the holders of the Class
I-P Certificates and shall not be available for distribution to the
holders of any other Class of Certificates
II. Distributions on the Group II Certificates.
On each Distribution Date, an amount equal to the Interest
Funds and Principal Funds for such Distribution Date shall be withdrawn
by the Paying Agent from the Distribution Account and distributed as
directed in accordance with the Remittance Report for such Distribution
Date, in the manner set forth in clauses (i), (ii), (iii) and (iv)
below:
(i) The Paying Agent shall apply Interest Funds for such
Distribution Date as follows:
first, on each Distribution Date on or after
the Distribution Date in March 2017, if applicable,
to the Final Maturity Reserve Account, an amount
equal to the coupon strip for such Distribution Date;
second, from remaining Interest Funds, to
each Class of Class II-A Certificates, Current
Interest and then any Interest Carry Forward Amount
for each such Class, pro rata, based on the amounts
of Current Interest and Interest Carry Forward
Amount, as applicable, due to each such Class;
third, from remaining Interest Funds, to the
Class II-M-1 Certificates, the Class II-M-2
Certificates, the Class II-M-3 Certificates, the
Class II-M-4 Certificates and the Class II-M-5
Certificates, sequentially, in that order, Current
Interest for each such Class;
fourth, any Excess Spread, to the extent
necessary to meet a level of overcollateralization
equal to the Specified Overcollateralization Amount,
will be the Extra Principal Distribution Amount and
will be included as part of the Principal
Distribution Amount; and
fifth, any Remaining Excess Spread will be
added to any Excess Overcollateralization Amount and
will be included in Excess Cashflow and applied as
described under clause (iii), below.
On any Distribution Date, any shortfalls on Mortgage Loans in
Loan Group II resulting from the application of the Relief Act or
similar state laws, and any Prepayment Interest Shortfalls to the
extent not covered by Compensating Interest will be allocated, first,
in reduction of amounts otherwise distributable to the Class B-IO
Certificates and Residual Certificates, and thereafter, to the Current
Interest payable to the Group II Certificates on such Distribution
Date, on a pro rata basis, based on the respective amounts of interest
accrued on such Certificates for such Distribution Date. The Holders of
the Group II Certificates will not be entitled to reimbursement for any
such interest shortfalls.
(ii) The Paying Agent shall apply the Principal
Distribution Amount for such Distribution Date as follows:
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(A) For each Distribution Date (i) prior to the
Stepdown Date or (ii) on which a Trigger Event is in effect:
first, concurrently, to the Class II-A-1
Certificates and the Class II-A-2 Certificates, pro
rata, in accordance with their respective Certificate
Principal Balances, in each case until the
Certificate Principal Balance of each such Class is
reduced to zero;
second, to the Class II-M-1 Certificates,
any remaining Principal Distribution Amount until the
Certificate Principal Balance thereof is reduced to
zero;
third, to the Class II-M-2 Certificates, any
remaining Principal Distribution Amount until the
Certificate Principal Balance thereof is reduced to
zero;
fourth, to the Class II-M-3 Certificates,
any remaining Principal Distribution Amount until the
Certificate Principal Balance thereof is reduced to
zero;
fifth, to the Class II-M-4 Certificates, any
remaining Principal Distribution Amount until the
Certificate Principal Balance thereof is reduced to
zero; and
sixth, to the Class II-M-5 Certificates, any
remaining Principal Distribution Amount until the
Certificate Principal Balance thereof is reduced to
zero.
(B) For each Distribution Date on or after the
Stepdown Date, so long as a Trigger Event is not in effect:
first, concurrently, to the Class II-A-1
Certificates and the Class II-A-2 Certificates, pro
rata, in accordance with their respective Certificate
Principal Balances, the Class II-A Principal
Distribution Amount, in each case until the
Certificate Principal Balance of each such Class is
reduced to zero;
second, to the Class II-M-1 Certificates,
from any remaining Principal Distribution Amount, the
Class II-M-1 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to
zero;
third, to the Class II-M-2 Certificates,
from any remaining Principal Distribution Amount, the
Class II-M-2 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to
zero; and
fourth, to the Class II-M-3 Certificates,
from any remaining Principal Distribution Amount, the
Class II-M-3 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to
zero;
fifth, to the Class II-M-4 Certificates,
from any remaining Principal Distribution Amount, the
Class II-M-4 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to
zero; and
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sixth, to the Class II-M-5 Certificates,
from any remaining Principal Distribution Amount, the
Class II-M-5 Principal Distribution Amount, until the
Certificate Principal Balance thereof is reduced to
zero.
(iii) The Paying Agent shall apply the sum of any Excess
Cashflow on each Distribution Date as follows:
first, to each Class of Class II-A
Certificates, any unpaid Interest Carry Forward
Amount for each such Class of Certificates and
Distribution Date, pro rata, to the extent not paid
pursuant to paragraph second of clause (i) above;
second, from the sum of any remaining Excess
Cashflow, to the Class II-A-1 Certificates and the
Class II-A-2 Certificates, sequentially, in that
order, an amount equal to any Unpaid Applied Realized
Loss Amount for each such Class and Distribution
Date;
third, from the sum of any remaining Excess
Cashflow, to the Class II-M-1 Certificates, Class
II-M-2 Certificates, Class II-M-3 Certificates, Class
II-M-4 Certificates and Class II-M-5 Certificates,
sequentially, in that order, an amount equal to any
Interest Carry Forward Amount for each such Class and
Distribution Date;
fourth, from the sum of any remaining Excess
Cashflow, to the Basis Risk Reserve Fund, and
therefrom to each Class of Class II-A Certificates,
pro rata, any Basis Risk Shortfall Carry Forward
Amount for each such Class and Distribution Date;
fifth, from the sum of any remaining Excess
Cashflow, to the Basis Risk Reserve Fund, and
therefrom to the Class II-M-1 Certificates, Class
II-M-2 Certificates, Class II-M-3 Certificates, the
Class II-M-4 Certificates and the Class II-M-5
Certificates, sequentially, in that order, an amount
equal to any Basis Risk Shortfall Carry Forward
Amount for each such Class and Distribution Date;
sixth, from the sum of any remaining Excess
Cashflow, first to each Class of Class II-A
Certificates, pro rata, and then to Class II-M-1
Certificates, Class II-M-2 Certificates, Class II-M-3
Certificates, Class II-M-4 Certificates and Class
II-M-5 Certificates, sequentially, in that order,
such respective Certificates' allocated share of any
Prepayment Interest Shortfalls to the extent not
covered by Compensating Interest and any shortfalls
resulting from the application of the Relief Act or
similar state laws, in each case without interest
accrued thereon;
seventh, from the sum of any remaining
Excess Cashflow, to the Class B-IO Certificates, the
Class B-IO Distribution Amount; and
eighth, any remaining amounts to the
Residual Certificates, based on the related REMIC in
which such amounts remain.
(iv) On each Distribution Date, all amounts transferred
from the Class P Reserve Account representing Prepayment Charges in
respect of the Prepayment Charge Loans in Loan Group II received during
the related Prepayment Period will be withdrawn from the Distribution
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Account and distributed by the Paying Agent to the Holders of the Class
II-P Certificates and shall not be available for distribution to the
Holders of any other Class of Group II Certificates.
(b) Subject to Section 10.02 hereof respecting the final
distribution, on each Distribution Date the Paying Agent shall make
distributions to each Certificateholder of record on the preceding
Record Date either by wire transfer in immediately available funds to
the account of such holder at a bank or other entity having appropriate
facilities therefor, if such Holder has so notified the Paying Agent at
least five (5) Business Days prior to the related Record Date or, if
not, by check mailed by first class mail to such Certificateholder at
the address of such holder appearing in the Certificate Register.
Notwithstanding the foregoing, but subject to Section 10.02 hereof
respecting the final distribution, distributions with respect to
Certificates registered in the name of a Depository shall be made to
such Depository in immediately available funds.
(c) The Securities Administrator shall deliver a
Remittance Report to the Paying Agent on or before 2:00 p.m. Eastern
time on the Business Day immediately preceding each Distribution Date.
Section 5.04A. Allocation of Realized Losses.
I. Allocation of Realized Losses on the Group I
Certificates.
(a) The applicable Non-PO Percentage of any Realized
Losses with respect to the Mortgage Loans in Loan Group I shall be applied on
Distribution Date after the distributions provided for in Section 5.04 in
each reduction of the Certificate Principal Balance of the Class or Classes of
Certificates as follows:
first, to the Class I-B-6 Certificates, until the
Certificate Principal Balance of such Class has been reduced
to zero;
second, to the Class I-B-5 Certificates, until the
Certificate Principal Balance of such Class has been reduced
to zero;
third, to the Class I-B-4 Certificates, until the
Certificate Principal Balance of such Class has been reduced
to zero;
fourth, to the Class I-B-3 Certificates, until the
Certificate Principal Balance of such Class has been reduced
to zero;
fifth, to the Class I-B-2 Certificates, until the
Certificate Principal Balance of such Class has been reduced
to zero;
sixth, to the Class I-B-1 Certificates, until the
Certificate Principal Balance of such Class has been reduced
to zero;
seventh, to the Group I Senior Certificates (other
than the Class I-X and Class I-PO Certificates), as follows:
(i) the applicable Non-PO Percentage of any
Realized Losses with respect to Sub-Loan
Group I-1 will be allocated to the Class
I-A-1B Certificates and Class I-A-1A
Certificates, sequentially, in that order,
in each case
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until the Certificate Principal Balance of
each such Class has been reduced to zero;
(ii) the applicable Non-PO Percentage of any
Realized Losses with respect to Sub-Loan
Group I-2 will be allocated to the Class
I-A-2B Certificates and Class I-A-2A
Certificates, sequentially, in that order,
in each case until the Certificate Principal
Balance of each such Class has been reduced
to zero;
(iii) the applicable Non-PO Percentage of any
Realized Losses with respect to Sub-Loan
Group I-3 will be allocated to the Class
I-A-3B Certificates and Class I-A-3A
Certificates, sequentially, in that order,
in each case until the Certificate Principal
Balance of each such Class has been reduced
to zero.
(b) Notwithstanding the foregoing clause (a), no
reduction of the Certificate Principal Balance on a Distribution Date of any
Class of (i) Group I Subordinate Certificates will be made on any Distribution
Date on account of Realized Losses on the Mortgage Loans in Loan Group I to the
extent that such allocation would result in the reduction of the aggregate
Certificate Principal Balances of all Group I Certificates as of such
Distribution Date, after giving effect to all distributions and prior
allocations of Realized Losses on the Mortgage Loans in Loan Group I on such
date, to an amount less than the aggregate Stated Principal Balance of all of
the Mortgage Loans in Loan Group I as of the first day of the month of such
Distribution Date and (ii) Group I Senior Certificates of a Certificate Group
will be made on any Distribution Date on account of Realized Losses in the
related Sub-Loan Group to the extent that such reduction would have the effect
of reducing the Certificate Principal Balance of such Certificate Group as of
such Distribution Date to an amount less than the Stated Principal Balances of
the Mortgage Loans in the related Sub-Loan Group in Loan Group I as of the
related Due Date. The limitation described in clauses (i) and (ii) above is
referred to herein as the "Loss Allocation Limitation".
(c) On any distribution date, the PO Percentage of any
Realized Loss on a Discount Mortgage Loan in Loan Group I and any Class I-PO
Certificate Cash Shortfall will be allocated to the Class I-PO Certificates
until the Certificate Principal Balance thereof is reduced to zero. The amount
of any Realized Loss allocated to the Class I-PO Certificates on or before the
Cross-Over Date and any Class I-PO Certificate Cash Shortfall will be treated as
a Class I-PO Certificate Deferred Amount. To the extent funds are available on
the Distribution Date or on any future Distribution Date from amounts that would
otherwise be allocable from Available Funds for the Subordinate Optimal
Principal Amount, Class I-PO Certificate Deferred Amounts will be paid on the
Class I-PO certificates before distributions of principal on the Group I
Subordinated Certificates. Any distribution of Available Funds in respect of
unpaid Class I-PO Certificate Deferred Amounts will not further reduce the
Certificate Principal Balance of the Class I-PO certificates. The Class I-PO
Certificate Deferred Amounts will not bear interest. The Certificate Principal
Balance of the Class of Group I Subordinated Certificates then outstanding with
the lowest payment priority will be reduced by the amount of any payments in
respect of Class I-PO Certificate Deferred Amounts. After the Cross-Over Date,
no new Class I-PO Certificate Deferred Amounts will be created.
(d) If a Servicer or the Master Servicer receives a
Subsequent Recovery with respect to Loan Group I in a Prepayment Period, it will
be distributed on the following Distribution Date in accordance with the
priorities described under Section 5.04(a)(I). Additionally, the Certificate
Principal Balance of each Class of Group I Certificates that had been reduced by
the allocation of a Realized Loss will be increased, in order of seniority, by
the amount of such Subsequent Recovery, but not by more than the amount of
Realized Losses previously allocated to that Class of Certificates pursuant to
this Section
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5.04A. Holders of such Certificates will not be entitled to any payment in
respect of Current Interest on the amount of such increases for an Accrual
Period preceding the Distribution Date on which such increase occurs.
II. Allocation of Realized Losses on the Group II
Certificates.
Any Realized Losses with respect to the Mortgage Loans in Loan
Group II shall be applied on each Distribution Date after the distributions
provided for in Section 5.04 in reduction of the Certificate Principal Balance
of the Class or Classes of Group II Certificates as provided in the definition
of Applied Realized Loss Amount.
Any amounts distributed to the Class of Group II Offered
Certificates in respect of any Unpaid Applied Realized Loss Amount will not be
applied to reduce the Certificate Principal Balance of such Class.
If a Servicer or the Master Servicer receives a Subsequent
Recovery with respect to Loan Group II in a Prepayment Period, it will be
distributed on the following Distribution Date in accordance with the priorities
described under Section 5.04(a)(II). Additionally, the Certificate Principal
Balance of each Class of Group II Offered Certificates that had been reduced by
the allocation of a Realized Loss will be increased, in order of seniority, by
the amount of such Subsequent Recovery, but not in excess of the Unpaid Applied
Realized Loss Amount for such Class immediately prior to that Distribution Date.
Holders of such Certificates will not be entitled to any payment in respect of
Current Interest on the amount of such increases for an Accrual Period preceding
the Distribution Date on which such increase occurs.
Section 5.05. Monthly Statements to Certificateholders.
(a) Not later than each Distribution Date, the Securities
Administrator shall prepare and make available to each Holder of Certificates,
the Trustee, the Rating Agencies, the Master Servicer, each Servicer and the
Depositor, a statement setting forth for the Certificates, with respect to each
Sub-Loan Group in a Loan Group, as applicable:
(i) the applicable Accrual Periods for calculating
distributions and general Distribution Dates;
(ii) total cash flows received and the general sources
thereof;
(iii) the related amount of the Master Servicing Fees paid
to or retained by the Master Servicer and the Servicing Fees paid to or
retained by each Servicer for the related Due Period;
(iv) the amount of the related distribution to Holders of
each Class allocable to principal, separately identifying (A) the
aggregate amount of any Principal Prepayments included therein, (B) the
aggregate of all Scheduled Payments (except with respect to any Simple
Interest Loans) of principal included therein (and with respect to any
Simple Interest Loans, the amount of principal actually received
included therein), and (C) the Extra Principal Distribution Amount
included therein (if any);
(v) the amount of such distribution to Holders of each
Class allocable to interest and the portion thereof, if any, provided
by the Yield Maintenance Agreements;
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(vi) any Interest Carry Forward Amounts, and any Basis
Risk Carry Forward Amounts for each Class of Adjustable Rate
Certificates (if any);
(vii) the Certificate Principal Balance or the Notional
Amount, as applicable, of the Offered Certificates before and after
giving effect to all distributions of principal and allocation of the
applicable Realized Losses for such Distribution Date and the
allocation of any Subsequent Recoveries to increase the Certificate
Principal Balance for such Distribution Date and the aggregate
Certificate Principal Balance or the Notional Amount, as applicable, of
the Offered Certificates after all such distributions and allocations;
(viii) the number and aggregate of the Stated Principal
Balances of the Mortgage Loans on the related Due Date;
(ix) the Pass-Through Rate for each Class of Offered
Certificates with respect to the current Accrual Period, and, if
applicable, whether such Pass-Through Rate was limited by the Interest
Rate Cap;
(x) the amount of Advances included in the distribution
on such Distribution Date (including the general purpose of such
Advances);
(xi) the number and Stated Principal Balance of any
Mortgage Loans that were (a) Delinquent (exclusive of Mortgage Loans in
foreclosure or that became Liquidated Mortgage Loans during the
preceding calendar month) under the OTS method of calculation, (1) one
scheduled payment, (2) two Scheduled Payments, and (3) three or more
Scheduled Payments, and (b) for which foreclosure proceedings have been
commenced, in each case as of the end of the preceding calendar month;
(xii) with respect to any Mortgage Loan that was liquidated
during the preceding calendar month, the loan number and Stated
Principal Balance of, and Realized Loss on, such Mortgage Loan as of
the end of the preceding calendar month;
(xiii) the total number and principal balance of any real
estate owned, or REO, properties as of the end of the preceding
calendar month;
(xiv) the cumulative amount of Realized Losses for each
applicable Class of Offered Certificates after giving effect to the
distribution of principal (including Subsequent Recoveries) and
allocation of Realized Losses;
(xv) the six-month rolling average of the percent
equivalent of a fraction, the numerator of which is the aggregate
Stated Principal Balance of the Mortgage Loans that are 60 days or more
delinquent or are in bankruptcy or foreclosure or are REO properties,
and the denominator of which is the Stated Principal Balances of all of
the Mortgage Loans;
(xvi) unless otherwise previously reported on Form 10-D,
any material modifications, extensions or waivers to Mortgage Loan
terms, fees, penalties or payments during the related Due Period or
that have become material over time;
(xvii) the Realized Losses during the related Realized Loss
Period and the cumulative Realized Losses through the end of the
related Realized Loss Period;
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(xviii) the amount of any Subsequent Recovery for such
Distribution Date and the amount by which the Certificate Principal
Balance of each Class of Offered Certificates was increased as a result
thereof; and
(xix) the amount of the distribution made on such
Distribution Date to the Holders of the Class P Certificates allocable
to Prepayment Charges on the Prepayment Charge Loans.
The Securities Administrator may make the foregoing monthly
statement (and, at its option, any additional files containing the same
information in an alternative format) available each month to Certificateholders
via the Securities Administrator's internet website. The Securities
Administrator's internet website shall initially be located at
"xxx.xxxxxxx.xxx". Assistance in using the Securities Administrator's website
can be obtained by calling the Securities Administrator's customer service desk
at (000) 000-0000. Parties that are unable to use the above distribution options
are entitled to have a paper copy mailed to them via first class mail by calling
the Securities Administrator's customer service desk and indicating such. The
Securities Administrator may change the way monthly statements are distributed
in order to make such distributions more convenient or more accessible to the
above parties.
(b) The Securities Administrator's responsibility for making
the above information available to the Certificateholders is limited to the
availability, timeliness and accuracy of the information derived from the Master
Servicer and the Servicers.
(c) Within a reasonable period of time after the end of each
calendar year, the Securities Administrator will prepare and provide to EMC and,
upon request, to each Person who at any time during the calendar year was a
Certificateholder, a statement containing the information set forth in clauses
(a)(i) and (a)(ii) of this Section 5.05 aggregated for such calendar year or
applicable portion thereof during which such Person was a Certificateholder.
Such obligation of the Securities Administrator shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Securities Administrator pursuant to any requirements of the
Code as from time to time in effect.
(d) Upon filing with the Internal Revenue Service, the
Securities Administrator shall furnish to the Holders of the Residual
Certificates the applicable Form 1066 and each applicable Form 1066Q and shall
respond promptly to written requests made not more frequently than quarterly by
any Holder of a Residual Certificate with respect to the following matters:
(i) The original projected principal and interest cash
flows on the Closing Date on each Class of regular and residual
interests created hereunder and on the Mortgage Loans, based on the
Prepayment Assumption;
(ii) The projected remaining principal and interest cash
flows as of the end of any calendar quarter with respect to each Class
of regular and residual interests created hereunder and the Mortgage
Loans, based on the Prepayment Assumption;
(iii) The applicable Prepayment Assumption and any interest
rate assumptions used in determining the projected principal and
interest cash flows described above;
(iv) The original issue discount (or, in the case of the
Mortgage Loans, market discount) or premium accrued or amortized
through the end of such calendar quarter with respect to each Class of
regular or residual interests created hereunder and to the Mortgage
Loans, together with each constant yield to maturity used in computing
the same;
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(v) The treatment of losses realized with respect to the
Mortgage Loans or the regular interests created hereunder, including
the timing and amount of any cancellation of indebtedness income of a
REMIC with respect to such regular interests or bad debt deductions
claimed with respect to the Mortgage Loans;
(vi) The amount and timing of any non-interest expenses of
a REMIC; and
(vii) Any taxes (including penalties and interest) imposed
on the REMIC, including, without limitation, taxes on "prohibited
transactions," "contributions" or "net income from foreclosure
property" or state or local income or franchise taxes.
The information pursuant to clauses (i), (ii), (iii) and (iv)
above shall be provided by the Depositor pursuant to Section 9.12.
Section 5.06. REMIC Designations and Allocations.
(a) The Securities Administrator shall elect that each of
REMIC I, REMIC II, REMIC III and REMIC IV shall be treated as a REMIC under
Section 860D of the Code. Any inconsistencies or ambiguities in this Agreement
or in the administration of this Agreement shall be resolved in a manner that
preserves the validity of such REMIC elections. The assets of REMIC I shall
include the Mortgage Loans and all interest owing in respect of and principal
due thereon, the Distribution Account, any REO Property, and any proceeds of the
foregoing.
(b) (i) REMIC I will be evidenced by (x) the REMIC I
Regular Interests (designated below), which will be uncertificated and
non-transferable and are hereby designated as the "regular interests" in REMIC I
and have the principal balances and accrue interest at the Pass-Through Rates
equal to those set forth in this Section 5.06(b)(i) and (y) the Class R-I
Certificate, which is hereby designated as the single "residual interest" in
REMIC I.
Distributions of principal shall be deemed to be made from
amounts received on the related Mortgage Loans in Loan Group I, to the REMIC I
Regular Interests in any Sub-Loan Group in Loan Group I, first, so as to keep
the Uncertificated Principal Balance of each such REMIC I Regular Interest
ending with the designation "B" equal to 0.01% of the aggregate Stated Principal
Balance of the Mortgage Loans in the related Sub-Loan Group in Loan Group I;
second, to each REMIC I Regular Interest ending with the designation "A," so
that the Uncertificated Principal Balance of each such REMIC I Regular Interest
is equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of
the Mortgage Loans in the related Sub-Loan Group in Loan Group I over (y) the
Current Principal Amount of the related Group I Senior Certificates in the
related Sub-Loan Group in Loan Group I (except that if any such excess is a
larger number than in the preceding distribution period, the least amount of
principal shall be distributed to such REMIC I Regular Interests such that the
REMIC I Subordinated Balance Ratio is maintained); and third, any such remaining
principal to REMIC I Regular Interest I-ZZZ. Realized Losses shall be applied
after all distributions have been made on each Distribution Date first, so as to
keep the Uncertificated Principal Balance of each REMIC I Regular Interest in
any Sub-Loan Group in Loan Group I ending with the designation "B" equal to
0.01% of the aggregate Stated Principal Balance of the Mortgage Loans in the
related Sub-Loan Group in Loan Group I; second, to each REMIC I Regular Interest
in any Sub-Loan Group in Loan Group I ending with the designation "A," so that
the Uncertificated Principal Balance of each such REMIC II Regular Interest is
equal to 0.01% of the excess of (x) the aggregate Stated Principal Balance of
the Mortgage Loans in the related Sub-Loan Group in Loan Group I over (y) the
Current Principal Amount of the related Group I Senior Certificates in the
related Sub-Loan Group (except that if any such excess is a larger number than
in the preceding distribution period, the least amount of Realized Losses shall
be applied to such REMIC I Regular
103
Interests such that the REMIC I Subordinated Balance Ratio is maintained); and
third, any remaining Realized Losses shall be allocated to REMIC II Regular
Interest I-ZZZ.
Interest from the Mortgage Loans in Loan Group II that is
allocable to payments of principal on the Group II Certificates (the "Turbo
Amount") will not be paid directly as principal to the REMIC I Regular
Interests, but instead a portion of the interest otherwise payable with respect
to the Class I-Q REMIC I Regular Interest which equals 0.1% of the Turbo Amount
will be payable as a reduction of the principal balances of the Class II-A-1,
Class II-A-2, Class II-M-1, Class II-M-2, Class II-M-3, Class II-M-4 and Class
II-M-5 REMIC I Regular Interests in the same proportions that the Turbo Amount
is allocated among the respective Classes of Certificates with the corresponding
designations, and will be accrued and added to principal on the Class II-Q REMIC
I Regular Interest.
Principal payments on the Mortgage Loans in Loan Group II held
by REMIC I shall be allocated 0.1% to the Class II-A-1, Class II-A-2, Class
II-M-1, Class II-M-2, Class II-M-3, Class II-M-4 and Class II-M-5 REMIC I
Regular Interests. The remaining 99.9% shall be allocated to Class II-Q REMIC I
Regular Interest. The aggregate amount of principal allocated to the Class
II-A-1, Class II-A-2, Class II-M-1, Class II-M-2, Class II-M-3, Class II-M-4 and
Class II-M-5 REMIC I Regular Interests shall be apportioned among such Classes
in the same proportions as principal is payable with respect to the respective
Classes of Certificates with the corresponding designations. Notwithstanding the
above, principal payments on REMIC I Regular Interests that are attributable to
an Excess Overcollateralization Amount shall be allocated to the Class II-Q
REMIC I Regular Interest. Realized losses shall be applied such that after all
distributions have been made on such Distribution Date (i) the principal
balances of the Class II-A-1, Class II-A-2, Class II-M-1, Class II-M-2, Class
II-M-3, Class II-M-4 and Class II-M-5 REMIC I Regular Interests are each 0.1% of
the principal balances of the respective Classes of Certificates with the
corresponding designations, and (ii) the principal balance of the Class II-Q
REMIC I Regular Interest is equal to the principal balance of the Mortgage Loans
in Loan Group II, less an amount equal to 0.1% of the aggregate Certificate
Principal Balances of the Class II-A-1, Class II-A-2, Class II-M-1, Class
II-M-2, Class II-M-3, Class II-M-4 and Class II-M-5 Certificates.
The REMIC I Regular Interests and the Class R-I Certificate
will have the following designations, initial balances and pass-through rates:
Pass-
REMIC I Initial Principal Through Related Sub-Loan Group/
Interests Balance Rate Group
--------- ------- ---- -----
I-1A $ 694.84 (1) Sub-Loan Group I-1
I-1B $ 4,510.99 (2) Sub-Loan Group I-1
I-2A $ 527.97 (1) Sub-Loan Group I-2
I-2B $ 3,289.57 (3) Sub-Loan Group I-2
I-3A $ 1,117.18 (1) Sub-Loan Group I-3
I-3B $ 6,960.98 (4) Sub-Loan Group I-3
I-ZZZ $ 147,598,281.47 (1) N/A
Allocation
of
Interest
II-A-1 $ 137,696.00 (5) (6),(7)
II-A-2 $ 34,424.00 (5) (6),(7)
II-M-1 $ 4,776.00 (5) (6),(7)
II-M-2 $ 4,471.00 (5) (6),(7)
II-M-3 $ 7,418.00 (5) (6),(7)
II-M-4 $ 5,284.00 (5) (6),(7)
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II-M-5 $ 2,032.00 (5) (6),(7)
II-Q $ 203,025,523.00 (5) (6),(7)
I-P N/A N/A (8) Group I
II-P N/A N/A (9) Group II
Class R-I $0 N/A N/A
(1) The weighted average of the Net Rates of the Mortgage Loans (as of
the second preceding Due Date) as adjusted (to the extent applicable) to an
effective rate reflecting the accrual of interest on an actual/360 basis,
weighted on the basis of the respective Stated Principal Balance of each such
Mortgage Loan as of the beginning of the Due Period immediately preceding the
related Distribution Date.
(2) The weighted average of the Net Rates of the Sub-Loan Group I-1
Mortgage Loans (as of the second preceding Due Date) as adjusted (to the extent
applicable) to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted on the basis of the respective Stated Principal
Balance of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date.
(3) The weighted average of the Net Rates of the Sub-Loan Group I-2
Mortgage Loans (as of the second preceding Due Date) as adjusted (to the extent
applicable) to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted on the basis of the respective Stated Principal
Balance of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date.
(4) The weighted average of the Net Rates of the Sub-Loan Group I-3
Mortgage Loans (as of the second preceding Due Date) as adjusted (to the extent
applicable) to an effective rate reflecting the accrual of interest on an
actual/360 basis, weighted on the basis of the respective Stated Principal
Balance of each such Mortgage Loan as of the beginning of the Due Period
immediately preceding the related Distribution Date.
(5) The weighted average of the Net Mortgage Rates of the Mortgage
Loans in Loan Group II (as of the second preceding Due Date), weighted on the
basis of the respective Stated Principal Balance of each such Mortgage Loan as
of the beginning of the Due Period immediately preceding the related
Distribution Date.
(6) Except as provided in note (7) below, interest with respect to
this REMIC I Regular Interest will be allocated among the Class II-A-1 Class
II-A-2, Class II-M-1, Class II-M-2, Class II-M-3, Class II-M-4, and Class II-M-5
Certificates in the same proportion as interest is payable with respect to those
Certificates.
(7) Any interest with respect to this REMIC I Regular Interest -- in
excess of the product of (i) 1,000 times the weighted average coupon of the
Class II-A-1 Class II-A-2, Class II-M-1, Class II-M-2, Class II-M-3, Class
II-M-4, Class II-M-5 and Class II-Q REMIC I Regular Interests, where each of the
Class II-A-1 Class II-A-2, Class II-M-1, Class II-M-2, Class II-M-3, Class
II-M-4, and Class II-M-5 REMIC I Regular Interests is first subject to a cap and
floor equal to the Pass-Through Rates of the Class II-A-1 Class II-A-2, Class
II-M-1, Class II-M-2, Class II-M-3, Class II-M-4, and Class II-M-5 Certificates,
respectively, and the Class II-Q REMIC I Regular Interest is subject to a cap
equal to 0%, and (ii) the principal balance of this REMIC I Regular Interest,
will be allocated to the Class B-IO Certificates. In addition, an amount equal
to the Initial Overcollateralization Amount shall be allocated to the Class B-IO
Certificates on the first Distribution Date. The Class B-IO Certificates shall
be subordinated to the extent provided in Section 6.01.
(8) This interest will not bear any interest, but will be entitled to
receive 100% of any prepayment charges on the Mortgage Loans in Loan Group I
serviced by EMC Mortgage Corporation, to the extent not retained by EMC Mortgage
Corporation as servicer in accordance with the terms of the Servicing Agreement.
This interest will not represent an interest in any REMIC; it will instead
represent an interest in the Trust constituted by this Agreement to receive such
prepayment charges.
(9) This interest will not bear any interest, but will be entitled to
receive 100% of any prepayment charges on the Mortgage Loans in Loan Group II
serviced by EMC Mortgage Corporation, to the extent not retained by EMC Mortgage
Corporation as servicer in accordance with the terms of the Servicing Agreement.
This interest
105
will not represent an interest in any REMIC; it will instead represent an
interest in the Trust constituted by this Agreement to receive such prepayment
charges.
(ii) REMIC II will be evidenced by (x) the REMIC II
Regular Interests (designated below), which will be uncertificated and
non-transferable and are hereby designated as the "regular interests"
in REMIC II and have the principal balances and accrue interest at the
Pass-Through Rates equal to those set forth in this Section 5.06(b)(ii)
and (y) the Class R-II Certificate, which is hereby designated as the
single "residual interest" in REMIC II.
The REMIC II Regular Interests and the Class R-II Certificate
will have the following designations, initial balances and pass-through
rates:
REMIC II Interest Initial Balance Pass-Through Rate Related Sub-Loan Group/
Group
I-A-1A $34,526,000 (1) Sub-Loan Group I-1
I-A-1B $1,819,000 (1) Sub-Loan Group I-1
I-A-2A $26,234,000 (2) Sub-Loan Group I-2
I-A-2B $1,382,000 (2) Sub-Loan Group I-2
I-A-3A $55,514,000 (3) Sub-Loan Group I-3
I-A-3B $2,924,000 (3) Sub-Loan Group I-3
I-B-1 $8,192,000 (4) Group I
I-B-2 $4,946,000 (4) Group I
I-B-3 $2,878,000 (4) Group I
I-B-4 $2,435,000 (4) Group I
I-B-5 $1,551,000 (4) Group I
I-B-6 $3,397,968 (4) Group I
II-A-1 $137,696,000 (5) Group II
II-A-2 $34,424,000 (5) Group II
II-M-1 $4,776,000 (5) Group II
II-M-2 $4,471,000 (5) Group II
II-M-3 $7,418,000 (5) Group II
II-M-4 $5,284,000 (5) Group II
II-M-5 $2,032,000 (5) Group II
I-P $100 N/A (6) Group I
II-P $100 N/A (7) Group II
I-PO $1,816,415 N/A Sub-Loan Group I-1
R-II $0 N/A N/A
(1) The weighted average of the Net Rates of the Sub-Loan Group I-1
Mortgage Loans (as of the second preceding Due Date), weighted on the basis of
the respective Stated Principal Balance of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date.
(2) The weighted average of the Net Rates of the Sub-Loan Group I-2
Mortgage Loans (as of the second preceding Due Date), weighted on the basis of
the respective Stated Principal Balance of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date.
(3) The weighted average of the Net Rates of the Sub-Loan Group I-3
Mortgage Loans (as of the second preceding Due Date), weighted on the basis of
the respective Stated Principal Balance of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date.
(4) A variable Pass-Through Rate equal to the weighted average of the
Pass-Through Rates on REMIC I Regular Interests 1A, 2A and 3A, weighted on the
basis of the Uncertificated Principal Balance of each such REMIC I Regular
Interest immediately preceding the related Distribution Date, provided that for
purposes of that weighted average, the Pass-Through Rate of each such REMIC I
Regular Interest shall be subject to a cap and a
106
floor equal to the Pass-Through Rate of the REMIC I Regular Interest from the
related Group ending with the designation "B".
(5) The weighted average of the Net Rates of the Mortgage Loans in Loan
Group II (as of the second preceding Due Date), weighted on the basis of the
respective Stated Principal Balance of each such Mortgage Loan as of the
beginning of the Due Period immediately preceding the related Distribution Date.
(6) This interest will not bear any interest, but will be entitled to
receive 100% of any prepayment charges on the Mortgage Loans in Loan Group I
serviced by EMC Mortgage Corporation, to the extent not retained by EMC Mortgage
Corporation as servicer in accordance with the terms of the Servicing Agreement.
This interest will not represent an interest in any REMIC; it will instead
represent an interest in the Trust constituted by this Agreement to receive such
prepayment charges.
(7) This interest will not bear any interest, but will be entitled to
receive 100% of any prepayment charges on the Mortgage Loans in Loan Group II
serviced by EMC Mortgage Corporation, to the extent not retained by EMC Mortgage
Corporation as servicer in accordance with the terms of the Servicing Agreement.
This interest will not represent an interest in any REMIC; it will instead
represent an interest in the Trust constituted by this Agreement to receive such
prepayment charges.
Principal shall be payable to, and shortfalls, losses and prepayments
are allocable to, the REMIC II Regular Interests as such amounts are payable and
allocable to the Certificates with the corresponding designations.
(iii) The Certificates designated in Section 6.01(a), below
(other than the Residual Certificates) are hereby designated as "regular
interests" with respect to REMIC III (the "REMIC III Regular Interests") and the
Class R-III Certificate is hereby designated as the single "residual interest"
with respect to REMIC III. On each Distribution Date, amounts, if any, remaining
in REMIC III after payments of interest and principal as designated herein shall
be distributed to the Class R-III Certificate. The terms of the REMIC III
Regular Interests are set out in Section 5.04. The designations, initial
principal amounts and Pass-Through Rates of the REMIC III Regular Interests are
set out in Section 6.01.
(iv) REMIC IV will be evidenced by (x) the REMIC IV B-IO
Regular Interest, which will be uncertificated and non-transferable and are
hereby designated as the "regular interest" in REMIC IV and be entitled to
receive amounts set forth in this Section 6.01(b), and (y) the Class R-X
Certificate, which is hereby designated as the single "residual interest" in
REMIC IV.
The REMIC IV Regular Interest and the Class R-X Certificate will have
the following designations, initial balances and pass-through rates:
Designations for REMIC IV Initial Uncertificated Uncertificated
Interests Principal Balance Pass-Through Rate
Class B-IO Certificate $203,221,624 (1)
Class P Certificate $200 (2)
Class R-X Certificate $0 (3)
(1) The Class B-IO Certificates will bear interest at a per annum rate
equal to the Class B-IO Pass-Through Rate on its Notional Amount. This REMIC IV
Regular Interest will not have an Uncertificated Pass-
107
Through Rate, but will be entitled to 100% of all amounts distributed or deemed
distributed on the REMIC III B-IO Regular Interest.
(2) This interest will not bear any interest, but will be entitled to
receive 100% of any prepayment charges on the Mortgage Loans serviced by EMC
Mortgage Corporation, to the extent not retained by EMC Mortgage Corporation as
servicer in accordance with the terms of the Servicing Agreement. This interest
will not represent an interest in any REMIC; it will instead represent an
interest in the Trust constituted by this Agreement to receive such prepayment
charges.
(3) The Class R-X Certificate does not have a Pass-Through Rate and
will not bear interest. On each Distribution Date, amounts, if any, remaining in
REMIC IV after payments of interest and principal, as designated above, will be
distributed to the Class R-X Certificate.
(c) For federal income tax purposes, each of REMIC I, REMIC
II, REMIC III and REMIC IV shall have a tax year that is a calendar year and
shall report income on an accrual basis.
(d) Payments of Basis Risk Shortfall Carry Forward Amounts and
Yield Maintenance Payments shall be deemed to be made to the holders of the
Class B-IO Certificate with respect to which such payments were made, who will
be the owners of such amounts (on a pro rata basis based upon their Percentage
Interest in such Class) for federal income tax purposes. The Class B-IO
Certificateholders will be considered to pay such amounts to the Class II-A-1,
Class II-A-2, Class II-M-1, Class II-M-2, Class II-M-3, Class II-M-4 and Class
II-M-5, as and to the extent appropriate, pursuant to a notional principal
contract.
Section 5.07. Basis Risk Reserve Fund.
(a) No later than the Closing Date, the Paying Agent shall
establish and maintain in the name of the Trustee, for the benefit of the
Adjustable Rate Certificateholders, a separate, segregated trust account titled,
"Basis Risk Reserve Fund, Citibank, N.A., as trustee, in trust for registered
Holders of Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset-Backed
Certificates, Series 2007-SD2." The Paying Agent shall, promptly upon receipt,
deposit in the Basis Risk Reserve Fund an amount equal to $5,000 to be remitted
on the Closing Date to the Paying Agent.
(b) On each Distribution Date as to which there is Basis Risk
Shortfall Carry Forward Amount to the extent not paid under Section 5.04(a), the
Paying Agent has been directed to, and shall therefore, deposit into the Basis
Risk Reserve Fund an amount equal to the Basis Risk Shortfall Carry Forward
Amount with respect to each Class of Adjustable Rate Certificates for such
Distribution Date to the extent such amounts are payable pursuant to Section
5.04(a). For federal and state income tax purposes, the Class B-IO
Certificateholders will be deemed to be the owners of the Basis Risk Reserve
Fund and all amounts deposited into the Basis Risk Reserve Fund shall be treated
as amounts distributed by the REMIC II with respect to the Class B-IO
Distribution Amount. Amounts held in the Basis Risk Reserve Fund and not
distributable to the Adjustable Rate Certificateholders on any Distribution Date
will be invested by the Paying Agent in investments designated by the Class B-IO
Certificateholders having maturities on or prior to the next succeeding
Distribution Date on which such amounts will be distributable to the Adjustable
Rate Certificateholders. In the absence of such direction, amounts will remain
uninvested. Upon the termination of the Trust, or the payment in full of the
Adjustable Rate Certificates, all amounts remaining on deposit in the Basis Risk
Reserve Fund will be released from the lien of the Trust and distributed to the
Class B-IO Certificateholders or their designees, pro rata. The Basis Risk
Reserve Fund will be part of the Trust but not part of any REMIC created
hereunder and any payments to the Adjustable Rate Certificates of Basis Risk
Shortfall Carry Forward Amount will not be payments with respect to a "regular
interest" in a REMIC within the meaning of Code Section 860G(a)(1).
108
(c) The Paying Agent and the Trustee shall treat the Basis
Risk Reserve Fund as an outside reserve fund within the meaning of Treasury
Regulation Section 1.860G-2(h) that is owned by the Class B-IO
Certificateholders and that is not an asset of any REMIC. The Paying Agent and
the Trustee shall treat the rights of the Adjustable Rate Certificateholders to
receive payments from the Basis Risk Reserve Fund as rights in an interest rate
cap contract written by the Class B-IO Certificateholders in favor of the
Adjustable Rate Certificateholders. Thus, each Adjustable Rate Certificate shall
be treated as representing not only ownership of a regular interest in REMIC II,
but also ownership of an interest in an interest rate cap contract.
(d) Notwithstanding the priority and sources of payments set
forth in Section 5.04(a) hereof or otherwise, the Paying Agent and the Trustee
shall account for all distributions on the Certificates as set forth in this
section. In no event shall any payments provided for in this section be treated
as payments with respect to a "regular interest" in a REMIC within the meaning
of Code Section 860G(a)(1) and shall be treated as an asset held separate and
apart from any REMIC created under this Agreement in accordance with Treasury
regulation section 1.860G-2(i).
ARTICLE VI.
THE CERTIFICATES
Section 6.01. The Certificates.
The Certificates shall be substantially in the forms attached
hereto as Exhibits A-1 through A-6.
(a) The Classes of the Certificates shall have the following
designations, initial principal amounts and Pass-Through Rates:
Designation Initial Principal/ Pass-Through Rate
Notional Amount
I-A-1A $34,526,000 5.500%
I-A-1B $1,819,000 5.500%
I-A-2A $26,234,000 6.000%
I-A-2B $1,382,000 6.000%
I-A-3A $55,514,000 6.500%
I-A-3B $2,924,000 6.500%
I-X Notional Amount(1) (2)
II-A-1 $137,696,000 Adjustable (3)
II-A-2 $34,424,000 Adjustable (4)
I-B-1 $8,192,000 (5)
I-B-2 $4,946,000 (5)
I-B-3 $2,878,000 (5)
I-B-4 $2,435,000 (5)
I-B-5 $1,551,000 (5)
I-B-6 $3,397,968 (5)
II-M-1 $4,776,000 Adjustable (6)
II-M-2 $4,471,000 Adjustable (7)
II-M-3 $7,418,000 Adjustable (8)
II-M-4 $5,284,000 Adjustable (9)
II-M-5 $2,032,000 Adjustable (10)
I-PO $1,816,415 (11)
I-P $100 (12)
II-P $100 (13)
109
B-IO Notional Amount (14) N/A
R-I $0 (15)
R-II $0 (15)
R-III $0 (15)
R-X $0 (15)
(1) The Class I-X Certificates are Interest-Only Certificates that
bear interest on a Notional Amount, for any Distribution Date,
equal to the aggregate Stated Principal Balance of the
Sub-Loan Group I-3 Mortgage Loans with a Net Mortgage Rate
greater than or equal to 6.500% per annum.
(2) For any Distribution Date, the excess, if any, of (a) the
weighted average of the Net Mortgage Rates of the Sub-Loan
Group I-3 Mortgage Loans with a Net Mortgage Rate greater than
or equal to 6.500%, over (b) 6.500%.
(3) For any Distribution Date, the least of (i) One-Month LIBOR
for the related Accrual Period plus the Class II-A-1 Margin
for such Distribution Date, (ii) 11.50% per annum, and (iii)
the Interest Rate Cap for such Distribution Date.
(4) For any Distribution Date, the least of (i) One-Month LIBOR
for the related Accrual Period plus the Class II-A-2 Margin
for such Distribution Date, (ii) 11.50% per annum, and (iii)
the Interest Rate Cap for such Distribution Date.
(5) For any Distribution Date, the weighted average of the
Pass-Through Rates per annum for each Class of Class I-A
Certificates, weighted in proportion to the excess of the
aggregate Stated Principal Balance of each related Sub-Loan
Group over the aggregate Certificate Principal Balance of the
Senior Certificates related to such Sub-Loan Group.
(6) For any Distribution Date, the least of (i) One-Month LIBOR
for the related Accrual Period plus the Class II-M-1 Margin
for such Distribution Date, (ii) 11.50% per annum, and (iii)
the Interest Rate Cap for such Distribution Date.
(7) For any Distribution Date, the least of (i) One-Month LIBOR
for the related Accrual Period plus the Class II-M-2 Margin
for such Distribution Date, (ii) 11.50% per annum, and (iii)
the Interest Rate Cap for such Distribution Date.
(8) For any Distribution Date, the least of (i) One-Month LIBOR
for the related Accrual Period plus the Class II-M-3 Margin
for such Distribution Date, (ii) 11.50% per annum, and (iii)
the Interest Rate Cap for such Distribution Date.
(9) For any Distribution Date, the least of (i) One-Month LIBOR
for the related Accrual Period plus the Class II-M-4 Margin
for such Distribution Date, (ii) 11.50% per annum, and (iii)
the Interest Rate Cap for such Distribution Date.
(10) For any Distribution Date, the least of (i) One-Month LIBOR
for the related Accrual Period plus the Class II-M-5 Margin
for such Distribution Date, (ii) 11.50% per annum, and (iii)
the Interest Rate Cap for such Distribution Date.
(11) The Class I-PO Certificates are principal-only certificates
that do not bear interest.
(12) The Class I-P Certificates will not bear any interest, but
will be entitled to receive 100% of any prepayment charges on
the Mortgage Loans in Loan Group I serviced by EMC Mortgage
Corporation, to the extent not retained by EMC Mortgage
Corporation as servicer in accordance with the terms of its
Servicing Agreement. The Class I-P Certificates will not
represent an interest in any REMIC; it will instead represent
an interest in the Trust constituted by this Agreement to
receive such prepayment charges.
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(13) The Class II-P Certificates will not bear any interest, but
will be entitled to receive 100% of any prepayment charges on
the Mortgage Loans in Loan Group II serviced by EMC Mortgage
Corporation, to the extent not retained by EMC Mortgage
Corporation as servicer in accordance with the terms of its
Servicing Agreement. The Class II-P Certificates will not
represent an interest in any REMIC; it will instead represent
an interest in the Trust constituted by this Agreement to
receive such prepayment charges.
(14) Initially $203,221,624.32; and thereafter the aggregate Stated
Principal Balance of the Mortgage Loans in Loan Group II as of
the last day of the related Due Period. The Class B-IO
Certificates will be entitled to receive certain distributions
as provided for in Section 5.04. Other than for federal income
tax purposes, the Class B-IO Distribution Amount may be deemed
to be interest on the notional principal balance of the Class
B-IO Certificates.
(15) These Certificates do not have a Pass-Through Rate and will
not bear interest.
(b) The Certificates shall be executed by manual or facsimile
signature on behalf of the Certificate Registrar by an authorized officer.
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures were affixed, authorized to sign on behalf of
the Certificate Registrar shall bind the Certificate Registrar, notwithstanding
that such individuals or any of them have ceased to be so authorized prior to
the authentication and delivery of such Certificates or did not hold such
offices at the date of such authentication and delivery. No Certificate shall be
entitled to any benefit under this Agreement, or be valid for any purpose,
unless there appears on such Certificate the authentication of the Certificate
Registrar by manual signature, and such authentication upon any Certificate
shall be conclusive evidence, and the only evidence, that such Certificate has
been duly authenticated and delivered hereunder. All Certificates shall be dated
the date of their authentication. On the Closing Date, the Certificate Registrar
shall authenticate the Certificates to be issued at the written direction of the
Depositor, or any affiliate thereof.
The Depositor shall provide, or cause to be provided, to the
Certificate Registrar on a continuous basis, an adequate inventory of
Certificates to facilitate transfers.
Section 6.02. Certificate Register; Registration of Transfer and
Exchange of Certificates.
(a) The Certificate Registrar shall maintain, or cause to be
maintained in accordance with the provisions of Section 6.09 hereof, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of Transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of Transfer of any Certificate, the Certificate
Registrar shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and of
like aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Certificate
Registrar. Whenever any Certificates are so surrendered for exchange, the
Certificate Registrar shall execute, authenticate, and deliver the Certificates
that the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for registration of Transfer or exchange
shall be accompanied by a written instrument of Transfer in form satisfactory to
the Certificate Registrar duly executed by the holder thereof or his attorney
duly authorized in writing.
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No service charge to the Certificateholders shall be made for
any registration of Transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any Transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of Transfer or
exchange shall be canceled and subsequently destroyed by the Certificate
Registrar in accordance with the Certificate Registrar's customary procedures.
(b) No Transfer of a Non-Offered Certificate shall be made
unless such Transfer is made pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws or is exempt
from the registration requirements under the Securities Act and such state
securities laws. In the event that a Transfer is to be made in reliance upon an
exemption from the Securities Act and such laws, in order to assure compliance
with the Securities Act and such laws, the Certificateholder desiring to effect
such Transfer (except with respect to (i) the initial Transfer of the
Non-Offered Certificates on the Closing Date, (ii) the Transfer of any Class of
Non-Offered Certificates to a NIM Issuer or a NIM Trustee or in connection with
the issuance of any NIM Securities, or (iii) a Transfer of any Class of
Non-Offered Certificates to the Depositor or any affiliate of the Depositor) and
such Certificateholder's prospective transferee shall each certify to the
Trustee and the Securities Administrator in writing the facts surrounding the
Transfer in substantially the forms set forth in Exhibit E (the "Transferor
Certificate") and (x) deliver a letter in substantially the form of either
Exhibit F (the "Investment Letter") or Exhibit G (the "Rule 144A Letter") or (y)
there shall be delivered to the Trustee and the Securities Administrator an
Opinion of Counsel addressed to the Trustee and the Securities Administrator
that such Transfer may be made pursuant to an exemption from the Securities Act,
which Opinion of Counsel shall not be an expense of the Depositor, the Sponsor,
any Servicer, the Master Servicer, the Securities Administrator, the Certificate
Registrar or the Trustee. The Depositor shall provide to any Holder of a
Non-Offered Certificate and any prospective transferee designated by any such
Holder, information regarding the related Certificates and the Mortgage Loans
and such other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for Transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee, the Securities
Administrator, the Certificate Registrar and the Master Servicer shall cooperate
with the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Non-Offered Certificate desiring
to effect such Transfer shall, and does hereby agree to, indemnify the Trustee,
the Depositor, the Sponsor, the Securities Administrator, the Certificate
Registrar and the Master Servicer against any liability that may result if the
Transfer is not so exempt or is not made in accordance with such federal and
state laws.
No Transfer of an ERISA Restricted Certificate (other than (i)
the initial Transfer of the Non-Offered Certificates on the Closing Date, (ii)
the Transfer of any Class of Non-Offered Certificates to a NIM Issuer or a NIM
Trustee or in connection with the issuance of any NIM Securities, or (iii) a
Transfer of any Class of Non-Offered Certificates to the Depositor or any
affiliate of the Depositor) shall be made unless either (i) the Trustee, the
Master Servicer and the Securities Administrator shall have received a
representation from the transferee of such Certificate acceptable to and in form
and substance satisfactory to the Trustee and the Securities Administrator, to
the effect that such transferee is not an employee benefit plan subject to
Section 406 of ERISA and/or a plan subject to Section 4975 of the Code ("Plan"),
or a Person, directly or indirectly, acting on behalf of any such Plan or using
the assets of any such Plan, or (ii) in the case of any such ERISA Restricted
Certificate presented for registration in the name of a Plan, or a trustee of
any Plan or any other person acting, directly or indirectly, on behalf of any
such Plan, the Securities Administrator shall have received an Opinion of
Counsel for the benefit of the
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Trustee, the Master Servicer and the Securities Administrator and on which they
may rely, satisfactory to the Securities Administrator, to the effect that the
purchase and holding of such ERISA Restricted Certificate is permissible under
applicable law, will not constitute or result in the assets of the Trust being
deemed to be "plan assets" under ERISA or the Code, will not result in any
prohibited transactions under ERISA or Section 4975 of the Code and will not
subject the Trustee, the Master Servicer, the Depositor or the Securities
Administrator to any obligation in addition to those expressly undertaken in
this Agreement, which Opinion of Counsel shall not be an expense of the Trustee,
the Master Servicer, the Depositor or the Securities Administrator or, in the
case of a Class I-B or Class II-M Certificate, the transferee provides a
representation, or deemed representation in the case of a Book-Entry Certificate
or an Opinion of Counsel to the effect that the proposed transfer and holding of
such Certificate and the servicing, management and operation of the Trustee and
its assets: (I) will not result in any prohibited transaction which is not
covered under an individual or class prohibited transaction exemption,
including, but not limited to, Prohibited Transaction Class Exemption ("PTCE")
84-14, XXXX 00-00, XXXX 00-0, XXXX 95-60 or PTCE 96-23 and (II) will not give
rise to any additional obligations on the part of the Depositor, the Securities
Administrator, the Master Servicer or the Trustee. Notwithstanding anything else
to the contrary herein, any purported transfer of an ERISA Restricted
Certificate to or on behalf of any Plan without a representation, deemed
representation or the delivery of the Opinion of Counsel as described above
shall be void and of no effect. None of the Trustee, the Securities
Administrator or the Master Servicer shall be required to monitor, determine or
inquire as to compliance with the transfer restrictions with respect to any
ERISA Restricted Certificate that is a Book-Entry Certificate, and none of the
Trustee, the Securities Administrator or the Master Servicer shall have any
liability for transfers of any such Book-Entry Certificates made through the
book-entry facilities of any Depository or between or among participants of the
Depository or Certificate Owners made in violation of the transfer restrictions
set forth herein. None of the Trustee, the Securities Administrator or the
Master Servicer shall be under any liability to any Person for any registration
of transfer of any ERISA Restricted Certificate that is in fact not permitted by
this Section 6.02(b) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder under the
provisions of this Agreement. The Trustee and the Securities Administrator shall
each be entitled, but not obligated, to recover from any Holder of any ERISA
Restricted Certificate that was in fact a Plan or a Person, directly or
indirectly, any Plan at the time it became a Holder or, at such subsequent time
as it became a Plan or Person acting on behalf of a Plan, all payments made on
such ERISA Restricted Certificate at and after either such time. Any such
payments so recovered by the Trustee or the Securities Administrator shall be
paid and delivered by the Trustee or the Securities Administrator to the last
preceding Holder of such Certificate that is not a Plan or Person acting on
behalf of a Plan.
(c) Each Person who has or who acquires any Ownership Interest
in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by
the following provisions, and the rights of each Person acquiring any
Ownership Interest in a Residual Certificate are expressly subject to
the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Residual Certificate which shall always be issued as a physical
certificate and not as a Book-Entry Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee and the Certificate
Registrar of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Certificate Registrar shall not register the Transfer of any Residual
Certificate unless, in addition to the certificates required to be
delivered to the Trustee and the Certificate Registrar under
subparagraph (b) above, the Trustee and the Certificate Registrar shall
have been furnished with an affidavit (a "Transfer Affidavit") of the
initial owner or the proposed transferee in the form attached hereto as
Exhibit D.
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(iii) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Residual Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of
a Residual Certificate and (C) not to Transfer its Ownership Interest
in a Residual Certificate or to cause the Transfer of an Ownership
Interest in a Residual Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section 6.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Residual Certificate in violation of the
provisions of this Section 6.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Residual
Certificate. The Certificate Registrar shall be under no liability to
any Person for any registration of Transfer of a Residual Certificate
that is in fact not permitted by Section 6.02(b) and this Section
6.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit and
Transferor Certificate. The Certificate Registrar shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact not a Permitted Transferee at the time it became a Holder
or, at such subsequent time as it became other than a Permitted
Transferee, all payments made on such Residual Certificate at and after
either such time. Any such payments so recovered by the Certificate
Registrar shall be paid and delivered by the Certificate Registrar to
the last preceding Permitted Transferee of such Certificate.
(v) The Master Servicer shall make available within 60 days of
written request from the Trustee or Certificate Registrar, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Residual Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set
forth in this Section 6.02(c) shall cease to apply (and the applicable portions
of the legend on a Residual Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee and the Certificate Registrar
of an Opinion of Counsel addressed to the Trustee and the Certificate Registrar,
which Opinion of Counsel shall not be an expense of the Trustee, the Securities
Administrator, the Certificate Registrar, the Sponsor, any Servicer or the
Master Servicer to the effect that the elimination of such restrictions will not
cause the REMIC I, REMIC II, REMIC III and/or REMIC IV, as applicable, to fail
to qualify as a REMIC at any time that the Certificates are outstanding or
result in the imposition of any tax on the Trust Fund, a Certificateholder or
another Person. Each Person holding or acquiring any Ownership Interest in a
Residual Certificate hereby consents to any amendment of this Agreement that,
based on an Opinion of Counsel furnished to the Trustee and the Certificate
Registrar, is reasonably necessary (a) to ensure that the record ownership of,
or any beneficial interest in, a Residual Certificate is not transferred,
directly or indirectly, to a Person that is not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Residual Certificate that is
held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
(d) The preparation and delivery of all certificates and
opinions referred to above in this Section 6.02 shall not be an expense of the
Trust Fund, the Trustee, the Depositor, the Sponsor, the Securities
Administrator, the Certificate Registrar, the Master Servicer or any Servicer.
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Section 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (a) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate and of the
ownership thereof and (b) there is delivered to the Master Servicer, the
Securities Administrator, the Certificate Registrar and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Certificate
Registrar shall execute, authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 6.03, the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Certificate Registrar) connected therewith. Any
replacement Certificate issued pursuant to this Section 6.03 shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time. All Certificates surrendered to the Certificate
Registrar under the terms of this Section 6.03 shall be canceled and destroyed
by the Certificate Registrar in accordance with its standard procedures without
liability on its part.
Section 6.04. Persons Deemed Owners.
The Securities Administrator, the Trustee, the Master
Servicer, the Certificate Registrar and the Paying Agent and any agent thereof
may treat the person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Securities
Administrator, the Trustee, the Master Servicer, the Certificate Registrar, the
Paying Agent nor any agent thereof shall be affected by any notice to the
contrary.
Section 6.05. Access to List of Certificateholders' Names and
Addresses.
If three or more Certificateholders (a) request such
information in writing from the Certificate Registrar, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication that such Certificateholders propose to
transmit or if the Depositor or the Master Servicer shall request such
information in writing from the Certificate Registrar, then the Certificate
Registrar shall, within ten Business Days after the receipt of such request,
provide the Depositor, the Master Servicer or such Certificateholders at such
recipients' expense the most recent list of the Certificateholders of the Trust
Fund held by the Certificate Registrar, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Certificate Registrar shall not be held accountable by reason of the disclosure
of any such information as to the list of the Certificateholders hereunder,
regardless of the source from which such information was derived.
Section 6.06. Book-Entry Certificates.
The Regular Certificates (other than the Group I Non-Offered
Certificates and Group II Non-Offered Certificates), upon original issuance,
shall be issued in the form of one or more typewritten Certificates representing
the Book-Entry Certificates, to be delivered to the Depository or its agent by
or on behalf of the Depositor. Such Certificates shall initially be registered
on the Certificate Register in the name of the Depository or its nominee, and no
Certificate Owner of such Certificates will receive a definitive certificate
representing such Certificate Owner's interest in such Certificates, except as
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provided in Section 6.08. Unless and until definitive, fully registered
Certificates ("Definitive Certificates") have been issued to the Certificate
Owners of such Certificates pursuant to Section 6.08:
(a) the provisions of this Section shall be in full force and
effect;
(b) the Depositor, the Securities Administrator, the
Certificate Registrar and the Trustee may deal with the Depository and the
Depository Participants for all purposes (including the making of distributions)
as the authorized representative of the respective Certificate Owners of such
Certificates;
(c) registration of the Book-Entry Certificates may not be
transferred by the Certificate Registrar except to another Depository;
(d) the rights of the respective Certificate Owners of such
Certificates shall be exercised only through the Depository and the Depository
Participants and shall be limited to those established by law and agreements
between the Owners of such Certificates and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 6.08, the Depository will make
book-entry transfers among the Depository Participants and receive and transmit
distributions of principal and interest on the related Certificates to such
Depository Participants;
(e) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants;
(f) the Trustee and the Certificate Registrar may rely and
shall be fully protected in relying upon information furnished by the Depository
with respect to its Depository Participants; and
(g) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this Section
shall control.
For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of,
Certificateholders evidencing a specified percentage of the aggregate unpaid
principal amount of any Class of Certificates, such direction or consent may be
given by Certificate Owners (acting through the Depository and the Depository
Participants) owning Book-Entry Certificates evidencing the requisite percentage
of principal amount of such Class of Certificates.
Section 6.07. Notices to Depository.
Whenever any notice or other communication is required to be
given to Certificateholders of a Class with respect to which Book-Entry
Certificates have been issued, unless and until Definitive Certificates shall
have been issued to the related Certificate Owners, the Certificate Registrar
shall give all such notices and communications to the Depository.
Section 6.08. Definitive Certificates.
If, after Book-Entry Certificates have been issued with
respect to any Certificates, (a) the Depositor or the Depository advises the
Certificate Registrar that the Depository is no longer willing or able to
discharge properly its responsibilities under the Depository Agreement with
respect to such Certificates and the Depositor is unable to locate a qualified
successor or (b) after the occurrence and continuation of an Event of Default,
Certificate Owners of such Book-Entry Certificates having more than 50% of the
Voting Rights evidenced by any Class of Book-Entry Certificates advise the
Trustee,
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Certificate Registrar and the Depository in writing through the Depository
Participants that the continuation of a book-entry system with respect to
Certificates of such Class through the Depository (or its successor) is no
longer in the best interests of the Certificate Owners of such Class, then the
Certificate Registrar shall notify all Certificate Owners of such Certificates,
through the Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to applicable Certificate Owners
requesting the same. The Depositor shall provide the Certificate Registrar with
an adequate inventory of certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon surrender to the Certificate Registrar of any such
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration, the Certificate Registrar shall authenticate
and deliver such Definitive Certificates. Neither the Depositor nor the
Certificate Registrar shall be liable for any delay in delivery of such
instructions and each may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of such Definitive
Certificates, all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Certificate Registrar, to the extent applicable with respect to such
Definitive Certificates and the Certificate Registrar shall recognize the
Holders of such Definitive Certificates as Certificateholders hereunder.
Section 6.09. Maintenance of Office or Agency.
The Certificate Registrar will maintain or cause to be
maintained at its expense an office or offices or agency or agencies in New York
City or at its Corporate Trust Office (if not in New York City) where
Certificates may be surrendered for registration of transfer or exchange. The
Certificate Registrar will give prompt written notice to the Certificateholders
of any change in such location of any such office or agency.
Section 6.10. Appointment of Paying Agent and Certificate Registrar
Xxxxx Fargo Bank, National Association, as Securities
Administrator, shall act as the initial Paying Agent and Certificate Registrar
for so long as it is also the Master Servicer. Each of the Paying Agent and the
Certificate Registrar may resign upon thirty (30) days' prior written notice to
the Trustee; provided hereto that no such resignation shall be effective until
the appointment of a successor paying agent or certificate registrar. In the
event the Paying Agent and/or the Certificate Registrar resigns or is removed by
the Trustee for cause, the Trustee may appoint a successor paying agent or
certificate registrar, as applicable. The Trustee shall cause such successor
paying agent, if other than the Trustee or the Master Servicer or the Securities
Administrator, to execute and deliver to the Trustee an instrument in which such
paying agent shall agree with the Trustee that such paying agent will hold all
sums held by it for the payment to Certificateholders in trust for the benefit
of the Certificateholders entitled thereto until such sums have been paid to the
Certificateholders.
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ARTICLE VII.
THE DEPOSITOR, THE MASTER SERVICER AND THE SPONSOR
Section 7.01. Respective Liabilities of the Depositor, the Master
Servicer and the Sponsor.
The Depositor, the Master Servicer and the Sponsor shall each
be liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by them herein.
Section 7.02. Merger or Consolidation of the Depositor, the Master
Servicer or the Sponsor.
The Depositor, the Master Servicer and the Sponsor will each
keep in full effect its existence, rights and franchises as a corporation, a
limited liability company or a national association under the laws of the United
States or under the laws of one of the States thereof and will each 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 respective duties under this Agreement.
Any Person into which the Depositor, the Master Servicer or
the Sponsor may be merged or consolidated, or any Person resulting from any
merger or consolidation to which the Depositor, the Master Servicer or the
Sponsor shall be a party, or any person succeeding to the business of the
Depositor, the Master Servicer or the Sponsor shall be the successor of the
Depositor, the Master Servicer or the Sponsor, as the case may be, 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 that the successor or surviving Person to the Sponsor or the Master
Servicer shall be qualified to sell mortgage loans to, and to service mortgage
loans on behalf of, Xxxxxx Mae or Xxxxxxx Mac.
Section 7.03. Indemnification of the Trustee, the Master Servicer, the
Securities Administrator and Others.
(a) The Master Servicer agrees to indemnify the Indemnified
Persons (other than the Master Servicer) for, and to hold them harmless against,
any loss, liability or expense (except as otherwise provided herein with respect
to expenses) (including reasonable legal fees and disbursements of counsel)
incurred on their part that may be sustained in connection with, arising out of,
or relating to this Agreement, the Certificates or any powers of attorney
furnished by the Trustee to the Master Servicer hereunder (i) related to the
Master Servicer's failure to perform its duties in compliance with this
Agreement (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) or (ii) incurred by reason of the
Master Servicer's willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder, provided, in each case, that with respect to
any such claim or legal action (or pending or threatened claim or legal action),
an Indemnified Person shall have given Master Servicer and the Depositor written
notice thereof promptly after a Responsible Officer of such Indemnified Person
shall have with respect to such claim or legal action actual knowledge thereof.
The Indemnified Person's failure to give such notice shall not affect the
Indemnified Person's right to indemnification hereunder. This indemnity shall
survive the resignation or removal of the Trustee, the Master Servicer or the
Securities Administrator and the termination of this Agreement.
(b) The Trust will indemnify any Indemnified Person for any
loss, liability or expense of any Indemnified Person not otherwise indemnified
by the Master Servicer that is referred to in Subsection (a) above.
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(c) The Securities Administrator agrees to indemnify the
Indemnified Persons (other than the Securities Administrator) for, and to hold
them harmless against, any loss, liability or expense (except as otherwise
provided herein with respect to expenses) (including reasonable legal fees and
disbursements of counsel) incurred on their part (i) in connection with, arising
out of, or relating to the Securities Administrator's failure to prepare and
file a Form 10-K in accordance with Section 3.18, (ii) by reason of the
Securities Administrator's willful misfeasance, bad faith or gross negligence in
the performance of its obligations pursuant to Section 3.18 or (iii) by reason
of the Securities Administrator's reckless disregard of its obligations pursuant
to Section 3.18, (including, without limitation, in respect of any powers of
attorney furnished to the Securities Administrator) provided, in each case, that
with respect to any such claim or legal action (or pending or threatened claim
or legal action), an Indemnified Person shall have given the Securities
Administrator written notice thereof promptly after such Indemnified Person
shall have with respect to such claim or legal action knowledge thereof. The
Indemnified Person's failure to give such notice shall not affect the
Indemnified Person's right to indemnification hereunder. This indemnity shall
survive the resignation or removal of the Trustee, the Master Servicer or the
Securities Administrator and the termination of this Agreement.
Section 7.04. Limitation on Liability of the Depositor, the Sponsor,
the Master Servicer, the Securities Administrator and
Others.
None of the Depositor, the Sponsor, the Master Servicer, the
Securities Administrator, the Trustee, the Custodian or any of the directors,
officers, employees or agents of the Depositor, the Sponsor, the Master
Servicer, the Securities Administrator, the Trustee or the Custodian (each, a
"Protected Party") shall be under any liability to any Indemnified Person, the
Trust Fund or the Certificateholders 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 that this provision shall not protect any such Protected
Party against any breach of representations or warranties made by it herein or
protect any such Protected Party from any liability that would otherwise be
imposed by reasons of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder or, in the case of the Master Servicer, its liability pursuant
to Section 7.03(a). The Protected Parties 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 Protected Parties shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense incurred in
connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or any legal action relating to this Agreement or
the Certificates other than any loss, liability or expense related to a specific
Mortgage Loan or Mortgage Loans, except any loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement and any loss, liability or
expense incurred by reason of such Protected Party's willful misfeasance, bad
faith or negligence in the performance of its duties hereunder or by reason of
its reckless disregard of its obligations and duties hereunder or, in the case
of the Master Servicer, its liability pursuant to Section 7.03(a). No Protected
Party shall be under any obligation to appear in, prosecute or defend any legal
action that is not incidental to its respective duties hereunder and that in its
opinion may involve it in any expense or liability; provided that a Protected
Party may, in its discretion undertake any such action that it may deem
necessary or desirable in respect of this Agreement and the rights and duties of
the parties hereto and interests of the Trustee and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be, expenses, costs and liabilities of the
Trust Fund, and such Protected Party shall be entitled to be reimbursed therefor
out of the Distribution Account as provided in Section 4.05 hereof.
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Section 7.05. Limitation on Resignation of Master Servicer and Sponsor.
Neither the Master Servicer nor the Sponsor shall resign from
the obligations and duties hereby imposed on it except upon (x) determination
that its duties hereunder are no longer permissible under applicable law or (y)
in the case of the Master Servicer, compliance with the following requirements:
(i) the Master Servicer has proposed a successor to the Trustee and the Trustee
has consented thereto (such consent not to be withheld unreasonably; (ii) the
successor is qualified to sell mortgage loans to, and to service mortgage loans
on behalf of, Xxxxxx Xxx or Xxxxxxx Mac; and (iii) each Rating Agency shall have
delivered to the Trustee written confirmation that the appointment of such
successor will not result in the qualification, reduction or withdrawal of the
then-current ratings assigned by such Rating Agency to any of the Certificates.
Any such determination permitting the resignation of the Master Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Trustee.
No resignation by the Master Servicer shall become effective until the Trustee
or a successor servicer to such appointment shall have assumed the Master
Servicer's responsibilities, duties, liabilities and obligations hereunder.
Section 7.06. Errors and Omissions Insurance; Fidelity Bonds.
The Master Servicer shall, for so long as it acts as a
successor servicer under a Servicing Agreement, obtain and maintain in force (a)
a policy or policies of insurance covering errors and omissions in the
performance of its obligations as successor servicer thereunder, and (b) a
fidelity bond in respect of its officers, employees and agents. Each such policy
or policies and bond shall, together, comply with the requirements from time to
time of Xxxxxx Mae or Xxxxxxx Mac for persons performing servicing for mortgage
loans purchased by Xxxxxx Mae or Xxxxxxx Mac. In the event that any such policy
or bond ceases to be in effect, the Master Servicer shall use its reasonable
best efforts to obtain a comparable replacement policy or bond from an insurer
or issuer, meeting the requirements set forth above as of the date of such
replacement.
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ARTICLE VIII.
DEFAULT; TERMINATION OF MASTER SERVICER
Section 8.01. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events:
(i) any failure by the Paying Agent to deposit in the
Distribution Account the amounts required pursuant to this Agreement or
by the Master Servicer to remit to the Paying Agent any payment,
including any Advance, required to be made pursuant to this Agreement,
which failure shall continue unremedied for one Business Day after the
date on which Applicable Written Notice of such failure shall have been
given to the Master Servicer; or
(ii) any failure by the Master Servicer to observe or perform
in any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in this Agreement or any breach
of a representation or warranty by the Master Servicer, which failure
or breach shall continue unremedied for a period of 60 days after the
date on which Applicable Written Notice of such failure shall have been
given to the Master Servicer; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises for the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60
consecutive days; or
(iv) the Master Servicer shall consent to the appointment of a
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or
relating to the Master Servicer or all or substantially all of the
property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability
to pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its
obligations, or
(vi) the Master Servicer fails to comply with Section 3.16,
Section 3.17 or Section 3.18 hereto.
If an Event of Default shall occur, then, and in each and
every such case, so long as such Event of Default shall not have been remedied,
the Trustee may, and, at the direction of the Holders of Certificates evidencing
not less than 25% of the Voting Rights evidenced by the Certificates, the
Trustee shall, by notice in writing to the Master Servicer (with a copy to each
Rating Agency), terminate all of the rights and obligations of the Master
Servicer under this Agreement and in and to the Mortgage Loans and the proceeds
thereof, other than its rights as a Certificateholder hereunder. On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer hereunder, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee, or any successor
appointed pursuant to Section 8.02 (a "Successor Master Servicer"). Such
Successor Master Servicer shall thereupon make any Advance described in Section
5.01 hereof and payments of Compensating Interest pursuant to Section 5.02
hereof, subject, in the case of the Trustee, to Section 8.02.
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The Trustee is hereby authorized and empowered to execute and deliver, on behalf
of the terminated 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
any Mortgage Loans and related documents, or otherwise. Unless expressly
provided in such written notice, no such termination shall affect any obligation
of the Master Servicer to pay amounts owed pursuant to Article IX.
The Master Servicer agrees to cooperate with the Trustee in
effecting the termination of the Master Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to the applicable
Successor Master Servicer of all cash amounts which shall at the time be
credited to the Distribution Account or the Protected Account, as applicable, or
thereafter be received with respect to the applicable Mortgage Loans. The
Trustee shall promptly notify the Rating Agencies of the occurrence of an Event
of Default with respect to the Master Servicer actually known to a Responsible
Officer of the Trustee.
Notwithstanding any termination of the activities of the
Master Servicer hereunder, the Master Servicer shall be entitled to receive, out
of any late collection of a Scheduled Payment on a Mortgage Loan that was due
prior to the notice terminating the Master Servicer's rights and obligations as
Master Servicer hereunder and received after such notice, that portion thereof
to which the Master Servicer would have been entitled, and to receive any other
amounts payable to the Master Servicer hereunder the entitlement to which arose
prior to the termination of its activities hereunder.
Section 8.02. Trustee to Act; Appointment of Successor.
On and after the time the Master Servicer receives a notice of
termination pursuant to Section 8.01 hereof the Trustee shall automatically
become the successor to the Master Servicer with respect to the transactions set
forth or provided for herein and after a transition period (not to exceed 90
days), shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Master Servicer by the terms and provisions
hereof and applicable law including, if applicable, the obligation to make
Advances pursuant to Section 5.01 hereof, and payments of Compensating Interest
pursuant to Section 5.02 hereof, except as otherwise provided herein. Effective
on the date of such notice of termination, as compensation therefor, the Trustee
shall be entitled to all fees, costs and expenses relating to the Mortgage Loans
that the Master Servicer would have been entitled to if it had continued to act
hereunder, provided, however, that the Trustee shall not be (i) liable for any
losses pursuant to Section 3.09 or as a result of any acts or omissions of the
Master Servicer, (ii) obligated to make Advances if it is prohibited from doing
so under applicable law, (iii) obligated to effectuate any repurchases or
substitutions of Mortgage Loans hereunder, including pursuant to Section 2.02 or
2.03 hereof, (iv) responsible for expenses of the Master Servicer pursuant to
Section 2.03 or (v) deemed to have made any representations and warranties
hereunder, including pursuant to Section 2.03. Notwithstanding the foregoing,
the Trustee may, if it shall be unwilling to so act, or shall, if it is
prohibited by applicable law from making Advances pursuant to Section 5.01
hereof, or if it is otherwise unable to so act, appoint, or petition a court of
competent jurisdiction to appoint, any established mortgage loan servicing
institution the appointment of which does not adversely affect the then current
rating of the Certificates by each Rating Agency as the successor to the Master
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer hereunder. Any Successor Master
Servicer shall (i) be an institution that is a Xxxxxx Mae and Xxxxxxx Mac
approved seller/servicer in good standing, that has a net worth of at least
$15,000,000 and (ii) be willing to act as successor servicer of any Mortgage
Loans under any Servicing Agreement with respect to which the original Servicer
has been terminated as servicer, and shall have executed and delivered to the
Depositor and the Trustee an agreement accepting such delegation and assignment,
that contains an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of the Master Servicer (other than
any
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liabilities of the Master Servicer hereof incurred prior to termination of
the Master Servicer under Section 8.01 or as otherwise set forth herein), with
like effect as if originally named as a party to this Agreement, provided that
each Rating Agency shall have acknowledged in writing that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced as a result of such assignment and delegation. If
the Trustee assumes the duties and responsibilities of the Master Servicer in
accordance with this Section 8.02, the Trustee shall not resign as Master
Servicer until a Successor Master Servicer has been appointed and has accepted
such appointment. Pending appointment of a successor to the Master Servicer
hereunder, the Trustee, unless the Trustee is prohibited by law from so acting,
shall, subject to Section 3.04 hereof, act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Mortgage Loans or otherwise as it and such successor shall agree; provided that
no such compensation shall be in excess of that permitted the Master Servicer
hereunder. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Neither the Trustee nor any other Successor Master Servicer shall be deemed to
be in default hereunder by reason of any failure to make, or any delay in
making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Master Servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
The costs and expenses of the Trustee and the Successor Master
Servicer in connection with the termination of the Master Servicer, appointment
of a Successor Master Servicer and, if applicable, any transfer of servicing,
including, without limitation, all costs and expenses associated with the
complete transfer of all servicing data and the completion, correction or
manipulation of such servicing data as may be required by the Trustee to correct
any errors or insufficiencies in the servicing data or otherwise to enable the
Trustee or the Successor Master Servicer to service the related Mortgage Loans
properly and effectively, to the extent not paid by the terminated Master
Servicer, shall be payable to the Trustee and the Successor Master Servicer
pursuant to Section 9.05.
Any successor to the Master Servicer as successor servicer
under any Servicing Agreement shall give notice to the applicable Mortgagors of
such change of servicer and shall, during the term of its service as successor
servicer maintain in force the policy or policies that the Master Servicer is
required to maintain pursuant to Section 7.06.
Section 8.03. Notification to Certificateholders.
(a) Upon any termination of or appointment of a successor to
the Master Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of
Default with respect to the Master Servicer, the Trustee shall transmit by mail
to all Certificateholders notice of each such Event of Default hereunder
actually known to a Responsible Officer of the Trustee, unless such Event of
Default shall have been cured or waived.
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ARTICLE IX.
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 9.01. Duties of Trustee and Securities Administrator.
(a) The Trustee, prior to the occurrence of an Event of
Default of which a Responsible Officer of the Trustee shall have actual
knowledge, and after the curing or waiver of all Events of Default
which may have occurred, and the Securities Administrator each
undertake to perform such duties and only such duties as are
specifically set forth in this Agreement as duties of the Trustee and
the Securities Administrator, respectively. If an Event of Default of
which a Responsible Officer of the Trustee shall have actual knowledge,
has occurred and has not been cured or waived, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement,
and the same degree of care and skill in their exercise, as a prudent
person would exercise under the circumstances in the conduct of such
Person's own affairs.
(b) Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments which are
specifically required to be furnished to the Trustee or the Securities
Administrator pursuant to any provision of this Agreement, the Trustee
or the Securities Administrator, respectively, shall examine them to
determine whether they are in the form required by this Agreement;
provided, however, that neither the Trustee nor the Securities
Administrator shall be responsible for the accuracy or content of any
resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Master Servicer; provided, further,
that neither the Trustee nor the Securities Administrator shall be
responsible for the accuracy or verification of any calculation
provided to it pursuant to this Agreement.
(c) On each Distribution Date, the Paying Agent or, if the
Paying Agent shall be the Trustee, the Trustee, shall make monthly
distributions and the final distribution to the Certificateholders from
funds in the Distribution Account as provided in Sections 5.04 and
10.01 herein based solely on the applicable Remittance Report.
(d) No provision of this Agreement shall be construed to
relieve the Trustee or the Securities Administrator from liability for
its own negligent action, its own negligent failure to act or its own
willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee shall have actual knowledge, and
after the curing or waiver of all such Events of Default which may have
occurred with respect to the Trustee and at all times with respect to
the Securities Administrator, the duties and obligations of the Trustee
and the Securities Administrator shall be determined solely by the
express provisions of this Agreement, neither the Trustee nor the
Securities Administrator shall be liable except for the performance of
their respective duties and obligations as are specifically set forth
in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Trustee or the Securities Administrator
and, in the absence of bad faith on the part of the Trustee or the
Securities Administrator, respectively, the Trustee or the Securities
Administrator, respectively, may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee or the
Securities Administrator, respectively, and conforming to the
requirements of this Agreement;
(ii) Neither the Trustee nor the Securities Administrator
shall be liable for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee or
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an officer or officers of the Securities Administrator, respectively,
unless it shall be proved that the Trustee or the Securities
Administrator, respectively, was negligent in ascertaining the
pertinent facts;
(iii) Neither the Trustee nor the Securities Administrator
shall be liable with respect to any action taken, suffered or omitted
to be taken by it in good faith in accordance with the directions of
the Holders of Certificates evidencing not less than 25% of the
aggregate Voting Rights of the Certificates, if such action or
non-action relates to the time, method and place of conducting any
proceeding for any remedy available to the Trustee or the Securities
Administrator, respectively, or exercising any trust or other power
conferred upon the Trustee or the Securities Administrator,
respectively, under this Agreement;
(iv) The Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any default or Event of Default
unless a Responsible Officer of the Trustee shall have actual knowledge
thereof. In the absence of such notice, the Trustee may conclusively
assume there is no such default or Event of Default;
(v) The Trustee shall not in any way be liable by reason of
any insufficiency in any Account held by or in the name of Trustee
unless it is determined by a court of competent jurisdiction that the
Trustee's negligence or willful misconduct was the primary cause of
such insufficiency (except to the extent that the Trustee is obligor
and has defaulted thereon);
(vi) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Trustee or the Securities
Administrator be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost
profits), even if the Trustee or the Securities Administrator,
respectively, has been advised of the likelihood of such loss or damage
and regardless of the form of action; and
(vii) None of the Securities Administrator, the Master
Servicer, any Servicer, the Sponsor, the Depositor, the Custodian or
the Trustee shall be responsible for the acts or omissions of the
others, it being understood that this Agreement shall not be construed
to render them partners, joint venturers or agents of one another.
Neither the Trustee nor the Securities Administrator shall be required to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it, and none of the provisions contained in this Agreement shall in
any event require the Trustee or the Securities Administrator to perform, or be
responsible for the manner of performance of, any of the obligations of the
Master Servicer hereunder or under the applicable Servicing Agreements.
(e) All funds received by the Trustee (if any), the Master
Servicer and the Paying Agent and required to be deposited in the Distribution
Account pursuant to this Agreement will be promptly so deposited.
Section 9.02. Certain Matters Affecting the Trustee and the Securities
Administrator
(a) Except as otherwise provided in Section 9.01:
(i) The Trustee and the Securities Administrator may rely and
shall be protected in acting or refraining from acting in reliance on
any resolution or certificate of the Sponsor or the
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Master Servicer or any Servicer, any certificates of auditors or any
other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) The Trustee and the Securities Administrator may consult
with counsel or accountants and any advice of such counsel or
accountants or any Opinion of Counsel shall be full and complete
authorization and protection with respect to any action taken or
suffered or omitted by it hereunder in good faith and in accordance
with such advice or Opinion of Counsel;
(iii) Neither the Trustee nor the Securities Administrator
shall be under any obligation to exercise any of the trusts or powers
vested in it by this Agreement, other than its obligation to give
notices pursuant to this Agreement, or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to
the Trustee or the Securities Administrator, as applicable, reasonable
security or indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby. Nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of
an Event of Default of which a Responsible Officer of the Trustee has
actual knowledge (which has not been cured or waived), to exercise such
of the rights and powers vested in it by this Agreement, and to use the
same degree of care and skill in their exercise, as a prudent person
would exercise under the circumstances in the conduct of his own
affairs;
(iv) Prior to the occurrence of an Event of Default hereunder
and after the curing or waiver of all Events of Default which may have
occurred with respect to the Trustee and at all times with respect to
the Securities Administrator, neither the Trustee nor the Securities
Administrator shall be liable in its individual capacity for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) Neither the Trustee nor the Securities Administrator shall
be bound to make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by Holders of
Certificates evidencing not less than 25% of the aggregate Voting
Rights of the Certificates and provided that the payment within a
reasonable time to the Trustee or the Securities Administrator, as
applicable, of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee or the Securities Administrator, as applicable, reasonably
assured to the Trustee or the Securities Administrator, as applicable,
by the security afforded to it by the terms of this Agreement. The
Trustee or the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to taking
any such action. The reasonable expense of every such examination shall
be paid by the Certificateholders requesting the investigation;
(vi) The Trustee and the Securities Administrator may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or through Affiliates, agents or attorneys; provided,
however, that the Trustee may not appoint any agent other than the
Custodian to perform its custodial functions with respect to the
Mortgage Files or any paying agent other than the Securities
Administrator to perform any paying agent functions under this
Agreement without the express written consent of the Master Servicer,
which consent will not be unreasonably withheld or delayed. Neither the
Trustee nor the Securities Administrator shall be liable or responsible
for the misconduct or negligence of any of the Trustee's or the
Securities
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Administrator's agents or attorneys or a custodian or paying agent
appointed hereunder by the Trustee or the Securities Administrator with
due care and, when required, with the consent of the Master Servicer;
(vii) Should the Trustee or the Securities Administrator deem
the nature of any action required on its part, other than a payment or
transfer under Section 4.04 hereof, to be unclear, the Trustee or the
Securities Administrator, respectively, may require prior to such
action that it be provided by the Depositor with reasonable further
written instructions; the right of the Trustee or the Securities
Administrator to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and neither the Trustee nor
the Securities Administrator shall be accountable for other than its
negligence or willful misconduct in the performance of any such act;
(viii) Neither the Trustee nor the Securities Administrator
shall be required to give any bond or surety with respect to the
execution of the trust created hereby or the powers granted hereunder,
except as provided in Subsection 9.07;
(ix) Neither the Trustee nor the Securities Administrator
shall have any duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Mortgage
Loan by any Person pursuant to this Agreement, or the eligibility of
any Mortgage Loan for purposes of this Agreement; and
(x) Notwithstanding anything to the contrary herein, any and
all communications (both text and attachments) by or from the Trustee
that the Trustee in its sole discretion deems to contain confidential,
proprietary, and/or sensitive information and sent by electronic mail
will be encrypted. The recipient (the "Email Recipient") of the email
communication will be required to complete a one-time registration
process. Information and assistance on registering and using the email
encryption technology can be found at Citibank's secure website at
xxx.xxxxxxxxx.xxx/xxxxxxxxx/xxxxxxx/xxxxxxx/xxxxx.xxx or by calling
(000) 000-0000 (in the U.S.) or (000) 000-0000 at any time.
Section 9.03. Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other
than the signature and authentication of the Certificate Registrar on the
Certificates) shall be taken as the statements of the Depositor, and neither the
Trustee nor the Securities Administrator shall have any responsibility for their
correctness. Neither the Trustee nor the Securities Administrator makes any
representations as to the validity or sufficiency of the Certificates (other
than the signature and authentication of the Certificate Registrar on the
Certificates) or with respect to any Mortgage Loan except as expressly provided
in Sections 2.02 and 2.06 hereof; provided, however, that the foregoing shall
not relieve the Custodian of the obligation to review the Mortgage Files
pursuant to Sections 2.02 and 2.05 and the Custodial Agreement. The Certificate
Registrar's signature and authentication (or authentication by its agent) on the
Certificates shall be solely in its capacity as Certificate Registrar and shall
not constitute the Certificates an obligation of the Certificate Registrar in
any other capacity. Neither the Trustee or the Securities Administrator shall be
accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Depositor with respect to the Mortgage
Loans. Subject to the provisions of Section 2.06, neither the Trustee nor the
Securities Administrator shall be responsible for the legality or validity of
this Agreement or any document or instrument relating to this Agreement, the
validity of the execution of this Agreement or of any supplement hereto or
instrument of further assurance, or the validity, priority, perfection or
sufficiency of
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the security for the Certificates issued hereunder or intended to
be issued hereunder. Neither the Trustee nor the Securities Administrator shall
at any time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage or any Mortgage Loan, or
the perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
Fund or its ability to generate the payments to be distributed to
Certificateholders, under this Agreement. Neither the Trustee nor the Securities
Administrator shall have any responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to record this Agreement.
Section 9.04. Trustee and Securities Administrator May Own
Certificates.
Each of the Trustee and the Securities Administrator in its
individual capacity or in any capacity other than as Trustee or Securities
Administrator hereunder may become the owner or pledgee of any Certificates with
the same rights it would have if it were not the Trustee or the Securities
Administrator, as applicable, and may otherwise deal with the parties hereto.
Section 9.05. Trustee's and Securities Administrator's Fees and
Expenses.
The Trustee and the Securities Administrator shall be entitled
to the Trustee Fee and the Securities Administrator Fee, respectively, which
shall be paid by the Master Servicer out of funds received by it hereunder in
respect of the Master Servicing Fee. In addition, the Trustee and the Securities
Administrator shall be indemnified and held harmless by the Trust Fund (and
accordingly will be entitled to recover from the Distribution Account pursuant
to Section 4.05(a)(ix) and from comparable funds in a comparable order provided
to the Trustee and held in the Distribution Account) for all liabilities,
losses, costs, reasonable out-of-pocket expenses, disbursements and advances and
the expenses of the Trustee and the Securities Administrator, respectively, in
connection with the performance of its duties and obligations and the exercise
of its rights under this Agreement, (including exercise of such party's rights
under the Assumption Agreements and the Servicing Agreements), the Custodial
Agreement, the Certificates, the Mortgage Loans, any Event of Default, any
breach of this Agreement or any claim or legal action (including any pending or
threatened claim or legal action) incurred or made by the Trustee in the
administration of the trusts hereunder or the Securities Administrator,
respectively, (including the reasonable compensation, expenses and disbursements
of its counsel) except any such liability, loss, cost, expense, disbursement or
advance as may arise from its negligence, bad faith or intentional misconduct.
The Trust Fund further agrees to indemnify and hold harmless the Trustee for and
against any loss, liability or expense arising out of, or in connection with,
the provisions set forth in the final paragraph of Section 2.01 hereof,
including without limitation, all costs, liabilities and expenses (including
reasonable legal fees and expenses) of investigation and defending itself
against any claim, action or proceeding, pending or threatened, relating to the
provisions of such paragraph. If such funds are insufficient therefor, any such
insufficiency shall be recoverable from the Depositor. Such compensation and
reimbursement obligation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust. The indemnification set
forth herein shall survive the resignation or removal of the Trustee or the
Securities Administrator and the termination of this Agreement.
Section 9.06. Eligibility Requirements for Trustee, Securities
Administrator and Paying Agent.
The Trustee, the Securities Administrator and the Paying Agent
and any successor of any of the foregoing, shall during the entire duration of
this Agreement be a state bank or trust company or a national banking
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and
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surplus and undivided profits of at least $40,000,000 or, in the case of a
successor Trustee, $50,000,000, subject to supervision or examination by federal
or state authority and, in the case of the Trustee, rated "BBB" or higher by S&P
and "BBB/Baa2" or higher by Moody's, with respect to any outstanding long-term
unsecured unsubordinated debt, and, in the case of a successor Trustee,
successor Securities Administrator or successor Paying Agent other than pursuant
to Section 9.10, rated in one of the two highest long-term debt categories of,
or otherwise acceptable to, each of the Rating Agencies. The Trustee shall not
be an Affiliate of the Master Servicer. If the Trustee publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 9.06 the combined capital and surplus of such entity shall be deemed to
be its total equity capital (combined capital and surplus) as set forth in its
most recent report of condition so published. In case at any time the Trustee,
Securities Administrator or Paying Agent, as applicable, shall cease to be
eligible in accordance with the provisions of this Section 9.06, the Trustee,
Securities Administrator or Paying Agent shall resign immediately in the manner
and with the effect specified in Section 9.08.
In addition, the Securities Administrator (i) may not be an
Originator, Master Servicer, Servicer, the Depositor or an affiliate of the
Depositor unless the Securities Administrator is in an institutional trust
department of the Securities Administrator, (ii) must be authorized to exercise
corporate trust powers under the laws of its jurisdiction of organization, and
(iii) must be rated at least "A/F1" by Fitch, if Fitch is a Rating Agency, or
the equivalent rating by S&P. The Trustee shall notify the Rating Agencies of
any change of Securities Administrator.
Section 9.07. Insurance.
The Securities Administrator and Paying Agent, at their own
expense, shall at all times maintain and keep in full force and effect: (i)
fidelity insurance, (ii) theft of documents insurance and (iii) forgery
insurance (which may be collectively satisfied by a "Financial Institution Bond"
and/or a "Bankers' Blanket Bond"). All such insurance shall be in amounts, with
standard coverage and subject to deductibles, as are customary for insurance
typically maintained by banks or their affiliates which act as custodians for
investor-owned mortgage pools. A certificate of an officer of the Trustee or the
Securities Administrator as to the Trustee's or the Securities Administrator's,
respectively, compliance with this Section 9.07 shall be furnished to any
Certificateholder upon reasonable written request.
Section 9.08. Resignation and Removal of Trustee, Securities
Administrator and Paying Agent.
The Trustee and the Securities Administrator may at any time
resign and be discharged from the Trust hereby created by giving written notice
thereof to the Depositor, the Sponsor, the Securities Administrator (or the
Trustee, if the Securities Administrator resigns) and the Master Servicer, with
a copy to the Rating Agencies. Upon receiving such notice of resignation, the
Depositor shall promptly appoint a successor trustee or successor securities
administrator, as applicable, by written instrument, in triplicate, one copy of
which instrument shall be delivered to each of the resigning trustee or
securities administrator, as applicable, and the successor trustee or securities
administrator, as applicable. If no successor trustee or successor securities
administrator shall have been so appointed and have accepted appointment within
30 days after the giving of such notice of resignation, the resigning Trustee or
Securities Administrator may petition any court of competent jurisdiction for
the appointment of a successor trustee or securities administrator.
If at any time (i) the Trustee, Securities Administrator or
Paying Agent shall cease to be eligible in accordance with the provisions of
Section 9.06 hereof and shall fail to resign after written request thereto by
the Depositor, (ii) the Trustee, Securities Administrator or Paying Agent shall
become incapable of acting, or shall be adjudged as bankrupt or insolvent, or a
receiver of the Trustee, Securities
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Administrator or Paying Agent or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee, the Securities
Administrator or Paying Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or (iii)(A) a tax is imposed with
respect to the Trust Fund by any state in which the Trustee or the Securities
Administrator or the Trust Fund is located, (B) the imposition of such tax would
be avoided by the appointment of a different trustee or securities administrator
and (C) the Trustee or the Securities Administrator, as applicable fails to
indemnify the Trust Fund against such tax, then the Depositor or the Master
Servicers may remove the Trustee, Securities Administrator or Paying Agent, as
applicable, and appoint a successor trustee, successor securities administrator
or successor paying agent, as applicable, by written instrument, in multiple
copies, a copy of which instrument shall be delivered to the Trustee, the
Securities Administrator, the Master Servicer, the Paying Agent and the
successor trustee, successor securities administrator or successor paying agent,
as applicable.
The Holders evidencing more than 50% of the Voting Rights of
each Class of Certificates may at any time remove the Trustee, Securities
Administrator or Paying Agent and appoint a successor trustee, securities
administrator or paying agent by written instrument or instruments, in multiple
copies, signed by such Holders or their attorneys-in-fact duly authorized, one
complete set of which instruments shall be delivered by the successor trustee or
successor securities administrator to the Master Servicer, the Trustee,
Securities Administrator or Paying Agent so removed and the successor trustee or
securities administrator so appointed. Notice of any removal of the Trustee,
Securities Administrator or Paying Agent shall be given to each Rating Agency by
the Trustee or successor trustee. In the event that the fee payable to a
successor Trustee, successor Securities Administrator or successor Paying Agent
exceeds the applicable fee payable to the predecessor party, any such excess
shall be an obligation of the Trust.
Any resignation or removal of the Trustee, Securities
Administrator or Paying Agent and appointment of a successor trustee, securities
administrator or paying agent pursuant to any of the provisions of this Section
9.08 shall become effective upon acceptance of appointment by the successor
trustee, securities administrator or paying agent, respectively, as provided in
Section 9.09 hereof.
Section 9.09. Successor Trustee, Securities Administrator or Successor
Paying Agent.
Any successor trustee, securities administrator or paying
agent appointed as provided in Section 9.08 hereof shall execute, acknowledge
and deliver to the Depositor and to its predecessor trustee, predecessor
securities administrator or predecessor paying agent, as applicable, and the
Master Servicer an instrument accepting such appointment hereunder and thereupon
the resignation or removal of the predecessor trustee, securities administrator
or paying agent shall become effective and such successor trustee, securities
administrator or paying agent, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor hereunder, with the like effect as if originally named as
trustee or securities administrator herein.
No successor trustee, securities administrator or paying agent
shall accept appointment as provided in this Section 9.09 unless at the time of
such acceptance such successor trustee, securities administrator or paying agent
shall be eligible under the provisions of Section 9.07 hereof and its
appointment shall not adversely affect the then current rating of the
Certificates.
Upon acceptance of appointment by a successor trustee,
securities administrator or paying agent as provided in this Section 9.09, the
successor trustee, securities administrator or paying agent shall mail notice of
the succession of such trustee or securities administrator hereunder to all
Holders of Certificates. If the successor trustee, securities administrator or
paying agent fails to mail such notice within ten days after acceptance of
appointment, the Depositor shall cause such notice to be mailed at the expense
of the Trust Fund.
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Section 9.10. Merger or Consolidation of Trustee, Securities
Administrator or Paying Agent.
Any corporation, state bank or national banking association
into which the Trustee, Securities Administrator or Paying Agent may be merged
or converted or with which it may be consolidated or any corporation, state bank
or national banking association resulting from any merger, conversion or
consolidation to which the Trustee, Securities Administrator or Paying Agent
shall be a party, or any corporation, state bank or national banking association
succeeding to substantially all of the corporate trust business of the Trustee
or of the business of the Securities Administrator or Paying Agent, shall be the
successor of the Trustee, Securities Administrator or Paying Agent hereunder,
provided that such entity shall be eligible under the provisions of Section 9.06
hereof without the execution or filing of any paper or further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.
Section 9.11. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Trust Fund or property securing any Mortgage Note may at
the time be located, the Master Servicer and the Trustee acting jointly shall
have the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Trustee to act as co-trustee or co-trustees jointly
with the Trustee, or separate trustee or separate trustees, of all or any part
of the Trust Fund, and to vest in such Person or Persons, in such capacity and
for the benefit of the Certificateholders, such title to the Trust Fund or any
part thereof, whichever is applicable, and, subject to the other provisions of
this Section 9.11, such powers, duties, obligations, rights and trusts as the
Master Servicer and the Trustee may consider necessary or desirable. If the
Master Servicer shall not have joined in such appointment within 15 days after
the receipt by it of a request to do so, or in the case an Event of Default
shall have occurred and be continuing, the Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
9.06 and no notice to Certificateholders of the appointment of any co-trustee or
separate trustee shall be required under Section 9.09.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) All rights, powers, duties and obligations conferred or
imposed upon the Trustee, except for the obligation of the Trustee
under this Agreement to advance funds on behalf of the Master Servicer,
shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized
to act separately without the Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee
hereunder or as a Successor Master Servicer hereunder), the Trustee
shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including the
holding of title to the Trust Fund or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Trustee;
(ii) No trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
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Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article IX. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 9.12. Tax Matters.
It is intended that each of REMIC I, REMIC II, REMIC III and
REMIC IV shall constitute, and that the affairs of the Trust Fund shall be
conducted so that each REMIC formed hereunder qualifies as, a "real estate
mortgage investment conduit" as defined in and in accordance with the REMIC
Provisions. In furtherance of such intention, the Securities Administrator
covenants and agrees that it shall act as agent (and the Securities
Administrator is hereby appointed to act as agent) on behalf of the Trust Fund.
The Trustee and/or the Securities Administrator, as agent on behalf of the Trust
Fund, shall do or refrain from doing, as applicable, the following: (a) the
Securities Administrator shall prepare and file, or cause to be prepared and
filed, in a timely manner, U.S. Real Estate Mortgage Investment Conduit Income
Tax Returns (Form 1066 or any successor form adopted by the Internal Revenue
Service) and prepare and file or cause to be prepared and filed with the
Internal Revenue Service and applicable state or local tax authorities income
tax or information returns for each taxable year with respect to each such REMIC
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish or cause to be furnished to Certificateholders the schedules, statements
or information at such times and in such manner as may be required thereby; (b)
the Securities Administrator shall apply for an employer identification number
with the Internal Revenue Service via a Form SS-4 or other comparable method for
each REMIC that is or becomes a taxable entity, and within thirty days of the
Closing Date, furnish or cause to be furnished to the Internal Revenue Service,
on Forms 8811 or as otherwise may be required by the Code, the name, title,
address, and telephone number of the person that the holders of the Certificates
may contact for tax information relating thereto, together with such additional
information as may be required by such Form, and update such information at the
time or times in the manner required by the Code for the Trust Fund; (c) the
Securities Administrator shall make or cause to be made elections, on behalf of
each REMIC formed hereunder to be treated as a REMIC on the federal tax return
of such REMIC for its first taxable year (and, if necessary, under applicable
state law); (d) the Securities Administrator shall prepare and forward, or cause
to be prepared and forwarded, to the Certificateholders and to the Internal
Revenue Service and, if necessary, state tax authorities, all information
returns and reports as and when required to be provided to them in accordance
with the REMIC Provisions, including without limitation, the calculation of any
original issue discount using the Prepayment Assumption; (e) the Securities
Administrator shall provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is not a
Permitted Transferee, or an agent (including a broker, nominee or other
middleman) of a Person that is not a Permitted Transferee, or a pass-through
entity in which a Person that is not a Permitted Transferee is the record holder
of an interest (the reasonable cost of computing and furnishing
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such information may be charged to the Person liable for such tax) or to the
IRS, and the Trustee shall forward that information to the requesting party in
accordance with Treasury Regulation ss. 1.860E-2(a)(5); (f) each of the
Securities Administrator and the Trustee shall, to the extent under its control,
conduct the affairs of the Trust Fund at all times that any Certificates are
outstanding so as to maintain the status of each REMIC formed hereunder as a
REMIC under the REMIC Provisions; (g) neither the Trustee nor the Securities
Administrator shall knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any REMIC
formed hereunder; (h) the Securities Administrator shall pay, from the sources
specified in the second to last paragraph of this Section 9.12, the amount of
any federal, state and local taxes, including prohibited transaction taxes as
described below, imposed on any REMIC formed hereunder prior to the termination
of the Trust Fund when and as the same shall be due and payable (but such
obligation shall not prevent the Securities Administrator or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Securities Administrator from withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings); (i) the
Trustee shall sign or cause to be signed federal, state or local income tax or
information returns or any other document prepared by the Securities
Administrator pursuant to this Section 9.12 requiring a signature thereon by the
Trustee; (j) the Securities Administrator shall maintain records relating to
each REMIC formed hereunder including but not limited to the income, expenses,
assets and liabilities of each such REMIC and adjusted basis of the Trust Fund
property determined at such intervals as may be required by the Code, as may be
necessary to prepare the foregoing returns, schedules, statements or
information; and (k) as and when necessary and appropriate, the Securities
Administrator, shall represent the Trust Fund in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of any
REMIC formed hereunder, enter into settlement agreements with any governmental
taxing agency, extend any statute of limitations relating to any tax item of the
Trust Fund, and otherwise act on behalf of each REMIC formed hereunder in
relation to any tax matter involving any such REMIC.
In order to enable each of the Trustee and the Securities
Administrator to perform its duties as set forth herein, the Depositor shall
provide, or cause to be provided, to the Trustee or the Securities Administrator
within 10 days after the Closing Date all information or data that the Trustee
or the Securities Administrator requests in writing and determines to be
relevant for tax purposes to the valuations and offering prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flows of the Certificates and the Mortgage Loans.
Thereafter, the Depositor shall provide to the Trustee or the Securities
Administrator promptly upon written request therefor, any such additional
information or data that the Trustee or the Securities Administrator may, from
time to time, request in order to enable the Trustee or the Securities
Administrator to perform its duties as set forth herein. The Depositor hereby
indemnifies each of Trustee and the Securities Administrator for any losses,
liabilities, damages, claims or expenses of the Trustee or the Securities
Administrator arising from any errors or miscalculations of the Trustee or the
Securities Administrator, as applicable, that result from any failure of the
Depositor to provide, or to cause to be provided, accurate information or data
to the Trustee or the Securities Administrator, as applicable, on a timely
basis, which indemnification shall survive the resignation or removal of the
Trustee, the Master Servicer or the Securities Administrator and the termination
of this Agreement.
In the event that any tax is imposed on "prohibited
transactions" of either REMIC I, REMIC II, REMIC III or REMIC IV as defined in
Section 860F(a)(2) of the Code, on the "net income from foreclosure property" of
the Trust Fund as defined in Section 860G(c) of the Code, on any contribution to
either REMIC I, REMIC II, REMIC III or REMIC IV after the startup day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including, without
limitation, any federal, state or local tax or minimum tax imposed upon any of
REMIC I, REMIC II, REMIC III, REMIC IV or the Trust Fund, and is not paid as
otherwise provided for herein, such tax shall be paid by (i) the Trustee or
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the Securities Administrator, if any such other tax arises out of or results
from a breach by the Trustee or the Securities Administrator, respectively, of
any of its obligations under this Agreement, (ii) any party hereto (other than
the Trustee or the Securities Administrator) to the extent any such other tax
arises out of or results from a breach by such other party of any of its
obligations under this Agreement or (iii) in all other cases, or in the event
that any liable party hereto fails to honor its obligations under the preceding
clauses (i) or (ii), any such tax will be paid first with amounts otherwise to
be distributed to the Residual Certificateholders (pro rata based on the amounts
to be distributed), and second with amounts otherwise to be distributed to all
other Certificateholders in the following order of priority: first, to the
Subordinate Certificates in the related Loan Group in the order priority set
forth in Section 5.04A, and second, to the Senior Certificates in the related
Loan Group in the order priority set forth in Section 5.04A. Notwithstanding
anything to the contrary contained herein, to the extent that such tax is
payable by the Holder of any Certificates, the Securities Administrator is
hereby authorized to retain on any Distribution Date, from the Holders of the
Residual Certificates (and, if necessary, second, from the Holders of the other
Certificates in the priority specified in the preceding sentence), funds
otherwise distributable to such Holders in an amount sufficient to pay such tax.
As to any amount payable out of distributions to the Certificateholders pursuant
to the preceding two sentences, the Securities Administrator shall include in
its Remittance Report information as to distributions to such parties taking
into account the priorities described in the second preceding sentence. The
Securities Administrator agrees to promptly notify in writing the party liable
for any such tax of the amount thereof and the due date for the payment thereof.
The Trustee and the Securities Administrator each agree that,
in the event it should obtain any information necessary for the other party to
perform its obligations pursuant to this Section 9.12, it will promptly notify
and provide such information to such other party. Notwithstanding anything in
this Agreement to the contrary, the Trustee agrees that, in the event that the
Trustee obtains actual knowledge that the Securities Administrator has breached
any of its obligations pursuant to this Section 9.12, the Trustee shall perform
such obligations on its behalf to the extent that the Trustee possesses all
documents necessary to so perform and receives reasonable compensation therefor,
provided, however, that the Trustee shall not be liable for any losses resulting
from any such breach.
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ARTICLE X.
TERMINATION
Section 10.01. Termination upon Liquidation or Repurchase of the
Mortgage Loans.
Subject to Section 10.03, the obligations and responsibilities
of the Depositor, the Master Servicer, the Securities Administrator, the Paying
Agent, the Sponsor and the Trustee created hereby and with respect to a Loan
Group shall terminate upon the earlier of (a) the purchase by the Sponsor of all
of the Mortgage Loans (and REO Properties) remaining in the related Loan Group
(which repurchase with respect to Loan Group I and Loan Group II may occur on
separate dates) at the price equal to the sum of (i) 100% of the Stated
Principal Balance of each Mortgage Loan in such Loan Group (other than in
respect of REO Property), (ii) accrued interest thereon at the applicable
Mortgage Rate, (iii) the appraised value of any REO Property with respect to the
related Loan Group (up to the Stated Principal Balance of the related Mortgage
Loan), such appraisal to be conducted by an appraiser mutually agreed upon by
EMC and the Securities Administrator and (iv) unreimbursed out-of pocket costs
of the related Servicer or Master Servicer with respect to the related Loan
Group, including unreimbursed servicing advances and the principal portion of
any unreimbursed Advances, made on the related Mortgage Loans prior to the
exercise of such repurchase right, (v) any unreimbursed costs and expenses of
the Trustee and the Securities Administrator with respect to the related Loan
Group payable pursuant to Section 9.05, (vi) any unreimbursed costs and expenses
of the Custodian with respect to the related Loan Group payable pursuant to the
Custodial Agreement and (b) the later of (i) the maturity or other liquidation
(or any Advance with respect thereto) of the last Mortgage Loan remaining in the
related Loan Group and the disposition of all related REO Property, and (ii) the
distribution to related Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement, as applicable. In no event shall
the trusts created hereby continue beyond the earlier of (i) the expiration of
21 years from the death of the last survivor of the descendants of Xxxxxx X.
Xxxxxxx, the late Ambassador of the United States to the Court of St. James's,
living on the date hereof and (ii) the Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties
with respect to a Loan Group pursuant to clause (a) above shall be conditioned
upon the Stated Principal Balance of all of the Mortgage Loans and REO
Properties in the related Loan Group, at the time of any such repurchase,
aggregating ten percent or less of the aggregate Cut-off Date Principal Balance
of all of the related Mortgage Loans.
Section 10.02. Final Distribution on the Certificates.
If on any Determination Date, (i) the Master Servicer
determines that there are no Outstanding Mortgage Loans and no other funds or
assets in the Loan Group in the Trust other than the funds in the Distribution
Account, the Master Servicer shall direct the Securities Administrator to send a
final distribution notice promptly to each related Certificateholder or (ii) the
Securities Administrator determines that a Class of related Certificates shall
be retired after a final distribution on such Class, the Securities
Administrator shall notify the related Certificateholders within five (5)
Business Days after such Determination Date that the final distribution in
retirement of such Class of Certificates is scheduled to be made on the
immediately following Distribution Date. Any final distribution made pursuant to
the immediately preceding sentence will be made only upon presentation and
surrender of the related Certificates at the Corporate Trust Office of the
Certificate Registrar. If the Sponsor elects to terminate a Loan Group in the
Trust Fund pursuant to Section 10.01, on or before the Distribution Date
occurring in the month preceding the month in which notice is to be mailed to
the related Certificateholders, the Sponsor shall notify the Securities
Administrator, the Custodian, the Trustee, the Securities Administrator, the
Paying Agent and the Master Servicer of the date that the Depositor intends to
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terminate the Loan Group in the Trust Fund and the Sponsor shall provide the
Securities Administrator, the Paying Agent, the Custodian, the Master Servicer
and the Trustee with the applicable repurchase price of the related Mortgage
Loans and REO Properties serviced and administered by the Master Servicer. The
Sponsor shall remit the applicable Mortgage Loan Purchase Price to the Paying
Agent for deposit in the Distribution Account on the Business Day immediately
preceding the Distribution Date on which such Optional Termination by the
Sponsor will be effected.
Provided that timely notice has been received, the Securities
Administrator shall give notice of any termination of the Loan Group in the
Trust Fund, specifying the Distribution Date on which related Certificateholders
may surrender their Certificates for payment of the final distribution and
cancellation. To the extent reasonably practical, such notice shall be given by
letter mailed not earlier than the 1st day and no later than the 15th day of the
month of such final distribution and shall specify: (a) the Distribution Date
upon which final distribution on the related Certificates will be made upon
presentation and surrender of Certificates at the office therein designated, (b)
the amount of such final distribution, (c) the location of the office or agency
at which such presentation and surrender must be made and (d) that the Record
Date otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of the related
Certificates at the office therein specified. The Securities Administrator will
give such notice to each Rating Agency at the time such notice is given to
related Certificateholders.
In the event such notice is given, the Paying Agent shall
distribute, on the applicable Distribution Date in an amount equal to the final
distribution in respect of the related Certificates. Upon such final deposit
with respect to the Loan Group in the Trust Fund and the receipt by the Trustee
of a Request for Release therefor, the Trustee shall promptly release to EMC or
its designee the Mortgage Files for the related Mortgage Loans, and any
documents necessary to transfer any REO Property.
Upon presentation and surrender of the related Certificates,
the Paying Agent shall cause to be distributed to Certificateholders of each
related Class, based on the applicable Remittance Report for such Distribution
Date, the amounts allocable to such Certificates held in the Distribution
Account in the order and priority set forth in Section 5.04 hereof on the final
Distribution Date and in proportion to their respective Percentage Interests.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Securities Administrator
shall give a second written notice to the remaining related Certificateholders
to surrender their Certificates for cancellation and receive the final
distribution with respect thereto. If within six months after the second notice
all the applicable Certificates shall not have been surrendered for
cancellation, the Securities Administrator may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining related
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that remain a part of
the Loan Group in the Trust Fund. If within one year after the second notice all
the related Certificates shall not have been surrendered for cancellation, the
Residual Certificateholders shall be entitled to all unclaimed funds and other
assets of the Loan Group in the Trust Fund that remain subject hereto.
Section 10.03. Additional Termination Requirements.
(a) Upon exercise by the Sponsor of its purchase option with
respect to both Loan Groups as provided in Section 10.01, the Trust Fund shall
be terminated in accordance with the following additional requirements, unless
each of the Trustee and the Securities Administrator have been supplied with an
Opinion of Counsel, at the expense of the Sponsor, to the effect that the
failure of the Trust Fund to comply with the requirements of this Section 10.03
will not (i) result in the imposition of taxes on
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"prohibited transactions" of a REMIC, or (ii) cause a REMIC to fail to qualify
as a REMIC at any time that any Certificates are outstanding:
(1) The Sponsor shall establish a 90-day liquidation period
and notify the Trustee and Securities Administrator thereof, and the Securities
Administrator shall in turn specify the first day of such period in a statement
attached to each of REMIC I, REMIC II, REMIC III and REMIC IV's Tax Return
pursuant to Treasury Regulation Section 1.860F-1. The Sponsor shall satisfy all
the requirements of a qualified liquidation under Section 860F of the Code and
any regulations thereunder, as evidenced by an Opinion of Counsel obtained at
the expense of the Sponsor;
(2) During such 90-day liquidation period, and at or prior to
the time of making the final payment on the Certificates, EMC, acting as agent
of the Trustee, shall sell all of the assets of REMIC I, REMIC II, REMIC III and
REMIC IV for cash; and
(3) At the time of the making of the final payment on the
Certificates, the Securities Administrator as agent for the Trustee shall
distribute or credit, or cause to be distributed or credited, to the Holders of
the Residual Certificates all cash on hand (other than cash retained to meet
claims), and REMIC I, REMIC II, REMIC III and REMIC IV shall terminate at that
time.
(b) By their acceptance of the Certificates, the Holders
thereof hereby authorize the Sponsor to specify the 90-day liquidation period
for REMIC I, REMIC II, REMIC III and REMIC IV, which authorization shall be
binding upon all successor Certificateholders.
(c) Upon the written request of the Sponsor, and the receipt
of the Opinion of Counsel referred to in Section 10.03(a)(1), the Trustee shall
sign, and the Securities Administrator as agent for each REMIC hereby agrees to
adopt such a plan of complete liquidation and to take such other action in
connection therewith as may be reasonably requested by the Sponsor.
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ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
This Agreement may be amended from time to time by parties
hereto, without the consent of any of the Certificateholders to cure any
ambiguity, to correct or supplement any provisions herein (including to give
effect to the expectations of investors), to change the manner in which the
Distribution Account, or the Protected Account is maintained, to conform the
terms hereof to the disclosure in the Prospectus Supplement, to revise or
correct any provisions to reflect the obligations of the parties to this
Agreement as they related to Regulation AB, or to make such other provisions
with respect to matters or questions arising under this Agreement as shall not
be inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel addressed to the Trustee, adversely affect in
any material respect the interests of any Certificateholder; provided that any
such amendment shall be deemed not to adversely affect in any material respect
the interests of the Certificateholders and no such Opinion of Counsel shall be
required if the Person requesting such amendment obtains a letter from each
Rating Agency stating that such amendment would not result in the downgrading or
withdrawal of the respective ratings then assigned to the Certificates.
Notwithstanding the foregoing, without the consent of the
Certificateholders, the parties hereto may at any time and from time to time
amend this Agreement to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or appropriate to maintain the qualification
of each of REMIC I, REMIC II, REMIC III and REMIC IV as a REMIC under the Code
or to avoid or minimize the risk of the imposition of any tax on either REMIC I,
REMIC II, REMIC III or REMIC IV pursuant to the Code that would be a claim
against either REMIC I, REMIC II, REMIC III or REMIC IV at any time prior to the
final redemption of the Certificates, provided that the Trustee and the
Securities Administrator have been provided an Opinion of Counsel addressed to
the Trustee and the Securities Administrator, which opinion shall be an expense
of the party requesting such amendment but in any case shall not be an expense
of the Trustee or the Securities Administrator, to the effect that such action
is necessary or appropriate to maintain such qualification or to avoid or
minimize the risk of the imposition of such a tax.
This Agreement may also be amended from time to time by the
parties hereto and the Holders of each Class of Certificates affected thereby
evidencing more than 50% of the Voting Rights of such Class or Classes for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Holders of Certificates; provided that no such amendment shall (i) reduce in
any manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) cause either REMIC I, REMIC II, REMIC III or REMIC IV's REMIC
elections to fail to qualify or (iii) reduce the aforesaid percentages of
Certificates of each Class the Holders of which are required to consent to any
such amendment without the consent of the Holders of all Certificates of such
Class then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel addressed to the Trustee, which
opinion shall be an expense of the party requesting such amendment but in any
case shall not be an expense of the Trustee or the Securities Administrator, to
the effect that such amendment will not (other than an amendment pursuant to
clause (ii) of, and in accordance with, the preceding paragraph) cause the
imposition of any tax on REMIC I, REMIC II, REMIC III or REMIC IV or the
Certificateholders or cause REMIC I, REMIC II, REMIC III or REMIC IV's REMIC
elections to fail to qualify at any time that any Certificates are outstanding.
Further, nothing in this Agreement shall require
138
the Trustee to enter into an amendment without receiving an Opinion of Counsel,
addressed to and satisfactory to the Trustee that (i) such amendment is
permitted and is not prohibited by this Agreement and that all requirements for
amending this Agreement (including any consent of the applicable
Certificateholders) have been complied with.
Promptly after the execution of any amendment to this
Agreement requiring the consent of Certificateholders, the Trustee shall furnish
written notification of the substance of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of
Certificateholders under this Section to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Section 11.02. Recordation of Agreement; Counterparts.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all of the counties or other comparable jurisdictions in which any or
all of the Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere. The Master Servicer shall effect such
recordation at the Trust's expense upon the request in writing of a
Certificateholder, but only if such direction is accompanied by an Opinion of
Counsel (provided at the expense of the Certificateholder requesting
recordation) to the effect that such recordation would materially and
beneficially affect the interests of the Certificateholders or is required by
law.
For the purpose of facilitating the recordation of this
Agreement as herein provided and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute but one and the same instrument.
Section 11.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW WHICH THE PARTIES HERETO EXPRESSLY RELY UPON IN THE
CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER).
Section 11.04. Intention of Parties.
It is the express intent of the parties hereto that the
conveyance of the Mortgage Notes, Mortgages, assignments of Mortgages, title
insurance policies and any modifications, extensions and/or assumption
agreements and private mortgage insurance policies relating to the Mortgage
Loans by the Sponsor to the Depositor, and by the Depositor to the Trustee be,
and be construed as, an absolute sale thereof to the Depositor or the Trustee,
as applicable. It is, further, not the intention of the parties that such
conveyance be deemed a pledge thereof by the Sponsor to the Depositor, or by the
Depositor to the
139
Trustee. However, in the event that, notwithstanding the intent of the parties,
such assets are held to be the property of the Sponsor or the Depositor, as
applicable, or if for any other reason this Agreement is held or deemed to
create a security interest in such assets, then (i) this Agreement shall be
deemed to be a security agreement within the meaning of the Uniform Commercial
Code of the State of New York, (ii) each conveyance provided for in this
Agreement shall be deemed to be an assignment and a grant by the Sponsor or the
Depositor, as applicable, for the benefit of the Certificateholders, of a
security interest in all of the assets that constitute the Trust Fund, whether
now owned or hereafter acquired, (iii) the possession by the Trustee or the
Custodian of the Mortgage Notes and such other items of property as may be
perfected by possession pursuant to Section 9-313 (or comparable provision) of
the applicable Uniform Commercial Code for purposes of effecting the security
interest pursuant to such section of the applicable Uniform Commercial Code and
other applicable law. Any assignment of the Sponsor and the Depositor shall also
be deemed to be an assignment of any security interest created hereby.
Each of the Sponsor and the Depositor for the benefit of the
Certificateholders shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement were deemed
to create a security interest in the assets of the Trust Fund, such security
interest would be deemed to be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of the
Agreement.
Section 11.05. Notices.
(a) The Securities Administrator shall use its best efforts to
promptly provide notice to each Rating Agency with respect to each of
the following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of the Master Servicer,
the Securities Administrator or the Trustee and the appointment of any
successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant
to Sections 2.02, 2.03, 3.12 and 10.01; and
(v) The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly
furnish or make available to each Rating Agency copies of the
following:
(i) Each report to Certificateholders described in Section
5.05, if requested by such Rating Agency;
(ii) Each annual statement as to compliance described in
Section 3.16; and
(iii) Each Attestation Report described in Section 3.17.
(c) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered at
or mailed by registered mail, return receipt requested, postage
prepaid, or by recognized overnight courier, or by facsimile
transmission to a number provided by the appropriate party if receipt
of such transmission is confirmed to 1) in the case of the Depositor,
Bear Xxxxxxx Asset Backed Securities I LLC, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000,
140
Attention: Chief Counsel, and with respect to Reg AB notifications to
the Depositor at xxxxxxxxxxxxxxxxxx@xxxx.xxx, or such other address as
may be hereafter furnished to the other parties hereto by the Depositor
in writing; 2) in the case of the Sponsor (or EMC), EMC Mortgage
Corporation, 0000 Xxxx Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxx 00000 (Facsimile:
(000) 000-0000), Attention: President or General Counsel, or such other
address as may be hereafter furnished to the other parties hereto by
EMC in writing; 3) in the case of the Trustee, at the Corporate Trust
Office or such other address as the Trustee may hereafter furnish to
the other parties hereto; 4) in the case of the Master Servicer, the
Securities Administrator, the Paying Agent, the Certificate Registrar
or the Custodian, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 (or, in the
case of overnight delivery, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx
21045), in either case: Attention: BSABS 2007-SD2; or such other
address as may be hereafter furnished to the other parties hereto by
the Master Servicer in writing; and 5) in the case of the Rating
Agencies, (x) Standard & Poor's, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Mortgage Surveillance Group, (y) Fitch
Ratings, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Department, and (z) Xxxxx'x Investors Service,
Inc., 00 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. Any notice
delivered to the Sponsor, the Depositor, the Master Servicer, the
Securities Administrator, the Custodian or the Trustee under this
Agreement shall be effective only upon receipt. Any notice required or
permitted to be mailed to a Certificateholder, unless otherwise
provided herein, shall be given by first-class mail, postage prepaid,
at the address of such Certificateholder as shown in the Certificate
Register; any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given,
whether or not the Certificateholder receives such notice.
Section 11.06. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or
terms of this Agreement shall be for any reason whatsoever held invalid, then
such covenants, agreements, provisions or terms shall be deemed severable from
the remaining covenants, agreements, provisions or terms of this Agreement and
shall in no way affect the validity or enforceability of the other provisions of
this Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.07. Assignment.
Notwithstanding anything to the contrary contained herein,
except as provided pursuant to Section 7.02, this Agreement may not be assigned
by the Master Servicer, the Sponsor or the Depositor.
Section 11.08. Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the Trust Fund, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
141
No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action or proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee or the
Securities Administrator, as appropriate, a written notice of an Event of
Default and of the continuance thereof, as hereinbefore provided, the Holders of
Certificates evidencing not less than 25% of the Voting Rights evidenced by the
Certificates shall also have made written request to the Trustee or the
Securities Administrator, as appropriate to institute such action, suit or
proceeding in its own name as Trustee or the Securities Administrator, as
appropriate, hereunder and shall have offered to the Trustee or the Securities
Administrator, as appropriate, such reasonable indemnity as it may require
against the costs, expenses, and liabilities to be incurred therein or thereby,
and the Trustee or the Securities Administrator, as appropriate, for 60 days
after its receipt of such notice, request and offer of indemnity shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 11.08, each
and every Certificateholder, the Trustee or the Securities Administrator shall
be entitled to such relief as can be given either at law or in equity.
Section 11.09. Inspection and Audit Rights.
(a) The Master Servicer agrees that, on reasonable prior
notice, it will permit any representative of the Depositor or the Trustee during
the Master Servicer's normal business hours, to examine all the books of
account, records, reports and other papers of the Master Servicer relating to
the Mortgage Loans, to make copies and extracts therefrom, to cause such books
to be audited by independent certified public accountants selected by the
Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to such Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Master Servicer hereby authorizes
such accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense incident to the exercise by the Depositor
or the Trustee of any right under this Section 11.09 shall be borne by the party
requesting such inspection, subject to any right to reimbursement of such party
hereunder (in the case of the Trustee, pursuant to Section 4.05(a)(xii) hereof);
all other such expenses shall be borne by the Master Servicer.
(b) The Custodian and the Securities Administrator shall each
provide access to the records and documentation in its possession regarding the
related Mortgage Loans and REO Property and the servicing thereof to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC, such access being afforded only upon reasonable prior written request and
during normal business hours at its respective office; provided, however, that,
unless otherwise required by law, neither the Custodian nor the Securities
Administrator shall be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Custodian and the Securities Administrator shall each
allow representatives of the above entities to photocopy any of the records and
documentation and shall provide equipment for that purpose at a charge that
covers its actual costs.
Section 11.10. Certificates Nonassessable and Fully Paid.
It is the intention of the Depositor that Certificateholders
shall not be personally liable for obligations of the Trust Fund, that the
interests in the Trust Fund represented by the Certificates shall be
142
nonassessable for any reason whatsoever, and that the Certificates, upon due
authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.
* * *
143
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the
Sponsor, the Securities Administrator and the Trustee have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
BEAR XXXXXXX ASSET BACKED SECURITIES I LLC,
as Depositor
By: /s/ Xxxxx Xxxxxxxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxxxxxxx
Title: Vice President
EMC MORTGAGE CORPORATION,
as Sponsor
By: /s/ Xxxx Xxxxxxxxxx
----------------------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Senior Vice President
XXXXX FARGO BANK, N.A.,
as Master Servicer and Securities Administrator
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
CITIBANK, N.A.,
as Trustee
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President
[Signature Page to the Pooling and Servicing Agreement]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 15th day of March 2007, before me, a notary public
in and for said State, appeared Xxxxx Xxxxxxxxxxx, personally known to me on
the basis of satisfactory evidence to be an authorized representative of Bear
Xxxxxxx Asset Backed Securities I LLC, the limited liability company that
executed the within instrument, and also known to me to be the person who
executed it on behalf of such corporation and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------------
Notary Public
[Notarial Seal]
STATE OF MARYLAND )
) ss.:
COUNTY OF BALTIMORE )
On this 15th day of March 2007, before me, a notary public
in and for said State, appeared Xxxxxx Xxxxxx, personally known to me on the
basis of satisfactory evidence to be an authorized representative 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 such national
banking association, and acknowledged to me that such national banking
association 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/ Xxxxxxxx Xxxxxxxxxx
------------------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
)ss.:
COUNTY OF XXXXXX )
On this 15th day of March 2007, before me, a notary public
in and for said State, appeared Xxxx Xxxxxxxxxx, personally known to me on the
basis of satisfactory evidence to be an authorized representative of EMC
Mortgage Corporation, the corporation that executed the within instrument, and
also known to me to be the person who executed it on behalf of such corporation
and acknowledged to me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
/s/ Xxxxx Xxxxxxx
------------------------------------
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On this 15th day of March 2007, before me, a notary public
in and for said State, appeared Xxxxxx Xxxxxxxx, personally known to me on the
basis of satisfactory evidence to be an authorized representative of Citibank,
N.A., one of the national banking associations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
such national banking association and acknowledged to me that such national
banking association 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 Xxxxxxxx
------------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS A CERTIFICATES
CLASS [____A-____] CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE SECURITIES
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ON THE RELATED MORTGAGE LOANS AS
SET FORTH IN THE AGREEMENT (AS DEFINED BELOW). ACCORDINGLY, FOLLOWING THE
INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE CERTIFICATE REGISTRAR WITH RESPECT HERETO.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
A-1-1
Certificate No.: _____
Cut-off Date: February 1, 2007
First Distribution Date: March 26, 2007
Initial Principal
Balance of
this Certificate
("Denomination"): $_____________
Initial Certificate
Principal Balance of
Class [__A-__]
Certificates: $_____________
Latest Possible
Maturity Date: February 25, 2037
CUSIP: 07386U ____
Interest Rate: [5.500% per annum]
[6.000% per annum]
[6.500% per annum]
[For any Distribution Date, the lesser of
(i) One-Month LIBOR for the related
Accrual Period plus the Class II-A-1
Margin for such Distribution Date, (ii)
11.50% per annum, and (iii) the related
Interest Rate Cap for such Distribution
Date]
[For any Distribution Date, the lesser of
(i) One-Month LIBOR for the related
Accrual Period plus the Class II-A-2
Margin for such Distribution Date, (ii)
11.50% per annum, and (iii) the related
Interest Rate Cap for such Distribution
Date]
A-1-2
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
evidencing a percentage interest in the distributions allocable to the
Class of Certificates indicated on the first page of this Certificate
with respect to a Trust Fund consisting of a pool of fixed rate,
adjustable rate and hybrid mortgage loans (the "Mortgage Loans"),
substantially all of which are fully or negatively amortizing and
secured primarily by first liens on one- to four-family residential
properties (the "Trust Assets").
The Certificate Principal Balance of this Certificate at any time may
be less than the Initial Certificate Principal Balance of this Certificate as
set forth herein. This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Sponsor, the Master
Servicer, the Securities Administrator, any Servicer or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor most
of the Trust Assets are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the same Class) in certain monthly distributions with respect to
a Trust Fund consisting of the Trust Assets deposited by Bear Xxxxxxx Asset
Backed Securities I LLC (the "Depositor"). The Trust Fund was created pursuant
to a Pooling and Servicing Agreement dated as of February 1, 2007 (the
"Agreement") among the Depositor, EMC Mortgage Corporation, as sponsor (the
"Sponsor"), Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator (in its capacity as the master servicer, the "Master Servicer" and
in its capacity as securities administrator, the "Securities Administrator") and
Citibank, N.A., as trustee (the "Trustee"). To the extent not defined herein,
the capitalized terms used herein have the meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the applicable Record Date in an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of the Certificates of the Class
indicated on the first page of this certificate on such Distribution Date
pursuant to Section 5.04 of the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the registered Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Paying Agent in writing at least
five Business Days prior to the related Record Date or, if not, by check mailed
by first class mail to the address of such Certificateholder appearing in the
Certificate Register. The final distribution on each Certificate will be made in
like manner, but only upon presentment and
A-1-3
surrender of such Certificate at the Corporate Trust Office of the Certificate
Registrar or such other location specified in the notice to Certificateholders
of such final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless the certificate of authentication
hereon has been manually executed by an authorized officer of the Certificate
Registrar.
* * *
A-1-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: March 15, 2007
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Securities Administrator
By:
-----------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-named Agreement
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Certificate Registrar
By:
-------------------------------------
Authorized Signatory
A-1-5
[REVERSE OF CERTIFICATE]
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
This Certificate is one of a duly authorized issue of Certificates
designated as Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset-Backed
Certificates, Series 2007-SD2, issued in multiple Classes (the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Paying Agent nor the Trustee is liable to
the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Sponsor, the Securities Administrator
and the Trustee with the consent of the Holders of each Class or Classes of
Certificates affected by such amendment evidencing over 50% of the Voting Rights
of such Class or Classes. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Master Servicer, the Securities Administrator and
the Trustee and any of their agents may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee, or
any such agent shall be affected by any notice to the contrary.
A-1-6
Subject to Section 10.03 of the Agreement, the obligations and
responsibilities of the Depositor, the Master Servicer, the Paying Agent, the
Sponsor, the Securities Administrator and the Trustee created under the
Agreement and with respect to the Loan Group to which this Class relates shall
terminate upon the earlier of (a) the purchase by the Sponsor of all of the
Mortgage Loans (and REO Properties) remaining in the related Loan Group at the
price equal to the sum of (i) 100% of the Stated Principal Balance of each
Mortgage Loan in such Loan Group (other than in respect of REO Property), (ii)
accrued interest thereon at the applicable Mortgage Rate, (iii) the appraised
value of any REO Property (up to the Stated Principal Balance of the related
Mortgage Loan), such appraisal to be conducted by an appraiser mutually agreed
upon by the Sponsor and the Securities Administrator, (iv) unreimbursed out-of
pocket costs of the related Servicer or Master Servicer with respect to the
related Loan Group, including unreimbursed servicing advances and the principal
portion of any unreimbursed Advances, made on the related Mortgage Loans prior
to the exercise of such repurchase right, (v) any unreimbursed costs and
expenses of the Securities Administrator and the Trustee with respect to the
related Loan Group payable pursuant to Section 9.05 of the Agreement and (vi)
any unreimbursed costs and expenses of the Custodian with respect to the related
Loan Group payable pursuant to the Custodial Agreement and (b) the later of (i)
the maturity or other liquidation (or any Advance with respect thereto) of the
last Mortgage Loan remaining in the related Loan Group and the disposition of
all related REO Property and (ii) the distribution to the related
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement, as applicable. In no event shall the trusts created pursuant to
the Agreement continue beyond the earlier of (i) the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. James's, living on the date
of the Agreement and (ii) the Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties with
respect to the related Loan Group pursuant to clause (a) above shall be
conditioned upon the Stated Principal Balance of all of the Mortgage Loans and
REO Properties in the related Loan Group, at the time of any such repurchase,
aggregating ten percent or less of the aggregate Cut-off Date Principal Balance
of all of the related Mortgage Loans.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-1-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
---------------------------------------
Signature by or on behalf of assignor
A-1-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
--------------------------------------------------------------------------------
for the account of ,
-------------------------------------------------------------
account number , or, if mailed by check, to
--------------- ----------------------
. Applicable
----------------------------------------------------------------
statements should be mailed to .
-------------------------------------------------
This information is provided by ,
--------------------------------------
the assignee named above, or , as its agent.
-----------------------------------
X-0-0
XXXXXXX X-0
FORM OF CLASS B AND CLASS M CERTIFICATES
----------------------------------------
CLASS [__B-__] AND [__M-__] CERTIFICATE
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE SECURITIES
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ON THE RELATED MORTGAGE LOANS AS
SET FORTH IN THE AGREEMENT (AS DEFINED BELOW). ACCORDINGLY, FOLLOWING THE
INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE CERTIFICATE REGISTRAR WITH RESPECT HERETO.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
[THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 6.02 OF THE AGREEMENT REFERRED TO HEREIN.]
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF,
AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE
TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A
CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE
A-2-1
TRUST AND ITS ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS
NOT COVERED UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION,
INCLUDING, BUT NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14,
XXX 00-00, XXX 00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY
ADDITIONAL OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED
REPRESENTED BY AN OWNER OF A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE, OR
AN OPINION SPECIFIED IN SECTION 6.02 OF THE AGREEMENT IS PROVIDED.
Certificate No.: _____
Cut-off Date: February 1, 2007
First Distribution Date: March 26, 2007
Initial Principal
Balance of
this Certificate
("Denomination"): $____________
Initial Certificate
Principal Balance of
Class [__B-__][__M-__]
Certificates: $____________
Latest Possible
Maturity Date: February 25, 2037
CUSIP: 07386U ____
Interest Rate: [For any Distribution Date, a variable
pass-through rate equal to the weighted average
of the pass-through rates per annum for each
class of Class I-A Certificates, weighted in
proportion to the excess of the aggregate stated
principal balance of each related sub-loan group
over the aggregate certificate principal balance
of the senior certificates related to such
sub-loan group]
[For any Distribution Date, a variable
pass-through rate equal to the weighted average
of the weighted average of the net mortgage rates
of the mortgage loans in each sub-loan group in
loan group II, weighted in proportion to the
excess of the aggregate stated principal balance
of each such sub-loan group over the aggregate
certificate principal balance of the senior
certificates related to such sub-loan group]
A-2-2
[For any Distribution Date, the lesser of (i)
One-Month LIBOR for the related Accrual Period
plus the Class II-M-1 Margin for such
Distribution Date, (ii) 11.50% per annum, and
(iii) the related Interest Rate Cap for such
Distribution Date]
[For any Distribution Date, the lesser of (i)
One-Month LIBOR for the related Accrual Period
plus the Class II-M-2 Margin for such
Distribution Date, (ii) 11.50% per annum, and
(iii) the related Interest Rate Cap for such
Distribution Date]
[For any Distribution Date, the lesser of (i)
One-Month LIBOR for the related Accrual Period
plus the Class II-M-3 Margin for such
Distribution Date, (ii) 11.50% per annum, and
(iii) the related Interest Rate Cap for such
Distribution Date]
[For any Distribution Date, the lesser of (i)
One-Month LIBOR for the related Accrual Period
plus the Class II-M-4 Margin for such
Distribution Date, (ii) 11.50% per annum, and
(iii) the related Interest Rate Cap for such
Distribution Date]
[For any Distribution Date, the lesser of (i)
One-Month LIBOR for the related Accrual Period
plus the Class II-M-5 Margin for such
Distribution Date, (ii) 11.50% per annum, and
(iii) the related Interest Rate Cap for such
Distribution Date]
A-2-3
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
evidencing a percentage interest in the distributions allocable to the
Class of Certificates indicated on the first page of this Certificate
with respect to a Trust Fund consisting of a pool of fixed rate,
adjustable rate and hybrid mortgage loans (the "Mortgage Loans"),
substantially all of which are fully or negatively amortizing and
secured primarily by first liens on one- to four-family residential
properties (the "Trust Assets").
The Certificate Principal Balance of this Certificate at any time may
be less than the Initial Certificate Principal Balance of this Certificate as
set forth herein. This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Sponsor, the Master
Servicer, the Securities Administrator, any Servicer or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor most
of the Trust Assets are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that [CEDE & CO.][BEAR, XXXXXXX SECURITIES CORP.] is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate of
the denominations of all Certificates of the same Class) in certain monthly
distributions with respect to a Trust Fund consisting of the Trust Assets
deposited by Bear Xxxxxxx Asset Backed Securities I LLC (the "Depositor"). The
Trust Fund was created pursuant to a Pooling and Servicing Agreement dated as of
February 1, 2007 (the "Agreement") among the Depositor, EMC Mortgage
Corporation, as sponsor (the "Sponsor"), Xxxxx Fargo Bank, N.A., as master
servicer and securities administrator (in its capacity as the master servicer,
the "Master Servicer" and in its capacity as securities administrator, the
"Securities Administrator") and Citibank, N.A., as trustee (the "Trustee"). To
the extent not defined herein, the capitalized terms used herein have the
meanings assigned to them in the Agreement. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the applicable Record Date in an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of the Certificates of the Class
indicated on the first page of this certificate on such Distribution Date
pursuant to Section 5.04 of the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the registered Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Paying Agent in writing at least
five Business Days prior to the related Record Date or, if not, by check mailed
by first class mail to the address of such Certificateholder appearing in the
Certificate Register. The final distribution on each Certificate will be made in
like manner, but only upon presentment and
A-2-4
surrender of such Certificate at the Corporate Trust Office of the Certificate
Registrar or such other location specified in the notice to Certificateholders
of such final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless the certificate of authentication
hereon has been manually executed by an authorized officer of the Certificate
Registrar.
* * *
A-2-5
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: March 15, 2007
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Securities Administrator
By:
-----------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-named Agreement
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Certificate Registrar
By:
-------------------------------------
Authorized Signatory
A-2-6
[REVERSE OF CERTIFICATE]
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
This Certificate is one of a duly authorized issue of Certificates
designated as Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset-Backed
Certificates, Series 2007-SD2, issued in multiple Classes (the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Paying Agent nor the Trustee is liable to
the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Sponsor, the Securities Administrator
and the Trustee with the consent of the Holders of each Class or Classes of
Certificates affected by such amendment evidencing over 50% of the Voting Rights
of such Class or Classes. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Master Servicer, the Securities Administrator and
the Trustee and any of their agents may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee, or
any such agent shall be affected by any notice to the contrary.
A-2-7
Subject to Section 10.03 of the Agreement, the obligations and
responsibilities of the Depositor, the Master Servicer, the Paying Agent, the
Sponsor, the Securities Administrator and the Trustee created under the
Agreement and with respect to the Loan Group to which this Class relates shall
terminate upon the earlier of (a) the purchase by the Sponsor of all of the
Mortgage Loans (and REO Properties) remaining in the related Loan Group at the
price equal to the sum of (i) 100% of the Stated Principal Balance of each
Mortgage Loan in such Loan Group (other than in respect of REO Property), (ii)
accrued interest thereon at the applicable Mortgage Rate, (iii) the appraised
value of any REO Property (up to the Stated Principal Balance of the related
Mortgage Loan), such appraisal to be conducted by an appraiser mutually agreed
upon by the Sponsor and the Securities Administrator, (iv) unreimbursed out-of
pocket costs of the related Servicer or Master Servicer with respect to the
related Loan Group, including unreimbursed servicing advances and the principal
portion of any unreimbursed Advances, made on the related Mortgage Loans prior
to the exercise of such repurchase right, (v) any unreimbursed costs and
expenses of the Securities Administrator and the Trustee with respect to the
related Loan Group payable pursuant to Section 9.05 of the Agreement and (vi)
any unreimbursed costs and expenses of the Custodian with respect to the related
Loan Group payable pursuant to the Custodial Agreement and (b) the later of (i)
the maturity or other liquidation (or any Advance with respect thereto) of the
last Mortgage Loan remaining in the related Loan Group and the disposition of
all related REO Property and (ii) the distribution to the related
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement, as applicable. In no event shall the trusts created pursuant to
the Agreement continue beyond the earlier of (i) the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. James's, living on the date
of the Agreement and (ii) the Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties with
respect to the related Loan Group pursuant to clause (a) above shall be
conditioned upon the Stated Principal Balance of all of the Mortgage Loans and
REO Properties in the related Loan Group, at the time of any such repurchase,
aggregating ten percent or less of the aggregate Cut-off Date Principal Balance
of all of the related Mortgage Loans.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-2-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
---------------------------------------
Signature by or on behalf of assignor
A-2-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
--------------------------------------------------------------------------------
for the account of ,
-------------------------------------------------------------
account number , or, if mailed by check, to
--------------- ----------------------
. Applicable
----------------------------------------------------------------
statements should be mailed to .
-------------------------------------------------
This information is provided by ,
--------------------------------------
the assignee named above, or , as its agent.
-----------------------------------
X-0-00
XXXXXXX X-0
FORM OF CLASS I-PO CERTIFICATES
-------------------------------
CLASS I-PO CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE SECURITIES
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE CERTIFICATE PRINCIPAL BALANCE OF THIS CERTIFICATE WILL BE DECREASED BY THE
PRINCIPAL PAYMENTS HEREON AND REALIZED LOSSES ON THE RELATED MORTGAGE LOANS AS
SET FORTH IN THE AGREEMENT (AS DEFINED BELOW). ACCORDINGLY, FOLLOWING THE
INITIAL ISSUANCE OF THE CERTIFICATES, THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION SHOWN BELOW. ANYONE
ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CERTIFICATE PRINCIPAL BALANCE BY
INQUIRY OF THE CERTIFICATE REGISTRAR WITH RESPECT HERETO.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE IS A PRINCIPAL-ONLY CERTIFICATE AND DOES NOT BEAR INTEREST.
A-3-1
Certificate No.: _____
Cut-off Date: February 1, 2007
First Distribution Date: March 26, 2007
Initial Principal
Balance of
this Certificate
("Denomination"): $___________
Initial Certificate
Principal Balance of this
Class I-PO
Certificates: $___________
Latest Possible
Maturity Date: February 25, 2037
CUSIP: 07386U _____
Interest Rate: N/A
A-3-2
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
evidencing a percentage interest in the distributions allocable to the
Class of Certificates indicated on the first page of this Certificate
with respect to a Trust Fund consisting of a pool of fixed rate,
adjustable rate and hybrid mortgage loans (the "Mortgage Loans"),
substantially all of which are fully or negatively amortizing and
secured primarily by first liens on one- to four-family residential
properties (the "Trust Assets").
The Certificate Principal Balance of this Certificate at any time may
be less than the Initial Certificate Principal Balance of this Certificate as
set forth herein. This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Sponsor, the Master
Servicer, the Securities Administrator, any Servicer or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor most
of the Trust Assets are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the same Class) in certain monthly distributions with respect to
a Trust Fund consisting of the Trust Assets deposited by Bear Xxxxxxx Asset
Backed Securities I LLC (the "Depositor"). The Trust Fund was created pursuant
to a Pooling and Servicing Agreement dated as of February 1, 2007 (the
"Agreement") among the Depositor, EMC Mortgage Corporation, as sponsor (the
"Sponsor"), Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator (in its capacity as the master servicer, the "Master Servicer" and
in its capacity as securities administrator, the "Securities Administrator") and
Citibank, N.A., as trustee (the "Trustee"). To the extent not defined herein,
the capitalized terms used herein have the meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the applicable Record Date in an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of the Certificates of the Class
indicated on the first page of this certificate on such Distribution Date
pursuant to Section 5.04 of the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the registered Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Paying Agent in writing at least
five Business Days prior to the related Record Date or, if not, by check mailed
by first class mail to the address of such Certificateholder appearing in the
Certificate Register. The final distribution on each Certificate will be made in
like manner, but only upon presentment and
A-3-3
surrender of such Certificate at the Corporate Trust Office of the Certificate
Registrar or such other location specified in the notice to Certificateholders
of such final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless the certificate of authentication
hereon has been manually executed by an authorized officer of the Certificate
Registrar.
* * *
A-3-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: March 15, 2007
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Securities Administrator
By:
------------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-named Agreement
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Certificate Registrar
By:
--------------------------------------
Authorized Signatory
A-3-5
[REVERSE OF CERTIFICATE]
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
This Certificate is one of a duly authorized issue of Certificates
designated as Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset-Backed
Certificates, Series 2007-SD2, issued in multiple Classes (the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Paying Agent nor the Trustee is liable to
the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Sponsor, the Securities Administrator
and the Trustee with the consent of the Holders of each Class or Classes of
Certificates affected by such amendment evidencing over 50% of the Voting Rights
of such Class or Classes. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Master Servicer, the Securities Administrator and
the Trustee and any of their agents may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee, or
any such agent shall be affected by any notice to the contrary.
A-3-6
Subject to Section 10.03 of the Agreement, the obligations and
responsibilities of the Depositor, the Master Servicer, the Paying Agent, the
Sponsor, the Securities Administrator and the Trustee created under the
Agreement and with respect to the Loan Group to which this Class relates shall
terminate upon the earlier of (a) the purchase by the Sponsor of all of the
Mortgage Loans (and REO Properties) remaining in the related Loan Group at the
price equal to the sum of (i) 100% of the Stated Principal Balance of each
Mortgage Loan in such Loan Group (other than in respect of REO Property), (ii)
accrued interest thereon at the applicable Mortgage Rate, (iii) the appraised
value of any REO Property (up to the Stated Principal Balance of the related
Mortgage Loan), such appraisal to be conducted by an appraiser mutually agreed
upon by the Sponsor and the Securities Administrator, (iv) unreimbursed out-of
pocket costs of the related Servicer or Master Servicer with respect to the
related Loan Group, including unreimbursed servicing advances and the principal
portion of any unreimbursed Advances, made on the related Mortgage Loans prior
to the exercise of such repurchase right, (v) any unreimbursed costs and
expenses of the Securities Administrator and the Trustee with respect to the
related Loan Group payable pursuant to Section 9.05 of the Agreement and (vi)
any unreimbursed costs and expenses of the Custodian with respect to the related
Loan Group payable pursuant to the Custodial Agreement and (b) the later of (i)
the maturity or other liquidation (or any Advance with respect thereto) of the
last Mortgage Loan remaining in the related Loan Group and the disposition of
all related REO Property and (ii) the distribution to the related
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement, as applicable. In no event shall the trusts created pursuant to
the Agreement continue beyond the earlier of (i) the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. James's, living on the date
of the Agreement and (ii) the Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties with
respect to the related Loan Group pursuant to clause (a) above shall be
conditioned upon the Stated Principal Balance of all of the Mortgage Loans and
REO Properties in the related Loan Group, at the time of any such repurchase,
aggregating ten percent or less of the aggregate Cut-off Date Principal Balance
of all of the related Mortgage Loans.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-3-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
---------------------------------------
Signature by or on behalf of assignor
A-3-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
--------------------------------------------------------------------------------
for the account of ,
-------------------------------------------------------------
account number , or, if mailed by check, to
--------------- ----------------------
. Applicable
----------------------------------------------------------------
statements should be mailed to .
-------------------------------------------------
This information is provided by ,
--------------------------------------
the assignee named above, or , as its agent.
-----------------------------------
X-0-0
XXXXXXX X-0
FORM OF CLASS [___-P] CERTIFICATES
----------------------------------
CLASS P CERTIFICATE
THIS CERTIFICATE IS ENTITLED TO ONLY THOSE DISTRIBUTIONS PROVIDED FOR IN THE
AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 6.02 OF THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF,
AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE
TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A
CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS
ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED
UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT
NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX
00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE
MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF
A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE, OR AN OPINION SPECIFIED IN
SECTION 6.02 OF THE AGREEMENT IS PROVIDED.
A-4-1
Certificate No.: _____
Cut-off Date: February 1, 2007
First Distribution Date: March 26, 2007
Initial Notional
Balance of
this Certificate
("Denomination"): $___________
Initial Notional Balance
of this
Class [__-P]
Certificates: $___________
Latest Possible
Maturity Date: [February] [December] 1, 2010
CUSIP: 07386U ____
Interest Rate: N/A
A-4-2
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
evidencing a percentage interest in the distributions allocable to the
Class of Certificates indicated on the first page of this Certificate
with respect to a Trust Fund consisting of a pool of fixed rate,
adjustable rate and hybrid mortgage loans (the "Mortgage Loans"),
substantially all of which are fully or negatively amortizing and
secured primarily by first liens on one- to four-family residential
properties (the "Trust Assets").
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Securities Administrator, any
Servicer, the Sponsor, Master Servicer, or the Trustee referred to below or any
of their respective affiliates. Neither this Certificate nor most of the Trust
Assets are guaranteed or insured by any governmental agency or instrumentality.
This certifies that BEAR, XXXXXXX SECURITIES CORP. is the registered
owner of the Percentage Interest evidenced by this Certificate in certain
monthly distributions with respect to a Trust Fund consisting of the Mortgage
Loans deposited by Bear Xxxxxxx Asset Backed Securities I LLC (the "Depositor").
The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated
as of February 1, 2007 (the "Agreement") among the Depositor, EMC Mortgage
Corporation, as sponsor (the "Sponsor"), Xxxxx Fargo Bank, N.A., as master
servicer and securities administrator (in its capacity as the master servicer,
the "Master Servicer" and in its capacity as securities administrator, the
"Securities Administrator") and Citibank, N.A., as trustee (the "Trustee"). To
the extent not defined herein, the capitalized terms used herein have the
meanings assigned to them in the Agreement. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the applicable Record Date in an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of the Certificates of the Class
indicated on the first page of this certificate on such Distribution Date
pursuant to Section 5.04 of the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the registered Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Paying Agent in writing at least
five Business Days prior to the related Record Date or, if not, by check mailed
by first class mail to the address of such Certificateholder appearing in the
Certificate Register. The final distribution on each Certificate will be made in
like manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office of the Certificate Registrar or such other location
specified in the notice to Certificateholders of such final distribution.
A-4-3
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless the certificate of authentication
hereon has been manually executed by an authorized officer of the Certificate
Registrar.
* * *
A-4-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: March 15, 2007
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Securities Administrator
By:
------------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-named Agreement
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Certificate Registrar
By:
--------------------------------------
Authorized Signatory
A-4-5
[REVERSE OF CERTIFICATE]
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
This Certificate is one of a duly authorized issue of Certificates
designated as Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset-Backed
Certificates, Series 2007-SD2, issued in multiple Classes (the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Paying Agent nor the Trustee is liable to
the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Sponsor, the Securities Administrator
and the Trustee with the consent of the Holders of each Class or Classes of
Certificates affected by such amendment evidencing over 50% of the Voting Rights
of such Class or Classes. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Master Servicer, the Securities Administrator and
the Trustee and any of their agents may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee, or
any such agent shall be affected by any notice to the contrary.
A-4-6
Subject to Section 10.03 of the Agreement, the obligations and
responsibilities of the Depositor, the Master Servicer, the Paying Agent, the
Sponsor, the Securities Administrator and the Trustee created under the
Agreement and with respect to the Loan Group to which this Class relates shall
terminate upon the earlier of (a) the purchase by the Sponsor of all of the
Mortgage Loans (and REO Properties) remaining in the related Loan Group at the
price equal to the sum of (i) 100% of the Stated Principal Balance of each
Mortgage Loan in such Loan Group (other than in respect of REO Property), (ii)
accrued interest thereon at the applicable Mortgage Rate, (iii) the appraised
value of any REO Property (up to the Stated Principal Balance of the related
Mortgage Loan), such appraisal to be conducted by an appraiser mutually agreed
upon by the Sponsor and the Securities Administrator, (iv) unreimbursed out-of
pocket costs of the related Servicer or Master Servicer with respect to the
related Loan Group, including unreimbursed servicing advances and the principal
portion of any unreimbursed Advances, made on the related Mortgage Loans prior
to the exercise of such repurchase right, (v) any unreimbursed costs and
expenses of the Securities Administrator and the Trustee with respect to the
related Loan Group payable pursuant to Section 9.05 of the Agreement and (vi)
any unreimbursed costs and expenses of the Custodian with respect to the related
Loan Group payable pursuant to the Custodial Agreement and (b) the later of (i)
the maturity or other liquidation (or any Advance with respect thereto) of the
last Mortgage Loan remaining in the related Loan Group and the disposition of
all related REO Property and (ii) the distribution to the related
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement, as applicable. In no event shall the trusts created pursuant to
the Agreement continue beyond the earlier of (i) the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. James's, living on the date
of the Agreement and (ii) the Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties with
respect to the related Loan Group pursuant to clause (a) above shall be
conditioned upon the Stated Principal Balance of all of the Mortgage Loans and
REO Properties in the related Loan Group, at the time of any such repurchase,
aggregating ten percent or less of the aggregate Cut-off Date Principal Balance
of all of the related Mortgage Loans.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-4-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
---------------------------------------
Signature by or on behalf of assignor
A-4-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
--------------------------------------------------------------------------------
for the account of ,
-------------------------------------------------------------
account number , or, if mailed by check, to
--------------- ----------------------
. Applicable
----------------------------------------------------------------
statements should be mailed to .
-------------------------------------------------
This information is provided by ,
--------------------------------------
the assignee named above, or , as its agent.
-----------------------------------
X-0-0
XXXXXXX X-0
FORM OF CLASS X CERTIFICATES
CLASS I-X CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE SECURITIES
ADMINISTRATOR OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THE NOTIONAL AMOUNT OF THIS CERTIFICATE WILL BE DECREASED BY PRINCIPAL PAYMENTS
TO THE APPLICABLE GROUP I MORTGAGE LOANS AND REALIZED LOSSES ALLOCABLE THERETO.
ACCORDINGLY, FOLLOWING THE INITIAL ISSUANCE OF THE CERTIFICATES, THE CURRENT
NOTIONAL AMOUNT OF THIS CERTIFICATE WILL BE DIFFERENT FROM THE DENOMINATION
SHOWN BELOW. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
NOTIONAL AMOUNT BY INQUIRY OF THE CERTIFICATE REGISTRAR WITH RESPECT HERETO.
A-5-1
Certificate No.: 1
Cut-off Date: February 1, 2007
First Distribution Date: March 26, 2007
Initial Notional
Amount of
this Certificate
("Denomination"): $__________
Initial Certificate
Notional Amount of this
Class I-X
Certificates: $__________
Latest Possible
Maturity Date: February 25, 2037
CUSIP: 07386U ___
Interest Rate: For any Distribution Date, will be
equal to the excess, if any, of (a) the
weighted average of the net mortgage
rates of the sub-loan group I-3 mortgage
loans with a net mortgage rate greater
than or equal to 6.500% per annum, over
(b) 6.500% per annum
A-5-2
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
Asset-Backed Certificates, Series 2007-SD2
evidencing a percentage interest in the distributions allocable to the
Class of Certificates indicated on the first page of this Certificate
with respect to a Trust Fund consisting of a pool of fixed rate,
adjustable rate and hybrid mortgage loans (the "Mortgage Loans"),
substantially all of which are fully or negatively amortizing and
secured primarily by first liens on one- to four-family residential
properties (the "Trust Assets").
The Notional Amount of this Certificate at any time may be less than
the Initial Notional Amount of this Certificate as set forth herein. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Sponsor, the Master Servicer, the Securities
Administrator, any Servicer or the Trustee referred to below or any of their
respective affiliates. Neither this Certificate nor most of the Trust Assets are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the same Class) in certain monthly distributions with respect to
a Trust Fund consisting of the Trust Assets deposited by Bear Xxxxxxx Asset
Backed Securities I LLC (the "Depositor"). The Trust Fund was created pursuant
to a Pooling and Servicing Agreement dated as of February 1, 2007 (the
"Agreement") among the Depositor, EMC Mortgage Corporation, as sponsor (the
"Sponsor"), Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator (in its capacity as the master servicer, the "Master Servicer" and
in its capacity as securities administrator, the "Securities Administrator") and
Citibank, N.A., as trustee (the "Trustee"). To the extent not defined herein,
the capitalized terms used herein have the meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the applicable Record Date in an amount equal to
the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of the Certificates of the Class
indicated on the first page of this certificate on such Distribution Date
pursuant to Section 5.04 of the Agreement.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the registered Holder hereof at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Paying Agent in writing at least
five Business Days prior to the related Record Date or, if not, by check mailed
by first class mail to the address of such Certificateholder appearing in the
Certificate Register. The final distribution on each Certificate will be made in
like manner, but only upon presentment and
A-5-3
surrender of such Certificate at the Corporate Trust Office of the Certificate
Registrar or such other location specified in the notice to Certificateholders
of such final distribution.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless the certificate of authentication
hereon has been manually executed by an authorized officer of the Certificate
Registrar.
* * *
A-5-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: March 15, 2007
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Securities Administrator
By:
------------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-named Agreement
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Certificate Registrar
By:
--------------------------------------
Authorized Signatory
A-5-5
[REVERSE OF CERTIFICATE]
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
This Certificate is one of a duly authorized issue of Certificates
designated as Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset-Backed
Certificates, Series 2007-SD2, issued in multiple Classes (the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Paying Agent nor the Trustee is liable to
the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Sponsor, the Securities Administrator
and the Trustee with the consent of the Holders of each Class or Classes of
Certificates affected by such amendment evidencing over 50% of the Voting Rights
of such Class or Classes. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Master Servicer, the Securities Administrator and
the Trustee and any of their agents may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee, or
any such agent shall be affected by any notice to the contrary.
A-5-6
Subject to Section 10.03 of the Agreement, the obligations and
responsibilities of the Depositor, the Master Servicer, the Paying Agent, the
Sponsor, the Securities Administrator and the Trustee created under the
Agreement and with respect to the Loan Group to which this Class relates shall
terminate upon the earlier of (a) the purchase by the Sponsor of all of the
Mortgage Loans (and REO Properties) remaining in the related Loan Group at the
price equal to the sum of (i) 100% of the Stated Principal Balance of each
Mortgage Loan in such Loan Group (other than in respect of REO Property), (ii)
accrued interest thereon at the applicable Mortgage Rate, (iii) the appraised
value of any REO Property (up to the Stated Principal Balance of the related
Mortgage Loan), such appraisal to be conducted by an appraiser mutually agreed
upon by the Sponsor and the Securities Administrator, (iv) unreimbursed out-of
pocket costs of the related Servicer or Master Servicer with respect to the
related Loan Group, including unreimbursed servicing advances and the principal
portion of any unreimbursed Advances, made on the related Mortgage Loans prior
to the exercise of such repurchase right, (v) any unreimbursed costs and
expenses of the Securities Administrator and the Trustee with respect to the
related Loan Group payable pursuant to Section 9.05 of the Agreement and (vi)
any unreimbursed costs and expenses of the Custodian with respect to the related
Loan Group payable pursuant to the Custodial Agreement and (b) the later of (i)
the maturity or other liquidation (or any Advance with respect thereto) of the
last Mortgage Loan remaining in the related Loan Group and the disposition of
all related REO Property and (ii) the distribution to the related
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement, as applicable. In no event shall the trusts created pursuant to
the Agreement continue beyond the earlier of (i) the expiration of 21 years from
the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. James's, living on the date
of the Agreement and (ii) the Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties with
respect to the related Loan Group pursuant to clause (a) above shall be
conditioned upon the Stated Principal Balance of all of the Mortgage Loans and
REO Properties in the related Loan Group, at the time of any such repurchase,
aggregating ten percent or less of the aggregate Cut-off Date Principal Balance
of all of the related Mortgage Loans.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-5-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
---------------------------------------
Signature by or on behalf of assignor
A-5-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
--------------------------------------------------------------------------------
for the account of ,
-------------------------------------------------------------
account number , or, if mailed by check, to
--------------- ----------------------
. Applicable
----------------------------------------------------------------
statements should be mailed to .
-------------------------------------------------
This information is provided by ,
--------------------------------------
the assignee named above, or , as its agent.
-----------------------------------
X-0-0
XXXXXXX X-0
FORM OF CLASS B-IO CERTIFICATES
CLASS B-IO CERTIFICATE
THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT TO CERTAIN CERTIFICATES AS
DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NO PRINCIPAL BALANCE AND IS ENTITLED TO ONLY THOSE
DISTRIBUTIONS PROVIDED FOR IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 6.02 OF THE AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER (I) A CERTIFICATION PURSUANT TO SECTION 6.02(b) OF
THE AGREEMENT OR (II) AN OPINION OF COUNSEL PURSUANT TO 6.02(b) OF THE
AGREEMENT, SATISFACTORY TO THE SECURITIES ADMINISTRATOR THAT THE PURCHASE AND
HOLDING OF THIS CERTIFICATE ARE PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN ANY NON-EXEMPT PROHIBITED TRANSACTIONS UNDER SECTION 406
OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE TRUSTEE, MASTER SERVICER, THE
SECURITIES ADMINISTRATOR, OR THE DEPOSITOR TO ANY OBLIGATION OR LIABILITY IN
ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
A-6-1
Certificate No.: _____
Cut-off Date: January 1, 2007
First Distribution Date: February 26, 2007
Initial Notional
Balance of
this Certificate
("Denomination"): $__________
Initial Certificate
Notional Balance of this
Class I-X
Certificates: $__________
Latest Possible
Maturity Date: February 25, 2037
CUSIP: 07386U ___
N/A
A-6-2
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
evidencing a percentage interest in the distributions allocable to the
Class of Certificates indicated on the first page of this Certificate
with respect to a Trust Fund consisting of a pool of fixed rate,
adjustable rate and hybrid mortgage loans (the "Mortgage Loans"),
substantially all of which are fully or negatively amortizing and
secured primarily by first liens on one- to four-family residential
properties (the "Trust Assets").
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Sponsor, the Master Servicer, the
Securities Administrator, any Servicer or the Trustee referred to below or any
of their respective affiliates. Neither this Certificate nor most of the Trust
Assets are guaranteed or insured by any governmental agency or instrumentality.
This certifies that BEAR, XXXXXXX SECURITIES CORP. is the registered
owner of the Percentage Interest evidenced by this Certificate in certain
monthly distributions with respect to a Trust Fund consisting of the Trust
Assets (obtained by dividing the denomination of this Certificate by the
aggregate denominations of all Certificates of the same Class) deposited by Bear
Xxxxxxx Asset Backed Securities I LLC (the "Depositor"). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as of February 1,
2007 (the "Agreement") among the Depositor, EMC Mortgage Corporation, as sponsor
(the "Sponsor"), Xxxxx Fargo Bank, N.A., as master servicer and securities
administrator (in its capacity as the master servicer, the "Master Servicer" and
in its capacity as securities administrator, the "Securities Administrator") and
Citibank, N.A., as trustee (the "Trustee"). To the extent not defined herein,
the capitalized terms used herein have the meanings assigned to them in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
This Certificate has a notional principal balance and does not bear
interest at a specified rate. It is entitled on each Distribution Date to its
Percentage Interest of distributions of any remaining Excess Cashflow after all
other classes of Certificates (other than the Residual Certificates) have
received amounts to which they are entitled.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless the certificate of authentication
hereon has been manually executed by an authorized officer of the Certificate
Registrar.
* * *
A-6-3
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: March 15, 2007
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Securities Administrator
By:
------------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-named Agreement
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Certificate Registrar
By:
--------------------------------------
Authorized Signatory
A-6-4
[REVERSE OF CERTIFICATE]
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
This Certificate is one of a duly authorized issue of Certificates
designated as Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset-Backed
Certificates, Series 2007-SD2, issued in multiple Classes (the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Paying Agent nor the Trustee is liable to
the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Sponsor, the Securities Administrator
and the Trustee with the consent of the Holders of each Class or Classes of
Certificates affected by such amendment evidencing over 50% of the Voting Rights
of such Class or Classes. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Master Servicer, the Securities Administrator and
the Trustee and any of their agents may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee, or
any such agent shall be affected by any notice to the contrary.
A-6-5
Subject to Section 10.03 of the Agreement, the obligations and
responsibilities of the Depositor, the Master Servicer, the Paying Agent, the
Sponsor, the Securities Administrator and the Trustee created under the
Agreement shall terminate upon the earlier of (a) the purchase by the Sponsor of
all of the Mortgage Loans (and REO Properties) remaining in the Trust Fund at
the price equal to the sum of (i) 100% of the Stated Principal Balance of each
Mortgage Loan (other than in respect of REO Property), (ii) accrued interest
thereon at the applicable Mortgage Rate, (iii) the appraised value of any REO
Property (up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Sponsor
and the Securities Administrator, (iv) unreimbursed out-of pocket costs of the
related Servicer or Master Servicer, including unreimbursed servicing advances
and the principal portion of any unreimbursed Advances, made on the related
Mortgage Loans prior to the exercise of such repurchase right, (v) any
unreimbursed costs and expenses of the Securities Administrator and the Trustee
payable pursuant to Section 9.05 of the Agreement and (vi) any unreimbursed
costs and expenses of the Custodian payable pursuant to the Custodial Agreement
and (b) the later of (i) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to the Agreement, as
applicable. In no event shall the trusts created pursuant to the Agreement
continue beyond the earlier of (i) the expiration of 21 years from the death of
the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador
of the United States to the Court of St. James's, living on the date of the
Agreement and (ii) the Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties pursuant
to clause (a) above shall be conditioned upon the Stated Principal Balance of
all of the Mortgage Loans and REO Properties in the Trust Fund, at the time of
any such repurchase, aggregating ten percent or less of the aggregate Cut-off
Date principal Balance of all of the Mortgage Loans.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-6-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
---------------------------------------
Signature by or on behalf of assignor
A-6-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
--------------------------------------------------------------------------------
for the account of ,
-------------------------------------------------------------
account number , or, if mailed by check, to
--------------- ----------------------
. Applicable
----------------------------------------------------------------
statements should be mailed to .
-------------------------------------------------
This information is provided by ,
--------------------------------------
the assignee named above, or , as its agent.
-----------------------------------
X-0-0
XXXXXXX X-0
FORM OF CLASS R CERTIFICATES
CLASS [R-__] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 6.02 OF THE AGREEMENT REFERRED TO HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A RESIDUAL INTEREST IN
A "REMIC" AS DEFINED IN THE AGREEMENT REFERRED TO BELOW, WHICH IS A "REAL ESTATE
MORTGAGE INVESTMENT CONDUIT" (A "REMIC") AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED (THE "CODE"), AND IS NOT TREATED AS INDEBTEDNESS OF THE TRUST REFERRED
TO BELOW. EACH PURCHASER OF THE INTEREST REPRESENTED BY THIS CERTIFICATE WILL BE
REQUIRED TO REPRESENT IN AN AFFIDAVIT THAT IS A "PERMITTED TRANSFEREE" AS
DEFINED IN THE AGREEMENT REFERRED TO HEREIN. EACH PURCHASER WILL ALSO BE
REQUIRED TO REPRESENT IN SUCH AFFIDAVIT THAT IT WILL NOT TRANSFER THIS
CERTIFICATE UNLESS IT HAS OBTAINED A SIMILAR AFFIDAVIT FROM THE PROPOSED
TRANSFEREE AND DELIVERS A CERTIFICATE TO THE EFFECT THAT THE TRANSFEREE HAS NO
ACTUAL KNOWLEDGE THAT THE PROPOSED TRANSFEREE IS NOT A PERMITTED TRANSFEREE. THE
PARTIES TO THE AGREEMENT MAY, WITHOUT THE CONSENT OF THE CERTIFICATEHOLDERS,
AMEND THE AGREEMENT TO THE EXTENT NECESSARY OR APPROPRIATE TO MAINTAIN THE
QUALIFICATION OF EACH OF REMIC I AND REMIC II AS A REMIC UNDER THE CODE OR TO
AVOID OR MINIMIZE THE RISK OF THE IMPOSITION OF ANY TAX ON EITHER OF REMIC I OR
REMIC II PURSUANT TO THE CODE, THAT WOULD BE A CLAIM AGAINST EITHER OF REMIC I
OR REMIC II AT ANY TIME PRIOR TO THE FINAL REDEMPTION OF THE CERTIFICATES,
PROVIDED THAT THE SECURITIES ADMINISTRATOR AND THE TRUSTEE HAS RECEIVED AN
OPINION OF COUNSEL ADDRESSED TO THE SECURITIES ADMINISTRATOR AND THE
TRUSTEE TO THE EFFECT THAT SUCH ACTION IS NECESSARY OR APPROPRIATE TO MAINTAIN
SUCH REMIC STATUS OR TO AVOID THE IMPOSITION OF SUCH A TAX.
A-7-1
THIS CERTIFICATE MAY NOT BE ACQUIRED DIRECTLY OR INDIRECTLY BY, OR ON BEHALF OF,
AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT WHICH IS SUBJECT TO
TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, UNLESS THE
TRANSFEREE CERTIFIES OR REPRESENTS THAT THE PROPOSED TRANSFER AND HOLDING OF A
CERTIFICATE AND THE SERVICING, MANAGEMENT AND OPERATION OF THE TRUST AND ITS
ASSETS: (I) WILL NOT RESULT IN ANY PROHIBITED TRANSACTION WHICH IS NOT COVERED
UNDER AN INDIVIDUAL OR CLASS PROHIBITED TRANSACTION EXEMPTION, INCLUDING, BUT
NOT LIMITED TO, PROHIBITED TRANSACTION EXEMPTION ("PTE") 84-14, XXX 00-00, XXX
00-0, XXX 95-60 OR PTE 96-23 AND (II) WILL NOT GIVE RISE TO ANY ADDITIONAL
OBLIGATIONS ON THE PART OF THE DEPOSITOR, THE SECURITIES ADMINISTRATOR, THE
MASTER SERVICER OR THE TRUSTEE, WHICH WILL BE DEEMED REPRESENTED BY AN OWNER OF
A BOOK-ENTRY CERTIFICATE OR A GLOBAL CERTIFICATE, OR AN OPINION SPECIFIED IN
SECTION 6.02 OF THE AGREEMENT IS PROVIDED.
A-7-2
Certificate No.: [R-__]
Cut-off Date: February 1, 2007
First Distribution Date: March 26, 2007
Percentage Interest of this
Class R-[__] Certificate: 100%
Latest Possible
Maturity Date: February 25, 2037
CUSIP: 07386U ___
Interest Rate: N/A
A-7-3
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
evidencing a percentage interest in the distributions allocable to the
Class of Certificates indicated on the first page of this Certificate
with respect to a Trust Fund consisting of a pool of fixed rate,
adjustable rate and hybrid mortgage loans (the "Mortgage Loans"),
substantially all of which are fully or negatively amortizing and
secured primarily by first liens on one- to four-family residential
properties (the "Trust Assets").
This Certificate does not evidence an obligation of, or an interest in,
and is not guaranteed by the Depositor, the Securities Administrator, any
Servicer, the Sponsor, Master Servicer, or the Trustee referred to below or any
of their respective affiliates. Neither this Certificate nor most of the Trust
Assets are guaranteed or insured by any governmental agency or instrumentality.
This certifies that BEAR, XXXXXXX SECURITIES CORP. is the registered
owner of the Percentage Interest evidenced by this Certificate in certain
monthly distributions with respect to a Trust Fund consisting of the Mortgage
Loans deposited by Bear Xxxxxxx Asset Backed Securities I LLC (the "Depositor").
The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated
as of February 1, 2007 (the "Agreement") among the Depositor, EMC Mortgage
Corporation, as sponsor (the "Sponsor"), Xxxxx Fargo Bank, N.A., as master
servicer and securities administrator (in its capacity as the master servicer,
the "Master Servicer" and in its capacity as securities administrator, the
"Securities Administrator") and Citibank, N.A., as trustee (the "Trustee"). To
the extent not defined herein, the capitalized terms used herein have the
meanings assigned to them in the Agreement. This Certificate is issued under and
is subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentation and surrender of this Class R-[__]
Certificate at the Corporate Trust Office.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of Section 6.02 of the Agreement, including but not
limited to the restrictions that (i) each person holding or acquiring any
Ownership Interest in this Certificate must be a Permitted Transferee, (ii) no
Ownership Interest in this Certificate may be transferred without delivery to
the Trustee and the Certificate Registrar of a Transfer Affidavit of the
proposed transferee in the form described in the Agreement, (iii) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (iv)
any attempted or purported transfer of any Ownership Interest in this
Certificate in violation of such restrictions will be absolutely null and void
and will vest no rights in the purported transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
A-7-4
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless the certificate of authentication
hereon has been manually executed by an authorized officer of the Certificate
Registrar.
* * *
A-7-5
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated: March 15, 2007
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Securities Administrator
By:
------------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred
to in the within-named Agreement
XXXXX FARGO BANK, N.A.
not in its individual capacity,
but solely as Certificate Registrar
By:
-------------------------------------
Authorized Signatory
A-7-6
[REVERSE OF CERTIFICATE]
BEAR XXXXXXX ASSET BACKED SECURITIES TRUST 2007-SD2
ASSET-BACKED CERTIFICATES, SERIES 2007-SD2
This Certificate is one of a duly authorized issue of Certificates
designated as Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset-Backed
Certificates, Series 2007-SD2, issued in multiple Classes (the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Paying Agent nor the Trustee is liable to
the Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Master Servicer, the Sponsor, the Securities Administrator
and the Trustee with the consent of the Holders of each Class or Classes of
Certificates affected by such amendment evidencing over 50% of the Voting Rights
of such Class or Classes. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Master Servicer, the Securities Administrator and
the Trustee and any of their agents may treat the Person in whose name this
Certificate is registered as the owner hereof for all purposes, and none of the
Depositor, the Master Servicer, the Securities Administrator, the Trustee, or
any such agent shall be affected by any notice to the contrary.
A-7-7
Subject to Section 10.03 of the Agreement, the obligations and
responsibilities of the Depositor, the Master Servicer, the Paying Agent, the
Sponsor, the Securities Administrator and the Trustee created under the
Agreement shall terminate upon the earlier of (a) the purchase by the Sponsor of
all of the Mortgage Loans (and REO Properties) remaining in the Trust Fund at
the price equal to the sum of (i) 100% of the Stated Principal Balance of each
Mortgage Loan (other than in respect of REO Property), (ii) accrued interest
thereon at the applicable Mortgage Rate, (iii) the appraised value of any REO
Property (up to the Stated Principal Balance of the related Mortgage Loan), such
appraisal to be conducted by an appraiser mutually agreed upon by the Sponsor
and the Securities Administrator, (iv) unreimbursed out-of pocket costs of the
related Servicer or Master Servicer, including unreimbursed servicing advances
and the principal portion of any unreimbursed Advances, made on the related
Mortgage Loans prior to the exercise of such repurchase right, (v) any
unreimbursed costs and expenses of the Securities Administrator and the Trustee
payable pursuant to Section 9.05 of the Agreement and (vi) any unreimbursed
costs and expenses of the Custodian payable pursuant to the Custodial Agreement
and (b) the later of (i) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to the Agreement, as
applicable. In no event shall the trusts created pursuant to the Agreement
continue beyond the earlier of (i) the expiration of 21 years from the death of
the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador
of the United States to the Court of St. James's, living on the date of the
Agreement and (ii) the Latest Possible Maturity Date.
The right to repurchase all Mortgage Loans and REO Properties pursuant
to clause (a) above shall be conditioned upon the Stated Principal Balance of
all of the Mortgage Loans and REO Properties in the Trust Fund, at the time of
any such repurchase, aggregating ten percent or less of the aggregate Cut-off
Date principal Balance of all of the Mortgage Loans.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-7-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code
of assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
-------------------------------------------------------------------------------.
Dated:
---------------------------------------
Signature by or on behalf of assignor
A-7-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
--------------------------------------------------------------------------------
for the account of ,
-------------------------------------------------------------
account number , or, if mailed by check, to
--------------- ----------------------
. Applicable
----------------------------------------------------------------
statements should be mailed to .
-------------------------------------------------
This information is provided by ,
--------------------------------------
the assignee named above, or , as its agent.
-----------------------------------
A-7-10
EXHIBIT B
Mortgage Loan Schedule
[DELIVERED TO THE CUSTODIAN]
B-1
EXHIBIT C
[Reserved]
C-1
EXHIBIT D
TRANSFER AFFIDAVIT
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _______________, the proposed
Transferee of an Ownership Interest in a Class R Certificate (the "Certificate")
issued pursuant to the Pooling and Servicing Agreement, dated as of February 1,
2007 (the "Agreement"), by and among Bear Xxxxxxx Asset Backed Securities I LLC,
as depositor, EMC Mortgage Corporation as sponsor, Xxxxx Fargo Bank, National
Association, as master servicer and securities administrator, and Citibank,
N.A., as trustee, relating to the issuance of Bear Xxxxxxx Asset Backed
Securities Trust 2007-SD2, Asset-Backed Certificates, Series 2007-SD2.
Capitalized terms used, but not defined herein or in Exhibit 1 hereto, shall
have the meanings ascribed to such terms in the Agreement. The Transferee has
authorized the undersigned to make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 6.02(c) of
the Agreement (attached hereto as Exhibit 2 and incorporated herein by
reference) and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
D-1
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 6.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee and the Securities Administrator a
certificate substantially in the form set forth as Exhibit E to the Agreement (a
"Transferor Certificate") to the effect that such Transferee has no actual
knowledge that the Person to which the Transfer is to be made is not a Permitted
Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Class R Certificates.
8. The Transferee's taxpayer identification number is _____.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Class R Certificate may be
"noneconomic residual interests" within the meaning of Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax. In addition, as the holder of
a noneconomic residual interest, the Transferee may incur tax liabilities in
excess of any cash flows generated by the interest and the Transferee hereby
represents that it intends to pay taxes associated with holding the residual
interest as they become due.
11. Transferee is not a foreign permanent establishment or fixed
base (within the meaning of an applicable income tax treaty) of a U.S. taxpayer.
12. The Transferee will not transfer the Class R Certificate,
directly or indirectly, to a foreign permanent establishment or fixed base
(within the meaning of an applicable income tax treaty) of the Transferee or
another U.S. taxpayer.
13. The Transferee will not cause income from the Class R
Certificate to be attributable to a foreign permanent establishment or fixed
base (within the meaning of an applicable income tax treaty) of the Transferee
or another U.S. taxpayer.
14. The Transferee has provided financial statements or other
financial information requested by the Transferor in connection with the
transfer of the Class R Certificate to permit the Transferor to assess the
financial capability of the Transferee to pay such taxes.
* * *
D-2
IN WITNESS WHEREOF, the Transferee has caused this instrument to be executed on
its behalf, pursuant to authority of its Board of Directors, by its duly
authorized officer and its corporate seal to be hereunto affixed, duly attested,
this ____ day of _____________, 20__.
[NAME OF TRANSFEREE]
By:
------------------------------------
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------
[Assistant] Secretary
Personally appeared before me the above-named _____________, known or proved to
me to be the same person who executed the foregoing instrument and to be the
____________ of the Transferee, and acknowledged that he executed the same as
his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of _______, 20__.
------------------------------
---------------------------------
NOTARY PUBLIC
My Commission expires the ___ day
of _______________, 20__.
D-3
EXHIBIT 1 TO EXHIBIT D
Certain Definitions
-------------------
"Ownership Interest": As to any Certificate, any ownership interest in such
Certificate including any interest in such Certificate as the Holder thereof and
any other interest therein, whether direct or indirect, legal or beneficial.
"Permitted Transferee": Any person other than (i) the United States, any State
or political subdivision thereof, or any agency or instrumentality of any of the
foregoing, (ii) a foreign government, International Organization or any agency
or instrumentality of either of the foregoing, (iii) an organization (except
certain farmers' cooperatives described in section 521 of the Code) that is
exempt from tax imposed by Chapter 1 of the Code (including the tax imposed by
section 511 of the Code on unrelated business taxable income) on any excess
inclusions (as defined in section 860E(c)(1) of the Code) with respect to any
Class R Certificate, (iv) rural electric and telephone cooperatives described in
section 1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or
resident of the United States, a corporation, partnership (other than a
partnership that has any direct or indirect foreign partners), or other entity
(treated as a corporation or a partnership for federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, or an estate whose income from sources
without the United States is includable in gross income for United States
federal income tax purposes regardless of its connection with the conduct of a
trade or business within the United States, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States persons have authority to control all
substantial decisions of the trust, and (vi) any other Person so designated by
the Trustee based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Class R Certificate to such Person may cause the Trust Fund to
fail to qualify as a REMIC at any time that any Certificates are Outstanding.
The terms "United States," "State" and "International Organization" shall have
the meanings set forth in section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of the Federal Home Loan
Mortgage Corporation, a majority of its board of directors is not selected by
such government unit.
"Person": Any individual, corporation, limited liability company, partnership,
joint venture, bank, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Transfer": Any direct or indirect transfer or sale of any Ownership Interest in
a Certificate, including the acquisition of a Certificate by the Depositor.
"Transferee": Any Person who is acquiring by Transfer any Ownership Interest in
a Certificate.
D-4
EXHIBIT 2 TO EXHIBIT D
Section 6.02(c) of the Agreement
--------------------------------
(c) Each Person who has or who acquires any Ownership
Interest in a Residual Certificate shall be deemed by the acceptance or
acquisition of such Ownership Interest to have agreed to be bound by the
following provisions, and the rights of each Person acquiring any Ownership
Interest in a Residual Certificate are expressly subject to the following
provisions:
(i) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate which shall always be issued as a physical
certificate and not as a Book-Entry Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee and the Certificate
Registrar of any change or impending change in its status as a
Permitted Transferee.
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Certificate Registrar shall not register the Transfer of any Residual
Certificate unless, in addition to the certificates required to be
delivered to the Trustee and the Certificate Registrar under
subparagraph (b) above, the Trustee and the Certificate Registrar shall
have been furnished with an affidavit (a "Transfer Affidavit") of the
initial owner or the proposed transferee in the form attached hereto as
Exhibit D.
(iii) Each Person holding or acquiring any Ownership Interest
in a Residual Certificate shall agree (A) to obtain a Transfer
Affidavit from any other Person to whom such Person attempts to
Transfer its Ownership Interest in a Residual Certificate, (B) to
obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of
a Residual Certificate and (C) not to Transfer its Ownership Interest
in a Residual Certificate or to cause the Transfer of an Ownership
Interest in a Residual Certificate to any other Person if it has actual
knowledge that such Person is not a Permitted Transferee.
(iv) Any attempted or purported Transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of
this Section 6.02(c) shall be absolutely null and void and shall vest
no rights in the purported Transferee. If any purported transferee
shall become a Holder of a Residual Certificate in violation of the
provisions of this Section 6.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof
retroactive to the date of registration of Transfer of such Residual
Certificate. The Certificate Registrar shall be under no liability to
any Person for any registration of Transfer of a Residual Certificate
that is in fact not permitted by Section 6.02(b) and this Section
6.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit and
Transferor Certificate. The Certificate Registrar shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact not a Permitted Transferee at the time it became a Holder
or, at such subsequent time as it became other than a Permitted
Transferee, all payments made on such Residual Certificate at and after
either such time. Any such payments so recovered by the Certificate
Registrar shall be paid and delivered by the Certificate Registrar to
the last preceding Permitted Transferee of such Certificate.
(v) The Securities Administrator shall make available within
60 days of written request from the Trustee or Certificate Registrar,
all information necessary to compute any tax imposed under Section
860E(e) of the Code as a result of a Transfer of an Ownership Interest
in a Residual Certificate to any Holder who is not a Permitted
Transferee.
D-5
The restrictions on Transfers of a Residual Certificate set
forth in this Section 6.02(c) shall cease to apply (and the applicable portions
of the legend on a Residual Certificate may be deleted) with respect to
Transfers occurring after delivery to the Trustee and the Certificate Registrar
of an Opinion of Counsel addressed to the Trustee and the Certificate Registrar,
which Opinion of Counsel shall not be an expense of the Trustee, the Securities
Administrator, the Certificate Registrar, the Sponsor, any Servicer or the
Master Servicer to the effect that the elimination of such restrictions will not
cause the REMIC I and/or REMIC II, as applicable, to fail to qualify as a REMIC
at any time that the Certificates are outstanding or result in the imposition of
any tax on the Trust Fund, a Certificateholder or another Person. Each Person
holding or acquiring any Ownership Interest in a Residual Certificate hereby
consents to any amendment of this Agreement that, based on an Opinion of Counsel
furnished to the Trustee and the Certificate Registrar, is reasonably necessary
(a) to ensure that the record ownership of, or any beneficial interest in, a
Residual Certificate is not transferred, directly or indirectly, to a Person
that is not a Permitted Transferee and (b) to provide for a means to compel the
Transfer of a Residual Certificate that is held by a Person that is not a
Permitted Transferee to a Holder that is a Permitted Transferee.
D-6
EXHIBIT E
FORM OF TRANSFEROR CERTIFICATE FOR
NON-OFFERED CERTIFICATES
Date:___________
Xxxxx Fargo Bank, National Association
as Securities Administrator
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Citibank, N.A.,
as Trustee
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Agency & Trust - BSABS 2007-SD2
Re: Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2,
Asset-Backed Certificates, Series 2007-SD2________
Ladies and Gentlemen:
In connection with our disposition of the Class [____] Certificates, we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act and (b) we have not offered or sold any Certificates to, or solicited offers
to buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action that would result in, a violation of Section 5 of the Act. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Pooling and Servicing Agreement dated as of February 1,
2007, among Bear Xxxxxxx Asset Backed Securities I LLC, as Depositor, EMC
Mortgage Corporation, as Sponsor, Xxxxx Fargo Bank, National Association, as
Master Servicer and Securities Administrator, and Citibank, N.A., as Trustee,
relating to the issuance of Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2,
Asset-Backed Certificates, Series 2007-SD2.
Very truly yours,
---------------------------------------
Name of Transferor
By:
------------------------------------
Name:
Title:
E-1
EXHIBIT F
FORM OF INVESTMENT LETTER [NON-RULE 144A] FOR
NON-OFFERED CERTIFICATES
Date: ____________
Xxxxx Fargo Bank, National Association
as Securities Administrator
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Citibank, N.A.,
as Trustee
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Agency & Trust - BSABS 2007-SD2
Re: Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2,
Asset-Backed Certificates, Series 2007-SD2________
Ladies and Gentlemen:
In connection with our acquisition of the Class [______] Certificates
in the Denomination of ______________ (the "Certificates"), we certify that (a)
we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we are an
"accredited investor," as defined in Regulation D under the Act, and have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either (i) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, nor a plan subject to Section 4975 of the Internal Revenue Code of 1986
(each of the foregoing, a "Plan"), nor are we acting on behalf of any Plan or
(ii) the purchase or holding of such ERISA Restricted Certificate will not
result in any prohibited transactions under ERISA or Section 4975 of the Code
and will not subject the Trustee or the Master Servicer to any obligation in
addition to those expressly undertaken in the Agreement referred to below, (e)
we are acquiring the Certificates for investment for our own account and not
with a view to any distribution of the Certificates (but without prejudice to
our right at all times to sell or otherwise dispose of the Certificates in
accordance with clause (g) below), (f) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, or
taken any other action that would result in a violation of Section 5 of the Act,
and (g) we will not sell, transfer or otherwise dispose of any Certificates
unless (1) such sale, transfer or other disposition is made pursuant to an
effective registration statement under the Act or is exempt from such
registration
F-1
requirements, and if requested, we will at our expense provide an opinion of
counsel satisfactory to the addressees of this certificate that such sale,
transfer or other disposition may be made pursuant to an exemption from the Act,
(2) the purchaser or transferee of the Certificate has executed and delivered to
you a certificate to substantially the same effect as this certificate, and (3)
the purchaser or transferee has otherwise complied with any conditions for
transfer set forth in the Pooling and Servicing Agreement dated as of February
1, 2007 (the "Agreement"), among Bear Xxxxxxx Asset Backed Securities I LLC, as
Depositor, EMC Mortgage Corporation, as Sponsor, Xxxxx Fargo Bank, National
Association, as Master Servicer and Securities Administrator, and Citibank,
N.A., as Trustee, relating to the issuance of Bear Xxxxxxx Asset Backed
Securities Trust 2007-SD2, Asset-Backed Certificates, Series 2007-SD2. All
capitalized terms used herein but not defined herein shall have the meanings
assigned to them in the Agreement.
Very truly yours,
---------------------------------------
Name of Transferee
By:
-----------------------------------
Name:
Title:
F-2
EXHIBIT G
FORM OF RULE 144A LETTER FOR
NON-OFFERED CERTIFICATES
Date: ____________
Xxxxx Fargo Bank, National Association
as Securities Administrator
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2
Citibank, N.A.,
as Trustee
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Agency & Trust - BSABS 2007-SD2
Re: Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2,
Asset-Backed Certificates, Series 2007-SD2________
Ladies and Gentlemen:
In connection with our proposed purchase of the Class [____]
Certificates (the "Certificates") we certify that (a) we understand that the
Certificates are not being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws and are being transferred to
us in a transaction that is exempt from the registration requirements of the Act
and any such laws, (b) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
investments in the Certificates, (c) we have had the opportunity to ask
questions of and receive answers from the Depositor concerning the purchase of
the Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Certificates, (d) either (i) we
are not an employee benefit plan that is subject to the Employee Retirement
Income Security Act of 1974, as amended, nor a plan subject to Section 4975 of
the Internal Revenue Code of 1986 (each of the foregoing, a "Plan"), nor are we
acting on behalf of any Plan or (ii) the purchase or holding of such ERISA
Restricted Certificate will not result in any prohibited transactions under
ERISA or Section 4975 of the Code and will not subject the Trustee, the Master
Servicer, the Securities Administrator or the Depositor to any obligation in
addition to those expressly undertaken in the Agreement referred to below, (e)
we have not, nor has anyone acting on our behalf offered, transferred, pledged,
sold or otherwise disposed of the Certificates, any interest in the Certificates
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or taken
any other
G-1
action, that would constitute a distribution of the Certificates under the
Securities Act or that would render the disposition of the Certificates a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will act, nor has authorized or will authorize any person to act,
in such manner with respect to the Certificates, and (f) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that the
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act. All capitalized terms used herein but not defined herein shall
have the meanings assigned to them in the Pooling and Servicing Agreement, dated
as of February 1, 2007, among Bear Xxxxxxx Asset Backed Securities I LLC, as
Depositor, EMC Mortgage Corporation, as Sponsor, Xxxxx Fargo Bank, National
Association, as Master Servicer and Securities Administrator, and Citibank,
N.A., as Trustee, relating to the issuance of Bear Xxxxxxx Asset Backed
Securities Trust 2007-SD2, Asset-Backed Certificates, Series 2007-SD2.
---------------------------------------
Name of Buyer
By:
-----------------------------------
Name:
Title:
G-2
ANNEX 1 TO EXHIBIT G
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $__________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is attached
hereto.
------------------------
1 Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless: Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $10,000,000 in securities;
or Buyer is an entity in which all the owners are qualified institutional
buyers.
G-3
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions,
for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. The Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively State or
Local Plans or ERISA Plans as defined above, and no participant
of the Buyer is an individual retirement account or an H.R.10
(Xxxxx) plan.
___ Equity Owners. Buyer is an entity in which all of the equity
owners are qualified institutional buyers.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer
G-4
in its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
---------------------------------------
Name of Buyer
By:
------------------------------------
Name:
Title:
Date:
----------------------------------
G-5
ANNEX 2 TO EXHIBIT G
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
___ The Buyer owned $____________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $__________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
G-6
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
---------------------------------------
Name of Buyer or Adviser
By:
------------------------------------
Name:
Title:
IF AN ADVISER:
---------------------------------------
Name of Buyer
Date:
---------------------------------
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EXHIBIT H
REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank, National Association
as Custodian
0000 00xx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2,
Asset-Backed Certificates, Series 2007-SD2.
In connection with the administration of the Mortgage Loans held by you
as Custodian pursuant to the Custodial Agreement, dated as of February 15, 2007,
among Bear Xxxxxxx Asset Backed Securities I LLC, as depositor, EMC Mortgage
Corporation, as sponsor, Xxxxx Fargo Bank, National Association, as master
servicer (the "Master Servicer"), securities administrator (the "Securities
Administrator") and custodian (the "Custodian"), and Citibank. N.A., as trustee
(the "Trustee"), we request the release, and hereby acknowledge receipt, of the
Mortgage File for the Mortgage Loan described below, for the reason indicated:
Mortgage Loan Number:
Mortgagor Name, Address & Zip Code:
Reason for Requesting Documents (check one):
____ 1. Mortgage Paid in Full (and all amounts received or to be
received in connection with such payment have been or will be
remitted to the Master Servicer for deposit in the Master
Servicer Collection Account)
____ 2. Foreclosure
____ 3. Substitution
____ 4. Other Liquidation (Repurchases, etc.)
____ 5. Nonliquidation Reason:________________________________
Address to which Custodian should _____________________________
Deliver the Mortgage File ___________________________________
___________________________________
By:
------------------------------------
(authorized signer)
Issuer:
--------------------------------
Address:
-------------------------------
---------------------------------------
Date:
----------------------------------
H-1
Custodian:
Xxxxx Fargo Bank, National Association
Please acknowledge the execution of the above request by your signature and date
below:
------------------------------- --------------
Signature Date
Documents returned to Trustee:
------------------------------- --------------
Custodian Date
H-2
EXHIBIT I
DTC LETTER OF REPRESENTATIONS
[See document at Tab No. ___ of the Closing Binder]
I-1
EXHIBIT J
SCHEDULE OF MORTGAGE LOANS WITH LOST NOTES
[DELIVERED TO THE CUSTODIAN]
J-1
EXHIBIT K
FORM OF CUSTODIAL AGREEMENT
CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to time, the
"Agreement"), dated as of March 15, 2007, by and among CITIBANK, N.A., as
trustee (including its successors under the Pooling and Servicing Agreement
defined below, the "Trustee"), BEAR XXXXXXX ASSET BACKED SECURITIES I LLC
(together with any successor in interest, the "Company"), EMC MORTGAGE
CORPORATION as seller and sponsor (in such capacity, together with any successor
in interest, the "Seller"), XXXXX FARGO BANK, N.A., as master servicer and
securities administrator (together with any successor in interest or successor
under the Pooling and Servicing Agreement, the "Master Servicer" or the
"Securities Administrator," respectively), and XXXXX FARGO BANK, N.A., as
custodian (together with any successor in interest or any successor appointed
hereunder, the "Custodian").
W I T N E S S E T H T H A T :
- - - - - - - - - - - - - - -
WHEREAS, the Company, the Seller, the Master Servicer, the Securities
Administrator and the Trustee have entered into a Pooling and Servicing
Agreement, dated as of February 1, 2007, relating to the issuance of Bear
Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset-Backed Certificates,
Series 2007-SD2 (the "Pooling and Servicing Agreement");
WHEREAS, the Custodian has agreed to act as agent for the Trustee for the
purposes of receiving and holding certain documents and other instruments
delivered by the Company or the Master Servicer under the Pooling and Servicing
Agreement, all upon the terms and conditions and subject to the limitations
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the Trustee, the Company, the Seller, the
Master Servicer, the Securities Administrator and the Custodian hereby agree as
follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement and not defined herein shall have the
meanings assigned in the Pooling and Servicing Agreement, unless otherwise
required by the context herein.
ARTICLE II
CUSTODY OF MORTGAGE DOCUMENTS
Section 2.1. Custodian to Act as Agent; Acceptance of Mortgage
Files. The Custodian, as the duly appointed agent of the Trustee for these
purposes, acknowledges (subject to any exceptions noted in the Initial
Certification referred to in Section 2.3(a)) receipt of the Mortgage Files
relating to the Mortgage Loans identified on the Schedule 1 attached hereto (the
K-1
"Mortgage Files") and declares that it holds and will hold such Mortgage Files
as agent for the Trustee, in trust, for the use and benefit of all present and
future Certificateholders.
Section 2.2. Recordation of Assignments. If any Mortgage File
includes one or more assignments of Mortgage to the Trustee that have not been
recorded, each such assignment (to the extent required to be recorded pursuant
to Section 2.01 of the Pooling and Servicing Agreement) shall be delivered by
the Custodian to the Company for the purpose of recording it in the appropriate
public office for real property records, and the Company, at no expense to the
Custodian, shall promptly cause to be recorded in the appropriate public office
for real property records each such assignment of Mortgage and, upon receipt
thereof from such public office, shall return each such assignment of Mortgage
to the Custodian.
Section 2.3. Review of Mortgage Files.
(a) On or prior to the Closing Date, in accordance with
Section 2.02 of the Pooling and Servicing Agreement, the Custodian shall deliver
to the Trustee, the Seller and the Company an Initial Certification in the form
annexed hereto as Exhibit One evidencing receipt (subject to any exceptions
noted therein) of a Mortgage File for each of the Mortgage Loans listed on the
Schedule 1 attached hereto (the "Mortgage Loan Schedule").
(b) Within 90 days of the Closing Date, the Custodian
agrees, for the benefit of Certificateholders, in accordance with the provisions
of Section 2.02 of the Pooling and Servicing Agreement, to perform a limited
review of the Mortgage Files delivered to it, and shall deliver to the Trustee,
the Seller and the Company an Interim Certification in the form annexed hereto
as Exhibit Two to the effect that all such documents have been executed and
received and that such documents relate to the extent provided in Section
2.02(a) of the Pooling and Servicing Agreement to the Mortgage Loans identified
on the Mortgage Loan Schedule, except for any exceptions listed on Schedule A
attached to such Interim Certification. The Custodian shall be under no duty or
obligation to inspect, review or examine said documents, instruments,
certificates or other papers to determine that the same are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.
(c) Not later than 180 days after the Closing Date, the
Custodian shall review the Mortgage Files as provided in Section 2.02 of the
Pooling and Servicing Agreement and deliver to the Trustee, the Seller and the
Company a Final Certification in the form annexed hereto as Exhibit Three
evidencing the completeness of the Mortgage Files.
(d) In reviewing the Mortgage Files as provided herein and
in the Pooling and Servicing Agreement, the Custodian shall make no
representation as to and shall not be responsible to verify (i) the validity,
legality, enforceability, due authorization, recordability, sufficiency or
genuineness of any of the documents included in any Mortgage File or (ii) the
collectibility, insurability, effectiveness or suitability of any of the
documents in any Mortgage File.
Upon receipt of written request from the Trustee, the Master Servicer, the
Securities Administrator, or the Seller, the Custodian shall as soon as
practicable supply the Trustee, the
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Master Servicer, the Securities Administrator or the Seller with a list of all
of the documents relating to the Mortgage Loans missing from the Mortgage Files.
Section 2.4. Notification of Breaches of Representations and
Warranties. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Company as set forth in the Pooling and Servicing Agreement
with respect to a Mortgage Loan relating to a Mortgage File, the Custodian shall
give prompt written notice to the Company, the applicable Servicer, the Master
Servicer, the Securities Administrator and the Trustee.
Section 2.5. Custodian to Cooperate; Release of Mortgage
Files. Upon receipt of written notice from the Trustee that the Seller has
repurchased a Mortgage Loan pursuant to Article II of the Pooling and Servicing
Agreement, and a Request for Release, the Custodian agrees to release to the
Seller the related Mortgage File within five days of receipt of such notice.
Upon the Custodian's receipt of a request for release (a "Request for Release")
substantially in the form of Exhibit H to the Pooling and Servicing Agreement
signed by a Servicing Officer of the Master Servicer or the related Servicer
stating that it has received payment in full of a Mortgage Loan or that payment
in full will be escrowed in a manner customary for such purposes, the Custodian
agrees to release to the related Servicer the related Mortgage File within five
days of receipt of such Request for Release.
The Company shall deliver to the Custodian the Mortgage Note and other documents
constituting the Mortgage File with respect to any Replacement Mortgage Loan
which documents the Custodian will review to the extent provided in Article II
of the Pooling and Servicing Agreement.
From time to time as is appropriate for the servicing or foreclosure of any
Mortgage Loan, including, for this purpose, collection under any Primary
Mortgage Insurance Policy, the related Servicer shall (or if the related
Servicer does not, the Master Servicer may) deliver to the Custodian a Request
for Release signed by a Servicing Officer requesting that possession of all of
the Mortgage Files be released to the related Servicer or the Master Servicer,
as applicable, and certifying as to the reason for such release and that such
release will not invalidate any insurance coverage provided in respect of the
Mortgage Loan under any of the Insurance Policies. Upon receipt of the
foregoing, the Custodian shall deliver the Mortgage File or such document to the
related Servicer or the Master Servicer, as applicable. The related Servicer or
the Master Servicer, as applicable, shall cause each Mortgage File or any
document therein so released to be returned to the Custodian when the need
therefor by the related Servicer no longer exists, unless (i) the Mortgage Loan
has been liquidated and the Liquidation Proceeds relating to the Mortgage Loan
have been deposited in a Protected Account or the Distribution Account or (ii)
the Mortgage File or such document has been delivered to an attorney, or to a
public trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property either judicially or non-judicially, and the related
Servicer has delivered to the Custodian a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
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At any time that a Servicer or the Master Servicer is required to deliver to the
Custodian a Request for Release, such Servicer or the Master Servicer shall
deliver two copies of the Request for Release if delivered in hard copy or the
Servicer or the Master Servicer may furnish such Request for Release
electronically to the Custodian, in which event the Servicing Officer
transmitting the same shall be deemed to have signed the Request for Release. In
connection with any Request for Release of a Mortgage File because of a
repurchase of a Mortgage Loan, such Request for Release shall be accompanied by
an assignment of mortgage, without recourse, executed by or on behalf of the
Trustee to the Seller and the related Mortgage Note shall be endorsed without
recourse by or on behalf of the Trustee and be returned to the Seller; provided
however, that in the case of a Mortgage Loan that is registered on the MERS
System no assignment of mortgage or endorsement of the Mortgage Note by the
Trustee shall be required. In connection with any Request for Release of a
Mortgage File because of the payment in full of a Mortgage Loan such Request for
Release shall be accompanied by a certificate of satisfaction or other similar
instrument to be executed by or on behalf of the Trustee and returned to the
related Servicer or the Master Servicer, as applicable.
Section 2.6. Assumption Agreements. In the event that any
assumption agreement or substitution of liability agreement or sale of servicing
agreement is entered into with respect to any Mortgage Loan subject to this
Agreement in accordance with the terms and provisions of the Pooling and
Servicing Agreement, the Master Servicer, to the extent provided in the related
Servicing Agreement, shall cause the related Servicer to notify the Custodian
that such assumption or substitution agreement has been completed by forwarding
to the Custodian the original of such assumption or substitution agreement,
which shall be added to the related Mortgage File and, for all purposes, shall
be considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting parts thereof.
ARTICLE III
CONCERNING THE CUSTODIAN
Section 3.1. Custodian a Bailee and Agent of the Trustee. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Mortgage File which are delivered to the Custodian, the Custodian is exclusively
the bailee and agent of the Trustee and has no instructions to hold any Mortgage
Note or Mortgage for the benefit of any person other than the Trustee and the
Certificateholders and undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement. Except upon compliance with the
provisions of Section 2.4 of this Agreement, no Mortgage Note, Mortgage or
Mortgage File shall be delivered by the Custodian to the Company, the Servicers
or the Master Servicer or otherwise released from the possession of the
Custodian.
Section 3.2 [Reserved].
Section 3.3. Custodian May Own Certificates. The Custodian in
its individual or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Custodian.
Section 3.4. Master Servicer to Pay Custodian's Fees and
Expenses. Xxxxx Fargo Bank, N.A., as Master Servicer, covenants and agrees to
pay to the Custodian from time to
K-4
time, and the Custodian shall be entitled to, an annual fee for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and, the Custodian, shall be entitled to be paid
or reimbursed from the Trust Fund, upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Custodian in
accordance with any of the provisions of this Agreement (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ), except (i) any such expense,
disbursement or advance as may arise from its negligence or bad faith or (ii) to
the extent that such cost or expense is indemnified by the Master Servicer or
the Securities Administrator pursuant to the Pooling and Servicing Agreement.
Section 3.5. Custodian May Resign; Trustee May Remove
Custodian. The Custodian may resign from the obligations and duties hereby
imposed upon it as such obligations and duties relate to its acting as Custodian
of the Mortgage Loans. Upon receiving such notice of resignation, the Trustee
shall either take custody of the Mortgage Files itself and give prompt notice
thereof to the Company, the Servicers, the Master Servicer and the Custodian, or
promptly appoint a successor Custodian by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Custodian and one
copy to the successor Custodian. If the Trustee shall not have taken custody of
the Mortgage Files and no successor Custodian shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Custodian may petition any court of competent
jurisdiction for the appointment of a successor Custodian.
The Trustee may remove the Custodian upon 60 days prior written notice to the
Custodian. In such event, the Trustee shall appoint, or petition a court of
competent jurisdiction to appoint, a successor Custodian hereunder. Any
successor Custodian shall be a depository institution subject to supervision or
examination by federal or state authority shall be able to satisfy the other
requirements contained in Section 3.7 and shall be unaffiliated with the
Company.
Any resignation or removal of the Custodian and appointment of a successor
Custodian pursuant to any of the provisions of this Section 3.5 shall become
effective upon acceptance of appointment by the successor Custodian. The Trustee
shall give prompt notice to the Company, the Servicer and the Master Servicer of
the appointment of any successor Custodian. No successor Custodian shall be
appointed by the Trustee without the prior approval of the Company, the Servicer
and the Master Servicer.
Section 3.6. Merger or Consolidation of Custodian. Any Person
into which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, (provided such Person shall satisfy the requirements set forth in
Section 3.7) 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.
Section 3.7. Representations of the Custodian. The Custodian
hereby represents, and any successor Custodian hereunder shall represent, that
it is a depository institution subject to supervision or examination by a
federal or state authority, has a combined
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capital and surplus of at least $15,000,000 and is qualified to do business in
the jurisdictions in which it will hold any Mortgage File.
Section 3.8 Limitation on Liability. Neither the Custodian
nor any of its directors, officers, agents or employees, shall be liable for any
action taken or omitted to be taken by it or them hereunder or in connection
herewith in good faith and reasonably believed (which belief may be based upon
the written opinion or advice of counsel selected by it in the exercise of
reasonable care) by it or them to be within the purview of this Agreement,
except for its or their own negligence, lack of good faith or willful
misconduct. The Custodian and any director, officer, employee or agent of the
Custodian may rely in good faith on any document of any kind prima facie
properly executed and submitted by any person with authority with respect to any
related matters arising hereunder. In no event shall the Custodian or its
directors, officers, agents and employees be held liable for any special,
indirect or consequential damages resulting from any action taken or omitted to
be taken by it or them hereunder or in connection herewith even if advised of
the possibility of such damages.
Notwithstanding anything herein to the contrary, the Custodian
agrees to indemnify the Trust Fund, the Trustee, the Master Servicer, the
Company, the Securities Administrator and each of their respective employees,
representatives, affiliates, officers, directors and agents for any and all
liabilities, obligations, losses, damages, payments, costs or expenses of any
kind whatsoever that may be imposed on, incurred by or asserted against the
Trustee, Trust Fund, Master Servicer, Company, Securities Administrator or any
such other respective Person, due to any willful misfeasance or negligent or bad
faith performance or non-performance by the Custodian of its duties and
responsibilities under this Agreement; provided, however, that the Custodian
shall not be liable to any of the foregoing Persons for any amount and any
portion of any such amount directly and solely resulting from the willful
misfeasance, bad faith or negligence of such person, and the Custodian's
reliance on written instructions from the Trustee or the Master Servicer. The
provisions of this Section 3.8 shall survive the termination of this Custodial
Agreement.
The Custodian and its directors, officers, employees and
agents shall be entitled to indemnification and defense from the Trust Fund for
any loss, liability or expense incurred (other than as a result of any willful
misfeasance or negligent or bad-faith performance or non-performance on their
part), arising out of, or in connection with, the acceptance or administration
of the custodial arrangement created hereunder, including the 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 hereunder.
ARTICLE IV
COMPLIANCE WITH REGULATION AB
Section 4.1. Intent of the parties; Reasonableness. The
parties hereto acknowledge and agree that the purpose of this Article IV is to
facilitate compliance by the Company, the Master Servicer and the Securities
Administrator with the provisions of Regulation AB and related rules and
regulations of the Commission. The Company, the Master Servicer and the
Securities Administrator shall not exercise its right to request delivery of
information or other performance under these provisions other than in good
faith, or for purposes
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other than compliance with the Securities Act, the Exchange Act and the rules
and regulations of the Commission under the Securities Act and the Exchange Act.
Each of the parties hereto acknowledges that interpretations of the requirements
of Regulation AB may change over time, whether due to interpretive guidance
provided by the Commission or its staff, consensus among participants in the
mortgage-backed securities markets, advice of counsel, or otherwise, and agrees
to comply with requests made by the Company, the Master Servicer and the
Securities Administrator in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB to the
extent reasonably practicable. The Custodian shall cooperate reasonably with the
Company, the Master Servicer and the Securities Administrator to deliver to the
Company, the Master Servicer and the Securities Administrator (including any of
their respective assignees or designees), any and all disclosure, statements,
reports, certifications, records and any other information necessary in the
reasonable, good faith determination of the Company, the Master Servicer and the
Securities Administrator to permit the Company, the Master Servicer and the
Securities Administrator to comply with the provisions of Regulation AB.
Section 4.2. Additional Representations and Warranties of the
Custodian.
The Custodian shall be deemed to represent to the Company as of
the date hereof and on each date on which information is provided to the Company
under Section 4.3 that, except as disclosed in writing to the Company prior to
such date: (a) there are no aspects of its financial condition that could have a
material adverse effect on the performance by it of its Custodian obligations
under this Agreement or any other securitization transaction as to which it is
the custodian; (ii) there are no material legal or governmental proceedings
pending (or known to be contemplated) against it; and (iii) there are no
affiliations, relationships or transactions relating to the Custodian with
respect to the Company or any sponsor, issuing entity, servicer (other than the
Master Servicer), trustee, originator, significant obligor, enhancement or
support provider (other than the Securities Administrator) or other material
transaction party (as such terms are used in Regulation AB) relating to the
securitization transaction contemplated by the Pooling and Servicing Agreement,
as identified by the Company to the Custodian in writing as of the Closing Date
(each, a "Transaction Party").
If so requested by the Company on any date following the Closing
Date, the Custodian shall, within five Business Days following such request,
confirm in writing the accuracy of the representations and warranties set forth
in paragraph (1) of this section or, if any such representation and warranty is
not accurate as of the date of such confirmation, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting party. Any such
request from the Company shall not be given more than once each calendar
quarter, unless the Company shall have a reasonable basis for a determination
that any of the representations and warranties may not be accurate.
Section 4.3. Additional Information to Be Provided by the
Custodian. For so long as the Certificates are outstanding, for the purpose of
satisfying the Company's reporting obligation under the Exchange Act with
respect to any class of Certificates, the Custodian shall (a) notify the Company
and the Securities Administrator in writing of any material litigation or
governmental proceedings pending against the Custodian that would be material to
Certificateholders, and (b) provide to the Company and the Securities
Administrator a written
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description of such proceedings. Any notices and descriptions required under
this Section 4.3 shall be given no later than five Business Days prior to the
Determination Date following the month in which the Custodian has knowledge of
the occurrence of the relevant event. As of the date the Company, Securities
Administrator or Master Servicer files each Report on Form 10-D or Form 10-K
with respect to the Certificates, the Custodian will be deemed to represent that
any information previously provided under this Section 4.3, if any, and to the
extent updated is materially correct and does not have any material omissions.
Section 4.4. Report on Assessment of Compliance and
Attestation. On or before March 15 of each calendar year, the Custodian shall:
(a) deliver to the Company, the Master Servicer and the
Securities Administrator a report (in form and substance reasonably satisfactory
to the Company, the Master Servicer and the Securities Administrator) regarding
the Custodian's assessment of compliance with the Servicing Criteria during the
immediately preceding calendar year, as required under Rules 13a-18 and 15d-18
of the Exchange Act and Item 1122 of Regulation AB. Such report shall be
addressed to the Company, the Master Servicer and the Securities Administrator
and signed by an authorized officer of the Custodian, and shall address each of
the Servicing Criteria specified on a certification substantially in the form of
Exhibit Four hereto; and
(b) deliver to the Company, the Master Servicer and the
Securities Administrator a report of a registered public accounting firm
reasonably acceptable to the Company, the Master Servicer and the Securities
Administrator that attests to, and reports on, the assessment of compliance made
by the Custodian and delivered pursuant to the preceding paragraph. Such
attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of
Regulation S-X under the Securities Act and the Exchange Act.
Section 4.5. Indemnification; Remedies.
(a) The Custodian shall indemnify the Company, each
affiliate of the Company, the Master Servicer, the Trustee and each broker
dealer acting as underwriter, placement agent or initial purchaser of the
Certificates or each Person who controls any of such parties (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act); and the
respective present and former directors, officers, employees and agents of each
of the foregoing (each, an "Indemnifed Party"), and shall hold each of them
harmless from and against any losses, damages, penalties, fines, forfeitures,
legal fees and expenses and related costs, judgments, and any other costs, fees
and expenses that any of them may sustain arising out of or based upon:
(A) any untrue statement of a material fact contained
or alleged to be contained in any information, report, certification,
accountants' attestation or other material provided under this Article
IV by or on behalf of the Custodian (collectively, the "Custodian
Information"), or (B) the omission or alleged omission to state in the
Custodian Information a material fact required to be stated in the
Custodian Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
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any failure by the Custodian to deliver any
information, report, certification, accountants' attestation or other
material when and as required under this Article IV; or
the negligence, bad faith or willful misconduct
of the Custodian in the performance of its obligations under this
Article IV.
If the indemnification provided for herein is unavailable to hold
harmless any Indemnified Party, then the Custodian agrees that it shall
contribute to the amount paid or payable by such Indemnified Party as a result
of any claims, losses, damages or liabilities incurred by such Indemnified Party
in such proportion as is appropriate to reflect the relative fault of such
Indemnified Party on the one hand and the Custodian on the other. This
indemnification shall survive the termination of this Agreement or the
termination of the Custodian.
(b) In the case of any failure of performance described in
clause (ii) of Section 4.5(a), the Custodian shall promptly reimburse the
Company for all costs reasonably incurred by the Company in order to obtain the
information, report, certification, accountants' letter or other material not
delivered as required by the Custodian.
(c) In no event shall the Custodian or its directors
officers and employees be liable for any special, indirect or consequential
damages from any action taken or omitted to be taken by it or them hereunder or
in connection herewith even if advised of the possibility of such damages.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.1. Notices. All notices, requests, consents and
demands and other communications required under this Agreement or pursuant to
any other instrument or document delivered hereunder shall be in writing and,
unless otherwise specifically provided, may be delivered personally, by telegram
or telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.
Section 5.2. Amendments. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by all parties hereto, and none of the Company, the Master
Servicer, the Securities Administrator nor the Trustee shall enter into any
amendment hereof except as permitted by the Pooling and Servicing Agreement. The
Securities Administrator shall give prompt notice to the Custodian of any
amendment or supplement to the Pooling and Servicing Agreement and furnish the
Custodian with written copies thereof.
Section 5.3. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK
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WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISION THEREOF (OTHER THAN
SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW, WHICH THE PARTIES HERETO
EXPRESSLY RELY UPON IN THE CHOICE OF SUCH LAW AS THE GOVERNING LAW HEREUNDER)
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK.
Section 5.4. Recordation of Agreement. To the extent permitted
by applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all 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 Company and at the Trust's expense on
direction by the Master Servicer, but only upon direction accompanied by an
Opinion of Counsel reasonably satisfactory to the Company to the effect that the
failure to effect such recordation is likely to materially and adversely affect
the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
Section 5.5. Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
[Remainder of page intentionally left blank]
K-10
IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
Address: CITIBANK, N.A.,
as Trustee
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Agency By:
& Trust - BSABS 2007-SD2 ------------------------------------
Name:
Title:
Address: BEAR XXXXXXX ASSET BACKED
SECURITIES I LLC, as Depositor
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Senior Managing Director - By:
Mortgage Department ------------------------------------
Name:
Title:
Address: EMC MORTGAGE CORPORATION,
as Seller
0000 Xxxx Xxxxx Xxxxx,
Xxxxxxxxxx, XX 00000
Attention: General Counsel By:
Telecopier: (000) 000-0000 ------------------------------------
Name:
Title:
Address: XXXXX FARGO BANK, N.A.,
as Master Servicer and
0000 Xxx Xxxxxxxxx Xxxx Xxxxxxxxxx Xxxxxxxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: BSABS 2007-SD2
Telecopier: (000) 000-0000 By:
------------------------------------
Name:
Title:
Address: XXXXX FARGO BANK, N.A.,
as Custodian
0000 00xx Xxxxxx X.X., XX 0031
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: BSABS 2007-SD2 By:
Telecopier: (000) 000-0000 ------------------------------------
Name:
Title:
X-00
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the _____ day of March 2007 before me, a notary public in and for said State,
personally appeared _____________________, known to me to be a
______________________ of Citibank, 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 national banking association and acknowledged to
me that such national banking association 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
[SEAL]
X-00
XXXXX XX XXXXXXXX )
) ss:
COUNTY OF XXXXXX )
On the _____ day of March 2007 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 national banking association, and
acknowledged to me that such national banking association 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
[SEAL]
X-00
XXXXX XX XXX XXXX )
) ss:
COUNTY OF NEW YORK )
On the _____ day of March 2007 before me, a notary public in and for said State,
personally appeared __________________, known to me to be a __________________
of Bear Xxxxxxx Asset Backed Securities I LLC, a limited liability company that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said limited liability company, and acknowledged to me
that such limited liability company 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]
X-00
XXXXX XX XXXXX )
) ss:
COUNTY OF XXXXXX )
On the _____ day of March 2007 before me, a notary public in and for said State,
personally appeared __________________, known to me to be a __________________
of EMC Mortgage 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]
X-00
XXXXX XX XXXXXXXXX )
) ss:
COUNTY OF HENNEPIN )
On the _____ day of March 2007 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 national banking association, and
acknowledged to me that such national banking association 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]
K-16
Schedule 1
----------
Mortgage Loans
--------------
[Provided Upon Request]
K-17
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
March ____, 2007
Citibank, N.A., as trustee
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Agency & Trust - BSABS 2007-SD2
Telecopier No.: (000) 000-0000
Bear Xxxxxxx Asset Backed Securities I LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Credit Administration
Facsimile: (000) 000-0000
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx , XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxx
Re: Custodial Agreement, dated as of March 15, 2007, by and among
Bear Xxxxxxx Asset Backed Securities I LLC, Citibank, N.A., as
Trustee, EMC Mortgage Corporation, as Seller, Xxxxx Fargo
Bank, N.A., as Master Servicer, Securities Administrator and
Custodian, relating to Bear Xxxxxxx Asset Backed Securities
Trust 2007-SD2, Asset Backed Certificates, Series 2007-SD2
----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial Agreement, and
subject to Section 2.02 of the Pooling and Servicing Agreement, the undersigned,
as Custodian, hereby certifies that it has received a Mortgage File (which
contains an original Mortgage Note or lost note affidavit, unless it has
received a separate blanket lost note affidavit covering such Mortgage Loans) to
the extent required in Section 2.01 of the Pooling and Servicing Agreement with
respect to each Mortgage Loan listed in the Mortgage Loan Schedule, with any
exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, N.A.
By:
-----------------------------------
Name:
Title:
K-18
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
[date]
Citibank, N.A., as trustee
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Agency & Trust - BSABS 2007-SD2
Telecopier No.: (000) 000-0000
Bear Xxxxxxx Asset Backed Securities I LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Credit Administration
Facsimile: (000) 000-0000
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx , XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxx
Re: Custodial Agreement, dated as of March 15, 2007, by and among
Bear Xxxxxxx Asset Backed Securities I LLC, Citibank, N.A., as
Trustee, EMC Mortgage Corporation, as Seller, Xxxxx Fargo
Bank, N.A., as Master Servicer, Securities Administrator and
Custodian, relating to Bear Xxxxxxx Asset Backed Securities
Trust 2007-SD2, Asset Backed Certificates, Series 2007-SD2
----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial Agreement, the
undersigned, as Custodian, hereby certifies that it has received a Mortgage File
to the extent required pursuant to Section 2.01 of the Pooling and Servicing
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, and it has reviewed the Mortgage File and the Mortgage Loan Schedule
and has determined that: all required documents have been executed and received
and that such documents related to the Mortgage Loans identified on the Mortgage
Loan Schedule determined on the basis of the Mortgagor's name, original
principal balance and loan number, with any exceptions listed on Schedule A
attached hereto.
Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, N.A.
By:
-----------------------------------
Name:
Title:
K-19
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
[date]
Citibank, N.A., as trustee
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Agency & Trust - BSABS 2007-SD2
Telecopier No.: (000) 000-0000
Bear Xxxxxxx Asset Backed Securities I LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Credit Administration
Facsimile: (000) 000-0000
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx , XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxx
Re: Custodial Agreement, dated as of March 15, 2007, by and among
Bear Xxxxxxx Asset Backed Securities I LLC, Citibank, N.A., as
Trustee, EMC Mortgage Corporation, as Seller, Xxxxx Fargo
Bank, N.A., as Master Servicer, Securities Administrator and
Custodian, relating to Bear Xxxxxxx Asset Backed Securities
Trust 2007-SD2, Asset Backed Certificates, Series 2007-SD2
----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial Agreement, the
undersigned, as Custodian, hereby certifies that subject to any exception listed
on Schedule A attached hereto (A) it has received a Mortgage File with respect
to each Mortgage Loan listed in the Mortgage Loan Schedule containing with
respect to each such Mortgage Loan:
The original Mortgage Note, including any riders thereto,
endorsed without recourse (unless such Mortgage Loan is registered on
the MERS System) to the order of "Citibank, N.A., as Trustee for
certificateholders of Bear Xxxxxxx Asset Backed Securities Trust
2007-SD2, Asset Backed Certificates, Series 2007-SD2, without
recourse", and showing to the extent available to the Seller an
unbroken chain of endorsements from the original payee thereof to the
Person endorsing it to the Trustee;
The original Mortgage and, if the related Mortgage Loan is a
MOM Loan, noting the presence of the MIN and language indicating that
such Mortgage Loan is a MOM Loan, which shall have been recorded (or if
the original is not available, a copy), with
K-20
evidence of such recording indicated thereon (or if clause (x) in the
proviso below applies, shall be in recordable form);
Unless the Mortgage Loan is registered on the MERS(R) System,
the assignment (either an original or a copy, which may be in the form
of a blanket assignment if permitted in the jurisdiction in which the
Mortgaged Property is located) to the Trustee of the Mortgage, in
recordable form, with respect to each Mortgage Loan in the name of
"Citibank, N.A., as Trustee for certificateholders of Bear Xxxxxxx
Asset Backed Securities Trust 2007-SD2, Asset Backed Certificates,
Series 2007-SD2" or in blank;
An original or a copy of all intervening assignments of the
Mortgage, if any, to the extent available to the Seller, with evidence
of recording thereon;
The original policy of title insurance or mortgagee's
certificate of title insurance or commitment or binder for title
insurance, if available, or a copy thereof, or, in the event that such
original title insurance policy is unavailable, a photocopy thereof, or
in lieu thereof, a current lien search on the related Mortgaged
Property; and
Originals or copies of all available assumption, modification
or substitution agreements, if any
and (B) it has determined that all required documents have been executed and
received and that such documents relate to the Mortgage Loans identified on the
Mortgage Loan Schedule, such determination having been made on the basis of the
Mortgagor's name, original principal balance and loan number.
Capitalized words and phrases used herein shall have the respective meanings
assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, N.A.
By:
-----------------------------------
Name:
Title:
K-21
EXHIBIT FOUR
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Custodian shall
address, at a minimum, the criteria identified as below as "Applicable Servicing
Criteria";
Applicable
Servicing Criteria Servicing Criteria
Reference Criteria
General Servicing Considerations
Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
1122(d)(1)(i) accordance with the transaction agreements
If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
1122(d)(1)(ii) activities
Any requirements in the transaction agreements to maintain a
1122(d)(1)(iii) back-up servicer for the pool assets are maintained.
A fidelity bond and errors and omissions policy is in effect on
the party participating in the servicing function throughout the
reporting period in the amount of coverage required by and
otherwise in accordance with the terms of the transaction
1122(d)(1)(iv) agreements.
Cash Collection and Administration
Payments on pool assets are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no
more than two business days following receipt and
identification, or such other number of days specified in the
1122(d)(2)(i) transaction agreements.
Disbursements made via wire transfer on behalf of an obligor
1122(d)(2)(ii) or to an investor are made only by authorized personnel.
Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees charged
for such advances are made, reviewed and approved as specified
1122(d)(2)(iii) in the transaction agreements.
The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv) agreements.
Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally insured
depository institutions" with respect to a foreign financial
institution means a foreign financial institution that meets the
1122(d)(2)(v) requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.
K-22
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent
unauthorized access.
Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date, or
such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than the
person who prepared the reconciliations; and (D) contain
explanations for reconciling items, These reconciling items are
resolved within 90 calendar days of their original
identification, or such other number of days specified in the
1122(d)(2)(vii) transaction agreements.
Investor Remittances and Reporting
Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements, (B) provide
information calculated in accordance with the terms specified in
the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with
investors; or the trustee's records as to the total unpaid
principal balance and number of pool assets serviced by the
servicer.
1122(d)(3)(i)
Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
1122(d)(3)(ii)
Disbursements made to an investor are posted within two business
days to the servicer's investor records, or such other number of
days specified in the transaction agreements.
1122(d)(3)(iii)
Amounts remitted to investors per the investor reports agree
with cancelled checks, or other form of payment, or custodial
bank statements.
1122(d)(3)(iv)
Pool Asset Administration
Collateral or security on pool assets is maintained as X
required by the transaction agreements or related asset pool
documents.
1122(d)(4)(i)
Pool assets and related documents are safeguarded as X
1122(d)(4)(ii) required by the transaction agreements.
Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions or
requirements in the transaction agreements
1122(d)(4)(iii)
Payments on pool assets, including any payoffs, made in
accordance with the related pool asset documents are posted to
the servicer's obligor records maintained no more than two
business days after receipt, or such other number of days
specified in the transaction agreements, and allocated to
K-23
principal, interest or other items (e.g., escrow) in accordance
1122(d)(4)(iv) with the related pool asset documents.
The servicer's records regarding the pool assets agree with the
servicer's records with respect to an obligor's unpaid principal
1122(d)(4)(v) balance.
Changes with respect to the terms or status of an obligor's pool
asset (e.g., loan modifications or re-agings) are made, reviewed
and approved by authorized personnel in accordance with the
1122(d)(4)(vi) transaction agreements and related pool asset documents.
Loss mitigation of recovery actions (e.g., forbearance plans,
modifications and deed in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other
1122(d)(4)(vii) requirements established by the transaction documents.
Records documenting collection efforts are maintained during the
period a pool asset is delinquent in accordance with the
transaction agreements., Such records are maintained in at least
a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities in
monitoring delinquent pool assets including, for example, phone
calls, letters and payment rescheduling plans in cases where
1122(d)(4)(viii) delinquency is deemed temporary (e.g., illness or unemployment).
Adjustments to interest rates or rates of return for pool assets
with variable rates are computed based on the related pool asset
1122(d)(4)(ix) documents.
Regarding any funds held in trust for an obligor (such as escrow
accounts); (A) such funds are analyzed, in accordance with the
obligor's pool asset documents, on at least an annual basis, or
such other period specified in the transaction agreements; (B)
interest on such funds is paid, or credited, to obligors in
accordance with applicable pool asset documents and state laws;
and (C) such funds are returned to the obligor within 3-
calendar days of full repayment of the related pool asset, or
such other number of days specified in the transaction
1122(d)(4)(x) agreements.
Payments made on behalf of an obligor (such as tax ore insurance
payments) are made on or before the related penalty or
expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has been
received by the service at least 30 calendar days prior to these
dates, or such other number of days specified in the transaction
1122(d)(4)(xi) agreements.
Any late payment penalties in connection with any payment to be
made on behalf of an obligor are paid from the servicer's funds
and not charged to the obligor, unless the late payment was due
1122(d)(4)(xii) to the obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
transaction agreements.
K-24
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible funds are
recognized and recorded in accordance with the
transaction agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in
item 1114(a)(1) through (3) or item 1115 of Regulation
AB, is maintained as set forth in the transaction
agreements.
K-25
EXHIBIT L
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
Definitions
-----------
Primary Servicer - transaction party having borrower contact
Master Servicer - aggregator of pool assets
Securities Administrator - waterfall calculator
Back-up Servicer - named in the transaction (in the event a Back up Servicer
becomes the Primary Servicer, follow Primary Servicer obligations)
Custodian - safe keeper of pool assets
Trustee - fiduciary of the transaction
Note: The definitions above describe the essential function that the party
performs, rather than the party's title. So, for example, in a particular
transaction, the trustee may perform the "paying agent" and "securities
administrator" functions, while in another transaction, the securities
administrator may perform these functions.
Where there are multiple checks for criteria the attesting party will identify
in their management assertion that they are attesting only to the portion of the
distribution chain they are responsible for in the related transaction
agreements.
KEY: X - OBLIGATION
REG AB SERVICING CRITERIA PRIMARY MASTER SECURITIES CUSTODIAN TRUSTEE
REFERENCE SERVICER SERVICER ADMIN (NOMINAL)
GENERAL SERVICING CONSIDERATIONS
Policies and procedures are instituted to X X X
monitor any performance or other triggers
and events of default in accordance with
1122(d)(1)(i) the transaction agreements.
If any material servicing activities are X X
outsourced to third parties, policies and
procedures are instituted to monitor the
third party's performance and compliance
1122(d)(1)(ii) with such servicing activities.
Any requirements in the transaction
agreements to maintain a back-up servicer
1122(d)(1)(iii) for the Pool Assets are maintained.
A fidelity bond and errors and omissions X X
policy is in effect on the party
participating in the servicing function
throughout the reporting period in the
amount of coverage required by and
otherwise in accordance with the terms of
1122(d)(1)(iv) the transaction agreements.
L-1
(continued)
REG AB SERVICING CRITERIA PRIMARY MASTER SECURITIES CUSTODIAN TRUSTEE
REFERENCE SERVICER SERVICER ADMIN (NOMINAL)
GENERAL SERVICING CONSIDERATIONS
CASH COLLECTION AND
ADMINISTRATION
Payments on pool assets are deposited X X X
into the appropriate custodial bank
accounts and related bank clearing
accounts no more than two business days
following receipt, or such other number
of days specified in the transaction
1122(d)(2)(i) agreements.
Disbursements made via wire transfer on X X X
behalf of an obligor or to an investor
1122(d)(2)(ii) are made only by authorized personnel.
Advances of funds or guarantees regarding X X X
collections, cash flows or distributions,
and any interest or other fees charged
for such advances, are made, reviewed and
approved as specified in the transaction
1122(d)(2)(iii) agreements.
The related accounts for the transaction, X X X
such as cash reserve accounts or accounts
established as a form of over
collateralization, are separately
maintained (e.g., with respect to
commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
Each custodial account is maintained at a X X X
federally insured depository institution
as set forth in the transaction
agreements. For purposes of this
criterion, "federally insured depository
institution" with respect to a foreign
financial institution means a foreign
financial institution that meets the
requirements of Rule 13k-1(b)(1) of the
1122(d)(2)(v) Securities Exchange Act.
Unissued checks are safeguarded X X
so as to prevent unauthorized
1122(d)(2)(vi) access.
L-2
(continued)
REG AB SERVICING CRITERIA PRIMARY MASTER SECURITIES CUSTODIAN TRUSTEE
REFERENCE SERVICER SERVICER ADMIN (NOMINAL)
GENERAL SERVICING CONSIDERATIONS
Reconciliations are prepared on a monthly X X X
basis for all asset-backed securities
related bank accounts, including
custodial accounts and related bank
clearing accounts. These reconciliations
are (A) mathematically accurate; (B)
prepared within 30 calendar days after
the bank statement cutoff date, or such
other number of days specified in the
transaction agreements; (C) reviewed and
approved by someone other than the person
who prepared the reconciliation; and (D)
contain explanations for reconciling
items. These reconciling items are
resolved within 90 calendar days of their
original identification, or such other
number of days specified in the
1122(d)(2)(vii) transaction agreements.
INVESTOR REMITTANCES AND
REPORTING
Reports to investors, including those to X X X
be filed with the Commission, are
maintained in accordance with the
transaction agreements and applicable
Commission requirements. Specifically,
such reports (A) are prepared in
accordance with timeframes and other
terms set forth in the transaction
agreements; (B) provide information
calculated in accordance with the terms
specified in the transaction agreements;
(C) are filed with the Commission as
required by its rules and regulations;
and (D) agree with investors' or the
trustee's records as to the total unpaid
principal balance and number of Pool
1122(d)(3)(i) Assets serviced by the Servicer.
Amounts due to investors are allocated X X X
and remitted in accordance with
timeframes, distribution priority and
other terms set forth in the transaction
1122(d)(3)(ii) agreements.
Disbursements made to an investor are X X X
posted within two business days to the
Servicer's investor records, or such
other number of days specified in the
1122(d)(3)(iii) transaction agreements.
Amounts remitted to investors per the X X X
investor reports agree with cancelled
checks, or other form of payment, or
1122(d)(3)(iv) custodial bank statements.
POOL ASSET ADMINISTRATION
L-3
(continued)
REG AB SERVICING CRITERIA PRIMARY MASTER SECURITIES CUSTODIAN TRUSTEE
REFERENCE SERVICER SERVICER ADMIN (NOMINAL)
GENERAL SERVICING CONSIDERATIONS
Collateral or security on pool assets is X X
maintained as required by the transaction
agreements or related pool asset
1122(d)(4)(i) documents.
Pool assets and related documents are X X
safeguarded as required by the
1122(d)(4)(ii) transaction agreements
Any additions, removals or substitutions X X
to the asset pool are made, reviewed and
approved in accordance with any
conditions or requirements in the
1122(d)(4)(iii) transaction agreements.
Payments on pool assets, including any X
payoffs, made in accordance with the
related pool asset documents are posted
to the Servicer's obligor records
maintained no more than two business days
after receipt, or such other number of
days specified in the transaction
agreements, and allocated to principal,
interest or other items (e.g., escrow) in
accordance with the related pool asset
1122(d)(4)(iv) documents.
The Servicer's records regarding the pool X
assets agree with the Servicer's records
with respect to an obligor's unpaid
1122(d)(4)(v) principal balance.
Changes with respect to the terms or X X
status of an obligor's pool assets (e.g.,
loan modifications or re-agings) are
made, reviewed and approved by authorized
personnel in accordance with the
transaction agreements and related pool
1122(d)(4)(vi) asset documents.
Loss mitigation or recovery actions X X
(e.g., forbearance plans, modifications
and deeds in lieu of foreclosure,
foreclosures and repossessions, as
applicable) are initiated, conducted and
concluded in accordance with the
timeframes or other requirements
established by the transaction
1122(d)(4)(vii) agreements.
L-4
(continued)
REG AB SERVICING CRITERIA PRIMARY MASTER SECURITIES CUSTODIAN TRUSTEE
REFERENCE SERVICER SERVICER ADMIN (NOMINAL)
GENERAL SERVICING CONSIDERATIONS
Records documenting collection efforts X
are maintained during the period a pool
asset is delinquent in accordance with
the transaction agreements. Such records
are maintained on at least a monthly
basis, or such other period specified in
the transaction agreements, and describe
the entity's activities in monitoring
delinquent pool assets including, for
example, phone calls, letters and payment
rescheduling plans in cases where
delinquency is deemed temporary (e.g.,
1122(d)(4)(viii) illness or unemployment).
Adjustments to interest rates or rates of X
return for pool assets with variable
rates are computed based on the related
1122(d)(4)(ix) pool asset documents.
Regarding any funds held in trust for an X
obligor (such as escrow accounts): (A)
such funds are analyzed, in accordance
with the obligor's pool asset documents,
on at least an annual basis, or such
other period specified in the transaction
agreements; (B) interest on such funds is
paid, or credited, to obligors in
accordance with applicable pool asset
documents and state laws; and (C) such
funds are returned to the obligor within
30 calendar days of full repayment of the
related pool assets, or such other number
of days specified in the transaction
1122(d)(4)(x) agreements.
Payments made on behalf of an obligor X
(such as tax or insurance payments) are
made on or before the related penalty or
expiration dates, as indicated on the
appropriate bills or notices for such
payments, provided that such support has
been received by the servicer at least 30
calendar days prior to these dates, or
such other number of days specified in
1122(d)(4)(xi) the transaction agreements.
Any late payment penalties in connection X
with any payment to be made on behalf of
an obligor are paid from the Servicer's
funds and not charged to the obligor,
unless the late payment was due to the
1122(d)(4)(xii) obligor's error or omission.
L-5
(continued)
REG AB SERVICING CRITERIA PRIMARY MASTER SECURITIES CUSTODIAN TRUSTEE
REFERENCE SERVICER SERVICER ADMIN (NOMINAL)
GENERAL SERVICING CONSIDERATIONS
Disbursements made on behalf of an X
obligor are posted within two business
days to the obligor's records maintained
by the servicer, or such other number of
days specified in the transaction
1122(d)(4)(xiii) agreements.
Delinquencies, charge-offs and X X
uncollectible accounts are recognized and
recorded in accordance with the
1122(d)(4)(xiv) transaction agreements.
Any external enhancement or other X X
support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation
AB, is maintained as set forth in the
1122(d)(4)(xv) transaction agreements.
X-0
XXXXXXX X-0
FORM OF BACK-UP CERTIFICATION
I. The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"),
among [IDENTIFY PARTIES] I, ________________________________, the
_______________________ of [NAME OF COMPANY], certify to [the
Depositor], and the [Master Servicer] [Securities Administrator]
[Trustee], and their officers, with the knowledge and intent that they
will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the
"Attestation Report"), and all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans by the Company during 200[ ] that were delivered by the
Company to the [Depositor] [Master Servicer] [Securities Administrator]
and the [Trustee] pursuant to the Agreement (collectively, the "Company
Servicing Information");
(2) Based on my knowledge, the Company Servicing Information, 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 with respect to the period of time covered by the Company
Servicing Information;
(3) Based on my knowledge, all of the Company Servicing Information
required to be provided by the Company under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities
Administrator] and the [Trustee];
(4) I am responsible for reviewing the activities performed by the
Company as servicer under the Agreement, and based on my knowledge and
the compliance review conducted in preparing the Compliance Statement
and except as disclosed in the Compliance Statement, the Servicing
Assessment or the Attestation Report, the Company has fulfilled its
obligations under the Agreement in all material respects; and
(5) The Compliance Statement required to be delivered by the
Company pursuant to the Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Company and by any
Subservicer or Subcontractor pursuant to the Agreement, have been
provided to the [Depositor] and the
M-1-1
[Securities Administrator]. Any material instances of noncompliance
described in such reports have been disclosed to the [Depositor] and
the [Securities Administrator]. Any material instance of noncompliance
with the Servicing Criteria has been disclosed in such reports.
Date:
--------------------------
By:
Name:
--------------------------------
Title:
--------------------------------
X-0-0
XXXXXXX X-0
FORM OF CERTIFICATION FOR THE SECURITIES ADMINISTRATOR
------------------------------------------------------
Re: Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2 (the
"Trust"), Mortgage Pass-Through Certificates, Series 2007-SD2,
issued pursuant to the Pooling and Servicing Agreement, dated
as of February 1, 2007, among Bear Xxxxxxx Asset Backed
Securities I LLC, as Depositor, EMC Mortgage Corporation, Xxxxx
Fargo Bank, National Association, as Master Servicer and
Securities Administrator and Citibank, N.A., as Trustee
The Securities Administrator hereby certifies to the Depositor, and its
officers, directors and affiliates, and with the knowledge and intent that they
will rely upon this certification, that:
(1) I have reviewed the annual report on Form 10-K for the fiscal
year [____] (the "Annual Report"), and all reports on Form 10-D required to be
filed in respect of period covered by the Annual Report (collectively with the
Annual Report, the "Reports"), of the Trust;
(2) To my knowledge, (a) the Reports, taken as a whole, do 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 with respect to the period covered by
the Annual Report, and (b) the Securities Administrator's assessment of
compliance and related attestation report referred to below, taken as a whole,
do 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 with respect
to the period covered by such assessment of compliance and attestation report;
(3) To my knowledge, the distribution information required to be
provided by the Securities Administrator under the Pooling and Servicing
Agreement for inclusion in the Reports is included in the Reports;
(4) I am responsible for reviewing the activities performed by the
Securities Administrator under the Pooling and Servicing Agreement, and based on
my knowledge and the compliance review conducted in preparing the compliance
statement of the Securities Administrator required by the Pooling and Servicing
Agreement, and except as disclosed in the Reports, the Securities Administrator
has fulfilled its obligations under the Pooling and Servicing Agreement in all
material respects; and
(5) The report on assessment of compliance with servicing criteria
applicable to the Securities Administrator for asset-backed securities of the
Securities Administrator and each Subcontractor utilized by the Securities
Administrator and related attestation report on assessment of compliance with
servicing criteria applicable to it required to be included in the Annual
M-2-1
Report in accordance with Item 1122 of Regulation AB and Exchange Act Rules
13a-18 and 15d-18 has been included as an exhibit to the Annual Report. Any
material instances of non-compliance are described in such report and have been
disclosed in the Annual Report.
In giving the certifications above, the Securities Administrator has
reasonably relied on information provided to it by the following unaffiliated
parties: [names of servicer(s), master servicer, subservicer, depositor,
trustee, custodian(s)]
Date:
-----------------------------
----------------------------------
[Signature]
[Title]
M-2-2
EXHIBIT N
Form of Yield Maintenance Agreements
Please see Tab ___ in the closing checklist
N--1
EXHIBIT O
FORM 10-D, FORM 8-K AND FORM 10-K
REPORTING RESPONSIBILITY
As to each item described below, the entity indicated as the
Responsible Party shall be primarily responsible for reporting the information
to the party identified as responsible for preparing the Securities Exchange Act
Reports pursuant to Section 3.18.
Under Item 1 of Form 10-D: a) items marked "Monthly Statement
to Certificateholders" are required to be included in the periodic Distribution
Date statement under Section 5.05, provided by the Securities Administrator
based on information received from the party providing such information; and b)
items marked "Form 10-D report" are required to be in the Form 10-D report but
not the Monthly Statements to Certificateholders, provided by the party
indicated. Information under all other Items of Form 10-D is to be included in
the Form 10-D report. All such information and any other Items on Form 8-K and
Form 10-D set forth in this Exhibit shall be sent to the Securities
Administrator and the Depositor.
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
10-D Must be filed within 15 days of the distribution date for the (NOMINAL)
asset-backed securities.
1 DISTRIBUTION AND
POOL PERFORMANCE
INFORMATION
Item 1121(a) -
Distribution and
Pool Performance
Information
(1) Any applicable X
record dates,
accrual dates, (MONTHLY
determination dates STATEMENTS TO
for calculating CERTIFICATEHOLDERS)
distributions and
actual distribution
dates for the
distribution period.
(2) Cash flows X
received and the
sources thereof for (MONTHLY
distributions, fees STATEMENTS TO
and expenses. CERTIFICATEHOLDERS)
(3) Calculated X
amounts and
distribution of the (MONTHLY
flow of funds for STATEMENTS TO
the period itemized CERTIFICATEHOLDERS)
by type and priority
of payment,
O-1
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
including:
(i) Fees or X
expenses accrued and
paid, with an (MONTHLY
identification of STATEMENTS TO
the general purpose CERTIFICATEHOLDERS)
of such fees and the
party receiving such
fees or expenses.
(ii) Payments X
accrued or paid with
respect to (MONTHLY
enhancement or other STATEMENTS TO
support identified CERTIFICATEHOLDERS)
in Item 1114 of
Regulation AB (such
as insurance
premiums or other
enhancement
maintenance fees),
with an
identification of
the general purpose
of such payments and
the party receiving
such payments.
(iii) Principal, X
interest and other
distributions (MONTHLY
accrued and paid on STATEMENTS TO
the asset-backed CERTIFICATEHOLDERS)
securities by type
and by class or
series and any
principal or
interest shortfalls
or carryovers.
(iv) The amount of X
excess cash flow or
excess spread and (MONTHLY
the disposition of STATEMENTS TO
excess cash flow. CERTIFICATEHOLDERS)
(4) Beginning and X
ending principal
balances of the (MONTHLY
asset-backed STATEMENTS TO
securities. CERTIFICATEHOLDERS)
O-2
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
(5) Interest rates X
applicable to the
pool assets and the (MONTHLY
asset-backed STATEMENTS TO
securities, as CERTIFICATEHOLDERS)
applicable. Consider
providing interest
rate information for
pool assets in
appropriate
distributional
groups or
incremental ranges.
(6) Beginning and X
ending balances of
transaction (MONTHLY
accounts, such as STATEMENTS TO
reserve accounts, CERTIFICATEHOLDERS)
and material account
activity during the
period.
(7) Any amounts X
drawn on any credit
enhancement or other (MONTHLY
support identified STATEMENTS TO
in Item 1114 of CERTIFICATEHOLDERS)
Regulation AB, as
applicable, and the
amount of coverage
remaining under any
such enhancement, if
known and applicable.
(8) Number and X Updated
amount of pool pool
assets at the (MONTHLY composition
beginning and ending STATEMENTS TO information
of each period, and CERTIFICATEHOLDERS) fields to
updated pool be as
composition specified
information, such as by
weighted average Depositor
coupon, weighted from time
average remaining to time
term,
O-3
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
pool factors
and prepayment
amounts.
(9) Delinquency and X X X
loss information for (MONTHLY
the period. STATEMENTS TO
CERTIFICATEHOLDERS)
In addition, X
describe any
material changes to
the information
specified in Item
1100(b)(5) of
Regulation AB
regarding the pool
assets. (methodology)
(10) Information on X X X
the amount, terms
and general purpose (MONTHLY
of any advances made STATEMENTS TO
or reimbursed during CERTIFICATEHOLDERS)
the period,
including the
general use of funds
advanced and the
general source of
funds for
reimbursements.
(11) Any material X X X
modifications,
extensions or (MONTHLY
waivers to pool STATEMENTS TO
asset terms, fees, CERTIFICATEHOLDERS)
penalties or
payments during the
distribution period
or that have
cumulatively become
material over time.
(12) Material X X X X
breaches of pool
asset (if agreed upon
representations or by the parties)
warranties or
transaction
covenants.
O-4
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
(13) Information on X
ratio, coverage or
other tests used for (MONTHLY
determining any STATEMENTS TO
early amortization, CERTIFICATEHOLDERS)
liquidation or other
performance trigger
and whether the
trigger was met.
(14) Information X
regarding any new
issuance of asset-
backedsecurities backed
by the same asset pool,
information X X X X
regarding any
pool asset
changes (other
than in
connection with a
pool asset
converting into
cash in
accordance with
its terms), such
as additions or
removals in
connection with a
prefunding or
revolving period
and pool asset
substitutions and
repurchases (and
purchase rates,
if applicable),
and cash flows
available for
future purchases,
such as the
balances of any
prefunding or
revolving
accounts, if
applicable.
Disclose any X X
material changes
in the
O-5
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
solicitation,
credit-granting,
underwriting,
origination,
acquisition or
pool selection
criteria or
procedures, as
applicable, used
to originate,
acquire or select
the new pool
assets.
Item 1121(b) - X
Pre-Funding or
Revolving Period
Information
Updated pool
information as required
under Item 1121(b).
2 LEGAL PROCEEDINGS
Item 1117 - Legal
proceedings pending
against the following
entities, or their
respective property,
that is material to
Certificateholders,
including proceedings
known to be
contemplated by
governmental
authorities:
Sponsor (Seller) X
Depositor X
Trustee X
Issuing entity X
Master Servicer, X X
affiliated Servicer,
other Servicer
servicing 20% or
more of pool assets
at time of report,
other material
servicers
O-6
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
Securities X
Administrator
Originator of 20% or X
more of pool assets
as of the Cut-off
Date
Custodian X
3 SALES OF SECURITIES
AND USE OF PROCEEDS
Information from Item X
2(a) of Part II of Form
10-Q:
With respect to any
sale of securities by
the sponsor, depositor
or issuing entity, that
are backed by the same
asset pool or are
otherwise issued by the
issuing entity, whether
or not registered,
provide the sales and
use of proceeds
information in Item 701
of Regulation S-K.
Pricing information can
be omitted if securities
were not registered.
4 DEFAULTS UPON SENIOR
SECURITIES
Information from Item 3 X
of Part II of Form 10-Q:
Report the
occurrence of any
Event of Default
(after expiration of
any grace period and
provision of any
required
O-7
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
notice)
5 SUBMISSION OF
MATTERS TO A VOTE OF
SECURITY HOLDERS
Information from X
Item 4 of Part II of
Form 10-Q
6 SIGNIFICANT OBLIGORS
OF POOL ASSETS
Item 1112(b) - X
Significant Obligor
Financial
Information*
*This information need
only be reported on the
Form 10-D for the
distribution period in
which updated
information is required
pursuant to the Item.
7 SIGNIFICANT
ENHANCEMENT PROVIDER
INFORMATION
Item 1114(b)(2) -
Credit Enhancement
Provider Financial
Information*
Determining X
applicable
disclosure
threshold
Obtaining X
required
financial
information or
effecting
incorporation by
reference
Item 1115(b) -
Derivative
Counterparty
Financial
Information*
Determining X
current
O-8
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
maximum
probable exposure
Determining X
current
significance
percentage
Notifying X
derivative
counterparty of
significance
percentage and
requesting
required
financial
information
Obtaining X
required
financial
information or
effecting
incorporation by
reference
*This information need
only be reported on the
Form 10-D for the
distribution period in
which updated
information is
required pursuant to
the Items.
8 OTHER INFORMATION
Disclose any The Responsible Party for the applicable Form 8-K item as indicated below.
information required
to be reported on
Form 8-K during the
period covered by
the Form 10-D but
not reported
9 EXHIBITS
Distribution report X
Exhibits required by X
Item 601 of
Regulation S-K, such
as material
agreements
8-K Must be filed within four business days of an event reportable on
Form 8-K.
1.01 ENTRY INTO A
O-9
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
MATERIAL DEFINITIVE
AGREEMENT
Disclosure is X X X X X
required regarding
entry into or
amendment of any
definitive agreement
that is material to
the securitization,
even if depositor is
not a party.
Examples: servicing
agreement, custodial
agreement.
Note: disclosure not
required as to
definitive
agreements that are
fully disclosed in
the prospectus
1.02 TERMINATION OF A X X X X X
MATERIAL DEFINITIVE
AGREEMENT
Disclosure is required
regarding termination
of any definitive
agreement that is
material to the
securitization (other
than expiration in
accordance with its
terms), even if
depositor is not a
party.
Examples: servicing
agreement, custodial
agreement.
1.03 BANKRUPTCY OR
RECEIVERSHIP
O-10
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
Disclosure is X X X X X X
required regarding
the bankruptcy or
receivership, if
known to the Master
Servicer, with
respect to any of
the following:
Sponsor (Seller),
Depositor, Master
Servicer, affiliated
Servicer, other
Servicer servicing 20%
or more of pool assets
at time of report,
other material
servicers, Certificate
Administrator, Trustee,
significant obligor,
credit enhancer
(10% or more),
derivatives
counterparty, Custodian
2.04 TRIGGERING EVENTS
THAT ACCELERATE OR
INCREASE A DIRECT
FINANCIAL OBLIGATION
OR AN OBLIGATION
UNDER AN OFF-BALANCE
SHEET ARRANGEMENT
Includes an early X X
amortization,
performance trigger
or other event,
including event of
default, that would
materially alter the
payment
priority/distribution
of cash
flows/amortization
schedule.
Disclosure will be
O-11
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
made of events other
than waterfall
triggers which are
disclosed in the
6.07 statement
3.03 MATERIAL
MODIFICATION TO
RIGHTS OF SECURITY
HOLDERS
Disclosure is X X
required of any
material
modification to
documents defining
the rights of
Certificateholders,
including the
Pooling and
Servicing Agreement
5.03 AMENDMENTS TO
ARTICLES OF
INCORPORATION OR
BYLAWS; CHANGE IN
FISCAL YEAR
Disclosure is X
required of any
amendment "to the
governing documents
of the issuing entity"
5.06 CHANGE IN SHELL
COMPANY STATUS
[Not applicable to X
ABS issuers]
6.01 ABS INFORMATIONAL
AND COMPUTATIONAL
MATERIAL
[Not included in X
reports to be filed
under Section 3.18]
6.02 CHANGE OF SERVICER
OR TRUSTEE
Requires disclosure X X X X
of any removal,
O-12
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
replacement,
substitution or
addition of any
master servicer,
affiliated servicer,
other servicer
servicing 10% or
more of pool assets
at time of report,
other material
servicers,
certificate
administrator or
trustee.
Reg AB disclosure X
about any new servicer
is also required.
Reg AB disclosure X (TO THE
about any new trustee EXTENT OF A
is also required. NEW TRUSTEE)
Reg AB disclosure X
about any new
securities administrator
is also required.
6.03 CHANGE IN CREDIT
ENHANCEMENT OR OTHER
EXTERNAL SUPPORT [IN
THIS TRANSACTION THERE
IS NO EXTERNAL
ENHANCEMENT OR OTHER
SUPPORT.]
Covers termination X X
of any enhancement
in manner other than
by its terms, the
addition of an
enhancement, or a
material change in
the enhancement
provided. Applies
to external credit
enhancements as well
as derivatives.
Reg AB disclosure X X
about any new
enhancement
O-13
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
provider is
also required.
6.04 FAILURE TO MAKE A X
REQUIRED DISTRIBUTION
6.05 SECURITIES ACT
UPDATING DISCLOSURE
If any material pool X
characteristic
differs by 5% or
more at the time of
issuance of the
securities from the
description in the
final prospectus,
provide updated Reg
AB disclosure about
the actual asset
pool.
If there are any new X
servicers or
originators required
to be disclosed
under Regulation AB
as a result of the
foregoing, provide
the information
called for in Items
1108 and 1110
respectively.
7.01 REGULATION FD X X X X
DISCLOSURE
8.01 OTHER EVENTS
Any event, with X
respect to which
information is not
otherwise called for
in Form 8-K, that
the registrant deems
of importance to
security holders.
9.01 FINANCIAL STATEMENTS The Responsible Party applicable to reportable event.
AND EXHIBITS
10-K Must be filed within 90 days of the fiscal year end for the registrant.
9B OTHER INFORMATION
Disclose any The Responsible Party for the applicable Form 8-K item as indicated above.
O-14
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
information required
to be reported on
Form 8-K during the
fourth quarter covered
by the Form 10-K but
not reported
15 EXHIBITS AND
FINANCIAL STATEMENT
SCHEDULES
Item 1112(b) - X
Significant Obligor
Financial Information
Item 1114(b)(2) -
Credit Enhancement
Provider Financial
Information
Determining X
applicable
disclosure
threshold
Obtaining X
required
financial
information or
effecting
incorporation by
reference
Item 1115(b) -
Derivative
Counterparty
Financial Information
Determining X
current maximum
probable exposure
Determining X
current
significance
percentage
Notifying X
derivative
counterparty of
significance
percentage and
O-15
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
requesting
required
financial
information
Obtaining X
required
financial
information or
effecting
incorporation by
reference
Item 1117 - Legal
proceedings pending
against the following
entities, or their
respective property,
that is material to
Certificateholders,
including proceedings
known to be
contemplated by
governmental
authorities:
Sponsor (Seller) X
Depositor X
Trustee
Issuing entity X
Master Servicer, X X
affiliated Servicer,
other Servicer
servicing 20% or
more of pool assets
at time of report,
other material
servicers
Securities X
Administrator
Originator of 20% or X
more of pool assets
as of the Cut-off
Date
Custodian X
Item 1119 -
Affiliations and
relationships
between the
following entities,
or their respective
affiliates, that are
O-16
(continued)
MASTER SECURITIES
FORM ITEM DESCRIPTION SERVICERS SERVICER ADMINISTRATOR CUSTODIAN TRUSTEE DEPOSITOR SPONSOR
material to
Certificateholders:
Sponsor (Seller) X
Depositor X
Trustee X
Master Servicer, X X
affiliated Servicer,
other Servicer
servicing 20% or
more of pool assets
at time of report,
other material
servicers
Securities X
Administrator
Originator X
Custodian X
Credit X
Enhancer/Support
Provider
Significant Obligor X
Item 1122 - X X X X
Assessment of
Compliance with
Servicing Criteria
Item 1123 - Servicer X X X
Compliance Statement
O-17
EXHIBIT P
ADDITIONAL DISCLOSURE NOTIFICATION
Xxxxx Fargo Bank, N.A. as [Securities Administrator]
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
E-mail: xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx
Attn: Corporate Trust Services - BSABS I 2007-SD2-SEC REPORT PROCESSING
RE: **Additional Form [ ] Disclosure**Required
Ladies and Gentlemen:
In accordance with Section 3.18 of the Pooling and Servicing Agreement,
dated as of February 1, 2007, among EMC Mortgage Corporation, as Sponsor, Xxxxx
Fargo Bank, National Association, as Master Servicer and Securities
Administrator and Citibank, N.A., as Trustee, relating to the issuance of Bear
Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset-Backed Certificates,
Series 2007-SD2. The Undersigned, as ____________________, hereby notifies you
that certain events have come to our attention that [will][may] need to be
disclosed on Form [ ].
Description of Additional Form [ ] Disclosure:
List of Any Attachments hereto to be included in the Additional Form [ ]
Disclosure:
Any inquiries related to this notification should be directed to [ ],
phone number: [ ]; email address: [ ].
[NAME OF PARTY]
as [role]
By:
------------------------------------
Name:
Title:
P-1
SCHEDULE I
Servicing Agreements
S-1-1
Execution Copy
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BEAR XXXXXXX ASSET BACKED SECURITIES I LLC
Owner
and
EMC MORTGAGE CORPORATION
Servicer
SERVICING AGREEMENT
Dated as of February 1, 2007
Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2
Mortgage Pass-Through Certificates
Series 2007-SD2
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Article I DEFINITIONS.........................................................1
Section 1.01. Defined Terms...........................................1
Article II SERVICING OF MORTGAGE LOANS; POSSESSION OF SERVICING FILES;
BOOKS AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS............11
Section 2.01. Servicing of Mortgage Loans............................11
Section 2.02. Maintenance of Servicing Files.........................11
Section 2.03. Books and Records......................................11
Section 2.04. Transfer of Mortgage Loans.............................12
Section 2.05. Delivery of Mortgage Loan Documents....................12
Article III REPRESENTATIONS AND WARRANTIES OF THE SERVICER...................13
Article IV ADMINISTRATION AND SERVICING OF MORTGAGE LOANS....................15
Section 4.01. Servicer to Act as Servicer............................15
Section 4.02. Collection of Mortgage Loan Payments...................17
Section 4.03. Realization Upon Defaulted Mortgage Loans..............18
Section 4.04. Establishment of Custodial Accounts; Deposits
in Custodial Accounts..................................18
Section 4.05. Permitted Withdrawals From the Custodial Account.......20
Section 4.06. Establishment of Escrow Accounts; Deposits in
Escrow Accounts........................................21
Section 4.07. Permitted Withdrawals From Escrow Account..............21
Section 4.08. Payment of Taxes, Insurance and Other Charges,
Maintenance of Primary Mortgage Insurance
Policies, Collections Thereunder.......................22
Section 4.09. Transfer of Accounts...................................23
Section 4.10. Maintenance of Hazard Insurance........................23
Section 4.11. Maintenance of Mortgage Impairment Insurance Policy....24
Section 4.12. Fidelity Bond, Errors and Omissions Insurance..........25
Section 4.13. Title, Management and Disposition of REO Property......25
Section 4.14. Notification of Adjustments............................27
Article V PAYMENTS TO THE OWNER..............................................27
Section 5.01. Remittances............................................27
Section 5.02. Statements to the Owner and the Master Servicer........28
Section 5.03. Monthly Advances by the Servicer.......................28
Section 5.04. Liquidation Reports....................................29
Article VI GENERAL SERVICING PROCEDURES......................................29
Section 6.01. Assumption Agreements..................................29
Section 6.02. Satisfaction of Mortgages and Release of
Mortgage Loan Documents................................30
Section 6.03. Servicing Compensation.................................31
Section 6.04. Annual Statement as to Compliance; Annual
Certification..........................................31
Section 6.05. [Reserved].............................................32
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Section 6.06. Owner's Right to Examine Servicer Records..............32
Section 6.07. Compliance with REMIC Provisions.......................33
Section 6.08. Non-solicitation.......................................33
Section 6.09. Assessment of Compliance with Servicing Criteria.......33
Section 6.10. Intent of the Parties; Reasonableness..................34
Article VII REPORTS TO BE PREPARED BY SERVICER...............................35
Section 7.01. Servicer Shall Provide Information as
Reasonably Required....................................35
Article VIII THE SERVICER....................................................35
Section 8.01. Indemnification; Third Party Claims....................35
Section 8.02. Merger or Consolidation of the Servicer................36
Section 8.03. Limitation on Liability of the Servicer and Others.....36
Section 8.04. Servicer Not to Resign.................................36
Section 8.05. No Transfer of Servicing...............................37
Article IX DEFAULT...........................................................37
Section 9.01. Events of Default......................................37
Section 9.02. Waiver of Defaults.....................................39
Article X TERMINATION........................................................39
Section 10.01. Termination............................................39
Section 10.02. Cooperation of Servicer with a Reconstitution..........39
Section 10.03. Master Servicer........................................43
Article XI MISCELLANEOUS PROVISIONS..........................................44
Section 11.01. Successor to the Servicer..............................44
Section 11.02. Amendment..............................................45
Section 11.03. Recordation of Agreement...............................45
Section 11.04. Governing Law..........................................45
Section 11.05. Notices................................................46
Section 11.06. Severability of Provisions.............................46
Section 11.07. Exhibits...............................................47
Section 11.08. General Interpretive Principles........................47
Section 11.09. Reproduction of Documents..............................47
Section 11.10. Confidentiality of Information.........................48
Section 11.11. Assignment by the Owner................................48
Section 11.12. No Partnership.........................................48
Section 11.13. Execution, Successors and Assigns......................48
Section 11.14. Entire Agreement.......................................48
Section 11.15. Use of Subservicers and Subcontractors.................49
Section 11.16. Third Party Beneficiary................................50
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EXHIBITS
Exhibit A Mortgage Loan Schedule
Exhibit B Custodial Account Letter Agreement
Exhibit C Escrow Account Letter Agreement
Exhibit D Form of Request for Release
Exhibit E Reporting Data for Monthly Report
Exhibit F Reporting Data for Defaulted Loans
Exhibit G Form of Owner Certification
Exhibit H Summary of Regulation AB Servicing Criteria
Exhibit I Summary of Applicable Regulation AB Requirements
Exhibit J Servicing Criteria to be Addressed in Assessment of Compliance
Exhibit K Reporting Data for Realized Losses and Gains
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THIS IS A SERVICING AGREEMENT, dated as of February 1, 2007, and is
executed between Bear Xxxxxxx Asset Backed Securities I LLC (the "Owner") and
EMC Mortgage Corporation (the "Servicer").
W I T N E S S E T H :
WHEREAS, the Owner is the owner of the Mortgage Loans;
WHEREAS, the Owner and the Servicer wish to prescribe the permanent
management, servicing and control of the Mortgage Loans;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the Owner and the Servicer agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meaning specified in
this Article:
Accepted Servicing Practices: The procedures, including prudent collection
and loan administration procedures, and the standard of care (i) employed by
prudent mortgage servicers which service mortgage loans of the same type as the
Mortgage Loans in the jurisdictions in which the related Mortgage Properties are
located or (ii) in accordance with the Xxxxxx Xxx Guide or Xxxxxxx Mac Guide,
subject to any variances negotiated with Xxxxxx Xxx or Xxxxxxx Mac and subject
to the express provisions of this Agreement. Such standard of care shall not be
lower than that the Servicer customarily employs and exercises in servicing and
administering similar mortgage loans for its own account and shall be in full
compliance with all federal, state, and local laws, ordinances, rules and
regulations.
Adjustment Date: As to each ARM Loan, the date on which the Mortgage
Interest Rate is adjusted in accordance with the terms of the related Mortgage
Note.
Agreement: This Servicing Agreement including all exhibits hereto,
amendments hereof and supplements hereto.
ARM Loans: First lien, conventional, 1-4 family residential Mortgage Loans
with interest rates which adjust from time to time in accordance with the
related Index and are subject to Periodic Rate Caps and Lifetime Rate Caps and
which may permit conversion to fixed interest rates.
BSABS I: Bear Xxxxxxx Asset Backed Securities I LLC.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a legal
holiday in the States of Maryland, Minnesota, New York or the jurisdiction in
which the Servicer conducts its
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servicing activities, or (iii) a day on which banks in the States of
Maryland, Minnesota, New York or the jurisdiction in which the Servicer conducts
its servicing activities are authorized or obligated by law or executive order
to be closed.
Code: The Internal Revenue Code of 1986, as it may be amended from time to
time, or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
Commission or SEC: The Securities and Exchange Commission.
Condemnation Proceeds: All awards or 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.
Custodial Account: One or more demand account or accounts created and
maintained pursuant to Section 4.04 which shall be entitled "BSABS 2007-SD2
Custodial Account in trust for BSABS I, Owner of Whole Loan Mortgages and
various Mortgagors" established at a Qualified Depository, each of which
accounts shall be held by such Qualified Depository in a fiduciary capacity,
separate and apart from its funds and general assets.
Custodian: Xxxxx Fargo Bank, National Association, or such other custodian
as Owner shall designate.
Cut-off Date: With respect to any Mortgage Loan, the opening of business on
the first day of the month in which the related closing date with respect to
such Mortgage Loan occurs.
Delinquent: A Mortgage Loan is "delinquent" if any payment due thereon is
not made pursuant to the terms of such Mortgage Loan by the close of business on
the day such payment is scheduled to be due. A Mortgage Loan is "30 days
delinquent" if such payment has not been received by the close of business on
the corresponding day of the month immediately succeeding the month in which
such payment was due, or, if there is no such corresponding day (e.g., as when a
30-day month follows a 31-day month in which a payment was due on the 31st day
of such month), then on the last day of such immediately succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so on. This method
of determining delinquencies is also referred to as the OTS method.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Pass-Through Transfer.
Determination Date: The 15th day (or if such 15th day is not a Business
Day, the Business Day immediately preceding such 15th day) of the month of the
Remittance Date.
Due Date: Each day on which payments of principal and interest are required
to be paid in accordance with the terms of the related Mortgage Note, exclusive
of any days of grace.
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Due Period: With respect to each Remittance Date, the period commencing on
the second day of the month preceding the month of such Remittance Date and
ending on the first day of the month of the Remittance Date.
Escrow Account: The separate trust account or accounts created and
maintained pursuant to Section 4.06 which shall be entitled "BSABS 2007-SD2
Escrow Account, in trust for BSABS I, Owner of Whole Loan Mortgages and various
Mortgagors" and shall be established at a Qualified Depository, each of which
accounts shall in no event contain funds in excess of the FDIC insurance limits.
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: Any one of the conditions or circumstances enumerated in
Section 9.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx: Xxxxxx Xxx, or any successor thereto.
Xxxxxx Mae Guide: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae Servicing
Guide and all amendments or additions thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer pursuant to
Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement Act of
1989, as amended from time to time.
Xxxxxxx Mac: Xxxxxxx Mac, or any successor thereto.
Xxxxxxx Mac Guide: The Xxxxxxx Mac Selling Guide and the Xxxxxxx Mac
Servicing Guide and all amendments or additions thereto.
Full Principal Prepayment: A Principal Prepayment made by a Mortgagor of
the entire principal balance of a Mortgage Loan.
GAAP: Generally accepted accounting procedures, consistently applied.
HUD: The United States Department of Housing and Urban Development or any
successor.
Index: With respect to each ARM Loan, on the related Adjustment Date, the
index used to determine the Mortgage Interest Rate on each such ARM Loan.
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Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Lifetime Rate Cap: With respect to each ARM Loan, the maximum Mortgage
Interest Rate over the term of such Mortgage Loan, as specified in the related
Mortgage Note.
Liquidation Proceeds: Amounts, other than Insurance Proceeds and
Condemnation Proceeds, 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 or otherwise, other than amounts received
following the acquisition of an REO Property pursuant to Section 4.13.
Margin: With respect to each ARM Loan, the fixed percentage amount set
forth in each related Mortgage Note which is added to the Index in order to
determine the related Mortgage Interest Rate.
Master Servicer: Xxxxx Fargo Bank, National Association, its successors in
interest and assigns, or any successor thereto designated by the Owner.
Monthly Advance: The aggregate of the advances made by the Servicer on any
Remittance Date pursuant to Section 5.03.
Monthly Payment: With respect to each Mortgage Loan, the scheduled monthly
payment of principal and interest thereon which is payable by the related
Mortgagor under the related Mortgage Note.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note.
Mortgage Interest Rate: The annual rate at which interest accrues on any
Mortgage Loan in accordance with the provisions of the related Mortgage Note,
and in the case of an ARM Loan, as adjusted from time to time on each Adjustment
Date for such Mortgage Loan to equal the Index for such Mortgage Loan plus the
Margin for such Mortgage Loan, and subject to the limitations on such interest
rate imposed by the Periodic Rate Cap and the Lifetime Rate Cap.
Mortgage Loan: An individual Mortgage Loan described herein and as further
identified on the Mortgage Loan Schedule, which Mortgage Loan includes without
limitation the Mortgage Loan Documents, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The original mortgage loan legal documents held by
the Custodian.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Owner, which shall be equal to the
related Mortgage Interest Rate minus the Servicing Fee Rate.
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Mortgage Loan Schedule: The schedule of Mortgage Loans attached hereto as
Exhibit A, such schedule being acceptable to the Owner and the Servicer.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The underlying real property securing repayment of a
Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Negative Amortization: The portion of interest accrued at the Mortgage
Interest Rate in any month which exceeds the Monthly Payment on a Mortgage Loan,
including an Option ARM Mortgage Loan, for such month and which, pursuant to the
terms of the Mortgage Note, is added to the principal balance of the related
Mortgage Loan.
Net Liquidation Proceeds: As to any Mortgage Loan, Liquidation Proceeds net
of unreimbursed Servicing Advances, Servicing Fees and Monthly Advances and
expenses incurred by the Servicer in connection with the liquidation of the
Mortgage Loan and the related Mortgaged Property.
Nonrecoverable Advance: Any advance previously made by the Servicer
pursuant to Section 5.03 or any Servicing Advance proposed to be made by the
Servicer in respect of a Mortgage Loan or REO Property which, in the good faith
judgment of the Servicer, may not be ultimately recoverable by the Servicer from
Liquidation Proceeds or Insurance Proceeds on such Mortgage Loan or REO Property
as provided herein. The determination by the Servicer that it has made a
Nonrecoverable Advance, or that a proposed advance may constitute a
Nonrecoverable Advance, shall be evidenced by an Officer's Certificate of the
Servicer delivered to the Owner and detailing the reasons for such
determination.
Officer's Certificate: A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President, a Senior Vice President or a Vice
President or by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Servicer, and delivered to the Owner
as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an employee of
the party on behalf of whom the opinion is being given, reasonably acceptable to
the Owner.
Option ARM Mortgage Loan: An ARM Loan which (i) provides the Mortgagor with
multiple Monthly Payment options and (ii) may result in Negative Amortization,
as set forth in the Servicer's underwriting guidelines.
Owner: Bear Xxxxxxx Asset Backed Securities I LLC, its successors in
interest and assigns (including the Trustee in connection with a Pass-Through
Transfer).
Partial Principal Prepayment: A Principal Prepayment by a Mortgagor of a
partial principal balance of a Mortgage Loan.
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Pass-Through Transfer: Any transaction involving either (1) a sale or other
transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all of
the Mortgage Loans.
Periodic Rate Cap: With respect to each ARM Loan, the maximum increase or
decrease in the Mortgage Interest Rate on any Adjustment Date.
Permitted Investments: Any one or more of the following obligations or
securities:
(i) direct obligations of, and obligations the timely payment of
which are fully guaranteed 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;
(ii) (a) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company
incorporated under the laws of the United States of America or any
state thereof (including any Trustee or the Master Servicer) and
subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or the short-term
deposit rating and/or the long-term unsecured debt obligations or
deposits of such depository institution or trust company at the time
of such investment or contractual commitment providing for such
investment are rated in one of the two highest rating categories by
each Rating Agency and (b) any other demand or time deposit or
certificate of deposit that is fully insured by the Federal Deposit
Insurance Corporation;
(iii) repurchase obligations with respect to (a) any security
described in clause (i) above or (b) any other security issued or
guaranteed by an 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, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (ii)(a) above;
(iv) securities bearing interest or sold at a discount issued by
any corporation (including any Trustee or the Master Servicer)
incorporated under the laws of the United States of America or any
state thereof that are rated in one of the two highest rating
categories by each Rating Agency at the time of such investment or
contractual commitment providing for such investment; provided,
however, that securities issued by any particular corporation will not
be Permitted Investments to the extent that investments therein will
cause the then outstanding principal amount of securities issued by
such corporation and held as Permitted Investments to exceed 10% of
the aggregate outstanding principal balances and amounts of all the
Permitted Investments;
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(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than one year after the date of
issuance thereof) which are rated in one of the two highest rating
categories by each Rating Agency at the time of such investment;
(vi) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each Rating Agency; and
(vii) any money market funds the collateral of which consists of
obligations fully guaranteed 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 (which may include repurchase obligations
secured by collateral described in clause (i)) and other securities
(including money market or common trust funds for which any Trustee or
the Master Servicer or any affiliate thereof acts as a manager or an
advisor) and which money market funds are rated in one of the two
highest rating categories by each Rating Agency;
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Prepayment Charge: Any prepayment premium, penalty or charge payable by a
Mortgagor in connection with any Principal Prepayment on a Mortgage Loan
pursuant to the terms of the related Mortgage Note.
Prepayment Interest Excess: With respect to any Remittance Date, for each
Mortgage Loan that was the subject of a Partial Principal Prepayment during the
preceding calendar month or a Full Principal Prepayment during the portion of
the related Prepayment Period occurring between the first day of the calendar
month in which such Remittance Date occurs and the Determination Date of the
calendar month in which such Remittance Date occurs, an amount equal to interest
(to the extent received) at the applicable Mortgage Loan Remittance Rate on the
amount of such Principal Prepayment for the number of days commencing on the
first day of the calendar month in which such Remittance Date occurs and ending
on the last date through which interest is collected from the related Mortgagor.
Prepayment Interest Shortfall: With respect to any Remittance Date, for
each such Mortgage Loan that was the subject of a Partial Principal Prepayment
during the preceding calendar month or a Full Principal Prepayment during the
portion of the related Prepayment Period occurring between the first day of the
related Prepayment Period and the last day of the calendar month preceding the
month in which such Remittance Date occurs, an amount equal to
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interest (to be paid by the Servicer out of its own funds without
reimbursement therefor) at the applicable Mortgage Loan Remittance Rate on the
amount of such Principal Prepayment for the number of days commencing on the
date on which the prepayment is applied and ending on the last day of the
calendar month preceding such Remittance Date.
Prepayment Period: As to any Remittance Date, (a) in the case of Full
Principal Prepayments, other than with respect to the initial Remittance Date,
the period commencing on the 16th day of the month prior to the month in which
the related Remittance Date occurs and ending on the 15th day of the month in
which such Remittance Date occurs and, in the case of the initial Remittance
Date, the period commencing on the Cut-off Date and ending on the 15th day of
the month in which such Remittance Date occurs and (b) in the case of Partial
Principal Prepayments or other recoveries, the preceding calendar month.
Primary Mortgage Insurance Policy: Each primary policy of mortgage
insurance, or any replacement policy therefor obtained by the Servicer pursuant
to Section 4.08.
Prime Rate: The prime rate of U.S. money center banks as published from
time to time in The Wall Street Journal.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan full or partial which is received in advance of its scheduled Due
Date, including any Prepayment Charge, and which is not accompanied by an amount
of interest representing scheduled interest due on any date or dates in any
month or months subsequent to the month of prepayment.
Qualified Appraiser: An appraiser, duly appointed by the Servicer, who had
no interest, direct or indirect in the Mortgaged Property or in any loan made on
the security thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, which appraiser and the appraisal made by such
appraiser both satisfy the requirements of Title XI of FIRREA and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified Depository: (a) The Custodian, (b) a depository, the accounts of
which are insured by the FDIC and the short term debt ratings and the long term
deposit ratings of which are rated in one of the two highest rating categories
by either of Xxxxx'x Investors Service, Inc. or Fitch, Inc., or (c) a
depository, the short-term debt obligations, or other short-term deposits of
which are rated at least `A-2' and the long-term unsecured debt obligations of
which are rated at least `AA-' by Standard & Poor's Ratings Service, a division
of The McGraw Hill Companies Inc.
Qualified Insurer: An insurance company duly qualified as such under the
laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by Xxxxxx
Xxx and Xxxxxxx Mac.
Rating Agency: Standard & Poor's Ratings Service, a division of The McGraw
Hill Companies Inc., and Xxxxx'x Investors Service, Inc.
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Reconstitution Agreement: Any agreement involving any Pass-Through Transfer
or Whole Loan Transfer.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. ss.ss.229.1100-229.1123, as amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time to
time.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
REMIC Provisions: The provisions of the Federal income tax law relating to
a REMIC, which appear at Section 860A through 860G of the Code, and related
provisions, and regulations, rulings or pronouncements promulgated thereunder,
as the foregoing may be in effect from time to time.
Remittance Date: The Remittance Date shall be no later than 1 PM New York
time on the 23rd day of any month, or if such 23rd day is not a Business Day,
the first Business Day immediately preceding such 23rd day.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: Amounts received by the Servicer in connection
with a related REO Disposition.
REO Property: A Mortgaged Property acquired by the Servicer on behalf of
the Owner as described in Section 4.13.
Sarbanes Certification: A certification required pursuant to The
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations of the Commission
promulgated thereunder (including any interpretations or amendments thereof by
the Commission's staff).
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: The securities administrator with respect to any
Pass-Through Transfer.
Servicer: EMC Mortgage Corporation, or any of its successors in interest or
any successor under this Agreement appointed as herein provided.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses (including reasonable attorneys' fees and disbursements)
incurred in the performance by the Servicer of its servicing obligations
relating to each Mortgage Loan, including, but not limited to, the cost of (a)
the preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement, administrative or judicial proceedings, or any legal work or advice
specifically related to servicing the Mortgage Loans, including but not limited
to, foreclosures,
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bankruptcies, condemnations, drug seizures, elections, foreclosures by
subordinate or superior lienholders, and other legal actions incidental to the
servicing of the Mortgage Loans (provided that such expenses are reasonable and
that the Servicer specifies the Mortgage Loan(s) to which such expenses relate),
(c) the management and liquidation of the Mortgaged Property if the Mortgaged
Property is acquired in full or partial satisfaction of the Mortgage, (d) taxes,
assessments, water rates, sewer rates and other charges which are or may become
a lien upon the Mortgaged Property, and Primary Mortgage Insurance Policy
premiums and fire and hazard insurance coverage and (e) compliance with the
obligations under Section 4.08.
Servicing Criteria: As of any date of determination, the "servicing
criteria" set forth in Item 1122(d) of Regulation AB, or any amendments thereto,
a summary of the requirements of which as of the date hereof is attached hereto
as Exhibit H for convenience of reference only. In the event of a conflict or
inconsistency between the terms of Exhibit H and the text of Item 1122(d) of
Regulation AB, the text of Item 1122(d) of Regulation AB shall control (or those
Servicing Criteria otherwise mutually agreed to by the Owner, the Servicer and
any Person that will be responsible for signing any Sarbanes Certification with
respect to a Pass-Through Transfer in response to evolving interpretations of
Regulation AB and incorporated into a revised Exhibit H).
Servicing Fee: With respect to each Mortgage Loan, the amount of the annual
servicing fee the Owner shall pay to the Servicer, which shall, for a period of
one full month, be equal to one-twelfth of the product of (a) the applicable
Servicing Fee Rate and (b) the outstanding principal balance of the Mortgage
Loan. Such fee shall be payable monthly, computed on the basis of the same
principal amount and period respecting which any related interest payment on a
Mortgage Loan is computed. The obligation of the Owner to pay the Servicing Fee
is limited to, and the Servicing Fee is payable from the interest portion of
such Monthly Payment collected by the Servicer or as otherwise provided under
Section 4.05.
Servicing Fee Rate: The Servicing Fee Rate shall be a rate per annum
between 0.25% and 0.50% for each respective mortgage loan, in each case as
provided in the Mortgage Loan Schedule.
Servicing File: The documents, records and other items pertaining to a
particular Mortgage Loan and any additional documents relating to such Mortgage
Loan as are in, or as may from time to time come into, the Servicer's
possession.
Servicing Officer: Any officer of the Servicer 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 to the Owner upon
request, as such list may from time to time be amended.
Stated Principal Balance: As to each Mortgage Loan as of any date of
determination, (i) the principal balance of such Mortgage Loan after giving
effect to payments of principal due and received or for which a Monthly Advance
has been made, minus (ii) all amounts previously distributed to the Owner with
respect to the Mortgage Loan representing Principal Prepayments.
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Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Servicer or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Servicer under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
Trustee: The Person appointed as trustee in connection with any
Pass-Through Transfer.
Whole Loan Transfer: The sale or transfer of some or all of the ownership
interest in the Mortgage Loans by the Owner to one or more third parties in
whole loan or participation format, which third party may be Xxxxxx Xxx or
Xxxxxxx Mac.
ARTICLE II
SERVICING OF MORTGAGE LOANS; POSSESSION OF SERVICING FILES; BOOKS
AND RECORDS; DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01. Servicing of Mortgage Loans.
The Servicer does hereby agree to service the Mortgage Loans in accordance
with the terms of this Agreement. The rights of the Owner to receive payments
with respect to the Mortgage Loans shall be as set forth in this Agreement.
Section 2.02. Maintenance of Servicing Files.
The Servicer shall maintain a Servicing File consisting of all documents
necessary to service the Mortgage Loans. The possession of each Servicing File
by the Servicer is for the sole purpose of servicing the Mortgage Loan, and such
retention and possession by the Servicer is in a custodial capacity only. The
Servicer acknowledges that the ownership of each Mortgage Loan, including the
Note, the Mortgage, all other Mortgage Loan Documents and all rights, benefits,
proceeds and obligations arising therefrom or in connection therewith, has been
vested in the Owner. All rights arising out of the Mortgage Loans including, but
not limited to, all funds received on or in connection with the Mortgage Loans
and all records or documents with respect to the Mortgage Loans prepared by or
which come into the possession of the Servicer shall be received and held by the
Servicer in trust for the exclusive benefit of the Owner as the owner of the
related Mortgage Loans. Any portion of the related Servicing Files retained by
the Servicer shall be appropriately identified in the Servicer's computer system
to clearly reflect the ownership of the related Mortgage Loans by the Owner. The
Servicer shall release its custody of the contents of the related Servicing
Files only in accordance with written instructions of the Owner, except when
such release is required as incidental to the Servicer's servicing of the
Mortgage Loans, such written instructions shall not be required.
Section 2.03. Books and Records.
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The Servicer shall be responsible for maintaining, and shall maintain, a
complete set of books and records for the Mortgage Loans which shall be
appropriately identified in the Servicer's computer system to clearly reflect
the ownership of the Mortgage Loan by the Owner. In particular, the Servicer
shall maintain in its possession, available for inspection by the Owner, or its
designee and shall deliver to the Owner upon demand, evidence of compliance with
all federal, state and local laws, rules and regulations, and requirements of
Xxxxxx Mae or Xxxxxxx Mac, as applicable, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the Flood Disaster Protection Act of 1973, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and eligibility
of any condominium project for approval by Xxxxxx Mae and periodic inspection
reports as required by Section 4.13. To the extent that original documents are
not required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Servicer may be in the form of microfilm
or microfiche or such other reliable means of recreating original documents,
including but not limited to, optical imagery techniques so long as the Servicer
complies with the requirements of the Xxxxxx Xxx Guide.
The Servicer shall maintain with respect to each Mortgage Loan and shall
make available for inspection by any Owner or its designee the related Servicing
File (or copies thereof) during the time the Owner retains ownership of a
Mortgage Loan and thereafter in accordance with applicable laws and regulations.
Section 2.04. Transfer of Mortgage Loans.
No transfer of a Mortgage Loan may be made unless such transfer is in
compliance with the terms hereof. For the purposes of this Agreement, the
Servicer shall be under no obligation to deal with any person with respect to
this Agreement or any Mortgage Loan unless a notice of the transfer of such
Mortgage Loan has been delivered to the Servicer in accordance with this Section
2.04. The Owner may, subject to the terms of this Agreement, sell and transfer
one or more of the Mortgage Loans in accordance with Sections 10.02 and 11.12,
provided, however, that the transferee will not be deemed to be an Owner
hereunder binding upon the Servicer unless such transferee shall agree in
writing to be bound by the terms of this Agreement and an assignment and
assumption of this Agreement reasonably acceptable to the Servicer. The Owner
shall advise the Servicer in writing of the transfer. Upon receipt of notice of
the permitted transfer, the Servicer shall xxxx its books and records to reflect
the ownership of the Mortgage Loans of such assignee, and shall release the
previous Owner from its obligations hereunder with respect to the Mortgage Loans
sold or transferred.
Section 2.05. Delivery of Mortgage Loan Documents.
The Servicer shall forward to the Custodian on behalf of the Owner original
documents evidencing an assumption, modification, consolidation or extension of
any Mortgage Loan entered into in accordance with Section 4.01 or 6.01 within 4
week(s) of their execution; provided, however, that the Servicer shall provide
the Custodian on behalf of the Owner with a certified true copy of any such
document submitted for recordation within 4 week(s) after 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 180
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days of its execution. If delivery is not completed within 180 days solely
due to delays in making such delivery by reason of the fact that such documents
shall not have been returned by the appropriate recording office, the Servicer
shall continue to use its best efforts to effect delivery as soon as possible
thereafter.
From time to time the Servicer may have a need for Mortgage Loan Documents
to be released by the Custodian. If the Servicer shall require any of the
Mortgage Loan Documents, the Servicer shall notify the Custodian in writing of
such request in the form of the request for release attached hereto as Exhibit
D. The Custodian shall deliver to the Servicer within five (5) Business Days,
any requested Mortgage Loan Document previously delivered to the Custodian,
provided that such documentation is promptly returned to the Custodian when the
Servicer no longer requires possession of the document, and provided that during
the time that any such documentation is held by the Servicer, such possession is
in trust for the benefit of the Owner.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SERVICER
The Servicer represents, warrants and covenants to the Owner that as of the
date hereof or as of such date specifically provided herein:
(a) The Servicer is a validly existing corporation in good standing under
the laws of the State of its organization and is qualified to transact business
in, is in good standing under the laws of, and possesses all licenses necessary
for the conduct of its business in, each state in which any Mortgaged Property
is located or is otherwise exempt or not required under applicable law to effect
such qualification or license and no demand for such qualification or license
has been made upon the Servicer by any such state, and in any event the Servicer
is in compliance with the laws of each such State to the extent necessary to
ensure the enforceability of each Mortgage Loan and the servicing of the
Mortgage Loans in accordance with the terms of this Agreement;
(b) The Servicer has full power and authority to execute, deliver and
perform, and to enter into and consummate all transactions contemplated by this
Agreement and to conduct its business as presently conducted, has duly
authorized the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement constitutes a legal,
valid and binding obligation of the Servicer, enforceable against it in
accordance with its terms subject to bankruptcy laws and other similar laws of
general application affecting rights of creditors and subject to the application
of the rules of equity, including those respecting the availability of specific
performance;
(c) None of the execution and delivery of this Agreement, the consummation
of the transactions contemplated thereby and hereby, or the fulfillment of or
compliance with the terms and conditions of this Agreement will conflict with
any of the terms, conditions or provisions of the Servicer's articles of
incorporation or by-laws or materially conflict with or result in a breach of
any of the terms, conditions or provisions of any legal restriction or any
agreement or instrument to which the Servicer is now a party or by which it is
bound, or constitute a default or result in an acceleration under any of the
foregoing, or result in the material violation of any law, rule, regulation,
order, judgment or decree to which the Servicer or its property is subject;
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(d) There is no litigation pending or, to the Servicer's knowledge,
threatened with respect to the Servicer which is reasonably likely to have a
material adverse effect on the execution, delivery or enforceability of this
Agreement, or which is reasonably likely to have a material adverse effect on
the financial condition of the Servicer;
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this Agreement
or the consummation of the transactions contemplated by this Agreement except
for consents, approvals, authorizations and orders which have been obtained;
(f) The Servicer is an approved seller/servicer of residential mortgage
loans for Xxxxxx Xxx and Xxxxxxx Mac. The Servicer is in good standing to
service mortgage loans for Xxxxxx Mae and Xxxxxxx Mac and no event has occurred
which would make the Servicer unable to comply with eligibility requirements or
which would require notification to either Xxxxxx Mae or Xxxxxxx Mac;
(g) As of the date of each Pass-Through Transfer, and except as has been
otherwise disclosed to the Owner, the Master Servicer and any Depositor, or
disclosed in any public filing: (1) no default or servicing related performance
trigger has occurred as to any other Pass-Through Transfer due to any act or
failure to act of the Servicer; (2) no material noncompliance with applicable
servicing criteria as to any other Pass-Through Transfer has occurred, been
disclosed or reported by the Servicer; (3) the Servicer has not been terminated
as servicer in a residential mortgage loan Pass-Through Transfer, either due to
a servicing default or to application of a servicing performance test or
trigger; (4) no material changes to the Servicer's servicing policies and
procedures for similar loans have occurred in the preceding three years outside
of the normal changes warranted by regulatory and product type changes in the
portfolio; (5) there are no aspects of the Servicer's financial condition that
could have a material adverse impact on the performance by the Servicer of its
obligations hereunder; (6) there are no legal proceedings pending, or known to
be contemplated by governmental authorities, against the Servicer that could be
material to investors in the securities issued in such Pass-Through Transfer;
and (7) there are no affiliations, relationships or transactions relating to the
Servicer of a type that are described under Item 1119 of Regulation AB;
(h) If so requested by the Owner, the Master Servicer or any Depositor on
any date, the Servicer shall, within five Business Days following such request,
confirm in writing the accuracy of the representations and warranties set forth
in clause (g) of this Article or, if any such representation and warranty is not
accurate as of the date of such request, provide reasonably adequate disclosure
of the pertinent facts, in writing, to the requesting party;
(i) Notwithstanding anything to the contrary in the Agreement, the Servicer
shall (or shall cause each Subservicer) (i) immediately notify the Owner, the
Master Servicer and any Depositor in writing of (A) any material litigation or
governmental proceedings pending against the Servicer or any Subservicer, (B)
any affiliations or relationships that develop following the closing date of a
Pass-Through Transfer between the Servicer or any Subservicer and any of the
parties specified in clause (7) of paragraph (g) of this Article (and any other
parties identified in writing by the requesting party) with respect to such
Pass-Through Transfer, (C) any Event of
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Default under the terms of this Agreement or any Reconstitution Agreement,
(D) any merger, consolidation or sale of substantially all of the assets of the
Servicer, and (E) the Servicer's entry into an agreement with a Subservicer to
perform or assist in the performance of any of the Servicer's obligations under
this Agreement or any Reconstitution Agreement and (ii) provide to the Owner and
any Depositor a description of such proceedings, affiliations or relationships;
(j) As a condition to the succession to the Servicer or any Subservicer as
servicer or subservicer under this Agreement or any Reconstitution Agreement by
any Person (i) into which the Servicer or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Servicer or
any Subservicer, the Servicer shall provide to the Owner, the Master Servicer
and any Depositor, at least 15 calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Owner, the Master Servicer
and any Depositor of such succession or appointment and (y) in writing and in
form and substance reasonably satisfactory to the Owner, the Master Servicer and
such Depositor, all information reasonably requested by the Owner, the Master
Servicer or any Depositor in order to comply with its reporting obligation under
Item 6.02 of Form 8-K with respect to any class of asset-backed securities; and
(k) Servicer has delivered to the Owner and the Master Servicer financial
statements of its parent, for its last two complete fiscal years. All such
financial information fairly presents the pertinent results of operations and
financial position for the period identified and has been prepared in accordance
with GAAP consistently applied throughout the periods involved, except as set
forth in the notes thereto. There has been no change in the servicing policies
and procedures, business, operations, financial condition, properties or assets
of the Servicer since the date of the Servicer's financial information that
would have a material adverse effect on its ability to perform its obligations
under this Agreement.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01. Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and with
Accepted Servicing Practices (giving due consideration to the Owner's reliance
on the Servicer), and shall have full power and authority, acting alone, to do
or cause to be done any and all things in connection with such servicing and
administration which the Servicer may deem necessary or desirable and consistent
with the terms of this Agreement and with Accepted Servicing Practices and shall
exercise the same care that it customarily employs for its own account. In
addition, the Servicer shall furnish information regarding the borrower credit
files related to such Mortgage Loan to credit reporting agencies in compliance
with the provisions of the Fair Credit Reporting Act and the applicable
implementing regulations. Except as set forth in this Agreement, the Servicer
shall service the Mortgage Loans in accordance with Accepted Servicing Practices
in compliance with the servicing provisions of the Xxxxxx Xxx Guide, which
include, but are not limited to, provisions regarding the liquidation of
Mortgage Loans, the collection of Mortgage Loan payments, the payment of taxes,
insurance and other charges, the maintenance of hazard insurance with a
Qualified Insurer, the maintenance of fidelity bond and errors and omissions
insurance, inspections, the restoration of
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Mortgaged Property, the maintenance of Primary Mortgage Insurance Policies,
insurance claims, and title insurance, management of REO Property, permitted
withdrawals with respect to REO Property, liquidation reports, and reports of
foreclosures and abandonments of Mortgaged Property, the transfer of Mortgaged
Property, the release of Mortgage Loan Documents, annual statements, and
examination of records and facilities. In the event of any conflict,
inconsistency or discrepancy between any of the servicing provisions of this
Agreement and any of the servicing provisions of the Xxxxxx Mae Guide, the
provisions of this Agreement shall control and be binding upon the Owner and the
Servicer. The Owner may, at its option, deliver powers-of-attorney to the
Servicer sufficient to allow the Servicer as servicer to execute all
documentation requiring execution on behalf of Owner with respect to the
servicing of the Mortgage Loans, including satisfactions, partial releases,
modifications and foreclosure documentation or, in the alternative, shall as
promptly as reasonably possible, execute and return such documentation to the
Servicer.
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 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 Owner, provided, however, that with
respect to any Mortgage Loan that is not in default or if default is not
reasonably forseeable, unless the Servicer has provided to the Owner a
certification addressed to the Owner, based on the advice of counsel or
certified public accountants that have a national reputation with respect to
taxation of REMICs that a modification of such Mortgage Loan will not result in
the imposition of taxes on or disqualify from REMIC status any of the REMICs and
has obtained the prior written consent of the Owner, the Servicer shall not
permit any modification with respect to any Mortgage Loan that would change the
Mortgage Interest Rate, forgive the payment of principal or interest, reduce or
increase the outstanding principal balance (except for actual payments of
principal), change the final maturity date on such Mortgage Loan or waive a
prepayment penalty or charge. In the event of any such modification which has
been agreed to in writing by the Owner and which permits the deferral of
interest or principal payments on any Mortgage Loan, the Servicer shall, on the
Business Day immediately preceding the related Remittance Date in any month in
which any such principal or interest payment has been deferred, deposit in the
Custodial Account from its own funds, in accordance with Section 4.04 and
Section 5.03, the difference between (a) such month's principal and one month's
interest at the related 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 pursuant to Section 4.05. Without limiting the
generality of the foregoing, the Servicer shall continue, and is hereby
authorized and empowered, to prepare, execute and deliver, 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 Servicer shall perform all of its servicing responsibilities hereunder
or may cause a subservicer to perform any such servicing responsibilities on its
behalf, but the use by the Servicer of a subservicer shall not release the
Servicer from any of its obligations hereunder and the Servicer shall remain
responsible hereunder for all acts and omissions of each subservicer as fully as
if such acts and omissions were those of the Servicer. Any such subservicer must
be a Xxxxxx Xxx approved seller/servicer or a Xxxxxxx Mac seller/servicer in
good standing and no
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event shall have occurred, including but not limited to, a change in
insurance coverage, which would make it unable to comply with the eligibility
requirements for lenders imposed by Xxxxxx Xxx or for seller/servicers by
Xxxxxxx Mac, or which would require notification to Xxxxxx Xxx or Xxxxxxx Mac.
The Servicer shall pay all fees and expenses of each subservicer from its own
funds, and a subservicer's fee shall not exceed the Servicing Fee.
At the cost and expense of the Servicer, without any right of reimbursement
from the Custodial Account, the Servicer shall be entitled to terminate the
rights and responsibilities of a subservicer and arrange for any servicing
responsibilities to be performed by a successor subservicer meeting the
requirements in the preceding paragraph, provided, however, that nothing
contained herein shall be deemed to prevent or prohibit the Servicer, at the
Servicer's option, from electing to service the related Mortgage Loans itself.
In the event that the Servicer's responsibilities and duties under this
Agreement are terminated pursuant to Section 8.04, 9.01 or 10.01, and if
requested to do so by the Owner, the Servicer shall at its own cost and expense
terminate the rights and responsibilities of each subservicer effective as of
the date of termination of the Servicer. The Servicer shall pay all fees,
expenses or penalties necessary in order to terminate the rights and
responsibilities of each subservicer from the Servicer's own funds without
reimbursement from the Owner.
Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a subservicer or any
reference herein to actions taken through a subservicer or otherwise, the
Servicer shall not be relieved of its obligations to the Owner and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans. The Servicer shall be
entitled to enter into an agreement with a subservicer for indemnification of
the Servicer by the subservicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
Any subservicing agreement and any other transactions or services relating
to the Mortgage Loans involving a subservicer shall be deemed to be between such
subservicer and Servicer alone, and the Owner shall have no obligations, duties
or liabilities with respect to such Subservicer including no obligation, duty or
liability of Owner to pay such subservicer's fees and expenses. For purposes of
distributions and advances by the Servicer pursuant to this Agreement, the
Servicer shall be deemed to have received a payment on a Mortgage Loan when a
subservicer has received such payment.
Section 4.02. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the date each Mortgage Loan ceases
to be subject to this Agreement, the Servicer will proceed with diligence to
collect all payments due under each Mortgage Loan when the same shall become due
and payable and shall, to the extent such procedures shall be consistent with
this Agreement and the terms and provisions of related Primary Mortgage
Insurance Policy, follow such collection procedures as it follows with respect
to mortgage loans comparable to the Mortgage Loans and held for its own account.
Further, the Servicer will take reasonable care in ascertaining and estimating
annual ground rents, taxes, assessments, water rates, fire and hazard insurance
premiums, mortgage insurance premiums, and all other charges that, as provided
in the Mortgage, will become due and payable to the end
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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 not waive any Prepayment Charge unless: (i) the
enforceability thereof shall have been limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors' rights
generally, (ii) the enforcement thereof is illegal, or any local, state or
federal agency has threatened legal action if the prepayment penalty is
enforced, (iii) the mortgage debt has been accelerated in connection with a
foreclosure or other involuntary payment or (iv) such waiver is standard and
customary in servicing similar Mortgage Loans and relates to a default or a
reasonably foreseeable default and would, in the reasonable judgment of the
Servicer, maximize recovery of total proceeds taking into account the value of
such Prepayment Charge and the related Mortgage Loan. If a Prepayment Charge is
waived, but does not meet the standards described above, then the Servicer is
required to pay the amount of such waived Prepayment Charge by remitting such
amount to the Owner by the Remittance Date.
Section 4.03. Realization Upon Defaulted Mortgage Loans.
The Servicer shall use its reasonable efforts, consistent with the
procedures that the Servicer would use in servicing loans for its own account
and the requirements of the Xxxxxx Mae Guide, to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 4.01. In determining the delinquency status of any Mortgage Loan, the
Servicer will apply the definition of Delinquent as such term is defined under
the related pooling and servicing agreement. The Servicer shall use its
reasonable efforts to realize upon defaulted Mortgage Loans in such manner as
will maximize the receipt of principal and interest by the Owner, 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 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 Owner 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, as contemplated in Section 4.05. The Servicer shall be
responsible for all costs and expenses incurred by it in any such proceedings or
functions as Servicing Advances; provided, however, that it shall be entitled to
reimbursement therefor as provided in Section 4.05. Notwithstanding anything to
the contrary contained herein, in connection with a foreclosure or acceptance of
a deed in lieu of foreclosure, in the event the Servicer has reasonable cause to
believe that a Mortgaged Property is contaminated by hazardous or toxic
substances or wastes, or if the Owner otherwise requests an environmental
inspection or review of such Mortgaged Property, such an inspection or review is
to be conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Owner with a written report of the
environmental inspection. After reviewing the environmental inspection report,
the Owner shall determine how the Servicer shall proceed with respect to the
Mortgaged Property.
Section 4.04. Establishment of Custodial Accounts; Deposits in Custodial
Accounts.
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The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts.
Each Custodial Account shall be established with a Qualified Depository. To the
extent such funds are not deposited in a Custodial Account, such funds may be
invested in Permitted Investments for the benefit of the Owner (with any income
earned thereon for the benefit of the Servicer). Custodial Accounts will be
reconciled within 45 calendar days after the bank statement cut-off date. Funds
deposited in the Custodial Account may be drawn on by the Servicer in accordance
with Section 4.05. The creation of any Custodial Account shall be evidenced by a
letter agreement in the form shown in Exhibit B hereto. The original of such
letter agreement shall be furnished to the Owner upon request. The Servicer
acknowledges and agrees that the Servicer shall bear any losses incurred with
respect to Permitted Investments. The amount of any such losses shall be
immediately deposited by the Servicer in the Custodial Account, out of the
Servicer's own funds, with no right to reimbursement therefor.
The Servicer shall deposit in a mortgage clearing account on a daily basis,
and in the Custodial Account or Accounts no later than two Business Days after
receipt and identification of funds and retain therein the following payments
and collections:
(i) all payments on account of principal, including Principal
Prepayments (inclusive of any Prepayment Charges), on the Mortgage Loans
received after the Cut-off Date;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the related Mortgage Loan Remittance Rate received after the
Cut-off Date;
(iii) all Net Liquidation Proceeds received after the Cut-off Date;
(iv) any net amounts received by the Servicer after the Cut-off Date
in connection with any REO Property pursuant to Section 4.13;
(v) all Insurance Proceeds received after the Cut-off Date including
amounts required to be deposited pursuant to Sections 4.08 and 4.10, other
than proceeds to be held in the Escrow Account and applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with the Servicer's normal servicing procedures,
the loan documents or applicable law;
(vi) all Condemnation Proceeds affecting any Mortgaged Property
received after the Cut-off Date other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Servicer's
normal servicing procedures, the loan documents or applicable law;
(vii) any Monthly Advances as provided in Section 5.03;
(viii) any amounts received after the Cut-off Date and required to be
deposited in the Custodial Account pursuant to Section 6.02; and
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(ix) with respect to each full or partial Principal Prepayment
received after the Cut-off Date, any Prepayment Interest Shortfalls, to the
extent of the Servicer's aggregate Servicing Fee received with respect to
the related Due Period.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges and assumption
fees, to the extent permitted by Section 6.01, and all Prepayment Interest
Excess need not be deposited by the Servicer in the Custodial Account.
Section 4.05. Permitted Withdrawals From the Custodial Account.
The Servicer may, from time to time, make withdrawals from the Custodial
Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the manner
provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances, the Servicer's right to
reimburse itself pursuant to this subclause (ii) being limited to amounts
received on the related Mortgage Loan which represent late collections (net
of the related Servicing Fees) of principal and/or interest respecting
which any such advance was made;
(iii) to reimburse itself for unreimbursed Servicing Advances and
Monthly Advances, the Servicer's right to reimburse itself pursuant to this
subclause (iii) with respect to any Mortgage Loan being limited to
Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds received
after the Cut-off Date related to such Mortgage Loan;
(iv) to pay to itself as servicing compensation (a) any interest
earned on funds in the Custodial Account (all such interest to be withdrawn
monthly not later than each Remittance Date) and (b) the Servicing Fee from
that portion of any payment recovery attributable to interest on a
particular Mortgage Loan;
(v) to reimburse itself for any Nonrecoverable Advances;
(vi) to transfer funds to another Qualified Depository in accordance
with Section 4.09 hereof;
(vii) to reimburse itself as provided in Section 8.03 hereof;
(viii) to remove funds inadvertently placed in the Custodial Account
in error by the Servicer;
(ix) to clear and terminate the Custodial Account upon the termination
of this Agreement; and
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(x) to reimburse itself for any Monthly Advances or Servicing Advances
made in connection with a Mortgage Loan modified pursuant to Section 4.01,
to the extent that such Advances or Servicing Advances have been added to
the Stated Principal Balance of the Mortgage Loan during the related Due
Period, the Company's right to reimburse itself pursuant to this subclause
(x) being limited to amounts received on the Mortgage Loans with respect to
principal only.
Section 4.06. Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts. Each Escrow Account shall be established
with a Qualified Depository. To the extent such funds are not deposited in an
Escrow Account, such funds may be invested in Permitted Investments. Funds
deposited in an Escrow Account may be drawn on by the Servicer in accordance
with Section 4.07. The creation of any Escrow Account shall be evidenced by a
letter agreement in the form shown in Exhibit C. The original of such letter
agreement shall be furnished to the Owner upon request. The Servicer
acknowledges and agrees that the Servicer shall bear any losses incurred with
respect to Permitted Investments. The amount of any such losses shall be
immediately deposited by the Servicer in the Escrow Account, as appropriate, out
of the Servicer's own funds, with no right to reimbursement therefor.
The Servicer shall deposit in a mortgage clearing account on a daily basis,
and in the Escrow Account or Accounts no later than 48 hours after receipt of
funds and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans,
for the purpose of effecting timely payment of any items as are required
under the terms of this Agreement;
(ii) all Insurance Proceeds which are to be applied to the restoration
or repair of any Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose Escrow Payments are
insufficient to cover escrow disbursements.
The Servicer shall make withdrawals from an Escrow Account only to effect
such payments as are required under this Agreement, and for such other purposes
as shall be as set forth in and in accordance with Section 4.07. Except as
provided in Section 4.07, the Servicer shall be entitled to retain any interest
paid on funds deposited in an Escrow Account by the Qualified Depository.
Section 4.07. Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, fire and hazard insurance premiums, Primary Mortgage Insurance
Policy premiums, if applicable, and comparable items;
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(ii) to reimburse Servicer for any Servicing Advance made by Servicer
with respect to a related Mortgage Loan but only from amounts received on
the related Mortgage Loan which represent late payments or collections of
Escrow Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be determined to be
overages;
(iv) for transfer to the Custodial Account in connection with an
acquisition of REO Property;
(v) for application to restoration or repair of the Mortgaged
Property;
(vi) to pay to the Servicer, or to the Mortgagor to the extent
required by law, any interest paid on the funds deposited in the Escrow
Account;
(vii) to pay to the Mortgagors or other parties Insurance Proceeds
deposited in accordance with Section 4.06;
(viii) to remove funds inadvertently placed in an Escrow Account in
error by the Servicer; and
(ix) to clear and terminate the Escrow Account on the termination of
this Agreement.
As part of its servicing duties, the Servicer shall pay to the Mortgagors
interest on funds in an Escrow Account, to the extent required by law, and to
the extent that interest earned on funds in the Escrow Account is insufficient,
shall pay such interest from its own funds, without any reimbursement therefor.
Section 4.08. Payment of Taxes, Insurance and Other Charges, Maintenance of
Primary Mortgage Insurance Policies, Collections Thereunder.
With respect to each Mortgage Loan, the Servicer shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates
and other charges which are or may become a lien upon the Mortgaged Property and
the status of Primary Mortgage Insurance Policy premiums and fire and hazard
insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges, including renewal premiums and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, 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 or applicable law. To the extent that
the Mortgage does not provide for Escrow Payments, the Servicer shall determine
that any such payments are made by the Mortgagor when due. The Servicer assumes
full responsibility for the timely payment of all such bills and shall effect
timely payments of all such bills irrespective of the Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make advances from its own funds to effect such payments.
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The Servicer will maintain in full force and effect Primary Mortgage
Insurance Policies issued by a Qualified Insurer with respect to each Mortgage
Loan for which such coverage is herein required. Such coverage will be
maintained until the ratio of the current outstanding principal balance of the
related Mortgage Loan to the appraised value of the related Mortgaged Property,
based on the most recent appraisal of the Mortgaged Property performed by a
Qualified Appraiser, such appraisal to be included in the Servicing File, is
reduced to an amount for which Xxxxxx Xxx no longer requires such insurance to
be maintained. The Servicer will not cancel or refuse to renew any Primary
Mortgage Insurance Policy that is required to be kept in force under this
Agreement unless a replacement Primary Mortgage Insurance Policy for such
canceled or nonrenewed policy is obtained from and maintained with a Qualified
Insurer. The Servicer shall not take any action which would result in
noncoverage under any applicable Primary Mortgage Insurance Policy of any loss
which, but for the actions of the Servicer would have been covered thereunder.
In connection with any assumption or substitution agreement entered into or to
be entered into pursuant to Section 6.01, the Servicer shall promptly notify the
insurer under the related Primary Mortgage Insurance Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
policy and shall take all actions which may be required by such insurer as a
condition to the continuation of coverage under the Primary Mortgage Insurance
Policy. If such Primary Mortgage Insurance Policy is terminated as a result of
such assumption or substitution of liability, the Servicer shall obtain a
replacement Primary Mortgage Insurance Policy as provided above.
In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Owner, claims to the insurer
under any Private Mortgage Insurance Policy in a timely fashion in accordance
with the terms of such Primary Mortgage Insurance Policy and, in this regard, to
take such action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to
Section 4.04, any amounts collected by the Servicer under any Primary Mortgage
Insurance Policy shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 4.05.
Section 4.09. Transfer of Accounts.
The Servicer may transfer the Custodial Account or the Escrow Account to a
different Qualified Depository from time to time. The Servicer shall notify the
Owner of any such transfer within 15 Business Days of transfer. If any one of
the investment ratings of a Qualified Depository holding funds or Eligible
Investments in the Custodial Account or Escrow Account is downgraded by the
issuing rating agency, the Servicer shall, within three (3) Business Days of
receipt of notice of the downgrading, transfer all such accounts, funds and
Permitted Investments to a different Qualified Depository in accordance with
this Agreement.
Section 4.10. Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan fire and
hazard insurance with extended coverage as is customary in the area where the
Mortgaged Property is located in an amount which is equal to the lesser of (i)
the maximum insurable value of the improvements securing such Mortgage Loan or
(ii) the greater of (a) the outstanding principal balance of the Mortgage Loan,
and (b) the percentage such that the proceeds thereof shall be sufficient to
prevent the Mortgagor and/or the Mortgagee from becoming a co-insurer. If the
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Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as being a special flood hazard area that
has federally-mandated flood insurance requirements, the Servicer will cause to
be maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding principal balance of the Mortgage Loan, (ii) the maximum
insurable value of the improvements securing such Mortgage Loan or (iii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. The Servicer shall also maintain on the REO
Property, fire and hazard insurance with extended coverage in an amount which is
at least equal to the maximum insurable value of the improvements which are a
part of such property, liability insurance and, to the extent required and
available under the Flood Disaster Protection Act of 1973, as amended, flood
insurance in an amount as provided above. 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 Mortgaged Property or REO
Property, or 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 4.05. It is understood and agreed that no other
additional insurance need be required by the Servicer or the Mortgagor or
maintained on property acquired in respect of the Mortgage Loans, other than
pursuant to the Xxxxxx Mae Guide or such applicable state or federal laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer and its successors and/or
assigns and shall provide for at least thirty days prior written notice of any
cancellation, reduction in the amount or material change in coverage to the
Servicer. 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 currently reflect a General Policy Rating in
Best's Key Rating Guide currently acceptable to Xxxxxx Xxx and are licensed to
do business in the state wherein the property subject to the policy is located.
Section 4.11. Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a mortgage
impairment or blanket policy issued by an issuer that has a Best rating of A:VI
insuring against hazard losses on all of Mortgaged Properties securing the
Mortgage Loans, then, to the extent such policy provides coverage in an amount
equal to the amount required pursuant to Section 4.10 and otherwise complies
with all other requirements of Section 4.10, the Servicer shall conclusively be
deemed to have satisfied its obligations as set forth in Section 4.10, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Servicer shall, in the event that there shall not have been maintained
on the related Mortgaged Property or REO Property a policy complying with
Section 4.10, and there shall have been one or more losses which would have been
covered by such policy, deposit in the Custodial Account the amount not
otherwise payable under the blanket policy because of such deductible clause. In
connection with its activities as Servicer of the Mortgage Loans, the Servicer
agrees to prepare and present, on behalf of the Owner, claims under any such
blanket policy in a timely fashion in accordance with the terms of such policy.
Upon request of the Owner, the Servicer shall cause to be delivered to the Owner
a certified true copy of such policy and a statement from the insurer thereunder
that
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such policy shall in no event be terminated or materially modified without
thirty (30) days prior written notice to the Owner.
Section 4.12. Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity bond
and an errors and omissions insurance policy, with broad coverage with
responsible companies that would meet the requirements of Xxxxxx Mae or Xxxxxxx
Mac on all officers, employees or other persons acting in any capacity with
regard to the Mortgage Loans and who handle funds, money, documents and papers
relating to the Mortgage Loans. The Fidelity Bond and errors and omissions
insurance shall be in the form of the Mortgage Banker's Blanket Bond and shall
protect and insure the Servicer against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such persons.
Such Fidelity Bond and errors and omissions insurance shall also protect and
insure the Servicer against losses in connection with the failure to maintain
any insurance policies required pursuant to this Agreement and the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 4.12 requiring the
Fidelity Bond and errors and omissions insurance shall diminish or relieve the
Servicer from its duties and obligations as set forth in this Agreement. The
minimum coverage under any such Fidelity Bond and insurance policy shall be at
least equal to the corresponding amounts required by Xxxxxx Mae in the Xxxxxx
Xxx Guide or by Xxxxxxx Mac in the Xxxxxxx Mac Guide. The Servicer shall, upon
request of Owner, deliver to the Owner a certificate from the surety and the
insurer as to the existence of the Fidelity Bond and errors and omissions
insurance policy and shall obtain a statement from the surety and the insurer
that such Fidelity Bond or insurance policy shall in no event be terminated or
materially modified without thirty days prior written notice to the Owner. The
Servicer shall notify the Owner within five Business Days of receipt of notice
that such Fidelity Bond or insurance policy will be, or has been, materially
modified or terminated. The Owner and its successors or assigns as their
interests may appear must be named as loss payees on the Fidelity Bond and as
additional insured on the errors and omissions policy.
Section 4.13. 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 certificate of sale
shall be taken in the name of the Owner or its designee. Any such Person or
Persons holding such title other than the Owner shall acknowledge in writing
that such title is being held as nominee for the benefit of the Owner.
The Servicer shall assume the responsibility for marketing each REO
Property in accordance with Accepted Servicing Practices. Thereafter, the
Servicer shall continue to provide certain administrative services to the Owner
relating to such REO Property as set forth in this Section 4.13. The REO
Property must be sold within three years following the end of the calendar year
of the date of acquisition, unless a REMIC election has been made with respect
to the arrangement under which the Mortgage Loans and REO Property are held and
(i) the Owner shall have been supplied with an Opinion of Counsel (at the
Servicer's expense) to the effect that the holding by the related trust of such
Mortgaged Property subsequent to such three-year period (and specifying the
period beyond such three-year period for which the Mortgaged Property may be
held) will not result in the imposition of taxes on "prohibited transactions" of
the related trust
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as defined in Section 860F of the Code, or cause the related REMIC to fail
to qualify as a REMIC, in which case the related trust may continue to hold such
Mortgaged Property (subject to any conditions contained in such Opinion of
Counsel), or (ii) the Owner (at the Servicer's expense) or the Servicer shall
have applied for, prior to the expiration of such three-year period, an
extension of such three-year period in the manner contemplated by Section
856(e)(3) of the Code, in which case the three-year period shall be extended by
the applicable period. If a period longer than three years is permitted under
the foregoing sentence and is necessary to sell any REO Property, the Servicer
shall report monthly to the Owner as to progress being made in selling such REO
Property.
Notwithstanding any other provision of this Agreement, if a REMIC election
has been made, no Mortgaged Property held by a REMIC shall be rented (or allowed
to continue to be rented) or otherwise used for the production of income by or
on behalf of the related trust or sold or managed in such a manner or pursuant
to any terms that would (i) cause such Mortgaged Property to fail to qualify at
any time as "foreclosure property" within a meaning of Section 860G(a)(8) of the
Code, (ii) subject the related trust to the imposition of any federal or state
income taxes on "net income from foreclosure property" with respect to such
Mortgaged Property within the meaning of Section 860G(c) of the Code, or (iii)
cause the sale of such Mortgaged Property to result in the receipt by the
related trust or any income from non-permitted assets as described in Section
860F(a) (2)(B) of the Code, unless the Servicer has agreed to indemnify and hold
harmless the related trust with respect to the imposition of any such taxes.
The Servicer shall deposit or cause to be deposited, on a daily basis in
each Custodial Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property, including the cost of
maintaining any hazard insurance pursuant to Section 4.10 hereof. The Servicer
shall maintain separate records with respect to each REO Property identifying
all deposits and withdrawals from the Custodial Account for each REO Property.
The Servicer shall furnish to the Owner on each Remittance Date, an
operating statement for each REO Property covering the operation of each REO
Property for the previous month. Such operating statement shall be accompanied
by such other information as the Owner shall reasonably request.
The Servicer shall, either itself or through an agent selected by the
Servicer, and in accordance with the Xxxxxx Mae Guide, manage, conserve, protect
and operate each 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. Each REO Disposition shall be carried out by the Servicer at such price
and upon such terms and conditions as the Servicer deems to be in the best
interest of the Owner. The REO Disposition Proceeds from the 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
shall reimburse itself for any related Servicing Advances, or Monthly Advances
made pursuant to Section 5.03.
The Servicer shall cause each REO Property to be inspected promptly upon
the acquisition of title thereto and shall cause each REO Property to be
inspected at least monthly
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thereafter or more frequently as may be required by the circumstances. The
Servicer shall make or cause the inspector to make a written report of each such
inspection. Such reports shall be retained in the Servicing File and copies
thereof shall be forwarded by the Servicer to the Owner.
Section 4.14. Notification of Adjustments.
With respect to each Mortgage Loan, the Servicer shall adjust the Mortgage
Interest Rate on the related Interest Rate Adjustment Date in compliance with
requirements of applicable law and the related Mortgage and Mortgage Note. The
Servicer shall execute and deliver any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage regarding
the Mortgage Interest Rate adjustments. The Servicer shall promptly, upon
written request therefor, deliver to the Owner 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 Owner that the Servicer has failed to adjust a
Mortgage Interest Rate in accordance with the terms of the related Mortgage Note
and Mortgage, the Servicer shall immediately deposit in the Custodial Account
from its own funds the amount of any interest loss or deferral caused to the
Owner thereby.
ARTICLE V
PAYMENTS TO THE OWNER
Section 5.01. Remittances.
On each Remittance Date, the Servicer shall remit to the Owner (i) all
amounts credited to the Custodial Account as of the close of business on the
last day of the calendar month preceding the Determination Date, net of charges
against or withdrawals from the Custodial Account pursuant to Section 4.05,
except (a) Full Principal Prepayments received on or before the 15th day of the
month in which a Remittance Date occurs shall be remitted to the Owner on the
Remittance Date of such month, and (b) Full Principal Prepayments received after
the 15th day of the month in which a Remittance Date occurs shall be remitted to
the Owner on the next following Remittance Date, plus, to the extent not already
deposited in the Custodial Account, the sum of (ii) all Monthly Advances, if
any, which the Servicer is obligated to distribute pursuant to Section 5.03 and
(iii) all Prepayment Interest Shortfalls the Servicer is required to make up
pursuant to Section 4.04, minus (iv) any amounts attributable to Monthly
Payments collected after the Cut-off Date but due on a Due Date or Dates
subsequent to the last day of the related Due Period, which amounts shall be
remitted on the related Remittance Date next succeeding the Due Period for such
amounts.
With respect to any remittance received by the Owner after the Business Day
on which such payment was due, the Servicer shall pay to the Owner interest on
any such late payment at an annual rate equal to the Prime Rate, adjusted as of
the date of each change, plus two percentage points, but in no event greater
than the maximum amount permitted by applicable law. Such interest shall be
remitted to the Owner by the Servicer on the date such late payment is made and
shall cover the period commencing with the day following such Business Day and
ending with the Business Day on which such payment is made, both inclusive. 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.
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Section 5.02. Statements to the Owner and the Master Servicer.
The Servicer shall furnish to the Owner and the Master Servicer an
individual Mortgage Loan accounting report (a "Report"), as of the last Business
Day of each month and the end of the related Prepayment Period, as applicable,
in the Servicer's assigned loan number order to document Mortgage Loan payment
activity on an individual Mortgage Loan basis. With respect to each month, such
Report shall be received by the Owner and the Master Servicer no later than the
twelfth calendar day of the month of the related Remittance Date (or, with
respect to information as to Full Principal Prepayments and prepayment penalties
no later than one (1) Business Day after the end of each Prepayment Period), a
report in an Excel (or compatible) electronic format, in such format as may be
mutually agreed upon by both the Owner and the Servicer, and which shall provide
the information required to be contained in the monthly statements to
certificateholders as specified in the related pooling and servicing agreement,
to the extent applicable to the Servicer.
In addition, the Servicer shall provide to the Master Servicer and the
Owner such other information known or available to the Servicer that is
necessary in order to provide the distribution and pool performance information
as required under Regulation AB, as amended from time to time, as determined by
the Owner in its sole discretion. The Servicer shall also provide a monthly
report, in the form of Exhibit E hereto, or such other form as is mutually
acceptable to the Servicer, the Owner and the Master Servicer, Exhibit F with
respect to defaulted mortgage loans and Exhibit K, with respect to realized
losses and gains, with each such report.
The Servicer shall prepare and file any and all information statements or
other filings required to be delivered to any governmental taxing authority or
to Owner or the Master Servicer pursuant to any applicable law with respect to
the Mortgage Loans and the transactions contemplated hereby. In addition, the
Servicer shall provide the Owner and the Master Servicer with such information
concerning the Mortgage Loans as is necessary for the Owner and the Master
Servicer to prepare its federal income tax return as Owner and the Master
Servicer may reasonably request from time to time.
In addition, not more than 60 days after the end of each calendar year, the
Servicer shall furnish to each Person who was an Owner and the Master Servicer
at any time during such calendar year an annual statement in accordance with the
requirements of applicable federal income tax law as to the aggregate of
remittances of principal and interest for the applicable portion of such year.
Section 5.03. Monthly Advances by the Servicer.
Not later than the close of business on the Business Day preceding each
Remittance Date, the Servicer shall deposit in the Custodial Account an amount
equal to all payments not previously advanced by the Servicer, whether or not
deferred pursuant to Section 4.01, of Monthly Payments, adjusted to the related
Mortgage Loan Remittance Rate, which are delinquent at the close of business on
the related Determination Date; provided, however, that in the case of any
Option ARM Mortgage Loan or Mortgage Loan having a Negative Amortization
feature, such deposit by the Servicer need not exceed scheduled monthly payment
of interest due
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thereon; and provided further, however, that the amount of any such deposit
may be reduced by the Amount Held for Future Distribution (as defined below)
then on deposit in the Custodial Account. Any portion of the Amount Held for
Future Distribution used to pay Monthly Advances shall be replaced by the
Servicer by deposit into the Custodial Account on any future Remittance Date to
the extent that the funds that are available in the Custodial Account for
remittance to the Owner on such Remittance Date are less than the amount of
payments required to be made to the Owner on such Remittance Date.
The "Amount Held for Future Distribution" as to any Remittance Date shall
be the total of the amounts held in the Custodial Account at the close of
business on the preceding Determination Date which were received after the
Cut-off Date on account of (i) Liquidation Proceeds, Insurance Proceeds, and
Principal Prepayments received or made in the month of such Remittance Date, and
(ii) payments which represent early receipt of scheduled payments of principal
and interest due on a date or dates subsequent to the related Due Date.
The Servicer's obligation to make such Monthly Advances as to any Mortgage
Loan will continue through the final disposition or liquidation of the Mortgaged
Property, unless the Servicer deems such advance to be nonrecoverable from
Liquidation Proceeds, REO Disposition Proceeds or Insurance Proceeds with
respect to the applicable Mortgage Loan. In such latter event, the Servicer
shall deliver to the Owner an Officer's Certificate of the Servicer to the
effect that an officer of the Servicer has reviewed the related Servicing File
and has obtained a recent appraisal and has made the reasonable determination
that any additional advances are nonrecoverable from Liquidation or Insurance
Proceeds with respect to the applicable Mortgage Loan.
Section 5.04. Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Owner pursuant to a deed-in-lieu of foreclosure, the Servicer
shall submit to the Owner a liquidation report with respect to such Mortgaged
Property in such form as the Servicer and the Owner shall agree. The Servicer
shall also provide reports on the status of REO Property containing such
information as Owner may reasonably require.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01. Assumption Agreements.
The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of a Mortgaged Property (whether by
absolute conveyance or by contract of, sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; provided, however, that the
Servicer shall not exercise any such rights if prohibited by law or the terms of
the Mortgage Note from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related Primary Mortgage Insurance
Policy, if any. If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the
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Servicer, will enter into an assumption agreement with the person to whom
the Mortgaged Property has been conveyed or is proposed to be conveyed, pursuant
to which such person becomes liable under the Mortgage Note and, to the extent
permitted by applicable state law, the Mortgagor remains liable thereon. Where
an assumption is allowed pursuant to this Section 6.01, the Servicer, with the
prior consent of the primary mortgage insurer, if any, is authorized to enter
into a substitution of liability agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed pursuant to which the
original mortgagor is released from liability and such Person is substituted as
mortgagor and becomes liable under the related Mortgage Note. Any such
substitution of liability agreement shall be in lieu of an assumption agreement.
In connection with any such assumption or substitution of liability, the
Servicer shall follow the underwriting practices and procedures of the Xxxxxx
Xxx Guide. With respect to an assumption or substitution of liability, the
Mortgage Interest Rate borne by the related Mortgage Note and the amount of the
Monthly Payment may not be changed. The Servicer shall notify the Owner that any
such substitution of liability or assumption agreement has been completed by
forwarding to the Owner the original of any such substitution of liability or
assumption agreement, which document shall be added to the related Mortgage Loan
Documents and shall, for all purposes, be considered a part of such related
mortgage file to the same extent as all other documents and instruments
constituting a part thereof. All fees collected by the Servicer for entering
into an assumption or substitution of liability agreement shall belong to the
Servicer.
Notwithstanding the foregoing paragraphs of this section or any other
provision of this Agreement, the Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption which the
Servicer may be restricted by law from preventing, for any reason whatsoever.
For purposes of this Section 6.01, the term "assumption" is deemed to also
include a sale of the Mortgaged Property subject to the Mortgage that is not
accompanied by an assumption or substitution of liability agreement.
Section 6.02. Satisfaction of Mortgages and Release of Mortgage Loan
Documents.
Upon the payment in full of any Mortgage Loan, the Servicer will
immediately notify the Custodian with a certification and request for release by
a Servicing Officer, which certification shall include a statement to the effect
that all amounts received in connection with such payment which are required to
be deposited in the Custodial Account pursuant to Section 4.04 have been so
deposited, and a request for delivery to the Servicer of the portion of the
Mortgage Loan Documents held by the Custodian. Upon receipt of such
certification and request, the Owner shall promptly release or cause the
Custodian to promptly release the related Mortgage Loan Documents to the
Servicer and the Servicer shall prepare and deliver for execution by the Owner
or at the Owner's option execute under the authority of a power of attorney
delivered to the Servicer by the Owner any satisfaction or release. No expense
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Custodial Account.
In the event the Servicer satisfies or releases a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage or should
it otherwise prejudice any right the Owner may have under the mortgage
instruments, the Servicer, upon written demand,
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shall remit within one Business Day to the Owner the then outstanding
principal balance of the related Mortgage Loan by deposit thereof in the
Custodial Account. The Servicer shall maintain the Fidelity Bond 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.
From time to time and as appropriate for the servicing or foreclosure of
the Mortgage Loans, including for the purpose of collection under any Primary
Mortgage Insurance Policy, upon request of the Servicer and delivery to the
Custodian of a servicing receipt signed by a Servicing Officer, the Custodian
shall release the portion of the Mortgage Loan Documents held by the Custodian
to the Servicer. Such servicing receipt shall obligate the Servicer to promptly
return the related Mortgage Loan Documents to the Custodian, when the need
therefor by the Servicer no longer exists, unless the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Custodial Account or such documents have been delivered to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Servicer has promptly delivered to the Owner or the Custodian a certificate
of a Servicing Officer certifying as to the name and address of the Person to
which such documents were delivered and the purpose or purposes of such
delivery. Upon receipt of a certificate of a Servicing Officer stating that such
Mortgage Loan was liquidated, the servicing receipt shall be released by the
Owner or the Custodian, as applicable, to the Servicer.
Section 6.03. Servicing Compensation.
As compensation for its services hereunder, the Servicer shall be entitled
to withdraw from the Custodial Account or to retain from interest payments on
the Mortgage Loans the amounts provided for as the Servicer's Servicing Fee.
Additional servicing compensation in the form of Prepayment Charges, assumption
fees, as provided in Section 6.01, late payment charges (exclusive of any
Prepayment Charges) and other ancillary fees shall be retained by the Servicer
to the extent not required to be deposited in the Custodial Account. The
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder and shall not be entitled to reimbursement
therefor except as specifically provided for.
Section 6.04. Annual Statement as to Compliance; Annual Certification.
(a) The Servicer will deliver to the Owner and the Master Servicer, not
later than March 15th of each calendar year beginning in 2008, an Officer's
Certificate (an "Annual Statement of Compliance") stating, as to each signatory
thereof, that (i) a review of the activities of the Servicer during the
preceding calendar year and of performance under this Agreement or other
applicable servicing agreement has been made under such officer's supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this Agreement or other
applicable servicing agreement in all material respects throughout such year,
or, if there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature and
status of cure provisions thereof. Such Annual Statement of Compliance shall
contain no restrictions or limitations on its use. Copies of such statement
shall be provided by the Servicer to the Owner upon request and by the Owner to
any Person identified as a prospective purchaser of the
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Mortgage Loans. In the event that the Servicer has delegated any servicing
responsibilities with respect to the Mortgage Loans to a Subservicer, the
Servicer shall deliver an Annual Statement of Compliance of the Subservicer as
described above as to each Subservicer as and when required with respect to the
Servicer.
(b) With respect to the Mortgage Loans, by March 15th of each calendar year
beginning in 2008, an officer of the Servicer shall execute and deliver an
Officer's Certificate (an "Annual Certification") to the Owner, the Master
Servicer, the Securities Administrator, and any related Depositor for the
benefit of each such entity and such entity's affiliates and the officers,
directors and agents of any such entity and such entity's affiliates, in the
form attached hereto as Exhibit G. In the event that the Servicer has delegated
any servicing responsibilities with respect to the Mortgage Loans to a
Subservicer or a Subcontractor, to the extent such Subcontractor is
"participating in the servicing function" pursuant to Item 1122 of Regulation
AB, the Servicer shall deliver an Annual Certification as to each such
Subservicer and Subcontractor, as and when required with respect to the
Servicer.
The Servicer shall indemnify and hold harmless the Master Servicer and its
officers, directors, agents and affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable legal fees and related costs,
judgments and other costs and expenses arising out of or based upon a breach by
the Servicer or any of its officers, directors, agents or affiliates of its
obligations under this Section 6.04 or Section 6.09 or the negligence, bad faith
or willful misconduct of the Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Master Servicer, then the Servicer 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 Servicer on the other in connection with a breach of the Servicer's
obligations under this Section 6.04 or Section 6.09 or the Servicer's
negligence, bad faith or willful misconduct in connection therewith.
Upon request by the Owner or the Master Servicer, the Servicer will deliver
to such requesting party a copy of the audited (if such financial statements are
available, otherwise unaudited) financial statements of the Servicer for the
most recent fiscal year of the Servicer.
Section 6.05. [Reserved]
Section 6.06. Owner's Right to Examine Servicer Records.
The Owner shall have the right to examine and audit, at its expense, upon
reasonable notice to the Servicer, during business hours or at such other times
as might be reasonable under applicable circumstances, any and all of the books,
records, documentation or other information of the Servicer, or held by another
for the Servicer or on its behalf or otherwise, which relate to the performance
or observance by the Servicer of the terms, covenants or conditions of this
Agreement.
The Servicer shall provide to the Owner and any supervisory agents or
examiners representing a state or federal governmental agency having
jurisdiction over the Owner access to any documentation regarding the Mortgage
Loans in the possession of the Servicer which may
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be required by any applicable regulations. Such access shall be afforded
without charge, upon reasonable request, during normal business hours and at the
offices of the Servicer, and in accordance with the applicable federal or state
government regulations.
Section 6.07. Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Servicer shall not take
any action, cause the REMIC to take any action or fail to take (or fail to cause
to be taken) any action that, under the REMIC Provisions, if taken or not taken,
as the case may be could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited to
the tax on "prohibited transactions" as defined in Section 860F(a)(2) of the
Code and the tax on "contribution" to a REMIC set forth in Section 860G(d) of
the Code unless the Servicer has received an Opinion of Counsel (at the expense
of the party seeking to take such actions) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
Section 6.08. Non-solicitation.
The Servicer shall not knowingly conduct any solicitation exclusively
targeted to the Mortgagors for the purpose of inducing or encouraging the early
prepayment or refinancing of the related Mortgage Loans. It is understood and
agreed that promotions undertaken by the Servicer or any agent or affiliate of
the Servicer which are directed to the general public at large, including,
without limitation, mass mailings based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this section. Nothing contained herein shall prohibit the Servicer from
(i) distributing to Mortgagors any general advertising including information
brochures, coupon books, or other similar documentation which indicates services
the Servicer offers, including refinances or (ii) providing financing of home
equity loans to Mortgagors at the Mortgagor's request.
Section 6.09. Assessment of Compliance with Servicing Criteria.
On and after February 1, 2007, the Servicer shall service and administer,
and shall cause each subservicer to service or administer, the Mortgage Loans in
accordance with all applicable requirements of the Servicing Criteria.
With respect to the Mortgage Loans, the Servicer shall deliver to the Owner
or its designee, the Master Servicer, the Securities Administrator, and any
Depositor on or before March 15th of each calendar year beginning in 2008, a
report (an "Assessment of Compliance") regarding the Servicer's assessment of
compliance with the Servicing Criteria during the preceding calendar year as
required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB, or as otherwise required by the Master Servicer, which as of the
date hereof, require a report by an authorized officer of the Servicer that
contains the following:
(a) A statement by such officer of its responsibility for assessing
compliance with the Servicing Criteria applicable to the Servicer;
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(b) A statement by such officer that such officer used the Servicing
Criteria to assess compliance with the Servicing Criteria applicable to the
Servicer;
(c) An assessment by such officer of the Servicer's compliance with the
applicable Servicing Criteria for the period consisting of the preceding
calendar year, including disclosure of any material instance of noncompliance
with respect thereto during such period, which assessment shall be based on the
activities it performs with respect to asset-backed securities transactions
taken as a whole involving the Servicer, that are backed by the same asset type
as the Mortgage Loans;
(d) A statement that a registered public accounting firm has issued an
attestation report on the Servicer's Assessment of Compliance for the period
consisting of the preceding calendar year; and
(e) A statement as to which of the Servicing Criteria, if any, are not
applicable to the Servicer, which statement shall be based on the activities it
performs with respect to asset-backed securities transactions taken as a whole
involving the Servicer, that are backed by the same asset type as the Mortgage
Loans.
Such report at a minimum shall address each of the Servicing Criteria
specified on Exhibit J hereto.
With respect to the Mortgage Loans, on or before March 15th of each
calendar year beginning in 2008, the Servicer shall furnish to the Owner or its
designee, the Master Servicer, the Securities Administrator and any Depositor a
report (an "Attestation Report") by a registered public accounting firm that
attests to, and reports on, the Assessment of Compliance made by the Servicer,
as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of
Regulation AB, or as otherwise required by the Master Servicer, which
Attestation Report must be made in accordance with standards for attestation
reports issued or adopted by the Public Company Accounting Oversight Board.
The Servicer shall cause each Subservicer, and each Subcontractor
determined by the Servicer pursuant to Section 11.15 to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, to deliver
to the Owner, the Master Servicer, the Securities Administrator and any
Depositor an assessment of compliance and accountants' attestation as and when
provided in Section 6.09.
Section 6.10. Intent of the Parties; Reasonableness.
The Owner and the Servicer acknowledge and agree that a purpose of clause
(g) of Article III, Sections 5.02, 6.04, 6.09 and 10.02 of this Agreement is to
facilitate compliance by the Owner and any Depositor with the provisions of
Regulation AB and related rules and regulations of the Commission. None of the
Owner, the Master Servicer or any Depositor shall exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission thereunder. The
Servicer acknowledges that interpretations of the requirements of Regulation AB
may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among
34
participants in the asset-backed securities markets, advice of counsel, or
otherwise, and agrees to comply with requests made by the Owner or any Depositor
in good faith for delivery of information under these provisions on the basis of
evolving interpretations of Regulation AB. In connection with any Pass-Through
Transfer, the Servicer shall cooperate fully with the Owner to deliver to the
Owner (including any of its assignees or designees) and any Depositor, any and
all statements, reports, certifications, records and any other information
necessary in the good faith determination of the Owner or any Depositor to
permit the Owner or such Depositor to comply with the provisions of Regulation
AB, together with such disclosures relating to the Servicer, any Subservicer and
the Mortgage Loans, or the servicing of the Mortgage Loans, reasonably believed
by the Owner or any Depositor to be necessary in order to effect such
compliance.
ARTICLE VII
REPORTS TO BE PREPARED BY SERVICER
Section 7.01. Servicer Shall Provide Information as Reasonably Required.
The Servicer shall furnish to the Owner upon request, during the term of
this Agreement, such periodic, special or other reports or information, whether
or not provided for herein, as shall be necessary, reasonable or appropriate
with respect to the purposes of this Agreement. The Servicer may negotiate with
the Owner for a reasonable fee for providing such report or information, unless
(i) the Servicer is required to supply such report or information pursuant to
any other section of this Agreement, or (ii) the report or information has been
requested in connection with Internal Revenue Service or other regulatory agency
requirements. All such reports or information shall be provided by and in
accordance with all reasonable instructions and directions given by the Owner.
The Servicer agrees to execute and deliver all such instruments and take all
such action as the Owner, from time to time, may reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.
ARTICLE VIII
THE SERVICER
Section 8.01. Indemnification; Third Party Claims.
The Servicer agrees to indemnify the Owner, its successors and assigns, any
agent of the Owner, and the Master Servicer, and hold each of such Persons
harmless from and against any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees
and expenses that such Person may sustain in any way related to the failure of
the Servicer to perform in any way its duties and service the Mortgage Loans in
strict compliance with the terms of this Agreement and for breach of any
representation or warranty of the Servicer contained herein. The Servicer shall
immediately notify the Owner or other indemnified Person if a claim is made by a
third party with respect to this Agreement or the Mortgage Loans, assume (with
the consent of the Owner and such other Indemnified Person and with counsel
reasonably satisfactory to the Owner and such Person) 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 such other indemnified Person in respect of such claim but failure
to so notify the Owner and such other indemnified Person shall not limit its
obligations hereunder. The Servicer agrees that it will not
35
enter into any settlement of any such claim without the consent of the
Owner and such other indemnified Person unless such settlement includes an
unconditional release of the Owner and such other indemnified Person from all
liability that is the subject matter of such claim. The provisions of this
Section 8.01 shall survive termination of this Agreement.
Section 8.02. Merger or Consolidation of the Servicer.
The Servicer will keep in full effect its existence, rights and franchises
as a corporation under the laws of the state of its incorporation except as
permitted herein, and will obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement
or any of the Mortgage Loans and to perform its duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Servicer shall be a party, or any Person succeeding to the business of the
Servicer whether or not related to loan servicing, shall be the successor of the
Servicer hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person shall
be an institution (i) having a GAAP net worth of not less than $25,000,000, (ii)
the deposits of which are insured by the FDIC, or which is a HUD-approved
mortgagee whose primary business is in origination and servicing of first lien
mortgage loans, and (iii) which is a Xxxxxx Xxx or Xxxxxxx Mac approved
seller/servicer in good standing.
Section 8.03. Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the officers, employees or agents of the
Servicer shall be under any liability to the Owner 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 made in good faith; provided, however, that
this provision shall not protect the Servicer or any such person against any
breach of warranties or representations made herein, or failure to perform in
any way its obligations in compliance with any standard of care set forth in
this Agreement, or any liability which would otherwise be imposed by reason of
gross negligence or any breach of the terms and conditions of this Agreement.
The Servicer and any officer, employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
the Owner respecting any matters arising hereunder. The Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action which is
not incidental to its duties to service the Mortgage Loans in accordance with
this Agreement and which in its opinion may involve it in any expenses or
liability; provided, however, that the Servicer may, with the consent of the
Owner, which consent shall not be unreasonably withheld, undertake any such
action which it may deem necessary or desirable with respect to this Agreement
and the rights and duties of the parties hereto. In such event, the reasonable
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities for which the Owner will be liable, and
the Servicer shall be entitled to be reimbursed therefor from the Custodial
Account pursuant to Section 4.05.
Section 8.04. Servicer Not to Resign.
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The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer and the Owner or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner which Opinion of
Counsel shall be in form and substance acceptable to the Owner. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided in
Section 11.01.
Section 8.05. No Transfer of Servicing.
With respect to the retention of the Servicer to service the Mortgage Loans
hereunder, the Servicer acknowledges that the Owner has acted in reliance upon
the Servicer's independent status, the adequacy of its servicing facilities,
plan, personnel, records and procedures, its integrity, reputation and financial
standing and the continuance thereof. Without in any way limiting the generality
of this section, the Servicer shall not either assign this Agreement or the
servicing hereunder or delegate its rights or duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written approval of the Owner, which
approval shall not be unreasonably withheld; provided that the Servicer may
assign the Agreement and the servicing hereunder without the consent of Owner to
an affiliate of the Servicer to which all servicing of the Servicer is assigned
so long as (i) such affiliate is a Xxxxxx Xxx and Xxxxxxx Mac approved servicer
and (ii) if it is intended that such affiliate be spun off to the shareholders
of the Servicer, such affiliate have a GAAP net worth of at least $25,000,000
and (iii) such affiliate shall deliver to the Owner a certification pursuant to
which such affiliate shall agree to be bound by the terms and conditions of this
Agreement and shall certify that such affiliate is a Xxxxxx Mae and Xxxxxxx Mac
approved servicer in good standing.
ARTICLE IX
DEFAULT
Section 9.01. Events of Default.
In case one or more of the following Events of Default by the Servicer
shall occur and be continuing, that is to say:
(i) any failure by the Servicer to remit to the Owner any payment required
to be made under the terms of this Agreement which continues unremedied for one
(1) Business Day after written notice thereof (it being understood that this
subparagraph shall not affect Servicer's obligation pursuant to Section 5.01 to
pay default interest on any remittance received by the Owner after the Business
Day on which such payment was due); or
(ii) any failure on the part of the Servicer duly to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement (other than those described in clause (ix)
hereof), the breach of which has a material adverse effect and which continue
unremedied for a period of thirty days (except that such number of days shall be
fifteen in the case of a failure to pay any premium for any insurance
37
policy required to be maintained under this Agreement and such failure
shall be deemed to have a material adverse effect) after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Servicer by the Owner; 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, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(iv) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(v) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) the Servicer ceases to be approved by either Xxxxxx Mae or Xxxxxxx Mac
(to the extent such entities are then operating in a capacity similar to that in
which they operate on the date hereof) as a mortgage loan servicer for more than
thirty days to the extent such entities perform similar functions; or
(vii) the Servicer attempts to assign its right to servicing compensation
hereunder or the Servicer attempts, without the consent of the Owner, to sell or
otherwise dispose of all or substantially all of its property or assets or to
assign this Agreement or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof except as otherwise permitted
herein; or
(viii) the Servicer ceases to be qualified to transact business in any
jurisdiction where it is currently so qualified, but only to the extent such
non-qualification materially and adversely affects the Servicer's ability to
perform its obligations hereunder; or
(ix) failure by the Servicer to duly perform, within the required time
period, its obligations under Section 6.04, 6.09 or any of clauses (v) through
(viii) of Section 10.02;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Owner, by notice in writing to the Servicer may, in
addition to whatever rights the Owner may have under Section 8.01 and at law or
equity to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of the Servicer (and if the Servicer is
servicing any of the Mortgage Loans in a Pass-Through Transfer, appoint a
successor servicer reasonably acceptable to the Master Servicer for such
Pass-Through Transfer) under this Agreement and in and to the Mortgage Loans and
the proceeds thereof without compensating the Servicer for the same. On or after
the receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the Mortgage Loans or
38
otherwise, shall pass to and be vested in the successor appointed pursuant to
Section 11.01. Upon written request from the Owner, the Servicer shall prepare,
execute and deliver, any and all documents and other instruments, place in such
successor's possession all Servicing Files, and do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise, at the Servicer's sole
expense. The Servicer agrees to cooperate with the Owner and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans or any REO Property.
The Servicer shall promptly reimburse the Owner (or any designee of the
Owner, such as a master servicer) and any Depositor, as applicable, for all
reasonable expenses incurred by the Owner (or such designee) or such Depositor,
as such are incurred, in connection with the termination of the Servicer as
servicer and the transfer of servicing of the Mortgage Loans to a successor
servicer, if the termination and/or transfer of servicing is for cause related
to a servicer default. The provisions of this paragraph shall not limit whatever
rights the Owner or any Depositor may have under other provisions of this
Agreement and/or any applicable Reconstitution Agreement or otherwise, whether
in equity or at law, such as an action for damages, specific performance or
injunctive relief.
Section 9.02. Waiver of Defaults.
The Owner may waive only by written notice any default by the Servicer in
the performance of its obligations hereunder and its consequences. Upon any such
waiver of a past default, such default shall cease to exist, and any 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 in writing.
ARTICLE X
TERMINATION
Section 10.01. Termination.
The respective obligations and responsibilities of the Servicer shall
terminate upon: (i) the later of the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan or the disposition of
all REO Property and the remittance of all funds due hereunder; or (ii) by
mutual consent of the Servicer and the Owner in writing; or (iii) termination by
the Owner pursuant to Section 9.01. Simultaneously with any such termination and
the transfer of servicing hereunder, the Servicer shall be entitled to be
reimbursed for any outstanding Servicing Advances and Monthly Advances.
Section 10.02. Cooperation of Servicer with a Reconstitution.
The Servicer and the Owner agree that with respect to some or all of the
Mortgage Loans, on or after the related closing date, on one or more dates (each
a "Reconstitution Date") at the
39
Owner's sole option, the Owner may effect a sale (each, a "Reconstitution")
of some or all of the Mortgage Loans then subject to this Agreement, without
recourse, to:
(a) one or more third party purchasers in one or more in whole loan
transfers (each, a "Whole Loan Transfer"); or
(b) one or more trusts or other entities to be formed as part of one or
more Pass-Through Transfers.
The Servicer agrees to execute in connection with any agreements among the
Owner, the Servicer, and any servicer in connection with a Whole Loan Transfer,
an assignment, assumption and recognition agreement, or, at Owner's request, a
seller's warranties and servicing agreement or a participation and servicing
agreement or similar agreement in form and substance reasonably acceptable to
the parties, and in connection with a Pass-Through Transfer, a pooling and
servicing agreement in form and substance reasonably acceptable to the parties.
It is understood that any such Reconstitution Agreements will not contain any
greater obligations on the part of Servicer than are contained in this
Agreement.
With respect to each Whole Loan Transfer and each Pass-Through Transfer
entered into by the Owner, the Servicer agrees (1) to cooperate fully with the
Owner and any prospective purchaser with respect to all reasonable requests and
due diligence procedures; (2) to execute, deliver and perform all Reconstitution
Agreements required by the Owner; (3) to restate the representations and
warranties set forth in this Agreement as of the settlement or closing date in
connection with such Reconstitution (each, a "Reconstitution Date").
In addition, the Servicer shall provide to such servicer or issuer, as the
case may be, and any other participants in such Reconstitution:
(i) any and all information and appropriate verification of information
which may be reasonably available to the Servicer, whether through letters of
its auditors and counsel or otherwise, as the Owner or any such other
participant shall request upon reasonable demand;
(ii) such additional representations, warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Servicer as are reasonably agreed upon by the Servicer and the Owner or
any such other participant;
(iii) within 5 Business Days after request by the Owner, the information
with respect to the Servicer (as servicer) as required by Item 1108(b) and (c)
of Regulation AB, a summary of the requirements of which as of the date hereof
is attached hereto as Exhibit I for convenience of reference only, as determined
by Owner in its sole discretion. In the event that the Servicer has delegated
any servicing responsibilities with respect to the Mortgage Loans to a
Subservicer, the Servicer shall provide the information required pursuant to
this clause with respect to the Subservicer;
(iv) within 5 Business Days after request by the Owner,
(a) information regarding any legal proceedings pending (or known to
be contemplated) against the Servicer (as servicer) and each Subservicer as
required by Item 1117
40
of Regulation AB, a summary of the requirements of which as of the date
hereof is attached hereto as Exhibit I for convenience of reference only, as
determined by Owner in its sole discretion,
(b) information regarding affiliations with respect to the Servicer
(as servicer) and each Subservicer as required by Item 1119(a) of
Regulation AB, a summary of the requirements of which as of the date hereof is
attached hereto as Exhibit I for convenience of reference only, as determined by
Owner in its sole discretion, and
c) information regarding relationships and transactions with respect
to the Servicer (as servicer) and each Subservicer as required by Item
1119(b) and (c) of Regulation AB, a summary of the requirements of which as of
the date hereof is attached hereto as Exhibit I for convenience of reference
only, as determined by Owner in its sole discretion;
(v) for the purpose of satisfying the reporting obligation under the
Exchange Act with respect to any class of asset-backed securities, the Servicer
shall (or shall cause each Subservicer to) (i) provide prompt notice to the
Owner, the Master Servicer and any Depositor in writing of (A) any material
litigation or governmental proceedings involving the Servicer or any
Subservicer, (B) any affiliations or relationships that develop following the
closing date of a Pass-Through Transfer between the Servicer or any Subservicer
and any of the parties specified in clause (D) of paragraph (a) of this Section
(and any other parties identified in writing by the requesting party) with
respect to such Pass-Through Transfer, (C) any Event of Default under the terms
of this Agreement or any Reconstitution Agreement, (D) any merger, consolidation
or sale of substantially all of the assets of the Servicer, and (E) the
Servicer's entry into an agreement with a Subservicer to perform or assist in
the performance of any of the Servicer's obligations under this Agreement or any
Reconstitution Agreement and (ii) provide to the Owner and any Depositor a
description of such proceedings, affiliations or relationships;
(vi) as a condition to the succession to the Servicer or any Subservicer as
servicer or subservicer under this Agreement or any Reconstitution Agreement by
any Person (i) into which the Servicer or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Servicer or
any Subservicer, the Servicer shall provide to the Owner, the Master Servicer,
and any Depositor, at least 15 calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Owner and any Depositor of
such succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Owner and such Depositor, all information
reasonably requested by the Owner or any Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to any class of
asset-backed securities;
(vii) in addition to such information as the Servicer, as servicer, is
obligated to provide pursuant to other provisions of this Agreement, not later
than ten days prior to the deadline for the filing of any distribution report on
Form 10-D in respect of any Pass-Through Transfer that includes any of the
Mortgage Loans serviced by the Servicer or any Subservicer, the Servicer or such
Subservicer, as applicable, shall, to the extent the Servicer or such
Subservicer has knowledge, provide to the party responsible for filing such
report (including, if applicable, the Master Servicer) notice of the occurrence
of any of the following events along with all information, data, and materials
related thereto as may be required to be included in the related
41
distribution report on Form 10-D (as specified in the provisions of
Regulation AB referenced below):
(A) any material modifications, extensions or waivers of
pool asset terms, fees, penalties or payments during the distribution period or
that have cumulatively become material over time (Item 1121(a)(11) of Regulation
AB);
(B) material breaches of pool asset representations or
warranties or transaction covenants (Item 1121(a)(12) of Regulation AB); and
(C) information regarding new asset-backed securities
issuances backed by the same pool assets, any pool asset changes (such as,
additions, substitutions or repurchases), and any material changes in
origination, underwriting or other criteria for acquisition or selection of pool
assets (Item 1121(a)(14) of Regulation AB); and
(viii) the Servicer shall provide to the Owner, the Master Servicer and any
Depositor, evidence of the authorization of the person signing any certification
or statement, copies or other evidence of Fidelity Bond Insurance and Errors and
Omission Insurance policy, financial information and reports, and such other
information related to the Servicer or any Subservicer or the Servicer or such
Subservicer's performance hereunder.
In the event of a conflict or inconsistency between the terms of Exhibit I
and the text of the applicable Item of Regulation AB as cited above, the text of
Regulation AB, its adopting release and other public statements of the SEC shall
control.
The Servicer shall indemnify the Owner, each affiliate of the Owner, and
each of the following parties participating in a Pass-Through Transfer: each
issuing entity; each Person (including, but not limited to, the Master Servicer,
if applicable) responsible for the preparation, execution or filing of any
report required to be filed with the Commission with respect to such
Pass-Through Transfer, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Pass-Through Transfer; each broker dealer acting as underwriter, placement agent
or initial purchaser, each Person who controls any of such parties or the
Depositor (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act); and the respective present and former directors, officers,
employees, agents and affiliates of each of the foregoing and of the Depositor
(each, an "Indemnified Party"), and shall hold each of them harmless from and
against any claims, losses, damages, penalties, fines, forfeitures, legal fees
and expenses and related costs, judgments, and any other costs, fees and
expenses that any of them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or alleged to be
contained in any information, report, certification, data, accountants' letter
or other material provided under this Section 10.02 by or on behalf of the
Servicer, or provided under this Section 10.02, Sections 6.04 and 6.09 and by or
on behalf of any Subservicer or Subcontractor (collectively, the "Servicer
Information"), or (B) the omission or alleged omission to state in the Servicer
Information a material fact required to be stated in the Servicer Information or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, by way of
clarification, that clause (B) of this paragraph shall be construed
42
solely by reference to the Servicer Information and not to any other
information communicated in connection with a sale or purchase of securities,
without regard to whether the Servicer Information or any portion thereof is
presented together with or separately from such other information;
(ii) any breach by the Servicer of its obligations under this Section
10.02, including particularly any failure by the Servicer, any Subservicer or
any Subcontractor to deliver any information, report, certification,
accountants' letter or other material when and as required under this Section
10.02, including any failure by the Servicer to identify pursuant to Section
11.15 any Subcontractor "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB;
(iii) any breach by the Servicer of a representation or warranty set forth
in Section Article III or in a writing furnished pursuant to clause (h) of
Article III and made as of a date prior to the closing date of the related
Pass-Through Transfer, to the extent that such breach is not cured by such
closing date, or any breach by the Servicer of a representation or warranty in a
writing furnished pursuant to clause (h) of Article III to the extent made as of
a date subsequent to such closing date; or
(iv) the negligence bad faith or willful misconduct of the Servicer in
connection with its performance under this Section 10.02.
If the indemnification provided for herein is unavailable or insufficient
to hold harmless an Indemnified Party, then the Servicer agrees that it shall
contribute to the amount paid or payable by such Indemnified Party as a result
of any claims, losses, damages or liabilities incurred by such Indemnified Party
in such proportion as is appropriate to reflect the relative fault of such
Indemnified Party on the one hand and the Servicer on the other.
In the case of any failure of performance described above, the Servicer
shall promptly reimburse the Owner, any Depositor, as applicable, and each
Person responsible for the preparation, execution or filing of any report
required to be filed with the Commission with respect to such Pass-Through
Transfer, or for execution of a certification pursuant to Rule 13a-14(d) or Rule
15d-14(d) under the Exchange Act with respect to such Pass-Through Transfer, for
all costs reasonably incurred by each such party in order to obtain the
information, report, certification, accountants' letter or other material not
delivered pursuant to this Section or Section 6.04 or Section 6.09 as required
by the Servicer, any Subservicer or any Subcontractor.
This indemnification shall survive the termination of this Agreement or the
termination of any party to this Agreement.
All Mortgage Loans not sold or transferred pursuant to a Whole Loan
Transfer or Pass Through Transfer shall be subject to this Agreement and shall
continue to be serviced in accordance with the terms of this Agreement and with
respect thereto this Agreement shall remain in full force and effect.
Section 10.03. Master Servicer.
43
The Servicer, including any successor servicer hereunder, shall be subject
to the supervision of the Master Servicer, which Master Servicer shall be
obligated to ensure that the Servicer services the Mortgage Loans in accordance
with the provisions of this Agreement. The Master Servicer, acting on behalf of
the Owner, shall have the same rights as the Owner to enforce the obligations of
the Servicer under this Agreement. The Master Servicer, or the entity specified
in the pooling and servicing agreement, shall be entitled to terminate the
rights and obligations of the Servicer under this Agreement upon the failure of
the Servicer to perform any of its obligations under this Agreement if such
failure constitutes an Event of Default as provided in Article IX of this
Agreement. Notwithstanding anything to the contrary, in no event shall the
Master Servicer assume any of the obligations of the Owner under this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Successor to the Servicer.
Prior to termination of the Servicer's responsibilities and duties under
this Agreement pursuant to Sections 8.04, 9.01 or 10.01(ii), the Owner shall (i)
succeed to and assume all of the Servicer's responsibilities, rights, duties and
obligations under this Agreement, or (ii) appoint a successor having the
characteristics set forth in Section 8.02 hereof and which shall succeed to all
rights and assume all of the responsibilities, duties and liabilities of the
Servicer under this Agreement prior to the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement. In connection
with such appointment and assumption, the Owner may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as the
Owner and such successor shall agree. 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 and
shall in no event relieve the Servicer of the representations and warranties
made pursuant to Article III and the remedies available to the Owner under
Section 8.01, it being understood and agreed that the provisions of such Article
III and Section 8.01 shall be applicable to the Servicer notwithstanding any
such resignation or termination of the Servicer, or the termination of this
Agreement.
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Servicer and to the Owner an instrument accepting such
appointment, 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 this Agreement pursuant to
Section 8.04, 9.01 or 10.01 shall not affect any claims that the Owner may have
against the Servicer arising prior to any such termination or resignation.
44
The Servicer shall promptly deliver to the successor the funds in the
Custodial Account and the Escrow Account and the Servicing Files and related
documents and statements held by it hereunder and the Servicer shall account for
all funds. The Servicer shall execute and deliver such instruments and do such
other things all as may reasonably be required to more fully and definitely vest
and confirm in the successor all such rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer. The successor shall make such
arrangements as it may deem appropriate to reimburse the Servicer for
unrecovered Monthly Advances and Servicing Advances which the successor retains
hereunder and which would otherwise have been recovered by the Servicer pursuant
to this Agreement but for the appointment of the successor servicer.
Upon a successor's acceptance of appointment as such, the Servicer shall
notify the Owner of such appointment.
All reasonable costs and expenses incurred in connection with replacing the
Servicer upon its resignation or the termination of the Servicer in accordance
with the terms of this Agreement, including, without limitation, (i) all legal
costs and expenses and all due diligence costs and expenses associated with an
evaluation of the potential termination of the Servicer as a result of an Event
of Default and (ii) all costs and expenses associated with the complete transfer
of servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the successor servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor service to service the
Mortgage Loans in accordance with this Agreement, shall be payable on demand by
the resigning or terminated Servicer without any right of reimbursement
therefor.
Section 11.02. Amendment.
This Agreement may be amended from time to time by the Servicer and the
Owner by written agreement signed by the Servicer and the Owner.
Section 11.03. Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any of all 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
Servicer at the Owner's expense on direction of the Owner accompanied by an
opinion of counsel to the effect that such recordation materially and
beneficially affects the interest of the Owner or is necessary for the
administration or servicing the Mortgage Loans.
Section 11.04. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAWS. THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
45
Section 11.05. Notices.
Any demands, notices or other communications permitted or required
hereunder shall be in writing and shall be deemed conclusively to have been
given if personally delivered at or mailed by registered mail, postage prepaid,
and return receipt requested or transmitted by telecopier and confirmed by a
similar mailed writing, as follows:
(i) if to the Servicer:
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
(ii) if to the Owner:
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxx.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Credit Administration
Telecopier No.: (000) 000-0000
(iii) if to the Master Servicer:
Xxxxx Fargo Bank, National Association
X.X. Xxx 00
Xxxxxxxx, Xxxxxxxx 00000
Attention: Master Servicing - Bear Xxxxxxx
And for overnight delivery to:
Xxxxx Fargo Bank, National Association
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager, BSABS 2007-SD2
Telecopier No.: (000) 000-0000
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice, or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
address (as evidenced, in the case of registered or certified mail, by the date
noted on the return receipt).
Section 11.06. Severability of Provisions.
Any part, provision, representation or warranty of this Agreement which is
prohibited or which is held to be void or unenforceable shall be ineffective to
the extent of such prohibition or
46
unenforceability without invalidating the remaining provisions hereof. Any
part, provision, representation or warranty of this Agreement which is
prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
Section 11.07. Exhibits
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 11.08. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(i) the terms defined in this Agreement have the meanings assigned to them
in this Agreement and include the plural as well as the singular, and the use of
any gender herein shall be deemed to include the other gender;
(ii) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(iii) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(iv) a reference to a Subsection without further reference to a Section is
a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(v) the words "herein," "hereof," "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular provision;
and
(vi) the term "include" or "including" shall mean without limitation by
reason of enumeration.
Section 11.09. Reproduction of Documents.
This Agreement and all documents relating hereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received
47
by any party at the closing, and (iii) financial statements, certificates
and other information previously or hereafter furnished, may be reproduced by
any photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
Section 11.10. Confidentiality of Information.
Each party recognizes that, in connection with this Agreement, it may
become privy to non-public information regarding the financial condition,
operations and prospects of the other party. Except as required to be disclosed
by law, each party agrees to keep all non-public information regarding the other
party strictly confidential, and to use all such information solely in order to
effectuate the purpose of this Agreement.
Section 11.11. Assignment by the Owner.
The Owner shall have the right, without the consent of the Servicer hereof,
to assign, in whole or in part, its interest under this Agreement with respect
to some or all of the Mortgage Loans, and designate any person to exercise any
rights of the Owner hereunder, by executing an assignment and assumption
agreement reasonably acceptable to the Servicer and the assignee or designee
shall accede to the rights and obligations hereunder of the Owner with respect
to such Mortgage Loans. In no event shall Owner sell a partial interest in any
Mortgage Loan. All references to the Owner in this Agreement shall be deemed to
include its assignees or designees. It is understood and agreed between the
Owners and the Servicer that no more than five (5) Persons shall have the right
of owner under this Agreement at any one time.
Section 11.12. No Partnership.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent for
Owner.
Section 11.13. Execution, Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.05, this Agreement
shall inure to the benefit of and be binding upon the Servicer and the Owner and
their respective successors and assigns.
Section 11.14. Entire Agreement.
Each of the Servicer and the Owner acknowledge that no representations,
agreements or promises were made to it by the other party or any of its
employees other than those representations, agreements or promises specifically
contained herein. This Agreement sets forth
48
the entire understanding between the parties hereto and shall be binding
upon all successors of both parties.
Section 11.15. Use of Subservicers and Subcontractors.
(a) The Servicer shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Servicer as servicer under
this Agreement or any Reconstitution Agreement unless the Servicer complies with
the provisions of paragraph (b) of this Section. The Servicer shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the servicers of any Subcontractor, to
fulfill any of the obligations of the Servicer as servicer under this Agreement
or any Reconstitution Agreement unless the Servicer complies with the provisions
of paragraph (d) of this Section. The Servicer must notify the Owner, the Master
Servicer and any Depositor in writing of any affiliations or relationships that
develop following the closing date between the Servicer or any Subservicer.
(b) The Servicer shall cause any Subservicer used by the Servicer (or by
any Subservicer) for the benefit of the Owner and any Depositor to comply with
the provisions of this Section and with clauses (g) and (j) of Article III,
Sections 6.04, 6.09 and 10.02 of this Agreement to the same extent as if such
Subservicer were the Owner, and to provide the information required with respect
to such Subservicer under Section 3.01(i) of this Agreement. The Servicer shall
be responsible for obtaining from each Subservicer and delivering to the Owner,
the Master Servicer and any Depositor any Annual Statement of Compliance
required to be delivered by such Subservicer under Section 6.04(a), any
Assessment of Compliance and Attestation Report required to be delivered by such
Subservicer under Section 6.09, any Annual Certification required under Section
6.04(b), any Additional Form 10-D Disclosure and any Form 8-K Disclosure
Information, as and when required to be delivered.
(c) The Servicer shall promptly upon request provide to the Owner, the
Master Servicer and any Depositor (or any designee of the Depositor, such as an
administrator) a written description (in form and substance satisfactory to the
Owner, the Master Servicer and such Depositor) of the role and function of each
Subcontractor utilized by the Servicer or any Subservicer, specifying (i) the
identity of each such Subcontractor, (ii) which (if any) of such Subcontractors
are "participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.
(d) As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Servicer shall cause any such Subcontractor used by the
Servicer (or by any Subservicer) for the benefit of the Owner and any Depositor
to comply with the provisions of Sections 6.07 and 10.02 of this Agreement to
the same extent as if such Subcontractor were the Servicer. The Servicer shall
be responsible for obtaining from each Subcontractor and delivering to the Owner
and any Depositor any Assessment of Compliance and Attestation Report and other
certificates required to be delivered by such Subservicer and such Subcontractor
under Section 6.09 (and any Annual Certification required under Section
6.09(b)), in each case as and when required to be delivered.
49
Section 11.16. Third Party Beneficiary
For purposes of this Agreement, each Master Servicer shall be considered a
third party beneficiary to this Agreement, entitled to all the rights and
benefits hereof as if it were a direct party to this Agreement.
50
IN WITNESS WHEREOF, the Servicer and the Owner have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the date and year first above written.
EMC MORTGAGE CORPORATION,
as Servicer
By:
--------------------------
Name:
Title:
BEAR XXXXXXX ASSET BACKED SECURITIES I LLC,
as Owner
By:
-------------------------
Name:
Title:
EXHIBIT A
---------
MORTGAGE LOAN SCHEDULE
A-1
EXHIBIT B
---------
CUSTODIAL ACCOUNT LETTER AGREEMENT
(date)
To:
-----------------------
--------------------------
--------------------------
(the "Depository")
As "Servicer" under the Servicing Agreement, dated as of February 1, 2007,
(the "Agreement"), we hereby authorize and request you to establish an account,
as a Custodial Account pursuant to Section 4.04 of the Agreement, to be
designated as "BSABS 2007-SD2 Custodial Account, in trust for BSABS I, Owner of
Whole Loan Mortgages, and various Mortgagors." All deposits in the account shall
be subject to withdrawal therefrom by order signed by the Servicer. You may
refuse any deposit which would result in violation of the requirement that the
account be fully insured as described below. This letter is submitted to you in
duplicate. Please execute and return one original to us.
By:
-------------------
Name:
-------------------
Title:
-------------------
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. The full amount deposited at any time in the account will be
insured up to applicable limits by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund or the Savings Association Insurance Fund or
will be invested in Permitted Investments as defined in the Agreement.
[ ]
(name of Depository)
By:
-------------------
Name:
-------------------
Title:
-------------------
B-1
EXHIBIT C
---------
ESCROW ACCOUNT LETTER AGREEMENT
(date)
To:
-----------------------
--------------------------
--------------------------
(the "Depository")
As "Servicer" under the Servicing Agreement, dated as of February 1, 2007
(the "Agreement"), we hereby authorize and request you to establish an account,
as an Escrow Account pursuant to Section 4.06 of the Agreement, to be designated
as "BSABS 2007-SD2 Escrow Account, in trust for BSABS I, Owner of Whole Loan
Mortgages, and various Mortgagors." All deposits in the account shall be subject
to withdrawal therefrom by order signed by the Servicer. You may refuse any
deposit which would result in violation of the requirement that the account be
fully insured as described below. This letter is submitted to you in duplicate.
Please execute and return one original to us.
By:
-------------------
Name:
-------------------
Title:
-------------------
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. The full amount deposited at any time in the account will be
insured up to applicable limits by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund or the Savings Association Insurance Fund or
will be invested in Permitted Investments as defined in the Agreement.
[ ]
(name of Depository)
By:
-------------------
Name:
-------------------
Title:
-------------------
C-1
EXHIBIT D
---------
REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank, National Association
0000 00xx Xxxxxx X.X.
Xxxx., XX 00000
Attn:
---------------
Re: Custodial Agreement dated as of March 15, 2007, between EMC
Mortgage Corporation and Xxxxx Fargo Bank, National
Association, as Custodian
In connection with the administration of the Mortgage Loans held by
you as Custodian for the Owner pursuant to the above-captioned Custody
Agreement, we request the release, and hereby acknowledge receipt, of the
Custodian's Mortgage File for the Mortgage Loan described below, for the reason
indicated.
Mortgage Loan Number:
--------------------
Mortgagor Name, Address & Zip Code:
----------------------------------
Reason for Requesting Documents (check one):
_______ 1. Mortgage Paid in Full
_______ 2. Foreclosure
_______ 3. Substitution
_______ 4. Other Liquidation (Repurchases, etc.)
_______ 5. Nonliquidation
[Reason:________________________________]
Address to which Custodian should
Deliver the Custodian's Mortgage File:
------------------------------------------
------------------------------------------
------------------------------------------
By:
---------------------------------------
(authorized signer)
Issuer:
-----------------------------------
D-1
Address:
---------------------------------
---------------------------------
Date:
-------------------------------------
Custodian
---------
Xxxxx Fargo Bank, National Association
Please acknowledge the execution of the above request by your signature and
date below:
------------------------------------ -----------------
Signature Date
Documents returned to Custodian:
------------------------------------ -----------------
Custodian Date
D-2
EXHIBIT E
---------
REPORTING DATA FOR MONTHLY REPORT
------------------------------------------------------------------------------------------------------------------------
STANDARD LOAN LEVEL FILE LAYOUT -
MASTER SERVICING
------------------------------------------------------------------------------------------------------------------------
EXHIBIT 1: Layout
------------------------------------------------------------------------------------------------------------------------
COLUMN NAME DESCRIPTION DECIMAL FORMAT COMMENT
MAX
SIZE
------------------------------------------------------------------------------------------------------------------------
EACH FILE REQUIRES THE FOLLOWING FIELDS:
------------------------------------------------------------------------------------------------------------------------
SER_INVESTOR_NBR A value assigned by the Servicer to define a Text up to 20
group of loans. digits 20
------------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan by Text up to 10
the investor. digits 10
------------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10
Servicer. This may be different than the digits 10
LOAN_NBR.
------------------------------------------------------------------------------------------------------------------------
SCHED_PAY_AMT Scheduled monthly principal and scheduled 2 No commas(,) or
interest payment that a borrower is expected dollar signs ($) 11
to pay, P&I constant.
------------------------------------------------------------------------------------------------------------------------
NOTE_INT_RATE The loan interest rate as reported by the 4 Max length of 6
Servicer. 6
------------------------------------------------------------------------------------------------------------------------
NET_INT_RATE The loan gross interest rate less the service 4 Max length of 6
fee rate as reported by the Servicer. 6
------------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE The servicer's fee rate for a loan as reported 4 Max length of 6
by the Servicer. 6
------------------------------------------------------------------------------------------------------------------------
SERV_FEE_AMT The servicer's fee amount for a loan as 2 No commas(,) or
reported by the Servicer. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT The new loan payment amount as reported by the 2 No commas(,) or
Servicer. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE The new loan rate as reported by the Servicer. 4 Max length of 6
6
------------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE The index the Servicer is using to calculate a 4 Max length of 6
forecasted rate. 6
------------------------------------------------------------------------------------------------------------------------
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or
beginning of the processing cycle. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
ACTL_END_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or
end of the processing cycle. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle that MM/DD/YYYY
the borrower's next payment is due to the 10
Servicer, as reported by Servicer.
------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_1 The first curtailment amount to be applied. 2 No commas(,) or
dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_1 The curtailment date associated with the first MM/DD/YYYY
curtailment amount. 10
------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or
curtailment amount, if applicable. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or
dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_2 The curtailment date associated with MM/DD/YYYY 10
the second curtailment amount.
------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_2 The curtailment interest on the 2 No commas(,)
second curtailment amount, if or dollar 11
applicable. signs ($)
------------------------------------------------------------------------------------------------------------------------
E-1
------------------------------------------------------------------------------------------------------------------------
EXHIBIT 1: CONTINUED STANDARD LOAN LEVEL FILE LAYOUT
------------------------------------------------------------------------------------------------------------------------
COLUMN NAME DESCRIPTION DECIMAL FORMAT COMMENT
MAX
SIZE
------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or
dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_3 The curtailment date associated with the third MM/DD/YYYY
curtailment amount. 10
------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,) or
curtailment amount, if applicable. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
PIF_AMT The loan "paid in full" amount as reported by 2 No commas(,) or
the Servicer. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
PIF_DATE The paid in full date as reported by the MM/DD/YYYY
Servicer. 10
------------------------------------------------------------------------------------------------------------------------
ACTION_CODE The standard FNMA numeric code used to indicate Action Code Key:
the default/delinquent status of a particular 15=Bankruptcy, 2
loan. 00xXxxxxxxxxxx,
, 00xXXX,
63=Substitution,
65=Repurchase,70=REO
------------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT The amount of the interest adjustment as 2 No commas(,) or
reported by the Servicer. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, if 2 No commas(,) or
applicable. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if applicable. 2 No commas(,) or
dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
LOAN_LOSS_AMT The amount the Servicer is passing as a loss, 2 No commas(,) or
if applicable. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
PLUS THE FOLLOWING APPLICABLE FIELDS:
------------------------------------------------------------------------------------------------------------------------
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount due 2 No commas(,) or
at the beginning of the cycle date to be dollar signs ($) 11
passed through to investors.
------------------------------------------------------------------------------------------------------------------------
SCHED_END_PRIN_BAL The scheduled principal balance due to 2 No commas(,) or
investors at the end of a processing cycle. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT The scheduled principal amount as reported by 2 No commas(,) or
the Servicer for the current cycle -- only dollar signs ($) 11
applicable for Scheduled/Scheduled Loans.
------------------------------------------------------------------------------------------------------------------------
SCHED_NET_INT The scheduled gross interest amount less the 2 No commas(,) or
service fee amount for the current cycle as dollar signs ($) 11
reported by the Servicer -- only applicable
for Scheduled/Scheduled Loans.
------------------------------------------------------------------------------------------------------------------------
ACTL_PRIN_AMT The actual principal amount collected by the 2 No commas(,) or
Servicer for the current reporting cycle -- dollar signs ($) 11
only applicable for Actual/Actual Loans.
------------------------------------------------------------------------------------------------------------------------
ACTL_NET_INT The actual gross interest amount less the 2 No commas(,) or
service fee amount for the current reporting dollar signs ($) 11
cycle as reported by the Servicer -- only
applicable for Actual/Actual Loans.
------------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ AMT The penalty amount received when a borrower 2 No commas(,) or
prepays on his loan as reported by the dollar signs ($) 11
Servicer.
------------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan 2 No commas(,) or
waived by the servicer. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
EXHIBIT 1: CONTINUED STANDARD LOAN LEVEL FILE LAYOUT
------------------------------------------------------------------------------------------------------------------------
COLUMN NAME DESCRIPTION DECIMAL FORMAT COMMENT
MAX
SIZE
------------------------------------------------------------------------------------------------------------------------
MOD_DATE The Effective Payment Date of the Modification MM/DD/YYYY
for the loan. 10
------------------------------------------------------------------------------------------------------------------------
E-2
------------------------------------------------------------------------------------------------------------------------
MOD_TYPE The Modification Type. Varchar - value
can be alpha or 30
numeric
------------------------------------------------------------------------------------------------------------------------
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and interest 2 No commas(,) or
advances made by Servicer. dollar signs ($) 11
------------------------------------------------------------------------------------------------------------------------
BREACH_FLAG Flag to indicate if the repurchase of a loan Y=Breach
is due to a breach of Representations and N=NO Breach 1
Warranties Let blank if N/A
------------------------------------------------------------------------------------------------------------------------
E-3
EXHIBIT F
---------
REPORTING DATA FOR DEFAULTED LOANS
EXHIBIT : STANDARD FILE LAYOUT - DELINQUENCY REPORTING
*The column/header names in BOLD are the minimum fields Xxxxx Fargo must
receive from every Servicer
----------------------------------------------------------------------------------------------------------------------------------
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT COMMENT
----------------------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer.
This may be different than the LOAN_NBR
----------------------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan by the
originator.
----------------------------------------------------------------------------------------------------------------------------------
CLIENT_NBR Servicer Client Number
----------------------------------------------------------------------------------------------------------------------------------
SERV_INVESTOR_NBR Contains a unique number as
assigned by an external servicer
to identify a group of loans in
their system.
----------------------------------------------------------------------------------------------------------------------------------
BORROWER_FIRST_NAME First Name of the Borrower.
----------------------------------------------------------------------------------------------------------------------------------
BORROWER_LAST_NAME Last name of the borrower.
----------------------------------------------------------------------------------------------------------------------------------
PROP_ADDRESS Street Name and Number of Property
----------------------------------------------------------------------------------------------------------------------------------
PROP_STATE The state where the property located.
----------------------------------------------------------------------------------------------------------------------------------
PROP_ZIP Zip code where the property is located.
----------------------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next
payment is due to MM/DD/YYYY the
servicer at the end of processing
cycle, as reported by Servicer.
----------------------------------------------------------------------------------------------------------------------------------
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
----------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
----------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CASE_NBR The case number assigned by the court to the
bankruptcy filing.
----------------------------------------------------------------------------------------------------------------------------------
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been MM/DD/YYYY
approved by the courts
----------------------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. Either MM/DD/YYYY
by Dismissal, Discharged and/or a Motion For Relief
Was Granted.
----------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The MM/DD/YYYY
Servicer
----------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such
As;
----------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To MM/DD/YYYY
End/Close
----------------------------------------------------------------------------------------------------------------------------------
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_APPROVED_DATE The date DA Admin sends a letter
to the servicer with MM/DD/YYYY
instructions to begin foreclosure
proceedings.
----------------------------------------------------------------------------------------------------------------------------------
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue MM/DD/YYYY
Foreclosure
----------------------------------------------------------------------------------------------------------------------------------
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a MM/DD/YYYY
Foreclosure Action
----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected to MM/DD/YYYY
occur.
----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure sale. 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------------------
EVICTION_START_DATE The date the servicer initiates eviction of the MM/DD/YYYY
borrower.
----------------------------------------------------------------------------------------------------------------------------------
EVICTION_COMPLETED_DATE The date the court revokes legal
possession of the MM/DD/YYYY
property from the borrower.
----------------------------------------------------------------------------------------------------------------------------------
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------------------
LIST_DATE The date an REO property is listed at a particular MM/DD/YYYY
price.
----------------------------------------------------------------------------------------------------------------------------------
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------------------
OFFER_DATE_TIME The date an offer is received by DA Admin or by the MM/DD/YYYY
Servicer.
----------------------------------------------------------------------------------------------------------------------------------
F-1
----------------------------------------------------------------------------------------------------------------------------------
REO_CLOSING_DATE The date the REO sale of the property is scheduled to MM/DD/YYYY
close.
----------------------------------------------------------------------------------------------------------------------------------
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
OCCUPANT_CODE Classification of how the property is occupied.
----------------------------------------------------------------------------------------------------------------------------------
PROP_CONDITION_CODE A code that indicates the condition of the property.
----------------------------------------------------------------------------------------------------------------------------------
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
CURR_PROP_VAL The current "as is" value of the property based on 2
brokers price opinion or appraisal.
----------------------------------------------------------------------------------------------------------------------------------
REPAIRED_PROP_VAL The amount the property would be worth if repairs are 2
completed pursuant to a broker's price opinion or
appraisal.
----------------------------------------------------------------------------------------------------------------------------------
IF APPLICABLE:
----------------------------------------------------------------------------------------------------------------------------------
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
----------------------------------------------------------------------------------------------------------------------------------
DELINQ_REASON_CODE The circumstances which caused a
borrower to stop paying on a loan.
Code indicates the reason why the
loan is in default for this cycle.
----------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
----------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim Payment MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By The MM/DD/YYYY
Pool Insurer
----------------------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------------------
MOTION_FOR_RELIEF_DATE The date the Motion for Relief was filed 10 MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_BID_AMT The foreclosure sale bid amount 11 No commas(,) or
dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_TYPE The foreclosure sales results: REO, Third Party,
Conveyance to HUD/VA
----------------------------------------------------------------------------------------------------------------------------------
REO_PROCEEDS The net proceeds from the sale of the REO property. No commas(,) or
dollar signs ($)
--------------------------------------------- ------------------------------------------------------- ---------- -----------------
F-2
----------------------------------------------------------------------------------------------------------------------------------
BPO_DATE The date the BPO was done.
----------------------------------------------------------------------------------------------------------------------------------
CURRENT_FICO The current FICO score
----------------------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_FILED_DATE The date the Hazard Claim was filed with the Hazard 10 MM/DD/YYYY
Insurance Company.
----------------------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_AMT The amount of the Hazard Insurance Claim filed. 11 No commas(,) or
dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_PAID_DATE The date the Hazard Insurance Company disbursed the 10 MM/DD/YYYY
claim payment.
----------------------------------------------------------------------------------------------------------------------------------
HAZARD_CLAIM_PAID_AMT The amount the Hazard Insurance Company paid on the 11 No commas(,) or
claim. dollar signs ($)
----------------------------------------------------------------------------------------------------------------------------------
ACTION_CODE Indicates loan status Number
----------------------------------------------------------------------------------------------------------------------------------
NOD_DATE MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
NOI_DATE MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
ACTUAL_PAYMENT_PLAN_START_DATE MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
ACTUAL_PAYMENT_ PLAN_END_DATE
----------------------------------------------------------------------------------------------------------------------------------
ACTUAL_REO_START_DATE MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------------------
REO_SALES_PRICE Number
----------------------------------------------------------------------------------------------------------------------------------
REALIZED_LOSS/GAIN As defined in the Servicing Agreement Number
----------------------------------------------------------------------------------------------------------------------------------
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING
The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
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
NOTE: Xxxxx Fargo Bank 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 Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The OCCUPANT CODE field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
F-3
The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
F-4
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED
The FNMA DELINQUENT REASON CODE field should show the Reason for Delinquency as
follows:
------------------------------------------------------------------
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
------------------------------------------------------------------
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
------------------------------------------------------------------
F-5
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED
The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:
---------------------------------------------------------------------
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
---------------------------------------------------------------------
F-6
EXHIBIT G
---------
FORM OF SERVICER CERTIFICATION
Re: The [ ] agreement dated as of [ l, 200[ ] (the "Agreement"), among
[IDENTIFY PARTIES]
I, ____________________________, the _______________________ of [NAME OF
COMPANY] (the "Company"), certify to [the Purchaser], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their officers, with
the knowledge and intent that they will rely upon this certification, that:
I have reviewed the servicer compliance statement of the Company provided
in accordance with Item 1123 of Regulation AB (the "Compliance Statement"), the
report on assessment of the Company's compliance with the servicing criteria set
forth in Item 1122(d) of Regulation AB (the "Servicing Criteria"), provided in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934,
as amended (the "Exchange Act") and Item 1122 of Regulation AB (the "Servicing
Assessment"), the registered public accounting firm's attestation report
provided in accordance with Rules 13a-18 and 15d-18 under the Exchange Act and
Section 1122(b) of Regulation AB (the "Attestation Report"), and all servicing
reports, Officer's Certificates and other information relating to the servicing
of the Mortgage Loans by the Company during 200[ ] that were delivered by the
Company to the [Depositor] [Master Servicer] [Securities Administrator]
[Trustee] pursuant to the Agreement (collectively, the "Company Servicing
Information");
Based on my knowledge, the Company Servicing Information, 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 the light of the
circumstances under which such statements were made, not misleading with respect
to the period of time covered by the Company Servicing Information;
Based on my knowledge, all of the Company Servicing Information required to
be provided by the Company under the Agreement has been provided to the
[Depositor] [Master Servicer] [Securities Administrator] [Trustee];
I am responsible for reviewing the activities performed by the Company as
servicer under the Agreement, and based on my knowledge and the compliance
review conducted in preparing the Compliance Statement and except as disclosed
in the Compliance Statement, the Servicing Assessment or the Attestation Report,
the Company has fulfilled its obligations under the Agreement in all material
respects; and
The Compliance Statement required to be delivered by the Company pursuant
to this Agreement, and the Servicing Assessment and Attestation Report required
to be provided by the Company and by any Subservicer and Subcontractor pursuant
to the Agreement, have been provided to the [Depositor] [Master Servicer]. Any
material instances of noncompliance described in such reports have been
disclosed to the [Depositor] [Master Servicer]. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such reports.
G-1
EXHIBIT H
---------
SUMMARY OF REGULATION AB
SERVICING CRITERIA
NOTE: This Exhibit H is provided for convenience of reference only. In the
event of a conflict or inconsistency between the terms of this Exhibit H and the
text of Regulation AB, the text of Regulation AB, its adopting release and other
public statements of the SEC shall control.
ITEM 1122(D)
(b) General servicing considerations.
(1) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in accordance with the
transaction agreements.
(2) If any material servicing activities are outsourced to
third parties, policies and procedures are instituted to monitor the third
party's performance and compliance with such servicing activities.
(3) Any requirements in the transaction agreements to maintain
a back-up servicer for the mortgage loans are maintained.
(4) A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing function throughout the
reporting period in the amount of coverage required by and otherwise in
accordance with the terms of the transaction agreements.
(c) Cash collection and administration.
(1) Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of days specified
in the transaction agreements.
(2) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized personnel.
(3) Advances of funds or guarantees regarding collections,
cash flows or distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the transaction
agreements.
(4) The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of overcollateralization, are
separately maintained (e.g., with respect to commingling of cash) as set forth
in the transaction agreements.
(5) Each custodial account is maintained at a federally
insured depository institution as set forth in the transaction agreements. For
purposes of this criterion, "federally insured depository institution" with
respect to a foreign financial institution means a foreign
H-1
financial institution that meets the requirements of Rule 13k-1(b)(1) of
the Securities Exchange Act.
(6) Unissued checks are safeguarded so as to prevent unauthorized
access.
(7) Reconciliations are prepared on a monthly basis for all asset-
backed securities related bank accounts, including custodial accounts and
related bank clearing accounts. These reconciliations are (A) mathematically
accurate; (B) prepared within 30 calendar days after the bank statement cutoff
date, or such other number of days specified in the transaction agreements; (C)
reviewed and approved by someone other than the person who prepared the
reconciliation; and (D) contain explanations for reconciling items. These
reconciling items are resolved within 90 calendar days of their original
identification, or such other number of days specified in the transaction
agreements.
(d) Investor remittances and reporting.
(1) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction agreements and
applicable Commission requirements. Specifically, such reports (A) are prepared
in accordance with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed with the Commission as
required by its rules and regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal balance and number of
mortgage loans serviced by the Servicer.
(2) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other terms set forth in
the transaction agreements.
(3) Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or such other number of days
specified in the transaction agreements.
(4) Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, or custodial bank
statements.
(e) Mortgage Loan administration.
(1) Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related mortgage loan documents.
(2) Mortgage loan and related documents are safeguarded as
required by the transaction agreements.
(3) Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any conditions or
requirements in the transaction agreements.
H-2
(4) Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted to the Servicer's
obligor records maintained no more than two business days after receipt, or such
other number of days specified in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in accordance with the related
mortgage loan documents.
(5) The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's unpaid principal
balance.
(6) Changes with respect to the terms or status of an
obligor's mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with the transaction
agreements and related mortgage loan documents.
(7) Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure, foreclosures and
repossessions, as applicable) are initiated, conducted and concluded in
accordance with the timeframes or other requirements established by the
transaction agreements.
(8) Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a monthly basis,
or such other period specified in the transaction agreements, and describe the
entity's activities in monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or unemployment).
(9) Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based on the related mortgage
loan documents.
(10) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in accordance with the obligor's
mortgage loan documents, on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest on such funds is paid, or
credited, to obligors in accordance with applicable mortgage loan documents and
state laws; and (C) such funds are returned to the obligor within 30 calendar
days of full repayment of the related mortgage loans, or such other number of
days specified in the transaction agreements.
(11) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related penalty or expiration
dates, as indicated on the appropriate bills or notices for such payments,
provided that such support has been received by the Servicer at least 30
calendar days prior to these dates, or such other number of days specified in
the transaction agreements.
(12) Any late payment penalties in connection with any payment
to be made on behalf of an obligor are paid from the Servicer's funds and not
charged to the obligor, unless the late payment was due to the obligor's error
or omission.
H-3
(13) Disbursements made on behalf of an obligor are posted within two
business days to the obligor's records maintained by the Servicer, or such other
number of days specified in the transaction agreements.
(14) Delinquencies, charge-offs and uncollectable accounts are
recognized and recorded in accordance with the transaction agreements.
(15) Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set
forth in the transaction agreements.
H-4
EXHIBIT I
---------
SUMMARY OF APPLICABLE REGULATION AB REQUIREMENTS
NOTE: This Exhibit I is provided for convenience of reference only. In the
event of a conflict or inconsistency between the terms of this Exhibit I and the
text of Regulation AB, the text of Regulation AB, its adopting release and other
public statements of the SEC shall control.
Item 1108(b) and (c)
Provide the following information with respect to each servicer that will
service, including interim service, 20% or more of the mortgage loans in any
loan group in the securitization issued in the Pass-Through Transfer:
-a description of the Owner's form of organization;
-a description of how long the Servicer has been servicing residential
mortgage loans; a general discussion of the Servicer's experience in servicing
assets of any type as well as a more detailed discussion of the Servicer's
experience in, and procedures for the servicing function it will perform under
this Agreement and any Reconstitution Agreements; information regarding the
size, composition and growth of the Servicer's portfolio of mortgage loans of
the type similar to the Mortgage Loans and information on factors related to the
Servicer that may be material to any analysis of the servicing of the Mortgage
Loans or the related asset-backed securities, as applicable, including whether
any default or servicing related performance trigger has occurred as to any
other securitization due to any act or failure to act of the Servicer, whether
any material noncompliance with applicable servicing criteria as to any other
securitization has been disclosed or reported by the Servicer, and the extent of
outsourcing the Servicer uses;
-a description of any material changes to the Servicer's policies or
procedures in the servicing function it will perform under this Agreement and
any Reconstitution Agreements for mortgage loans of the type similar to the
Mortgage Loans during the past three years;
-information regarding the Servicer's financial condition to the extent
that there is a material risk that the effect on one or more aspects of
servicing resulting from such financial condition could have a material impact
on the performance of the securities issued in the Pass-Through Transfer, or on
servicing of mortgage loans of the same asset type as the Mortgage Loans;
-any special or unique factors involved in servicing loans of the same type
as the Mortgage Loans, and the Servicer's processes and procedures designed to
address such factors;
-statistical information regarding principal and interest advances made by
the Servicer on the Mortgage Loans and the Servicer's overall servicing
portfolio for the past three years; and
-the Owner's process for handling delinquencies, losses, bankruptcies and
recoveries, such as through liquidation of REO Properties, foreclosure, sale of
the Mortgage Loans or workouts.
I-1
ITEM 1117
-describe any legal proceedings pending against the Servicer or against any
of its property, including any proceedings known to be contemplated by
governmental authorities, that may be material to the holders of the securities
issued in the Pass-Through Transfer.
Item 1119(a)
-describe any affiliations of the Servicer, each other originator of the
Mortgage Loans and each Subservicer with the sponsor, depositor, issuing entity,
trustee, any originator, any other servicer, any significant obligor,
enhancement or support provider or any other material parties related to the
Pass-Through Transfer.
Item 1119(b)
-describe any business relationship, agreement, arrangement, transaction or
understanding entered into outside of the ordinary course of business or on
terms other than those obtained in an arm's length transaction with an unrelated
third party, apart from the Pass-Through Transfer, between the Servicer, each
other originator of the Mortgage Loans and each Subservicer, or their respective
affiliates, and the sponsor, depositor or issuing entity or their respective
affiliates, that exists currently or has existed during the past two years, that
may be material to the understanding of an investor in the securities issued in
the Pass-Through Transfer.
Item 1119(c)
-describe any business relationship, agreement, arrangement, transaction or
understanding involving or relating to the Mortgage Loans or the Pass-Through
Transfer, including the material terms and approximate dollar amount involved,
between the Servicer, each other originator of the Mortgage Loans and each
Subservicer, or their respective affiliates and the sponsor, depositor or
issuing entity or their respective affiliates, that exists currently or has
existed during the past two years.
I-2
EXHIBIT J
---------
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
(RMBS unless otherwise noted)
KEY:
X - obligation
WHERE THERE ARE MULTIPLE CHECKS FOR CRITERIA THE ATTESTING PARTY WILL
IDENTIFY IN THEIR MANAGEMENT ASSERTION THAT THEY ARE ATTESTING ONLY TO THE
PORTION OF THE DISTRIBUTION CHAIN THEY ARE RESPONSIBLE FOR IN THE RELATED
TRANSACTION AGREEMENTS.
---------------------------------------------------------------------------------------------------------------------
REGAB REFERENCE SERVICING CRITERIA SERVICERS
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
---------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any performance X
or other triggers and events of default in accordance with the
1122(d)(1)(i) transaction agreements.
---------------------------------------------------------------------------------------------------------------------
If any material servicing activities are outsourced to third X
parties, policies and procedures are instituted to monitor the third
1122(d)(1)(ii) party's performance and compliance with such servicing activities.
---------------------------------------------------------------------------------------------------------------------
Any requirements in the transaction agreements to maintain a back-up
1122(d)(1)(iii) servicer for the Pool Assets are maintained.
---------------------------------------------------------------------------------------------------------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect on the X
party participating in the servicing function throughout the reporting
period in the amount of coverage required by and otherwise in accordance
with the terms of the transaction agreements.
---------------------------------------------------------------------------------------------------------------------
CASH COLLECTION AND ADMINISTRATION
---------------------------------------------------------------------------------------------------------------------
1122(d)(2)(i) Payments on pool assets are deposited into the appropriate X
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such
other number of days specified in the transaction agreements.
---------------------------------------------------------------------------------------------------------------------
Disbursements made via wire transfer on behalf of an obligor or to X
1122(d)(2)(ii) an investor are made only by authorized personnel.
---------------------------------------------------------------------------------------------------------------------
Advances of funds or guarantees regarding collections, cash flows
or distributions, and any X interest or other fees charged for such
advances, are made, reviewed and approved as specified in the transaction
1122(d)(2)(iii) agreements.
---------------------------------------------------------------------------------------------------------------------
The related accounts for the transaction, such as cash X
reserve accounts or accounts established as a form of over
collateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the transaction
1122(d)(2)(iv) agreements.
----------------------------------------------------------------------------------------------------------------------
Each custodial account is maintained at a federally
insured depository institution as set X forth in the
transaction agreements. For purposes of this criterion,
"federally insured depository institution" with respect to
a foreign financial institution means a foreign financial
institution that meets the requirements of Rule
13k-1(b)(1) of the Securities
1122(d)(2)(v) Exchange Act.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access. X
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all asset-backed X
securities related bank accounts, including custodial accounts
and related bank clearing accounts. These reconciliations are (A)
mathematically accurate; (B) prepared within 30 calendar days after
the bank statement cutoff date, or such other number of days
specified in the transaction agreements; (C) reviewed and approved
by someone other than the person who prepared the reconciliation; and
(D) contain explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original identification,
or such other number of
----------------------------------------------------------------------------------------------------------------------
J-1
----------------------------------------------------------------------------------------------------------------------
days specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
INVESTOR REMITTANCES AND REPORTING
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the X
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and other
terms set forth in the transaction agreements; (B) provide information
calculated in accordance with the terms specified in the transaction
agreements; (C) are filed with the Commission as required by its
rules and regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number of Pool
Assets serviced by the Servicer.
----------------------------------------------------------------------------------------------------------------------
Amounts due to investors are allocated and remitted in accordance with X
1122(d)(3)(ii) timeframes, distribution priority and other terms set forth in the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
Disbursements made to an investor are posted within two business days X
1122(d)(3)(iii) to the Servicer's investor records, or such other number of days specified in the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
Amounts remitted to investors per the investor reports agree with cancelled X
1122(d)(3)(iv) checks, or other form of payment, or custodial bank statements.
----------------------------------------------------------------------------------------------------------------------
POOL ASSET ADMINISTRATION
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on pool assets is maintained as required X
by the transaction agreements or related pool asset documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ii) Pool assets and related documents are safeguarded as required by X
the transaction agreements
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are made, X
reviewed and approved in accordance with any conditions or requirements in
the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on pool assets, including any payoffs, made in accordance X
with the related pool asset documents are posted to the Servicer's
obligor records maintained no more than two business days after receipt,
or such other number of days specified in the transaction
agreements, and allocated to principal, interest or other items (e.g.,
escrow) in accordance with the related pool asset documents.
----------------------------------------------------------------------------------------------------------------------
The Servicer's records regarding the pool assets agree with the X
1122(d)(4)(v) Servicer's records with respect to an obligor's unpaid principal balance.
----------------------------------------------------------------------------------------------------------------------
Changes with respect to the terms or status of an obligor's X
pool assets (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with the
1122(d)(4)(vi) transaction agreements and related pool asset
documents.
----------------------------------------------------------------------------------------------------------------------
Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in X lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the
1122(d)(4)(vii) transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during the X
period a pool asset is delinquent in accordance with the transaction
agreements. Such records are maintained on at least a monthly basis, or
such other period specified in the transaction agreements, and
describe the entity's activities in monitoring delinquent pool
assets including, for example, phone calls, letters and payment
rescheduling plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for pool assets X
with variable rates are computed based on the related pool
asset documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as escrow X
accounts): (A) such funds are analyzed, in accordance with the obligor's
pool asset documents, on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest on such
funds is paid, or credited, to obligors in accordance with applicable
pool asset documents and state laws; and (C) such funds are returned
to the obligor within 30 calendar days of full repayment of the related
pool assets, or such other number of days specified in the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or X before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided
that such support has been received by the servicer at
least 30 calendar days prior to these dates, or such other
number of days specified in the
1122(d)(4)(xi) transaction agreements.
----------------------------------------------------------------------------------------------------------------------
J-2
----------------------------------------------------------------------------------------------------------------------
Any late payment penalties in connection with any payment
to be made on behalf of an obligor X are paid from the
Servicer's funds and not charged to the obligor, unless
1122(d)(4)(xii) the late payment was due to the obligor's error or omission.
----------------------------------------------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are posted
within two business days to the X obligor's records
maintained by the servicer, or such other number of days
1122(d)(4)(xiii) specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
Delinquencies, charge-offs and uncollectible accounts are X
1122(d)(4)(xiv) recognized and recorded in accordance with the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
1122(d)(4)(xv) maintained as set forth in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
[NAME OF OWNER] [NAME OF SUBSERVICER]
Date:
---------------------------
By:
---------------------------
Name:
Title:
J-3
EXHIBIT K
---------
REPORTING DATA FOR REALIZED LOSSES AND GAINS
CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET
NOTE: DO NOT NET OR COMBINE ITEMS. SHOW ALL EXPENSES INDIVIDUALLY AND ALL
CREDITS AS SEPARATE LINE ITEMS. CLAIM PACKAGES ARE DUE WITHIN 90 DAYS OF
LIQUIDATION. LATE SUBMISSIONS MAY RESULT IN CLAIMS NOT BEING PASSED UNTIL THE
FOLLOWING MONTH. THE SERVICER IS RESPONSIBLE TO REMIT ALL FUNDS PENDING LOSS
APPROVAL AND /OR RESOLUTION OF ANY DISPUTED ITEMS.
The numbers on the 332 form correspond with the numbers listed
below.
LIQUIDATION AND ACQUISITION EXPENSES:
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees advanced is
required.
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.
For documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees advanced is
required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage Loan as calculated on a monthly basis. For documentation, an
Amortization Schedule from date of default through liquidation breaking out
the net interest and servicing fees advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form -
breakdown required showing period of coverage, base tax, interest,
penalty. Advances prior to default require evidence of servicer
efforts to recover advances.
* For escrow advances - complete payment history (to calculate
advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing
all payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision
and WFB's approved Officer Certificate
* Unusual or extraordinary items may require further
documentation.
13. The total of lines 1 through 12.
CREDITS:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid
instructions and Escrow Agent / Attorney Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee * All other credits
need to be clearly defined on the 332 form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part A/Initial proceeds and
line (18b) for Part B/Supplemental proceeds.
TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)
K-1
23. The total derived from subtracting line 22 from 13. If the amount
represents a realized gain, show the amount in parenthesis ( ).
CALCULATION OF REALIZED LOSS/GAIN FORM 332
Prepared by: Date:
------------------ ------------
Phone: Email Address:
------------------------- -----------------------
---------------------------- ------------------------ ---------------------
Servicer Loan No. Servicer Name Servicer Address
---------------------------- ------------------------ ---------------------
XXXXX FARGO BANK, N.A. LOAN NO.
---------------------------------------
Borrower's Name:
-----------------------------------------------------
Property Address:
-----------------------------------------------------
LIQUIDATION TYPE: REO SALE 3RD PARTY SALE SHORT SALE CHARGE OFF
WAS THIS LOAN GRANTED A BANKRUPTCY DEFICIENCY OR CRAMDOWN YES NO
If "Yes", provide deficiency or cramdown amount _______________________________
LIQUIDATION AND ACQUISITION EXPENSES:
(1) Actual Unpaid Principal Balance of Mortgage Loan $ ______________ (1)
(2) Interest accrued at Net Rate ________________(2)
(3) Accrued Servicing Fees ________________(3)
(4) Attorney's Fees ________________(4)
(5) Taxes (see page 2) ________________(5)
(6) Property Maintenance _______________ (6)
(7) MI/Hazard Insurance Premiums (see page 2) ________________(7)
(8) Utility Expenses ________________(8)
(9) Appraisal/BPO ________________(9)
(10) Property Inspections ________________(10)
(11) FC Costs/Other Legal Expenses ________________(11)
(12) Other (itemize) ________________(12)
Cash for Keys__________________________ ________________(12)
HOA/Condo Fees_______________________ ________________(12)
______________________________________ ________________(12)
TOTAL EXPENSES $_______________(13)
CREDITS:
(14) Escrow Balance $_______________(14)
(15) HIP Refund ________________(15)
(16) Rental Receipts ________________(16)
(17) Hazard Loss Proceeds ________________(17)
(18) Primary Mortgage Insurance / Gov't Insurance ________________(18a)
HUD Part A
________________(18b)
HUD Part B
K-2
(19) Pool Insurance Proceeds ________________(19)
(20) Proceeds from Sale of Acquired Property ________________(20)
(21) Other (itemize) ________________(21)
_________________________________________ ________________(21)
TOTAL CREDITS $_______________(22)
TOTAL REALIZED LOSS (OR AMOUNT OF GAIN) $_______________(23)
ESCROW DISBURSEMENT DETAIL
----------------------------------------------------------------------------------------------------------------------
TYPE DATE PAID PERIOD OF TOTAL PAID BASE AMOUNT PENALTIES INTEREST
(TAX /INS.) COVERAGE
----------------------------------------------------------------------------------------------------------------------
K-3
Execution Copy
EMC MORTGAGE CORPORATION
PURCHASER
AND
XXXXX FARGO BANK, N.A.
COMPANY
--------------------------------------------------------------------------------
SELLER'S WARRANTIES AND SERVICING AGREEMENT
DATED AS OF JANUARY 1, 2007
--------------------------------------------------------------------------------
WFHM MORTGAGE LOAN POOLS 6689, 6690, 6691, 6692, 6693 AND 6694
XXXXX FARGO RESTRICTED
ii
TABLE OF CONTENTS
ARTICLE I......................................................................1
DEFINITIONS....................................................................1
ARTICLE II....................................................................12
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES; BOOKS AND
RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS ..........................12
ARTICLE III...................................................................15
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH............................15
ARTICLE IV....................................................................29
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS................................29
ARTICLE V.....................................................................45
PAYMENTS TO PURCHASER.........................................................45
ARTICLE VI....................................................................47
GENERAL SERVICING PROCEDURES..................................................47
ARTICLE VII...................................................................52
COMPANY TO COOPERATE..........................................................52
ARTICLE VIII..................................................................53
THE COMPANY...................................................................53
ARTICLE IX....................................................................54
SECURITIZATION TRANSACTION....................................................51
i
ARTICLE X.....................................................................67
DEFAULT.......................................................................67
ARTICLE XI....................................................................69
TERMINATION...................................................................69
ARTICLE XII...................................................................69
MISCELLANEOUS PROVISIONS......................................................69
EXHIBITS
Exhibit A Mortgage Loan Schedule
Exhibit B Contents of Each Mortgage File
Exhibit C Custodial Agreement
Exhibit D Form of Assignment, Assumption and
Recognition Agreement
Exhibit E Servicing Criteria to be Addressed in
Assessment of Compliance
Exhibit F Form of Sarbanes Certification
ii
This is a Seller's Warranties and Servicing Agreement for various fixed
and adjustable rate, residential, first lien and second lien, mortgage loans,
dated and effective as of January 1, 2007, and is executed between EMC Mortgage
Corporation, as purchaser (the "Purchaser"), and Xxxxx Fargo Bank, N.A., as
seller and servicer (the "Company").
W I T N E S S E T H
WHEREAS, the Purchaser has agreed to purchase from the Company and the
Company has agreed to sell to the Purchaser certain fixed and adjustable
interest rate, Conventional Mortgage Loans which have an aggregate outstanding
principal balance as indicated on the Mortgage Loan Schedule, which is annexed
hereto as Exhibit A;
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed of
trust or other security instrument creating a first lien or second lien on a
residential dwelling located in the jurisdiction indicated on the Mortgage Loan
Schedule; and
WHEREAS, the Purchaser and the Company wish to prescribe the manner of
purchase of the Mortgage Loans and the conveyance, servicing and control of the
Mortgage Loans.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Purchaser and the Company agree as
follows:
ARTICLE I
DEFINITIONS
Whenever used herein, the following words and phrases, unless the
content otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices of prudent mortgage lending institutions which
service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located.
Adjustment Date: As to each adjustable rate Mortgage Loan, the date on
which the Mortgage Interest Rate is adjusted in accordance with the terms of the
related Mortgage Note.
Agency or Agencies: Xxxxxx Mae, Xxxxxxx Mac or GNMA, or any of them as
applicable.
Agency Sale: Any sale or transfer of some or all of the Mortgage Loans
by the Purchaser to an Agency which sale or transfer is not a Securitization
Transaction or Whole Loan Transfer.
1 XXXXX FARGO RESTRICTED
Agreement: This Seller's Warranties and Servicing Agreement and all
exhibits, amendments hereof and supplements hereto.
ALTA: The American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgage Loan, the lesser of (i)
the value set forth on the appraisal made in connection with the origination of
the related Mortgage Loan as the value of the related Mortgaged Property, or
(ii) the purchase price paid for the Mortgaged Property, provided, however, that
in the case of a refinanced Mortgage Loan, such value shall be based solely on
the appraisal made in connection with the origination of such Mortgage Loan.
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 sale of the Mortgage to the Purchaser or if the related Mortgage has been
recorded in the name of MERS or its designee, such actions as are necessary to
cause the Purchaser to be shown as the owner of the related Mortgage on the
records of MERS for purposes of the system of recording transfers of beneficial
ownership of mortgages maintained by MERS.
Balloon Loan: A Mortgage Loan for which the Monthly Payments will not
fully amortize the loan by the end of the term, at which time the balance of the
principal is due in a lump sum.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in the states where the
parties are located are authorized or obligated by law or executive order to be
closed.
Buydown Agreement: An agreement between the Company and a Mortgagor, or
an agreement among the Company, a Mortgagor and a seller of a Mortgaged Property
or a third party with respect to a Mortgage Loan which provides for the
application of Buydown Funds.
Buydown Funds: In respect of any Buydown Mortgage Loan, any amount
contributed by the seller of a Mortgaged Property subject to a Buydown Mortgage
Loan, the buyer of such property, the Company or any other source, plus interest
earned thereon, in order to enable the Mortgagor to reduce the payments required
to be made from the Mortgagor's funds in the early years of a Mortgage Loan.
Buydown Mortgage Loan: Any Mortgage Loan in respect of which, pursuant
to a Buydown Agreement, (i) the Mortgagor pays less than the full monthly
payments specified in the Mortgage Note for a specified period, and (ii) the
difference between the payments required under such Buydown Agreement and the
Mortgage Note is provided from Buydown Funds.
Buydown Period: The period of time when a Buydown Agreement is in
effect with respect to a related Buydown Mortgage Loan.
Closing Date: January 18, 2007.
2 XXXXX FARGO RESTRICTED
Code: The Internal Revenue Code of 1986, as it may be amended from time
to time or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
Combined Loan-to-Value Ratio or CLTV: As to any Second Lien Mortgage
Loan at any date of determination, the ratio on such date of the principal
balance of such Mortgage Loan plus the principal balance of any Superior Lien,
to the Appraised Value of the related Mortgaged Property.
Commission: The United States Securities and Exchange Commission.
Commitment Letter: That certain letter agreement dated as of December
20, 2006, between the Company and the Purchaser.
Company: Xxxxx Fargo Bank, N.A., or its successor in interest or
assigns, or any successor to the Company under this Agreement appointed as
herein provided.
Company Information: As defined in Section 9.01(e)(i)(A).
Condemnation Proceeds: All awards or 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.
Conventional Mortgage Loan: A mortgage or deed of trust not insured or
guaranteed under a government program (e.g., FHA or VA).
Covered Loan: A Mortgage Loan categorized as "Covered" pursuant to the
Standard & Poor's Glossary for File Format for LEVELS(R) Version 5.7, Appendix
E, revised July 1, 2006, (excluding New Jersey "Covered Home Loans" as that term
is defined in clause (1) of the definition of that term in the New Jersey Home
Ownership Security Act of 2002 that are first lien purchase money Mortgage Loans
originated between November 26, 2003, and July 7, 2004).
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 4.04.
Custodial Agreement: The Interim Custody Agreement dated as of November
30, 1999 by and between EMC Mortgage Corporation as Owner, and Xxxxx Fargo Bank,
N.A. (formerly known as Xxxxx Fargo Bank Minnesota, N.A.) governing the
retention of the originals of each Mortgage Note, Mortgage, Assignment of
Mortgage and other Mortgage Loan Documents, annexed hereto as Exhibit C.
Custodian: The custodian under the Custodial Agreement, or its
successor in interest or assigns, or any successor to the Custodian under the
Custodial Agreement as provided therein.
3 XXXXX FARGO RESTRICTED
Cut-off Date: January 1, 2007.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: The Business Day immediately preceding the related
Remittance Date.
Due Date: The day of the month on which the Monthly Payment is due on a
Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Remittance Date, the period commencing
on the second day of the month preceding the month of the Remittance Date and
ending in the first day of the month of the Remittance Date.
Errors and Omissions Insurance Policy: An errors and omissions
insurance policy to be maintained by the Company pursuant to Section 4.12.
Escrow Account: The separate account or accounts created and maintained
pursuant to Section 4.06.
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 related
document.
Event of Default: Any one of the conditions or circumstances enumerated
in Section 10.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx: The Federal National Mortgage Association, and its
successors.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: Federal Housing Administration and its successors.
Fidelity Bond: A fidelity bond to be maintained by the Company pursuant
to Section 4.12.
First Lien: With respect to each Mortgaged Property, the lien on the
mortgage, deed of trust or other instrument securing a Mortgage Note which
creates a first lien on the Mortgaged Property.
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First Lien Mortgage Loan: A Mortgage Loan secured by a First Lien on
the Mortgage Property.
First Remittance Date: February 20, 2007.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, and its
successors.
GNMA: Government National Mortgage Association and its successors.
Gross Margin: With respect to each adjustable rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note which is added to
the Index in order to determine the related Mortgage Interest Rate, as set forth
in the Mortgage Loan Schedule.
High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994, (b) a "high cost
home," "threshold," "covered," (excluding New Jersey "Covered Home Loans" as
that term is defined in clause (1) of the definition of that term in the New
Jersey Home Ownership Security Act of 2002 that are first lien purchase money
Mortgage Loans originated between November 26, 2003, and July 7, 2004), "high
risk home," "predatory" or similar loan under any other applicable state,
federal or local law or (c) a Mortgage Loan categorized as "High Cost" pursuant
to the Standard & Poor's Glossary for File Format for LEVELS(R) Version 5.7,
Appendix E, revised July 1, 2006.
HUD: The United States Department of Housing and Urban Development and
its successors.
Index: With respect to any adjustable rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating the interest thereon.
Interest Only Mortgage Loan: A Mortgage Loan for which an interest-only
payment feature is allowed during the interest-only period set forth in the
related Mortgage Note.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
LGC: Loan Guaranty Certificate issued by the VA as a guarantee that the
federal government will repay to the lender a specified percentage of the loan
balance in the event of the borrower's default.
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 or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan.
Lender Paid Mortgage Insurance Policy or LPMI Policy: A PMI Policy for
which the Company pays all premiums from its own funds, without reimbursement.
5 XXXXX FARGO RESTRICTED
Loan-to-Value Ratio or LTV: With respect to any First Lien Mortgage
Loan, the ratio of the original loan amount of the Mortgage Loan at its
origination (unless otherwise indicated) to the Appraised Value of the Mortgaged
Property.
Master Servicer: With respect to any Securitization Transaction, the
"master servicer," if any, identified in the related transaction documents.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, or any successor in interest thereto.
MERS Mortgage Loan: Any Mortgage Loan registered with MERS on the MERS
System
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
MIC: Mortgage Insurance Certificate issued by HUD/FHA or copy of the
FHA Case Query screen print from the FHA Connection as evidence that a mortgage
has been insured and that a contract of mortgage insurance exists between
HUD/FHA and the lender.
Monthly Advance: The portion of each Monthly Payment that is delinquent
with respect to each Mortgage Loan at the close of business on the Determination
Date required to be advanced by the Company pursuant to Section 5.03 on the
Business Day immediately preceding the Remittance Date of the related month.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan or in the case of an Interest Only Mortgage Loan,
payments of (i) interest or (ii) principal and interest, as applicable, on a
Mortgage Loan.
Mortgage: The mortgage, deed of trust or other instrument and riders
thereto securing a Mortgage Note, which creates a first or second lien on an
unsubordinated estate in fee simple in real property securing the Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Impairment Insurance Policy: A mortgage impairment or blanket
hazard insurance policy as described in Section 4.11.
Mortgage Interest Rate: The annual rate of interest borne on a Mortgage
Note in accordance with the provisions of the Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of this
Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File,
6 XXXXX FARGO RESTRICTED
the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, REO Disposition Proceeds and all other rights,
benefits, proceeds and obligations arising from or in connection with such
Mortgage Loan.
Mortgage Loan Documents: With respect to a Mortgage Loan, the original
related Mortgage Note with applicable addenda and riders, the original related
Mortgage and the originals of any required addenda and riders, the original
related Assignment of Mortgage and any original intervening related Assignments
of Mortgage, the original related title insurance policy and evidence of the
related PMI Policy, MIC or LCG, if any.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Purchaser, which shall be equal to the
Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto as
Exhibit A, such schedule setting forth the following information with respect to
each Mortgage Loan: (1) the Company's Mortgage Loan number; (2) the city state
and zip code of the Mortgaged Property; (3) a code indicating whether the
Mortgaged Property is a single family residence, two-family residence,
three-family residence, four-family residence, planned unit development or
condominium; (4) the current Mortgage Interest Rate; (5) the Mortgage Loan
Remittance Rate; (6) the current Monthly Payment; (7) the Gross Margin; (8) the
original term to maturity; (9) the scheduled maturity date; (10) the principal
balance of the Mortgage Loan as of the Cut-off Date after deduction of payments
of principal due on or before the Cut-off Date whether or not collected; (11)
the Loan-to-Value; (12) the next Adjustment Date; (13) the lifetime Mortgage
Interest Rate cap; (14) whether the Mortgage Loan is convertible or not; (15) a
code indicating the mortgage guaranty insurance company; (16) code indicating
whether the loan is subject to a LPMI Policy; (17) a code indicating whether the
Mortgage Loan is a Balloon Loan and (18) the Servicing Fee Rate.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage and riders thereto.
Mortgaged Property: The real property securing repayment of the debt
evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Nonrecoverable Advance: Any advance previously made by the Company
pursuant to Section 5.03 or any Servicing Advance which, in the good faith
judgment of the Company, may not be ultimately recoverable by the Company from
Liquidation Proceeds or otherwise. The determination by the Company that it has
made a Nonrecoverable Advance, shall be evidenced by an Officer's Certification
of the Company delivered to the Purchaser and the Master Servicer and detailing
the reasons for such determination.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Vice President, an
Assistant Vice President, the
7 XXXXX FARGO RESTRICTED
Treasurer, the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Company, and delivered to the Purchaser as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the Company, reasonably acceptable to the Purchaser.
Periodic Interest Rate Cap: As to each adjustable rate Mortgage Loan,
the maximum increase or decrease in the Mortgage Interest Rate on any Adjustment
Date.
Person: Any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued by a
Qualified Insurer, as required by this Agreement with respect to certain
Mortgage Loans.
Prepayment Charge: Any prepayment premium, penalty or charge payable by
a Mortgagor in connection with any Principal Prepayment on a Mortgage Loan
pursuant to the terms of the related Mortgage Note.
Prepayment Penalty: Payments calculated pursuant to the underwriting
guidelines of the Company and due on a Mortgage Loan as the result of a
Principal Prepayment in full of the Mortgage Loan, not otherwise due thereon in
respect of principal or interest, which are intended to be a disincentive to
prepayment.
Prime Rate: The prime rate announced to be in effect from time to time,
as published as the average rate in The Wall Street Journal.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan which is received in advance of its scheduled Due Date, including
any Prepayment Charge and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment Period: The month preceding the month in which the
related Remittance Date occurs.
Purchase Price: The purchase price percentage as stated in the
Commitment Letter with any adjustments provided therein, multiplied by the
Stated Principal Balance of the Mortgage Loans list on the Mortgage Loan
Schedule, as of the Cut-off Date, plus accrued interest on each Mortgage Loan,
at its respective Mortgage Loan Remittance Rate, from the Cut-off Date to and
including the day prior to the Closing Date..
Purchaser: EMC Mortgage Corporation or its successor in interest or any
successor to the Purchaser under this Agreement as herein provided.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were
8 XXXXX FARGO RESTRICTED
originated pursuant to an agreement between the Company and such Person that
contemplated that such person would underwrite mortgage loans from time to time,
for sale to the Company, in accordance with underwriting guidelines designated
by the Company ("Designated Guidelines") or guidelines that do not vary
materially from such Designated Guidelines; (ii) such Mortgage Loans were in
fact underwritten as described in clause (i) above and were acquired by the
Company within 180 days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Company in origination of mortgage loans of the same type as the Mortgage Loans
for the Company's own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Company on a consistent
basis for use by lenders in originating mortgage loans to be purchased by the
Company; and (iv) the Company employed, at the time such Mortgage Loans were
acquired by the Company, pre-purchase or post-purchase quality assurance
procedures (which may involve, among other things, review of a sample or
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage loans
properly applied the underwriting criteria designated by the Company.
Qualified Depository: A deposit account or accounts maintained with a
federal or state chartered depository institution the deposits in which are
insured by the FDIC to the applicable limits and the short-term unsecured debt
obligations of which (or, in the case of a depository institution that is a
subsidiary of a holding company, the short-term unsecured debt obligations of
such holding company) are rated A-1+ by Standard & Poor's Ratings Group or
Prime-1 by Xxxxx'x Investors Service, Inc. (or a comparable rating if another
rating agency is specified by the Purchaser by written notice to the Company) at
the time any deposits are held on deposit therein.
Qualified Insurer: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by the Agencies.
Rating Agencies: Any nationally recognized statistical rating agency,
or its successor, including Standard & Poor's Ratings Services, Xxxxx'x
Investors Service, Inc. and Fitch Ratings.
Reconstitution: Any Securitization Transaction, Agency Sale or Whole
Loan Transfer.
Reconstitution Agreement: The agreement or agreements entered into by
the Company and the Purchaser and/or certain third parties on the Reconstitution
Date or Dates with respect to any or all of the Mortgage Loans serviced
hereunder, in connection with a Whole Loan Transfer, Agency Sale or
Securitization Transaction.
Reconstitution Date: The date on which any or all of the Mortgage Loans
serviced under this Agreement may be removed from this Agreement and
reconstituted as part of an Agency Sale, Securitization Transaction or Whole
Loan Transfer pursuant to Section 9.01 hereof. The Reconstitution Date shall be
such date which the Purchaser shall designate.
9 XXXXX FARGO RESTRICTED
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as have been provided
by the Commission in the adopting release (Asset-Backed Securities, Securities
Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating to
a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter 1,
Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The eighteenth day (or if such eighteenth day is not a
Business Day, the first Business Day immediately following) of any month,
beginning with the First Remittance Date.
REO Disposition: The final sale by the Company of any REO Property.
REO Disposition Proceeds: All amounts received with respect to an REO
Disposition pursuant to Section 4.16.
REO Property: A Mortgaged Property acquired by the Company on behalf of
the Purchaser through foreclosure or by deed in lieu of foreclosure, as
described in Section 4.16.
Repurchase Price: A price equal to (i) the Stated Principal Balance of
the Mortgage Loan, as of the date on which such repurchase takes place,
multiplied by the purchase price percentage as stated in the Commitment Letter
with any adjustments provided therein, plus (ii) interest on such Stated
Principal Balance at the Mortgage Loan Remittance Rate from the date on which
interest has last been paid and distributed to the Purchaser through the last
day of the month in which such repurchase takes place, less amounts received or
advanced in respect of such repurchased Mortgage Loan which are being held in
the Custodial Account for distribution in the month of repurchase.
Second Lien: With respect to a Mortgaged Property, a lien of the
mortgage, deed of trust or other instrument securing a Mortgage Note which
creates a second lien of the Mortgaged Property.
Second Lien Mortgage Loan: A Mortgage Loan secured by the lien on the
Mortgaged Property, subject to one prior lien on such Mortgaged Property
securing financing obtained by the related Mortgagor.
Securities Act: The Securities Act of 1933, as amended.
10 XXXXX FARGO RESTRICTED
Securitization Transaction: Any transaction involving either (a) a sale
or other transfer of some or all of the Mortgage Loans directly or indirectly to
an issuing entity in connection with an issuance of publicly offered or
privately placed, rated or unrated mortgage-backed securities or (b) an issuance
of publicly offered or privately placed, rated or unrated securities, the
payments on which are determined primarily by reference to one or more
portfolios of residential mortgage loans consisting, in whole or in part, of
some or all of the Mortgage Loans.
Servicer: As defined in Section 9.01(d)(iii).
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses other than Monthly Advances (including reasonable
attorney's fees and disbursements) incurred in the performance by the Company of
its servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
enforcement or judicial proceedings, including foreclosures, (c) the management
and liquidation of any REO Property and (d) compliance with the obligations
under Section 4.08 and 4.10.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d)
of Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Company, which shall, for a period of
one full month, be equal to one-twelfth of the product of (a) the Servicing Fee
Rate and (b) the outstanding principal balance of such Mortgage Loan. Such fee
shall be payable monthly, computed on the basis of the same principal amount and
period respecting which any related interest payment on a Mortgage Loan is
received. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to the
extent permitted by Section 4.05) of such Monthly Payment collected by the
Company, or as otherwise provided under Section 4.05. The Servicing Fee shall
not be reduced by the amount of any guaranty fee charged by GNMA.
Servicing Fee Rate: 0.250% per annum for each Mortgage Loan.
Servicing File: With respect to each Mortgage Loan, the file retained
by the Company consisting of originals of all documents in the Mortgage File
which are not delivered to the Custodian and copies of the Mortgage Loan
Documents listed in the Custodial Agreement the originals of which are delivered
to the Custodian pursuant to Section 2.03.
Servicing Officer: Any officer of the Company 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 Company to the
Purchaser upon request, as such list may from time to time be amended.
Stated Principal Balance: As to each Mortgage Loan, (i) the principal
balance of the Mortgage Loan at the Cut-off Date after giving effect to payments
of principal due on or before such date, whether or not received, minus (ii) all
amounts previously distributed to the Purchaser
11 XXXXX FARGO RESTRICTED
with respect to the related Mortgage Loan representing payments or recoveries of
principal or advances in lieu thereof.
Static Pool Information: Static pool information as described in Item
1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Company under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
Superior Lien: With respect to any Second Lien Mortgage Loan, any other
mortgage loan relating to the corresponding Mortgaged Property that creates a
lien on the Mortgaged Property that is senior to such Mortgage Loan.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Company.
VA: The United States Department of Veterans Affairs and its
successors.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans by the Purchaser to a third party, which sale or transfer is not
a Securitization Transaction or Agency Sale.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE FILES;
BOOKS AND RECORDS; CUSTODIAL AGREEMENT; DELIVERY OF DOCUMENTS
Section 2.01 Conveyance of Mortgage Loans; Possession of Mortgage Files;
Maintenance of Servicing Files.
The Company, simultaneously with the execution and delivery of this
Agreement, does hereby sell, transfer, assign, set over and convey to the
Purchaser, without recourse, but subject to the terms of this Agreement, all the
right, title and interest of the Company in and to the
12 XXXXX FARGO RESTRICTED
Mortgage Loans. Pursuant to Section 2.03, the Company has delivered the Mortgage
Loan Documents to the Custodian.
The contents of each Mortgage File not delivered to the Custodian are
and shall be held in trust by the Company for the benefit of the Purchaser as
the owner thereof. The Company shall maintain a Servicing File consisting of a
copy of the contents of each Mortgage File and the originals of the documents in
each Mortgage File not delivered to the Custodian. The possession of each
Servicing File by the Company is at the will of the Purchaser for the sole
purpose of servicing the related Mortgage Loan, and such retention and
possession by the Company is in a custodial capacity only. Upon the sale of the
Mortgage Loans the ownership of each Mortgage Note, the related Mortgage and the
related Mortgage File and Servicing File shall vest immediately in the
Purchaser, 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
Company shall vest immediately in the Purchaser and shall be retained and
maintained by the Company, in trust, at the will of the Purchaser and only in
such custodial capacity. The Company shall release its custody of the contents
of any Servicing File only in accordance with written instructions from the
Purchaser, unless such release is required as incidental to the Company's
servicing of the Mortgage Loans or is in connection with a repurchase of any
Mortgage Loan pursuant to Section 3.03 or 6.02. All such costs associated with
the release, transfer and re-delivery to the Company shall be the responsibility
of the Purchaser.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Company agrees that it will cause, the MERS(R) System to indicate that
such Mortgage Loans have been assigned by the Company to the Purchaser in
accordance with this Agreement by including (or deleting, in the case of
Mortgage Loans which are repurchased in accordance with this Agreement) in such
computer files the information required by the MERS(R) System to identify the
Purchaser as beneficial owner of such Mortgage Loans.
Section 2.02 Books and Records; Transfers of Mortgage Loans.
From and after the sale of the Mortgage Loans to the Purchaser all
rights arising out of the Mortgage Loans including but not limited to all funds
received on or in connection with the Mortgage Loans, shall be received and held
by the Company in trust for the benefit of the Purchaser as owner of the
Mortgage Loans, and the Company shall retain record title to the related
Mortgages for the sole purpose of facilitating the servicing and the supervision
of the servicing of the Mortgage Loans.
The sale of each Mortgage Loan shall be reflected on the Company's
balance sheet and other financial statements as a sale of assets by the Company.
The Company shall be responsible for maintaining, and shall maintain, a complete
set of books and records for each Mortgage Loan which shall be marked clearly to
reflect the ownership of each Mortgage Loan by the Purchaser. In particular, the
Company shall maintain in its possession, available for inspection by the
Purchaser, or its designee, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of the Agencies, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the Flood Disaster Protection Act of 1973, as amended, to the
13 XXXXX FARGO RESTRICTED
Mortgaged Property, documentation evidencing insurance coverage and eligibility
of any condominium project for approval by the Agencies, and periodic inspection
reports as required by Section 4.13. To the extent that original documents are
not required for purposes of realization of Liquidation Proceeds or Insurance
Proceeds, documents maintained by the Company may be in the form of microfilm or
microfiche or such other reliable means of recreating original documents,
including but not limited to, optical imagery techniques so long as the Company
complies with the requirements of the Xxxxxx Mae Selling and Servicing Guide, as
amended from time to time.
The Company shall maintain with respect to each Mortgage Loan and shall
make available for inspection by any Purchaser or its designee the related
Servicing File during the time the Purchaser retains ownership of a Mortgage
Loan and thereafter in accordance with applicable laws and regulations.
The Company shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe, the Company
shall note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be
made unless such transfer is in compliance with the terms hereof. For the
purposes of this Agreement, the Company shall be under no obligation to deal
with any person with respect to this Agreement or the Mortgage Loans unless the
books and records show such person as the owner of the Mortgage Loan. The
Purchaser may, subject to the terms of this Agreement, sell and transfer one or
more of the Mortgage Loans. The Purchaser also shall advise the Company of the
transfer. Upon receipt of notice of the transfer, the Company shall xxxx its
books and records to reflect the ownership of the Mortgage Loans of such
assignee, and shall release the previous Purchaser from its obligations
hereunder with respect to the Mortgage Loans sold or transferred. If the Company
receives notification of a transfer, including a final loan schedule, less than
five (5) Business Days before the last Business Day of the month, the Company's
duties to remit and report to the new purchaser(s) as required by Section 5
shall begin with next Due Period.
Section 2.03 Delivery of Documents.
The Company has delivered to the Custodian those Mortgage Loan
Documents as required by this Agreement with respect to each Mortgage Loan.
The Custodian has certified its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement, as
evidenced by the trust receipt and initial certification of the Custodian in the
form annexed to the Custodial Agreement. The Company will be responsible for
fees and expenses with respect to the delivery of those Mortgage Loan Documents
required to be delivered pursuant to this Agreement. The Company will be
responsible for the fees and expenses related to the recording of the initial
Assignment of Mortgage. The Purchaser will be responsible for the fees and
expenses of the Custodian.
After the Closing Date, the Company shall deliver to the Custodian each
of the documents described in Exhibit B, not delivered pursuant to the
Agreement. Provided however, within 150 days from the Closing Date, the Company
shall deliver to the Custodian, the evidence of the MIC or LGC, as applicable,
or an Officer's Certificate, which shall (i) state that the MIC
14 XXXXX FARGO RESTRICTED
or LGC has not been delivered to the Custodian due solely to a delay by the
insuring agency, (ii) state the amount of time generally required by the
insuring agency to process the evidence of the MIC or LGC, and (iii) specify the
date the MIC or LGC will be delivered to the Purchaser. The Company will be
required to deliver the evidence of the MIC or LGC to the Custodian by the date
specified in (iii) above. An extension of the date specified in (iii) above may
be requested from the Custodian, which consent shall not be unreasonably
withheld.
The Company shall forward to the Custodian original documents
evidencing an assumption, modification, consolidation or extension of any
Mortgage Loan entered into in accordance with Section 4.01 or 6.01 within one
week of their execution, provided, however, that the Company shall provide the
Custodian with a certified true copy of any such document submitted for
recordation within ten (10) days 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 sixty (60) days of its submission for recordation.
In the event the public recording office is delayed in returning any
original document, the Company shall deliver to the Custodian within 240 days of
its submission for recordation, a copy of such document and an Officer's
Certificate, which shall (i) identify the recorded document; (ii) state that the
recorded document has not been delivered to the Custodian due solely to a delay
by the public recording office, (iii) state the amount of time generally
required by the applicable recording office to record and return a document
submitted for recordation, and (iv) specify the date the applicable recorded
document will be delivered to the Custodian. The Company will be required to
deliver the document to the Custodian by the date specified in (iv) above. An
extension of the date specified in (iv) above may be requested from the
Purchaser, which consent shall not be unreasonably withheld.
ARTICLE III
REPRESENTATIONS AND WARRANTIES REMEDIES AND BREACH
Section 3.01 Company Representations and Warranties.
The Company hereby represents and warrants to the Purchaser that, as of
the Closing Date:
(a) Due Organization and Authority.
The Company is a national banking association duly organized,
validly existing and in good standing under the laws of the
United States and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and
in good standing in each state where a Mortgaged Property is
located if the laws of such state require licensing or
qualification in order to conduct business of the type
conducted by the Company, and in any event the
15 XXXXX FARGO RESTRICTED
Company is in compliance with the laws of any such state
to the extent necessary to ensure the enforceability of the
related Mortgage Loan and the servicing of such Mortgage
Loan in accordance with the terms of this Agreement; the
Company has the full power and authority to execute and
deliver this Agreement and to perform in accordance
herewith; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Company and the
consummation of the transactions contemplated hereby have
been duly and validly authorized; this Agreement evidences
the valid, binding and enforceable obligation of the
Company; and all requisite action has been taken by the
Company to make this Agreement valid and binding upon the
Company in accordance with its terms;
(b) Ordinary Course of Business.
The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the
Company, who is in the business of selling and servicing
loans, and the transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Company pursuant to
this Agreement are not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable
jurisdiction;
(c) No Conflicts.
Neither the execution and delivery of this Agreement, the
acquisition of the Mortgage Loans by the Company, the sale of
the Mortgage Loans to the Purchaser or the transactions
contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement will conflict with
or result in a breach of any of the terms, articles of
incorporation or by-laws or any legal restriction or any
agreement or instrument to which the Company is now a party or
by which it is bound, or constitute a default or result in the
violation of any law, rule, regulation, order, judgment or
decree to which the Company or its property is subject, or
impair the ability of the Purchaser to realize on the Mortgage
Loans, or impair the value of the Mortgage Loans;
(d) Ability to Service.
The Company is an approved seller/servicer of residential
mortgage loans for the Agencies, with the facilities,
procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage
Loans. The Company is in good standing to sell mortgage loans
to and service mortgage loans for the Agencies, and no event
has occurred, including but not limited to a change in
insurance coverage, which would make the Company unable to
comply with the Agencies eligibility requirements or which
would require notification to the Agencies;
16 XXXXX FARGO RESTRICTED
(e) Reasonable Servicing Fee.
The Company acknowledges and agrees that the Servicing Fee
represents reasonable compensation for performing such
services and that the entire Servicing Fee shall be treated by
the Company, for accounting and tax purposes, as compensation
for the servicing and administration of the Mortgage Loans
pursuant to this Agreement;
(f) Ability to Perform.
The Company 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. The Company is solvent
and the sale of the Mortgage Loans will not cause the Company
to become insolvent. The sale of the Mortgage Loans is not
undertaken to hinder, delay or defraud any of the Company's
creditors;
(g) No Litigation Pending.
There is no action, suit, proceeding or investigation pending
or threatened against the Company 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 Company, or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted, or in
any material liability on the part of the Company, or which
would draw into question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be contemplated
herein, or which would be likely to impair materially the
ability of the Company to perform under the terms of this
Agreement;
(h) 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 Company of or compliance by
the Company with this Agreement or the sale of the Mortgage
Loans as evidenced by the consummation of the transactions
contemplated by this Agreement, or if required, such approval
has been obtained prior to the Closing Date;
(i) No Untrue Information.
Neither this Agreement nor any statement, report or other
document furnished or to be furnished pursuant to this
Agreement or in connection with the transactions contemplated
hereby contains any untrue statement of fact or omits to state
a fact necessary to make the statements contained therein not
misleading;
17 XXXXX FARGO RESTRICTED
(j) Sale Treatment.
The Company has determined that the disposition of the
Mortgage Loans pursuant to this Agreement will be afforded
sale treatment for accounting and tax purposes;
(k) No Material Change.
There has been no material adverse change in the business,
operations, financial condition or assets of the Company since
the date of the Company's most recent financial statements
that would have a material adverse effect on its ability to
perform its obligations under this Agreement; and
(l) No Brokers' Fees.
The Company has not dealt with any broker, investment banker,
agent or other Person that may be entitled to any commission
or compensation in the connection with the sale of the
Mortgage Loans.
Section 3.02 Representations and Warranties Regarding Individual Mortgage
Loans.
As to each Mortgage Loan, the Company hereby represents and warrants to
the Purchaser that as of the Closing Date:
(a) Mortgage Loans as Described.
The information set forth in the Mortgage Loan Schedule
attached hereto as Exhibit A is true and correct;
(b) No Outstanding Charges.
All taxes, governmental assessments, insurance premiums,
water, sewer and municipal charges, which previously became
due and owing have been paid, or an escrow of funds has been
established for every such item which remains unpaid and which
has been assessed but is not yet due and payable;
(c) Original Terms Unmodified.
The terms of the Mortgage Note and Mortgage have not been
impaired, waived, altered or modified in any respect, except
by a written instrument which has been recorded, if necessary
to protect the interests of the Purchaser and which has been
delivered to the Custodian. The substance of any such waiver,
alteration or modification has been approved by FHA, VA or the
issuer of any related PMI policy and the title insurer, to the
extent required by the policy, and its terms are reflected on
the Mortgage Loan Schedule. No Mortgagor has been released, in
whole or in part, except in connection with an assumption
agreement approved by the issuer of the guaranty certificate
or of any related Primary Mortgage Insurance policy and the
title insurer, to the extent required by the policy or Agency
guidelines, and which assumption agreement is part of the
Mortgage File
18 XXXXX FARGO RESTRICTED
delivered to the Custodian and the terms of which are
reflected in the Mortgage Loan Schedule;
(d) No Defenses.
The Mortgage Loan is not subject to any right of rescission,
set-off, counterclaim or defense, including without limitation
the defense of usury, nor will the operation of any of the
terms of the Mortgage Note or the Mortgage, or the exercise of
any right thereunder, render either the Mortgage Note or the
Mortgage unenforceable, in whole or in part, or subject to any
right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto;
(e) No Satisfaction of Mortgage.
The Mortgage has not been satisfied, canceled, subordinated or
rescinded, in whole or in part, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or
in part, nor has any instrument been executed that would
effect any such release, cancellation, subordination or
rescission;
(f) Validity of Mortgage Documents.
The Mortgage Note and the Mortgage and related documents are
genuine, and each is the legal, valid and binding obligation
of the maker thereof enforceable in accordance with its terms.
All parties to the Mortgage Note and the Mortgage had legal
capacity to enter into the Mortgage Loan and to execute and
deliver the Mortgage Note and the Mortgage, and the Mortgage
Note and the Mortgage have been duly and properly executed by
such parties;
(g) No Fraud.
All the documents executed in connection with the Mortgage
Loan including, but not limited to, the Mortgage Note and the
Mortgage are free of fraud and any misrepresentation, are
signed by the persons they purport to be signed by, and
witnessed or, as appropriate, notarized by the persons whose
signatures appear as witnesses or notaries, and each such
document constitutes the valid and binding legal obligation of
the signatories and is enforceable in accordance with its
terms;
(h) Compliance with Applicable Laws.
Any and all requirements of any applicable federal, state or
local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity, disclosure, or
predatory and abuse lending laws applicable to the Mortgage
Loan have been complied with, and the Company shall maintain
in its possession, available for the Purchaser's
19 XXXXX FARGO RESTRICTED
inspection, and shall deliver to the Purchaser upon demand,
evidence of compliance with all such requirements; All
inspections, licenses and certificates required to be made
or issued with respect to all occupied portions of the
Mortgaged Property and, with respect to the use and
occupancy of the same, including but not limited to
certificates of occupancy and fire underwriting
certificates, have been made or obtained from the
appropriate authorities;
(i) Location and Type of Mortgaged Property.
The Mortgaged Property is located in the state identified in
the Mortgage Loan Schedule and consists of a contiguous parcel
of real property with a detached single family residence
erected thereon, or a two- to four-family dwelling, or an
individual condominium unit in a condominium project, or a
manufactured dwelling, or an individual unit in a planned unit
development or a townhouse, provided, however, that any
condominium project or planned unit development shall conform
to the applicable Agency requirements, or the underwriting
guidelines of the Company, regarding such dwellings. As of the
respective appraisal date for each Mortgaged Property, any
Mortgaged Property being used for commercial purposes conforms
to the underwriting guidelines of the Company and, to the best
of the Company's knowledge, since the date of such appraisal,
no portion of the Mortgaged Property has been used for
commercial purposes outside of the Company's underwriting
guidelines;
(j) Valid First Lien.
Each First Lien Mortgage Loan is a valid, subsisting and
enforceable first lien on the Mortgaged Property, including
all buildings on the Mortgaged Property and all installations
and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings,
and all additions, alterations and replacements made at any
time with respect to the foregoing. The lien of the Mortgage
is subject only to:
(1) the lien of current real property taxes and
assessments not yet due and payable;
(2) covenants, conditions and restrictions,
rights of way, easements and other matters
of the public record as of the date of
recording acceptable to mortgage lending
institutions generally and specifically
referred to in the lender's title insurance
policy delivered to the originator of the
Mortgage Loan and (i) referred to or
otherwise considered in the appraisal made
for the originator of the Mortgage Loan and
(ii) which do not adversely affect the
Appraised Value of the Mortgaged Property
set forth in such appraisal; and
20 XXXXX FARGO RESTRICTED
(3) other matters to which like properties are
commonly subject which do not materially
interfere with the benefits of the security
intended to be provided by the mortgage or
the use, enjoyment, value or marketability
of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with the
Mortgage Loan establishes and creates a valid, subsisting and
enforceable first lien and first priority security interest on
the property described therein and the Company has full right
to sell and assign the same to the Purchaser.
(k) Full Disbursement of Proceeds.
The proceeds of the Mortgage Loan have been fully disbursed,
except for escrows established or created due to seasonal
weather conditions, and there is no requirement for future
advances thereunder. All costs, fees and expenses incurred in
making or closing the Mortgage Loan and the recording of the
Mortgage were paid, and the Mortgagor is not entitled to any
refund of any amounts paid or due under the Mortgage Note or
Mortgage;
(l) Ownership.
The Company is the sole owner of record and holder of the
Mortgage Loan and the related Mortgage Note and the Mortgage
are not assigned or pledged, and the Company has good and
marketable title thereto and has full right and authority to
transfer and sell the Mortgage Loan to the Purchaser. The
Company is transferring the Mortgage Loan free and clear of
any and all encumbrances, liens, pledges, equities,
participation interests, claims, charges or security interests
of any nature encumbering such Mortgage Loan;
(m) Origination/Doing Business.
The Mortgage Loan was originated by a savings and loan
association, a savings bank, a commercial bank, a credit
union, an insurance company, or similar institution which is
supervised and examined by a federal or state authority or by
a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to Sections 203 and 211 or the National
Housing Act. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or
otherwise, are (or, during the period in which they held and
disposed of such interest, were) (1) in compliance with any
and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2)
organized under the laws of such state, or (3) qualified to do
business in such state, or (4) federal savings and loan
associations or national banks having principal offices in
such state, or (5) not doing business in such state;
21 XXXXX FARGO RESTRICTED
(n) Primary Mortgage Insurance.
With respect to any Mortgage Loan subject to a PMI Policy or
LPMI Policy as indicated on the Mortgage Loan Schedule, all
provisions of such PMI Policy or LPMI Policy have been and are
being complied with, such policy is in full force and effect,
and all premiums due thereunder have been paid. Any Mortgage
Loan subject to a PMI Policy or LPMI Policy obligates the
Mortgagor or the Company, as applicable, thereunder to
maintain the PMI Policy or LPMI Policy and to pay all premiums
and charges in connection therewith. The Mortgage Interest
Rate for the Mortgage Loan as set forth on the Mortgage Loan
Schedule is net of any such insurance premium;
(o) FHA Insurance/VA Guaranty.
Each FHA Mortgage Loan, is fully-insured by the FHA, which
insurance is in full force and effect, and the Mortgage Loan
is not subject to any defect which would diminish or impair
the FHA insurance, and all prior transfers, if any, of the
Mortgage Loan have been, and the transactions herein
contemplated are, in compliance with the FHA regulations, and
no circumstances exist with respect to the FHA Mortgage Loans
which would permit the FHA to deny coverage under the FHA
insurance; and
Each VA Mortgage Loan is guaranteed by the VA, which guaranty
is in full force and effect, and the Mortgage Loan is not
subject to any defect which would diminish or impair the VA
guaranty (other than a potential valuation of the mortgaged
property), and all prior transfers, if any, of the Mortgage
Loan have been, and the transactions herein contemplated are,
in compliance with the VA regulations, and no circumstances
exist with respect to the VA Mortgage Loan which would permit
the VA to deny coverage under the VA guaranty;
(p) Title Insurance.
The Mortgage Loan is covered by an ALTA lender's title
insurance policy (or in the case of any Mortgage Loan secured
by a Mortgaged Property located in a jurisdiction where such
policies are generally not available, an opinion of counsel of
the type customarily rendered in such jurisdiction in lieu of
title insurance) or other generally acceptable form of policy
of insurance acceptable to the Agencies, issued by a title
insurer acceptable to the Agencies and qualified to do
business in the jurisdiction where the Mortgaged Property is
located, insuring the Company, its successors and assigns, as
to the first priority lien (or second priority if such
Mortgage Loan is a Second Lien Mortgage Loan) of the Mortgage
in the original principal amount of the Mortgage Loan, subject
only to the exceptions contained in clauses (1), (2) and (3)
of paragraph (xi) of this Section 3(b). The Company is the
sole insured of such lender's title insurance policy, and such
lender's title insurance policy is in full force and effect
and will be in force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have
been made under such lender's title insurance policy, and no
prior holder of
22 XXXXX FARGO RESTRICTED
the Mortgage, including the Company, has done, by act or
omission, anything which would impair the coverage of such
lender's title insurance policy;
(q) No Mechanics' Liens.
There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are
outstanding that under the law could give rise to such liens)
affecting the related Mortgaged Property which are or may be
liens prior to, or equal or coordinate with, the lien of the
related Mortgage which are not insured against by the Title
Insurance policy referenced in Section (p) above;
(r) Location of Improvements; No Encroachments.
Except as insured against by the Title Insurance policy
referenced in Section (p) above, all improvements which were
considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building
restriction lines of the Mortgaged Property and no
improvements on adjoining properties encroach upon the
Mortgaged Property. No improvement located on or being part of
the Mortgaged Property is in violation of any applicable
zoning law or regulation;
(s) Customary Provisions.
The Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged
Property of the benefits of the security provided thereby,
including, (i) in the case of a Mortgage designated as a deed
of trust, by trustee's sale, and (ii) otherwise by judicial
foreclosure. There is no homestead or other exemption
available to a Mortgagor which would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the
right to foreclose the Mortgage;
(t) Occupancy of the Mortgaged Property.
As of the date of origination, the Mortgaged Property was
lawfully occupied under applicable law.
(u) No Additional Collateral.
The Mortgage Note is not and has not been secured by any
collateral, pledged account or other security except the lien
of the corresponding Mortgage and the security interest of any
applicable security agreement or chattel mortgage referred to
in (j) above;
(v) Deeds of Trust.
23 XXXXX FARGO RESTRICTED
In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such,
has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will
become payable by the Mortgagee to the trustee under the deed
of trust, except in connection with a trustee's sale after
default by the Mortgagor;
(w) Transfer of Mortgage Loans.
If the Mortgage Loan is not a MERS Mortgage Loan, the
Assignment of Mortgage, upon the insertion of the name of the
assignee and recording information, is in recordable form and
is acceptable for recording under the laws of the jurisdiction
in which the Mortgaged Property is located;
(x) Mortgaged Property Undamaged.
The Mortgaged Property is undamaged by water, fire, earthquake
or earth movement, windstorm, flood, tornado or other casualty
so as to affect adversely the value of the Mortgaged Property
as security for the Mortgage Loan or the use for which the
premises was intended;
(y) Collection Practices; Escrow Deposits.
The origination and collection practices used with respect to
the Mortgage Loan have been in accordance with Accepted
Servicing Practices, and have been in all material respects
legal and proper. All Escrow Items have been collected in full
compliance with state and federal law. An escrow of funds is
not prohibited by applicable law and has been established to
pay for every item that remains unpaid and has been assessed
but is not yet due and payable. No escrow deposits or Escrow
Items or other charges or payments due the Company have been
capitalized under the Mortgage Note;
(z) No Condemnation.
To the best of Company's knowledge, there is no proceeding
pending or threatened for the total or partial condemnation of
the related Mortgaged Property;
(aa) The Appraisal.
The Mortgage File contains an appraisal of the related
Mortgaged Property by an appraiser who had no interest, direct
or indirect, in the Mortgaged Property or in any loan made on
the security thereof; and whose compensation is not affected
by the approval or disapproval of the Mortgage Loan, and the
appraisal and the appraiser both satisfy the applicable
requirements of Title XI of the Financial Institution Reform,
Recovery, and Enforcement Act of 1989 and the regulations
24 XXXXX FARGO RESTRICTED
promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(bb) Insurance.
The Mortgaged Property securing each Mortgage Loan is insured
by an insurer acceptable to the Agencies against loss by fire
and such hazards as are covered under a standard extended
coverage endorsement, in an amount which is at least equal to
the lesser of (i) 100% of the insurable value, on a
replacement cost basis, of the improvements on the related
Mortgaged Property, and the outstanding principal balance of
the Mortgage Loan, but in no event less and (ii) the greater
of (a) either (1) the outstanding principal balance of the
Mortgage Loan with respect to each First Lien Mortgage Loan or
(2) with respect to each Second Lien Mortgage Loan, the sum of
the outstanding principal balance of the first lien on such
Mortgage Loan and the outstanding principal balance of such
Second Lien Mortgage Loan, or (b) an amount such that the
proceeds of such insurance shall be sufficient to prevent the
application to the Mortgagor or the loss payee of any
coinsurance clause under the policy. If the Mortgaged Property
is a condominium unit, it is included under the coverage
afforded by a blanket policy for the project; the insurance
policy contains a standard clause naming the originator of
such mortgage loan, its successor and assigns, as insured
mortgagee; if upon origination of the Mortgage Loan, the
improvements on the Mortgaged Property were in an area
identified in the Federal Register by the Federal Emergency
Management Agency as having special flood hazards, a flood
insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in
effect with a generally acceptable insurance carrier, in an
amount representing coverage not less than the least of (A)
the outstanding principal balance of the Mortgage Loan, (B)
the full insurable value and (C) the maximum amount of
insurance which was available under the Flood Disaster
Protection Act of 1973, as amended; and the Mortgage obligates
the Mortgagor thereunder to maintain all such insurance at the
Mortgagor's cost and expense and the Company has not acted or
failed to act so as to impair the coverage of any such
insurance policy or the validity, binding effect and
enforceability thereof.
(cc) Servicemembers Civil Relief Act.
The Mortgagor has not notified the Company, and the Company
has no knowledge of any relief requested or allowed to the
Mortgagor under the Servicemembers Civil Relief Act, as
amended.
(dd) No Violation of Environmental Laws.
There is no pending action or proceeding directly involving
any Mortgaged Property of which the Company is aware in which
compliance with any environmental law, rule or regulation is
an issue; and to the best of the Company's knowledge nothing
further remains to be done to satisfy in full all
25 XXXXX FARGO RESTRICTED
requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said
property.
(ee) HOEPA/HIGH COST.
No Mortgage Loan is a High Cost Loan or Covered Loan.
(ff) Prepayment Penalty.
With respect to each Mortgage Loan that has a prepayment
penalty feature, each such prepayment penalty shall be
enforceable and will be enforced by the Company for the
benefit of the Purchaser, and each prepayment penalty shall be
permitted pursuant to federal, state and local law. Each such
prepayment penalty is in an amount equal to the maximum amount
permitted under applicable law and no such prepayment penalty
may be imposed for a term in excess of three (3) years with
respect to Mortgage Loans originated on or after October 1,
2002.
(gg) Georgia Fair Lending Act.
There is no Mortgage Loan that was originated on or after
October 1, 2002 and before March 7, 2003 which is secured by
property located in the State of Georgia.
(hh) Buydown Mortgage Loans.
With respect to each Mortgage Loan that is a Buydown Mortgage
Loan:
(i) On or before the date of origination of such Mortgage
Loan, the Company and the Mortgagor, or the Company,
the Mortgagor and the seller of the Mortgaged Property
or a third party entered into a Buydown Agreement. The
Buydown Agreement provides that the seller of the
Mortgaged Property (or third party) shall deliver to
the Company temporary Buydown Funds in an amount equal
to the aggregate undiscounted amount of payments that,
when added to the amount the Mortgagor on such Mortgage
Loan is obligated to pay on each Due Date in accordance
with the terms of the Buydown Agreement, is equal to
the full scheduled Monthly Payment due on such Mortgage
Loan. The temporary Buydown Funds enable the Mortgagor
to qualify for the Buydown Mortgage Loan. The effective
interest rate of a Buydown Mortgage Loan if less than
the interest rate set forth in the related Mortgage
Note will increase within the Buydown Period as
provided in the related Buydown Agreement so that the
effective interest rate will be equal to the interest
rate as set forth in the related Mortgage Note. The
Buydown Mortgage Loan satisfies the requirements of
Xxxxxx Xxx or Xxxxxxx Mac guidelines or the
underwriting guidelines of the Company;
26 XXXXX FARGO RESTRICTED
(ii) The Mortgage and Mortgage Note reflect the permanent
payment terms rather than the payment terms of the
Buydown Agreement. The Buydown Agreement provides for
the payment by the Mortgagor of the full amount of the
Monthly Payment on any Due Date that the Buydown Funds
are available. The Buydown Funds were not used to
reduce the original principal balance of the Mortgage
Loan or to increase the Appraised Value of the Mortgage
Property when calculating the Loan-to-Value Ratios for
purposes of the Agreement and, if the Buydown Funds
were provided by the Company and if required under
Xxxxxx Xxx or Xxxxxxx Mac guidelines or the
underwriting guidelines of the Company, the terms of
the Buydown Agreement were disclosed to the appraiser
of the Mortgaged Property;
(iii) The Buydown Funds may not be refunded to the Mortgagor
unless the Mortgagor makes a principal payment for the
outstanding balance of the Mortgage Loan;
(iv) As of the date of origination of the Mortgage Loan, the
provisions of the related Buydown Agreement complied
with the requirements of Xxxxxx Mae or Xxxxxxx Mac or
the underwriting guidelines of the Company regarding
buydown agreements.
(ii) Balloon Loans.
With respect to each Balloon Loan, the Mortgage Loan is
payable in equal monthly installments of principal and
interest based on a fifteen (15) or thirty (30) year
amortization schedule, as set forth in the related Mortgage
Note, and a final lump sum payment substantially greater than
the preceding Monthly Payment is required which is sufficient
to amortize the remaining principal balance of the Balloon
Loan.
(jj) Valid Second Lien.
With respect to any Second Lien Mortgage Loan, such Mortgage
is a valid, subsisting and enforceable Second Lien on the
Mortgaged Property, including all buildings on the Mortgaged
Property and all installations and mechanical, electrical,
plumbing, heating and air conditioning systems located in or
annexed to such buildings, and all additions, alterations and
replacements made at any time with respect to the foregoing.
The lien of such Mortgage is subject only to:
(i) the lien of current real property taxes and
assessments not yet due and payable;
(ii) superior position mortgage lien(s) acceptable in
accordance with the underwriting guidelines of the
Company;
(iii) covenants, conditions and restrictions, rights of
way, easements and other matters of the public record
as of the date of recording acceptable to
27 XXXXX FARGO RESTRICTED
mortgage lending institutions in accordance with
Accepted Servicing Practices and (i) referred to or
otherwise considered in the appraisal and (ii) which do
not adversely affect the Appraised Value; and
(iv) other matters to which like properties are commonly
subject which do not materially interfere with the
benefits of the security intended to be provided by the
mortgage or the use, enjoyment, value or marketability
of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent
document related to and delivered in connection with such
Mortgage Loan establishes and creates a valid, subsisting, and
enforceable Second Lien and second lien security interest on
the property described therein and the Company has full right
to sell and assign the same to the Purchaser. With respect to
each Second Lien Mortgage Loan: (a) the First Lien is in full
force and effect, (b) there is no default, breach, violation
or event of acceleration existing under such First Lien
Mortgage or the related Mortgage Note, (c) if the related
First Lien Mortgage Loan provides for negative amortization,
the LTV was calculated at the maximum principal balance of
such First Lien that could result upon application of such
negative amortization feature, (d) either no consent for the
Second Lien Mortgage Loan is required by the holder of the
First Lien or such consent has been obtained and is contained
in the Mortgage Loan Documents and (e) to the best of
Company's knowledge, no event which, with the passage of time
or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event or
acceleration under the related First Lien Mortgage Loan.
Section 3.03 Repurchase.
It is understood and agreed that the representations and warranties set
forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage Loans to
the Purchaser and the delivery of the Mortgage Loan Documents to the Custodian
and shall inure to the benefit of the Purchaser, notwithstanding any restrictive
or qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or failure to examine any Mortgage File. Upon discovery by either
the Company or the Purchaser of a breach of any of the foregoing representations
and warranties which materially and adversely affects the value of the Mortgage
Loans or the interest of the Purchaser (or which materially and adversely
affects the interests of Purchaser in the related Mortgage Loan in the case of a
representation and warranty relating to a particular Mortgage Loan), the party
discovering such breach shall give prompt written notice to the other.
Within ninety (90) days of the earlier of either discovery by or notice
to the Company of any breach of a representation or warranty which materially
and adversely affects the value of the Mortgage Loans, the Company shall use its
best efforts promptly to cure such breach in all material respects and, if such
breach cannot be cured, the Company shall, at the Purchaser's option, repurchase
such Mortgage Loan at the Repurchase Price. In the event that a breach shall
involve any representation or warranty set forth in Section 3.01, and such
breach cannot be cured within ninety (90) days of the earlier of either
discovery by or notice to the Company of such breach, all of the Mortgage Loans
shall, at the Purchaser's option, be repurchased by the
28 XXXXX FARGO RESTRICTED
Company at the Repurchase Price. Any repurchase of a Mortgage Loan or Loans
pursuant to the foregoing provisions of this Section 3.03 shall be accomplished
by deposit in the Custodial Account of the amount of the Repurchase Price for
distribution to Purchaser on the Remittance Date immediately following the
Principal Prepayment Period in which such Repurchase Price is received, after
deducting therefrom any amount received in respect of such repurchased Mortgage
Loan or Loans and being held in the Custodial Account for future distribution.
At the time of repurchase, the Purchaser and the Company shall arrange
for the reassignment of the repurchased Mortgage Loan to the Company and the
delivery to the Company of any documents held by the Custodian relating to the
repurchased Mortgage Loan. If the Company repurchases a Mortgage Loan that is a
MERS Mortgage Loan, the Company shall cause MERS to designate on the MERS(R)
System to remove the Purchaser as the beneficial holder with respect to such
Mortgage Loan. In the event of a repurchase, the Company shall, simultaneously
with such reassignment, give written notice to the Purchaser that such
repurchase has taken place, amend the Mortgage Loan Schedule to reflect the
withdrawal of the repurchased Mortgage Loan from this Agreement.
In addition to such repurchase obligation, the Company shall indemnify
the Purchaser and hold it 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
the Company representations and warranties contained in this Agreement. It is
understood and agreed that the obligations of the Company set forth in this
Section 3.03 to cure, substitute for or repurchase a defective Mortgage Loan and
to indemnify the Purchaser as provided in this Section 3.03 constitute the sole
remedies of the Purchaser respecting a breach of the foregoing representations
and warranties.
Any cause of action against the Company relating to or arising out of
the breach of any representations and warranties made in Sections 3.01 and 3.02
shall accrue as to any Mortgage Loan upon (i) discovery of such breach by the
Purchaser or notice thereof by the Company to the Purchaser, (ii) failures by
the Company to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Company by the Purchaser for compliance with
this Agreement.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Company to Act as Servicer.
The Company, as an independent contractor, shall service and administer
the Mortgage Loans and shall have full power and authority, acting alone or
through the utilization of a Subservicer or a Subcontractor, to do any and all
things in connection with such servicing and administration which the Company
may deem necessary or desirable, consistent with the terms of this Agreement and
with Accepted Servicing Practices. The Company shall service the Mortgage Loans
in accordance with the guidelines of the applicable governing Agency,
29 XXXXX FARGO RESTRICTED
including the Federal Housing Administration for FHA loans or the Veteran's
Administration for VA loans, and shall comply with all the rules and regulations
as set forth by each applicable agency. The Company shall be responsible for any
and all acts of a Subservicer and a Subcontractor, and the Company's utilization
of a Subservicer or Subcontractor shall in no way relieve the liability of the
Company under this Agreement.
Consistent with the terms of this Agreement and any applicable Agency
guidelines, the Company 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 Company's reasonable and
prudent determination such waiver, modification, postponement or indulgence is
not materially adverse to the Purchaser and will not result in the impairment of
coverage under any PMI Policy, the MIC or LGC. Provided, however, no such
modification shall reduce the mortgage interest rate below the Company's
prevailing market rate for similar loans in affect as of the date of
modification. In the event of any such modification which permits the deferral
of interest or principal payments on any Mortgage Loan, the Company shall
disburse on the following Remittance Date, from its own funds, 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 for any
Monthly Payment received or deferred and (b) the amount paid by the Mortgagor,
if any. Without limiting the generality of the foregoing, the Company shall
continue, and is hereby authorized and empowered, to execute and deliver on
behalf of itself and the Purchaser, 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. If reasonably required by the Company, the Purchaser shall
furnish the Company with any powers of attorney and other documents necessary or
appropriate to enable the Company to carry out its servicing and administrative
duties under this Agreement.
If a Second Lien Mortgage Loan becomes delinquent and the Servicer, in
its reasonable and good faith judgment, determines that the recovery of
principal with respect to such Mortgage Loan will not materially be in excess of
the cost of foreclosure or other liquidation of the Mortgage Loan, then the
Servicer will be deemed to have made a final recovery determination with respect
to such Second Lien Mortgage Loan and the Servicer may charge off such Second
Lien Mortgage Loan at any time thereafter.
In servicing and administering the Mortgage Loans, the Company shall
employ procedures (including collection procedures) and exercise the same care
that it customarily employs and exercises in servicing and administering
mortgage loans for its own account, giving due consideration to Accepted
Servicing Practices where such practices do not conflict with the requirements
of this Agreement, and the Purchaser's reliance on the Company.
The Company is authorized and empowered by the Purchaser, in its own
name, when the Company believes it appropriate in its reasonable judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, with written consent of
the Purchaser, to execute and deliver, on behalf of the Purchaser, any and all
instruments of assignment and other comparable instruments with respect to
30 XXXXX FARGO RESTRICTED
such assignment or re-recording of a Mortgage in the name of MERS, solely as
nominee for the Purchaser and its successors and assigns.
Section 4.02 Liquidation of Mortgage Loans.
In the event that any payment due under any Mortgage Loan and not
postponed pursuant to Section 4.01 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 Company shall take such action as (1) the Company
would take under similar circumstances with respect to a similar mortgage loan
held for its own account for investment, (2) shall be consistent with Accepted
Servicing Practices, (3) the Company shall determine prudently to be in the best
interest of Purchaser, and (4) is consistent with any related PMI Policy. In the
event that any payment due under any Mortgage Loan is not postponed pursuant to
Section 4.01 and remains delinquent for a period of ninety (90) days or any
other default continues for a period of ninety (90) days beyond the expiration
of any grace or cure period, the Company shall commence foreclosure proceedings.
In such connection, the Company shall from its own funds make all necessary and
proper Servicing Advances, provided, however, that the Company shall not be
required to expend its own funds in connection with any foreclosure or towards
the restoration or preservation of any Mortgaged Property, unless it shall
determine (a) that such preservation, restoration and/or foreclosure will
increase the proceeds of liquidation of the Mortgage Loan to Purchaser after
reimbursement to itself for such expenses and (b) that such expenses will be
recoverable by it either through Liquidation Proceeds (respecting which it shall
have priority for purposes of withdrawals from the Custodial Account pursuant to
Section 4.05) or through Insurance Proceeds (respecting which it shall have
similar priority).
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Company has reasonable cause to believe that a Mortgaged Property
is contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. The cost for such inspection or review shall be borne by the
Purchaser. Upon completion of the inspection or review, the Company shall
promptly provide the Purchaser with a written report of the environmental
inspection.
After reviewing the environmental inspection report, the Purchaser
shall determine how the Company shall proceed with respect to the Mortgaged
Property. In the event (a) the environmental inspection report indicates that
the Mortgaged Property is contaminated by hazardous or toxic substances or
wastes and (b) the Purchaser directs the Company to proceed with foreclosure or
acceptance of a deed in lieu of foreclosure, the Company shall be reimbursed for
all reasonable costs associated with such foreclosure or acceptance of a deed in
lieu of foreclosure and any related environmental clean up costs, as applicable,
from the related Liquidation Proceeds, or if the Liquidation Proceeds are
insufficient to fully reimburse the Company, the Company shall be entitled to be
reimbursed from amounts in the Custodial Account pursuant to Section 4.05
hereof. In the event the Purchaser directs the Company not to proceed with
foreclosure or acceptance of a deed in lieu of foreclosure, the Company shall be
31 XXXXX FARGO RESTRICTED
reimbursed for all Servicing Advances made with respect to the related Mortgaged
Property from the Custodial Account pursuant to Section 4.05 hereof.
Section 4.03 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on
all Mortgage Loans are paid in full, the Company 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 Loan and the 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 Company shall not waive any
Prepayment Charge unless: (i) the enforceability thereof shall have been limited
by bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally, (ii) the enforcement thereof is
illegal, or any local, state or federal agency has threatened legal action if
the prepayment penalty is enforced, (iii) the mortgage debt has been accelerated
in connection with a foreclosure or other involuntary payment or (iv) such
waiver is standard and customary in servicing similar Mortgage Loans and relates
to a default or a reasonably foreseeable default and would, in the reasonable
judgment of the Company, maximize recovery of total proceeds taking into account
the value of such Prepayment Charge and the related Mortgage Loan. If a
Prepayment Charge is waived, but does not meet the standards described above,
then the Company is required to pay the amount of such waived Prepayment Charge
by remitting such amount to the Purchaser by the Remittance Date.
Section 4.04 Establishment of and Deposits to Custodial Account.
The Company shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts,
in the form of time deposit or demand accounts, titled "Xxxxx Fargo Bank, N.A.
in trust for the Purchaser and/or subsequent purchasers of Residential Mortgage
Loans, - P & I." The Custodial Account shall be established with a Qualified
Depository. Upon request of the Purchaser and within ten (10) days thereof, the
Company shall provide the Purchaser with written confirmation of the existence
of such Custodial Account. Any funds deposited in the Custodial Account shall at
all times be insured to the fullest extent allowed by applicable law. Funds
deposited in the Custodial Account may be drawn on by the Company in accordance
with Section 4.05.
The Company shall deposit in the Custodial Account within two (2)
Business Days of the Company's receipt, and retain therein, the following
collections received by the Company and payments made by the Company after the
Cut-off Date, other than payments of principal and interest due on or before the
Cut-off Date, or received by the Company prior to the Cut-off Date but allocable
to a period subsequent thereto:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
32 XXXXX FARGO RESTRICTED
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 4.10 (other than proceeds to be
held in the Escrow Account and applied to the restoration or
repair of the Mortgaged Property or released to the Mortgagor
in accordance with Section 4.14), Section 4.11 and Section
4.15;
(v) all Condemnation Proceeds which are not applied to the
restoration or repair of the Mortgaged Property or released to
the Mortgagor in accordance with Section 4.14;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 4.01, 5.03, 6.01 or 6.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Section 3.03;
(viii) with respect to each Principal Prepayment an amount (to be
paid by the Company out of its funds) which, when added to all
amounts allocable to interest received in connection with the
Principal Prepayment, equals one month's interest on the
amount of principal so prepaid at the Mortgage Loan Remittance
Rate;
(ix) any amounts required to be deposited by the Company pursuant
to Section 4.11 in connection with the deductible clause in
any blanket hazard insurance policy;
(x) any amounts received with respect to or related to any REO
Property and all REO Disposition Proceeds pursuant to Section
4.16; and
(xi) with respect to each Buydown Mortgage Loan an amount from the
Buydown Account (or Escrow Account) that when added to the
amount received from the Mortgagor for such month equal the
full Monthly Payment due under the related Mortgage Note.
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 late payment charges and
assumption fees, to the extent permitted by Section 6.01, need not be deposited
by the Company into the Custodial Account. Any interest paid on funds deposited
in the Custodial Account by the depository institution shall accrue to the
benefit of the Company and the Company shall be entitled to retain and withdraw
such interest from the Custodial Account pursuant to Section 4.05.
33 XXXXX FARGO RESTRICTED
Section 4.05 Permitted Withdrawals From Custodial Account.
The Company shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in the
manner provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances of the Company's
funds made pursuant to Section 5.03, the Company's right to
reimburse itself pursuant to this subclause (ii) being
limited to amounts received on the related Mortgage Loan
which represent late payments of principal and/or interest
respecting which any such advance was made, it being
understood that, in the case of any such reimbursement, the
Company's right thereto shall be prior to the rights of
Purchaser, except that, where the Company is required to
repurchase a Mortgage Loan pursuant to Section 3.03 or 6.02,
the Company's right to such reimbursement shall be
subsequent to the payment to the Purchaser of the Repurchase
Price pursuant to such sections and all other amounts
required to be paid to the Purchaser with respect to such
Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances, and
for any unpaid Servicing Fees, the Company's right to
reimburse itself pursuant to this subclause (iii) with
respect to any Mortgage Loan being limited to related
Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds and such other amounts as may be collected by the
Company from the Mortgagor or otherwise relating to the
Mortgage Loan, it being understood that, in the case of any
such reimbursement, the Company's right thereto shall be
prior to the rights of Purchaser, except that where the
Company is required to repurchase a Mortgage Loan pursuant
to Section 3.03 or 6.02, in which case the Company's right
to such reimbursement shall be subsequent to the payment to
the Purchaser of the Repurchase Price pursuant to such
sections and all other amounts required to be paid to the
Purchaser with respect to such Mortgage Loan;
(iv) to pay itself interest on funds deposited in the Custodial
Account;
(v) to reimburse itself for expenses incurred and reimbursable to
it pursuant to Section 8.01;
(vi) to pay any amount required to be paid pursuant to Section 4.16
related to any REO Property, it being understood that, in the
case of any such expenditure or withdrawal related to a
particular REO Property, the amount of such expenditure or
withdrawal from the Custodial Account shall be limited to
amounts on deposit in the Custodial Account with respect to
the related REO Property;
(vii) to reimburse itself for any Servicing Advances or REO expenses
after liquidation of the Mortgaged Property not otherwise
reimbursed above;
34 XXXXX FARGO RESTRICTED
(viii) to remove funds inadvertently placed in the Custodial Account
by the Company; and
(ix) to clear and terminate the Custodial Account upon the
termination of this Agreement.
In the event that the Custodial Account is interest bearing, on each
Remittance Date, the Company shall withdraw all funds from the Custodial Account
except for those amounts which, pursuant to Section 5.01, the Company is not
obligated to remit on such Remittance Date. The Company may use such withdrawn
funds only for the purposes described in this Section 4.05.
Section 4.06 Establishment of and Deposits to Escrow Account.
The Company 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,
"Xxxxx Fargo Bank, N.A., in trust for the Purchaser and/or subsequent purchasers
of Mortgage Loans, and various Mortgagors - T & I." The Escrow Accounts shall be
established with a Qualified Depository, in a manner which shall provide maximum
available insurance thereunder. Upon request of the Purchaser and within ten
(10) days thereof, the Company shall provide the Purchaser with written
confirmation of the existence of such Escrow Account. Funds deposited in the
Escrow Account may be drawn on by the Company in accordance with Section 4.07.
The Company shall deposit in the Escrow Account or Accounts within two
(2) Business Days of Company's receipt 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;
(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair
of any Mortgaged Property;
(iii) all payments on account of Buydown Funds; and
(iv) all Servicing Advances for Mortgagors whose Escrow Payments
are insufficient to cover escrow disbursements.
The Company shall make withdrawals from the Escrow Account only to
effect such payments as are required under this Agreement, as set forth in
Section 4.07. The Company shall be entitled to retain any interest paid on funds
deposited in the Escrow Account by the depository institution, other than
interest on escrowed funds required by law to be paid to the Mortgagor. To the
extent required by law, the Company shall pay interest on escrowed funds to the
Mortgagor notwithstanding that the Escrow Account may be non-interest bearing or
that interest paid thereon is insufficient for such purposes.
35 XXXXX FARGO RESTRICTED
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the
Company 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 Company for any Servicing Advances made by
the Company pursuant to Section 4.08 or Section 4.10 with
respect to a related Mortgage Loan, but only from amounts
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 under the terms of the related Mortgage
Loan;
(iv) for transfer to the Custodial Account for 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 the procedures outlined in Section
4.14;
(vi) to pay to the Company, or any Mortgagor to the extent required
by law, any interest paid on the funds deposited in the Escrow
Account;
(vii) to remove funds inadvertently placed in the Escrow Account by
the Company;
(viii) to clear and terminate the Escrow Account on the termination
of this Agreement; and
(ix) to transfer payment on account of Buydown Funds to the
Custodial Account.
Section 4.08 Payment of Taxes, Insurance and Other Charges.
With respect to each Mortgage Loan, the Company 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 PMI Policy premiums and fire and hazard insurance
coverage and shall obtain, from time to time, all bills for the payment of such
charges (including renewal premiums) and shall effect payment thereof prior to
the applicable penalty or termination date, employing for such purpose deposits
of the Mortgagor in the Escrow Account which shall have been estimated and
accumulated by the Company in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage. The Company assumes full responsibility for the
timely payment of all such bills and
36 XXXXX FARGO RESTRICTED
shall effect timely payment of all such charges irrespective of each Mortgagor's
faithful performance in the payment of same or the making of the Escrow
Payments, and the Company shall make advances from its own funds to effect such
payments.
Section 4.09 Protection of Accounts.
The Company may transfer the Custodial Account or the Escrow Account to
a different Qualified Depository from time to time.
Section 4.10 Maintenance of Hazard Insurance.
The Company shall cause to be maintained for each Mortgage Loan hazard
insurance such that all buildings upon the Mortgaged Property are insured by an
insurer acceptable to the Agencies, 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)
100 % of the insurable value, on a replacement cost basis, of the improvements
on the related Mortgaged Property, and (ii) the greater of (a) the outstanding
principal balance of the Mortgage Loan or (b) an amount such that the proceeds
of such insurance shall be sufficient to prevent the application to the
Mortgagor or the loss payee of any coinsurance clause under the policy. In the
event a hazard insurance policy shall be in danger of being terminated, or in
the event the insurer shall cease to be acceptable to the Agencies, the Company
shall notify the Purchaser and the related Mortgagor, and shall use its best
efforts, as permitted by applicable law, to obtain from another Qualified
Insurer a replacement hazard insurance policy substantially and materially
similar in all respects to the original policy. In no event, however, shall a
Mortgage Loan be without a hazard insurance policy at any time, subject only to
Section 4.11 hereof.
If upon origination of the Mortgage Loan, the related Mortgaged
Property was located in an area identified by the Flood Emergency Management
Agency as having special flood hazards (and such flood insurance has been made
available) a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect with a generally
acceptable insurance carrier acceptable to the Agencies, 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 Company determines in accordance with applicable law 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 Company shall notify
the related Mortgagor that the Mortgagor must obtain such flood insurance
coverage, and if said Mortgagor fails to obtain the required flood insurance
coverage within forty-five (45) days after such notification, the Company shall
immediately force place the required flood insurance on the Mortgagor's behalf.
37 XXXXX FARGO RESTRICTED
If a Mortgage is secured by a unit in a condominium project, the
Company shall verify that the coverage required of the owner's association,
including hazard, flood, liability, and fidelity coverage, is being maintained
in accordance with then current Agency requirements, and secure from the owner's
association its agreement to notify the Company promptly of any change in the
insurance coverage or of any condemnation or casualty loss that may have a
material effect on the value of the Mortgaged Property as security.
In the event that any Purchaser or the Company 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 Company shall communicate and consult with the
Mortgagor with respect to the need for such insurance and bring to the
Mortgagor's attention the required amount of coverage for the Mortgaged Property
and if the Mortgagor does not obtain such coverage, the Company shall
immediately force place the required coverage on the Mortgagor's behalf.
All policies required hereunder shall name the Company as loss payee
and shall be endorsed with standard or union mortgagee clauses, without
contribution, which shall provide for at least thirty (30) days prior written
notice of any cancellation, reduction in amount or material change in coverage.
The Company shall not interfere with the Mortgagor's freedom of choice
in selecting either his insurance carrier or agent, provided, however, that the
Company shall not accept any such insurance policies from insurance companies
unless such companies are acceptable to the applicable Agency and are licensed
to do business in the jurisdiction in which the Mortgaged Property is located.
The Company 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.
Pursuant to Section 4.04, any amounts collected by the Company 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 Company's normal servicing procedures as
specified in Section 4.14) shall be deposited in the Custodial Account subject
to withdrawal pursuant to Section 4.05.
Section 4.11 Maintenance of Mortgage Impairment Insurance.
In the event that the Company 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
4.10 and otherwise complies with all other requirements of Section 4.10, it
shall conclusively be deemed to have satisfied its obligations as set forth in
Section 4.10. The Company shall prepare and make any claims on the blanket
policy as deemed necessary by the Company in accordance with prudent servicing
practices. Any amounts collected by the Company under any such policy relating
to a Mortgage Loan shall be deposited in the Custodial Account subject to
withdrawal pursuant to Section 4.05. Such policy may contain a deductible
38 XXXXX FARGO RESTRICTED
clause, in which case, in the event that there shall not have been maintained on
the related Mortgaged Property a policy complying with Section 4.10, and there
shall have been a loss which would have been covered by such policy, the Company
shall deposit in the Custodial Account at the time of such loss the amount not
otherwise payable under the blanket policy because of such deductible clause,
such amount to be deposited from the Company's funds, without reimbursement
therefor. Upon request of any Purchaser, the Company shall cause to be delivered
to such Purchaser 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 thirty (30) days' prior written notice to such
Purchaser.
Section 4.12 Maintenance of Fidelity Bond and Errors and Omissions
Insurance.
The Company 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 ("Company 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 Company against losses,
including forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of such Company Employees. Such Fidelity Bond and Errors and
Omissions Insurance Policy also shall protect and insure the Company 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 4.12 requiring such Fidelity Bond and Errors and
Omissions Insurance Policy shall diminish or relieve the Company from its duties
and obligations as set forth in this Agreement. The minimum coverage under any
such bond and insurance policy shall be acceptable to the Agencies. Upon the
request of any Purchaser, the Company shall cause to be delivered to such
Purchaser a certificate of insurance for 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
thirty (30) days' prior written notice to the Purchaser.
Section 4.13 Inspections.
If any Mortgage Loan is more than sixty (60) days delinquent, the
Company immediately shall inspect the Mortgaged Property and shall conduct
subsequent inspections in accordance with Accepted Servicing Practices or as may
be required by the primary mortgage guaranty insurer. The Company shall keep a
written report of each such inspection.
Section 4.14 Restoration of Mortgaged Property.
The Company need not obtain the approval of the Purchaser prior to
releasing any Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be
applied to the restoration or repair of the Mortgaged Property if such release
is in accordance with Accepted Servicing Practices. For claims greater than
$15,000, at a minimum the Company shall comply with the following conditions in
connection with any such release of Insurance Proceeds or Condemnation Proceeds:
39 XXXXX FARGO RESTRICTED
(i) the Company shall receive satisfactory independent verification
of completion of repairs and issuance of any required approvals
with respect thereto;
(ii) the Company 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;
(iii) the Company shall verify that the Mortgage Loan is not in
default; and
(iv) pending repairs or restoration, the Company shall place the
Insurance Proceeds or Condemnation Proceeds in the Escrow
Account.
If the Purchaser is named as an additional loss payee, the Company is
hereby empowered to endorse any loss draft issued in respect of such a claim in
the name of the Purchaser.
Section 4.15 Claims.
In connection with its activities as servicer, the Company agrees to
prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any PMI Policy, MIC or LGC in a timely fashion and in accordance
with the terms of the applicable policy or Agency requirements, in this regard,
to take such action as shall be necessary to permit recovery respecting a
defaulted Mortgage Loan. Pursuant to Section 4.04, any amounts collected by the
Company under any guaranty shall be deposited in the Custodial Account, subject
to withdrawal pursuant to Section 4.05.
Section 4.16 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 certificate of sale
shall be taken in the name of the Purchaser, or in the event the Purchaser 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 Company 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 Purchaser shall
acknowledge in writing that such title is being held as nominee for the
Purchaser.
The Purchaser shall have the option to manage and operate the REO
Property provided the Purchaser gives written notice of its intention to do so
within thirty (30) days after such REO Property is acquired in foreclosure or by
deed in lieu of foreclosure. The election by the Purchaser to manage the REO
Property shall not constitute a termination of any rights of the Company
pursuant to Section 11.02.
In the event the Purchaser does not elect to manage its own REO
property, the Company shall manage, conserve, protect and operate each REO
Property for the Purchaser solely for the
40 XXXXX FARGO RESTRICTED
purpose of its prompt disposition and sale. The Company, either itself or
through an agent selected by the Company, 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 Company shall attempt to sell the same (and may temporarily rent
the same for a period not greater than one (1) year, except as otherwise
provided below) on such terms and conditions as the Company deems to be in the
best interest of the Purchaser.
The Company shall use its best efforts to dispose of the REO Property
as soon as possible and shall sell such REO Property in any event prior to the
close of the third (3rd) calendar year beginning after the year in which title
has been taken to such REO Property, unless the Company determines, and gives an
appropriate notice to the Purchaser to such effect, that a longer period is
necessary for the orderly liquidation of such REO Property. If a period longer
than three (3) years is permitted under the foregoing sentence and is necessary
to sell any REO Property, (i) the Company shall report monthly to the Purchaser
as to the progress being made in selling such REO Property and (ii) if, with the
written consent of the Purchaser, a purchase money mortgage is taken in
connection with such sale, such purchase money mortgage shall name the Company
as mortgagee, and such purchase money mortgage shall not be held pursuant to
this Agreement.
The Company 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,
liability insurance 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 disposition of REO Property shall be carried out by the Company at
such price, and upon such terms and conditions, as the Company deems to be in
the best interests of the Purchaser. 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 Company shall
reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and unreimbursed advances made pursuant to Section 5.03. On the
Remittance Date immediately following the Principal Prepayment Period in which
such sale proceeds are received the net cash proceeds of such sale remaining in
the Custodial Account shall be distributed to the Purchaser.
The Company shall withdraw from the Custodial Account funds necessary
for the proper operation management and maintenance of the REO Property,
including the cost of maintaining any hazard insurance pursuant to Section 4.10
and the fees of any managing agent of the Company, or the Company itself. The
REO management fee shall be $1500 per REO Property. The Company shall make
monthly distributions on each Remittance Date to the Purchaser 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 4.16 and of any reserves
reasonably required from time to time to be maintained to satisfy anticipated
liabilities for such expenses).
Section 4.17 Real Estate Owned Reports.
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Together with the statement furnished pursuant to Section 5.02, the
Company shall furnish to the Purchaser on or before the Remittance Date each
month a statement with respect to any REO Property covering the operation of
such REO Property for the previous month and the Company'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 available to the Company as the Purchaser
shall reasonably request.
Section 4.18 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Purchaser pursuant to a deed in lieu of foreclosure, the Company
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property.
Section 4.19 Reports of Foreclosures and Abandonments of Mortgaged
Property.
Following the foreclosure sale or abandonment of any Mortgaged
Property, the Company shall report such foreclosure or abandonment as required
pursuant to Section 6050J of the Code. The Company shall file information
reports with respect to the receipt of mortgage interest received in a trade or
business and information returns relating to cancellation of indebtedness income
with respect to any Mortgaged Property as required by the Code. Such reports
shall be in form and substance sufficient to meet the reporting requirements
imposed by the Code.
Section 4.20 Application of Buydown Funds.
With respect to each Buydown Mortgage Loan, the Company shall have
deposited into the Escrow Account, no later than the last day of the month,
Buydown Funds in an amount equal to the aggregate undiscounted amount of
payments that, when added to the amount the Mortgagor on such Mortgage Loan is
obligated to pay on all Due Dates in accordance with the terms of the Buydown
Agreement, is equal to the full scheduled Monthly Payments which are required to
be paid by the Mortgagor under the terms of the related Mortgage Note (without
regard to the related Buydown Agreement as if the Mortgage Loan were not subject
to the terms of the Buydown Agreement). With respect to each Buydown Mortgage
Loan, the Company will distribute to the Purchaser on each Remittance Date an
amount of Buydown Funds equal to the amount that, when added to the amount
required to be paid on such date by the related Mortgagor, pursuant to and in
accordance with the related Buydown Agreement, equals the full Monthly Payment
that would otherwise be required to be paid on such Mortgage Loan by the related
Mortgagor under the terms of the related Mortgage Note (as if the Mortgage Loan
were not a Buydown Mortgage Loan and without regard to the related Buydown
Agreement).
If the Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage
Loan during the Buydown Period and the Mortgaged Property securing such Buydown
Mortgage Loan is sold in the liquidation thereof (either by the Company or the
insurer under any related Primary Insurance Policy) the Company shall, on the
Remittance Date following the date upon which Liquidation Proceeds or REO
Disposition proceeds are received with respect to any such Buydown Mortgage
Loan, distribute to the Purchaser all remaining Buydown Funds for such
42 XXXXX FARGO RESTRICTED
Mortgage Loan then remaining in the Escrow Account. Pursuant to the terms of
each Buydown Agreement, any amounts distributed to the Purchaser in accordance
with the preceding sentence will be applied to reduce the outstanding principal
balance of the related Buydown Mortgage Loan. If a Mortgagor on a Buydown
Mortgage Loan prepays such Mortgage Loan in its entirety during the related
Buydown Period, the Company shall be required to withdraw from the Escrow
Account any Buydown Funds remaining in the Escrow Account with respect to such
Buydown Mortgage Loan in accordance with the related Buydown Agreement. If a
principal prepayment by a Mortgagor on a Buydown Mortgage Loan during the
related Buydown Period, together with any Buydown Funds then remaining in the
Escrow Account related to such Buydown Mortgage Loan, would result in a
principal prepayment of the entire unpaid principal balance of the Buydown
Mortgage Loan, the Company shall distribute to the Purchaser on the Remittance
Date occurring in the month immediately succeeding the month in which such
Principal Prepayment is received, all Buydown Funds related to such Mortgage
Loan so remaining in the Escrow Account, together with any amounts required to
be deposited into the Custodial Account.
Section 4.21 Notification of Adjustments.
With respect to each adjustable rate Mortgage Loan, the Company shall
adjust the Mortgage Interest Rate on the related Adjustment Date in compliance
with the requirements of applicable law and the related Mortgage and Mortgage
Note. The Company shall execute and deliver any and all necessary notices
required under applicable law and the terms of the related Mortgage Note and
Mortgage regarding the Mortgage Interest Rate adjustments. Upon the discovery by
the Company or the receipt of notice from the Purchaser that the Company has
failed to adjust a Mortgage Interest Rate in accordance with the terms of the
related Mortgage Note, the Company shall immediately deposit in the Custodial
Account from its own funds the amount of any interest loss or deferral caused
the Purchaser thereby.
Section 4.22 Confidentiality/Protection of Customer Information.
The Company shall keep confidential and shall not divulge to any party,
without the Purchaser's prior written consent, the price paid by the Purchaser
for the Mortgage Loans, except to the extent that it is reasonable and necessary
for the Company to do so in working with legal counsel, auditors, taxing
authorities or other governmental agencies. Each party agrees that it shall
comply with all applicable laws and regulations regarding the privacy or
security of Customer Information and shall maintain appropriate administrative,
technical and physical safeguards to protect the security, confidentiality and
integrity of Customer Information, including maintaining security measures
designed to meet the objectives of the Interagency Guidelines Establishing
Standards for Safeguarding Customer Information, 66 Fed. Reg. 8616 (the
"Interagency Guidelines"). For purposes of this Section, the term "Customer
Information" shall have the meaning assigned to it in the Interagency
Guidelines.
Section 4.23 Prepayment Penalty Waivers.
To the extent consistent with the terms of this Agreement, the Company
may waive (or permit a subservicer to waive) a prepayment penalty only under the
following circumstances: (i) such waiver is standard and customary in servicing
similar Mortgage Loans and (ii) such waiver relates to a default or a reasonably
foreseeable default and would, in the reasonable judgment of
43 XXXXX FARGO RESTRICTED
the Company, maximize recovery of total proceeds taking into account the value
of such prepayment penalty and the related Mortgage Loan.
Section 4.24 Use of Subservicers and Subcontractors.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company under this
Agreement or any Reconstitution Agreement unless the Company complies with the
provisions of paragraph (a) of this Section 4.24. The Company shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Company under this Agreement or any
Reconstitution Agreement unless the Company complies with the provisions of
paragraph (b) of this Section 4.24.
(a) It shall not be necessary for the Company to seek the consent of
the Purchaser, any Master Servicer or any Depositor to the utilization
of any Subservicer. The Company shall cause any Subservicer used by the
Company (or by any Subservicer) for the benefit of the Purchaser and
any Depositor to comply with the provisions of this Section 4.24 and
with Sections 6.04, 6.06, 6.07, 9.01(d)(iii), 9.01(d)(v), 9.01(d)(vi),
9.01(d)(vii). 9.01(d)(viii) and 9.01(e) of this Agreement to the same
extent as if such Subservicer were the Company, and to provide the
information required with respect to such Subservicer under Section
9.01(d)(iv) of this Agreement. The Company shall be responsible for
obtaining from each Subservicer and delivering to the Purchaser and any
Depositor any servicer compliance statement required to be delivered by
such Subservicer under Section 6.04 and any assessment of compliance
and attestation required to be delivered by such Subservicer under
Section 6.06 and any certification required to be delivered to the
Person that will be responsible for signing the Sarbanes Certification
under Section 6.06 as and when required to be delivered.
(b) It shall not be necessary for the Company to seek the consent of
the Purchaser, any Master Servicer or any Depositor to the utilization
of any Subcontractor. The Company shall promptly upon request provide
to the Purchaser, any Master Servicer and any Depositor (or any
designee of the Depositor, such as an administrator) a written
description (in form and substance satisfactory to the Purchaser, such
Master Servicer and such Depositor) of the role and function of each
Subcontractor utilized by the Company or any Subservicer, specifying
(i) the identity of each such Subcontractor, (ii) which (if any) of
such Subcontractors are "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB, and (iii) which
elements of the Servicing Criteria will be addressed in assessments of
compliance provided by each Subcontractor identified pursuant to clause
(ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be
"participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 6.06, 6.07 and 9.01(e) of
this Agreement to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and
44 XXXXX FARGO RESTRICTED
any Depositor any assessment of compliance and attestation and other
certifications required to be delivered by such Subcontractor under Section
6.06, in each case as and when required to be delivered.
Section 4.25 Subordination of Second Lien Mortgage Loans.
The Company is authorized, without the prior approval of the Purchaser,
to consent to the refinancing of any Superior Lien on a Mortgaged Property,
provided, that the resulting Combined Loan-to-Value Ratio of such Mortgage Loan
is no higher than the Combined Loan-to-Value Ratio prior to such refinancing.
Where permitted by law and where the senior lienholder is required to
notify a junior lienholder be named as a party defendant in foreclosure
proceedings in order to foreclose such junior lienholder's equity of redemption,
the Company shall, at the reasonable expense of the Purchaser, file (or cause to
be filed) a request for notice of any action by a superior lienholder under a
related senior lien for the protection of the Purchaser's interest in the
related Second Lien Mortgage Loan.
If the Company is notified that any superior lienholder has accelerated
or intends to accelerate the obligations secured by the Superior Lien, or has
declared or intends to declare a default under the superior mortgage or the
promissory note secured thereby, or has filed or intends to file an election to
have the Mortgaged Property sold or foreclosed, the Company shall take whatever
actions are necessary to protect the interests of the Purchaser, and/or to
preserve the security of the related Mortgage Loan, subject to any requirements
applicable to real estate mortgage investment conduits pursuant to the Code. The
Company shall advance the funds necessary to cure the default or reinstate the
superior lien if the Company determines that such advance is in the best
interests of the Purchaser. The Company shall not make such an advance except to
the extent that it determines in its reasonable good faith judgment that such
advance will be recoverable from Liquidation Proceeds on the related Mortgage
Loan. The Company shall thereafter take such action as is necessary to recover
the amount so advanced.
ARTICLE V
PAYMENTS TO PURCHASER
Section 5.01 Remittances.
On each Remittance Date the Company shall remit by wire transfer of
immediately available funds to the Purchaser (a) all amounts deposited in the
Custodial Account as of the close of business on the Determination Date (net of
charges against or withdrawals from the Custodial Account pursuant to Section
4.05), plus (b) all amounts, if any, which the Company is obligated to
distribute pursuant to Section 5.03, minus (c) any amounts attributable to
Principal Prepayments received after the applicable Principal Prepayment Period
which amounts shall be remitted on the following Remittance Date, together with
any additional interest required to be deposited in the Custodial Account in
connection with such Principal Prepayment in accordance with Section 4.04(viii);
minus (d) any amounts attributable to Monthly Payments collected but
45 XXXXX FARGO RESTRICTED
due on a Due Date or Dates subsequent to the first (1st) day of the month of the
Remittance Date, and minus (e) any amounts attributable to Buydown Funds being
held in the Custodial Account, which amounts shall be remitted on the Remittance
Date next succeeding the Due Period for such amounts.
With respect to any remittance received by the Purchaser after the date
on which such payment was due, the Company shall pay to the Purchaser interest
on any such late payment at an annual rate equal to the Prime Rate, adjusted as
of the date of each change, plus two percentage points, but in no event greater
than the maximum amount permitted by applicable law. Such interest shall be
distributed with such late remittance by wire transfer to the Purchaser and
shall cover the period commencing with the day following such Remittance Date
and ending with the Business Day on which such payment is made, both inclusive.
The payment by the Company of any such interest shall not be deemed an extension
of time for payment or a waiver of any Event of Default by the Company.
Section 5.02 Statements to Purchaser.
Not later than the Remittance Date, the Company shall furnish to the
Purchaser a monthly remittance advice in the standard form of electronic
Alltel(R) file, as to the period ending on the last day of the preceding month.
Section 5.03 Monthly Advances by Company.
On the Business Day immediately preceding each Remittance Date, the
Company shall deposit in the Custodial Account from its own funds or from
amounts held for future distribution an amount equal to all Monthly 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 or which
were deferred pursuant to Section 4.01. Any amounts held for future distribution
and so used shall be replaced by the Company by deposit in the Custodial Account
on or before any future Remittance Date if funds in the Custodial Account on
such Remittance Date shall be less than payments to the Purchaser required to be
made on such Remittance Date. The Company's obligation to make such Monthly
Advances as to any Mortgage Loan will continue through the last Monthly Payment
due prior to the payment in full of the Mortgage Loan, or through the earlier
of: (i) the last Remittance Date prior to the Remittance Date for the
distribution of all Liquidation Proceeds and other payments or recoveries
(including Insurance Proceeds and Condemnation Proceeds) with respect to the
Mortgage Loan; and (ii) the Remittance Date prior to the date the Mortgage Loan
is converted to REO Property, provided however, that if requested in connection
with a securitization, the Company shall be obligated to make such advances
through the Remittance Date prior to the date on which cash is received in
connection with the liquidation of REO Property; provided, however, that such
obligation shall cease if the Company determines, in its sole reasonable
opinion, that advances with respect to such Mortgage Loan are non-recoverable by
the Company from Liquidation Proceeds, Insurance Proceeds, Condemnation
Proceeds, or otherwise with respect to a particular Mortgage Loan. In the event
that the Company determines that any such advances are non-recoverable, the
Company shall provide the Purchaser with a certificate signed by two officers of
the Company evidencing such
46 XXXXX FARGO RESTRICTED
determination. The Company shall not have an obligation to advance amounts in
respect to shortfalls relating to the Servicemembers Civil Relief Act or similar
state and local laws.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Transfers of Mortgaged Property.
The Company 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 Company 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 Company shall not exercise such rights if
prohibited by law from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related PMI Policy, MIC or LGC.
If the Company reasonably believes it is unable under applicable law to
enforce such "due-on-sale" clause, the Company 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
Company is unable under applicable law to require that the original Mortgagor
remain liable under the Mortgage Note and the Company has the prior consent of
the primary mortgage guaranty insurer, a substitution of liability agreement
with the purchaser of the Mortgaged Property pursuant to which the original
Mortgagor is released from liability and the purchaser of the Mortgaged Property
is substituted as Mortgagor and becomes liable under the Mortgage Note. If an
assumption fee is collected by the Company for entering into an assumption
agreement the fee will be retained by the Company as additional servicing
compensation. In connection with any such assumption, neither the Mortgage
Interest Rate borne by the related Mortgage Note, the term of the Mortgage Loan,
the outstanding principal amount of the Mortgage Loan nor any other material
terms shall be changed without Purchaser's consent.
To the extent that any Mortgage Loan is assumable, the Company shall
inquire diligently into the credit worthiness of the proposed transferee, and
shall use the underwriting criteria for approving the credit of the proposed
transferee which are used with respect to underwriting mortgage loans of the
same type as the Mortgage Loan. If the credit worthiness of the proposed
transferee does not meet such underwriting criteria, the Company diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Files.
47 XXXXX FARGO RESTRICTED
Upon the payment in full of any Mortgage Loan, the Company shall notify
the Purchaser in the Monthly Remittance Advice as provided in Section 5.02, and
may request the release of any Mortgage Loan Documents.
If the Company satisfies or releases a Mortgage without first having
obtained payment in full of the indebtedness secured by the Mortgage (other than
as a result of a modification of the Mortgage pursuant to the terms this
Agreement or liquidation of the Mortgaged Property pursuant to the terms of this
Agreement) or should the Company otherwise prejudice any rights the Purchaser
may have under the mortgage instruments, upon written demand of the Purchaser,
the Company shall repurchase the related Mortgage Loan at the Repurchase Price
by deposit thereof in the Custodial Account within two (2) Business Days of
receipt of such demand by the Purchaser. The Company shall maintain the Fidelity
Bond and Errors and Omissions Insurance Policy as provided for in Section 4.12
insuring the Company against any loss it may sustain with respect to any
Mortgage Loan not satisfied in accordance with the procedures set forth herein.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Company shall be
entitled to withdraw from the Custodial Account or to retain from interest
payments on the Mortgage Loans the amount of its Servicing Fee. The Servicing
Fee shall be payable monthly and shall be computed on the basis of the same
unpaid principal balance and for the period respecting which any related
interest payment on a Mortgage Loan is received. The obligation of the Purchaser
to pay the Servicing Fee is limited to, and payable solely from, the interest
portion of such Monthly Payments. The Servicing Fee shall not be reduced by the
amount of any guaranty fee payable to FHA or VA.
Additional servicing compensation in the form of assumption fees, to
the extent provided in Section 6.01, and late payment charges shall be retained
by the Company to the extent not required to be deposited in the Custodial
Account. The Company shall be required to pay all expenses incurred by it in
connection with its servicing activities hereunder and shall not be entitled to
reimbursement thereof except as specifically provided for herein.
Section 6.04 Annual Statement as to Compliance.
On or before March 1st of each calendar year, the Company shall deliver
to the Purchaser, any Master Servicer and any Depositor a statement of
compliance addressed to the Purchaser, such Master Servicer and such Depositor
and signed by an authorized officer of the Company, to the effect that (a) a
review of the Company's activities during the immediately preceding calendar
year (or applicable portion thereof) and of its performance under this Agreement
and any applicable Reconstitution Agreement during such period has been made
under such officer's supervision, and (b) to the best of such officers'
knowledge, based on such review, the Company has fulfilled all of its
obligations under this Agreement and any applicable Reconstitution Agreement in
all material respects throughout such calendar year (or applicable portion
thereof) or, if there has been a failure to fulfill any such obligation in any
material respect, specifically identifying each such failure known to such
officer and the nature and the status thereof.
48 XXXXX FARGO RESTRICTED
Section 6.05 [RESERVED]
Section 6.06 Report on Assessment of Compliance and Attestation.
On or before March 1st of each calendar year, the Company shall:
(i) deliver to the Purchaser, any Master Servicer and any Depositor a
report (in form and substance reasonably satisfactory to the
Purchaser, such Master Servicer and such Depositor) regarding the
Company's assessment of compliance with the Servicing Criteria
during the immediately preceding calendar year, as required under
Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be addressed to the Purchaser,
any Master Servicer and such Depositor and signed by an
authorized officer of the Company and shall address each of the
"Applicable Servicing Criteria" specified on Exhibit E hereto (or
those Servicing Criteria otherwise mutually agreed to by the
Purchaser, the Company and any Person that will be responsible
for signing any Sarbanes Certification with respect to a
Securitization Transaction in response to evolving
interpretations of Regulation AB);
(ii) deliver to the Purchaser, any Master Servicer and any Depositor a
report of a registered public accounting firm reasonably
acceptable to the Purchaser, any Master Servicer and such
Depositor that attests to, and reports on, the assessment of
compliance made by the Company and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with
Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the
Securities Act and the Exchange Act;
(iii) cause each Subservicer and each Subcontractor, determined by the
Company pursuant to Section 4.24(b) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation
AB, to deliver to the Purchaser and such Depositor an assessment
of compliance and accountants' attestation as and when provided
in this Section 6.06; and
(iv) deliver, and cause each Subservicer and each Subcontractor
described in clause (iii) to deliver to the Purchaser, any Master
Servicer any Depositor and any other Person that will be
responsible for signing the certification (a "Sarbanes
Certification") required by Rules 13a-14(d) and 15d-14(d) under
the Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx
Act of 2002) on behalf of an asset-backed issuer with respect to
a Securitization Transaction a certification, signed by the
appropriate officer of the Company, in the form attached hereto
as Exhibit F.
The Company acknowledges that the parties identified in clause (iv)
above may rely on the certification provided by the Company pursuant to such
clause in signing a Sarbanes Certification and filing such with the Commission.
Neither the Purchaser nor any Depositor will request delivery of a certification
under clause (iv) above unless a Depositor is required under
49 XXXXX FARGO RESTRICTED
the Exchange Act to file an annual report on Form 10-K with respect to an
issuing entity whose asset pool includes Mortgage Loans.
Each assessment of compliance provided by a Subservicer pursuant to
Section 6.06(i) shall address each of the Servicing Criteria specified
substantially in the form of Exhibit E hereto delivered to the Purchaser at the
time of any Securitization Transaction or, in the case of a Subservicer
subsequently appointed as such, on or prior to the date of such appointment. An
assessment of compliance provided by a Subcontractor pursuant to Section
6.06(iii) need not address any elements of the Servicing Criteria other than
those specified by the Company pursuant to Section 4.24.
Section 6.07 Remedies.
(i) Any failure by the Company, any Subservicer, any Subcontractor or
any Third-Party Originator to deliver any information, report, certification,
accountants' letter or other material when and as required under Article IX,
Section 4.24, Section 6.04 or Section 6.06, or any breach by the Company of a
representation or warranty set forth in Section 9.01(d)(iv)(A), or in a writing
furnished pursuant to Section 9.01(d)(iv)(B) and made as of a date prior to the
closing date of the related Securitization Transaction, to the extent that such
breach is not cured by such closing date, or any breach by the Company of a
representation or warranty in a writing furnished pursuant to Section
9.01(d)(iv)(B) to the extent made as of a date subsequent to such closing date,
shall, except as provided in sub-clause (ii) of this Section, immediately and
automatically, without notice or grace period, constitute an Event of Default
with respect to the Company under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or any Depositor, as
applicable, in its sole discretion to terminate the rights and obligations of
the Company as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement or any applicable Reconstitution Agreement to the contrary) of any
compensation to the Company (and, if the Company is servicing any of the
Mortgage Loans in a Securitization Transaction, appoint a successor servicer
reasonably acceptable to any Master Servicer for such Securitization
Transaction); provided that to the extent than any provision of this Agreement
and/or any applicable Reconstitution Agreement expressly provides for the
survival of certain rights or obligations following termination of the Company
as servicer, such provision shall be given effect.
(ii) Any failure by the Company, any Subservicer or any Subcontractor
to deliver any information, report, certification or accountants' letter when
and as required under Section 6.04 or Section 6.06, including any failure by the
Company to identify any Subcontractor "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB, which continues unremedied for
ten (10) calendar days after the date on which such information, report,
certification or accountants' letter was required to be delivered shall
constitute an Event of Default with respect to the Company under this Agreement
and any applicable Reconstitution Agreement, and shall entitle the Purchaser,
any Master Servicer or any Depositor, as applicable, in its sole discretion to
terminate the rights and obligations of the Company under this Agreement and/or
any applicable Reconstitution Agreement without payment (notwithstanding
anything in this Agreement to the contrary) of any compensation to the Company;
provided that
50 XXXXX FARGO RESTRICTED
to the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Company as servicer, such provision
shall be given effect.
Neither the Purchaser nor any Depositor shall be entitled to terminate
the rights and obligations of the Company pursuant to this Section 6.07(ii) if a
failure of the Company to identify a Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB was
attributable solely to the role or functions of such Subcontractor with respect
to mortgage loans other than the Mortgage Loans.
(iii) The Company shall promptly reimburse the Purchaser (or any
designee of the Purchaser), any Master Servicer and any Depositor, as
applicable, for all reasonable expenses incurred by the Purchaser (or such
designee) or such Depositor, as such are incurred, in connection with the
termination of the Company as servicer and the transfer of servicing of the
Mortgage Loans to a successor servicer. The provisions of this paragraph shall
not limit whatever rights the Purchaser or any Depositor may have under other
provisions of this Agreement and/or any applicable Reconstitution Agreement or
otherwise, whether in equity or at law, such as an action for damages, specific
performance or injunctive relief.
Section 6.08 Right to Examine Company Records.
The Purchaser, or its designee, shall have the right to examine and
audit any and all of the books, records, or other information of the Company,
whether held by the Company or by another on its behalf, with respect to or
concerning this Agreement or the Mortgage Loans, during business hours or at
such other times as may be reasonable under applicable circumstances, upon
reasonable advance notice. The Purchaser shall pay its own travel expenses
associated with such examination.
Section 6.09 Compliance with REMIC.
Notwithstanding anything in this Agreement to the contrary, the Company
(a) shall not permit any modification with respect to any Mortgage Loan that
would change the Mortgage Interest Rate and (b) shall not (unless the Mortgagor
is in default with respect to the Mortgage Loan or such default is, in the
judgment of the Company, reasonably foreseeable) make or permit any
modification, waiver or amendment of any term of any Mortgage Loan that would
both effect an exchange or reissuance of such Mortgage Loan under Section 1001
of the Code (or Treasury regulations promulgated thereunder).
Prior to taking any action with respect to the Mortgage Loans which is
not contemplated under the terms of this Agreement, the Company will obtain an
Opinion of Counsel reasonably acceptable to the Securities Administrator with a
copy to the Trustee with respect to whether such action could result in the
imposition of a tax upon the REMIC (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax
on contributions to a REMIC set forth in Section 860G(d) of the Code) (either
such event, an "Adverse REMIC Event"), and the Company shall not take any such
action or cause the Trust
51 XXXXX FARGO RESTRICTED
Fund to take any such action as to which it has been advised that an Adverse
REMIC Event could occur.
The Company shall not permit the creation of any "interests" (within
the meaning of Section 860G of the Code) in the REMIC. The Company shall not
enter into any arrangement by which the REMIC will receive a fee or other
compensation for services nor permit the REMIC to receive any income from assets
other than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code."
ARTICLE VII
COMPANY TO COOPERATE
Section 7.01 Provision of Information.
During the term of this Agreement, the Company shall furnish to the
Purchaser such periodic, special, or other reports or information, and copies or
originals of any documents contained in the Servicing File for each Mortgage
Loan provided for herein. All other special reports or information not provided
for herein as shall be necessary, reasonable, or appropriate with respect to the
Purchaser or any regulatory agency will be provided at the Purchaser's expense.
All such reports, documents or information shall be provided by and in
accordance with all reasonable instructions and directions which the Purchaser
may give.
The Company shall execute and deliver all such instruments and take all
such action as the Purchaser may reasonably request from time to time, in order
to effectuate the purposes and to carry out the terms of this Agreement.
Section 7.02 Financial Statements; Servicing Facility.
In connection with marketing the Mortgage Loans, the Purchaser may make
available to a prospective Purchaser a Consolidated Statement of Operations of
the Company for the most recently completed two (2) fiscal years for which such
a statement is available, as well as a Consolidated Statement of Condition at
the end of the last two (2) fiscal years covered by such Consolidated Statement
of Operations. The Company also shall make available any comparable interim
statements to the extent any such statements have been prepared by or on behalf
of the Company (and are available upon request to members or stockholders of the
Company or to the public at large).
The Company also shall make available to Purchaser or prospective
Purchaser a knowledgeable financial or accounting officer for the purpose of
answering questions respecting recent developments affecting the Company or the
financial statements of the Company, and to permit any prospective Purchaser to
inspect the Company's servicing facilities for the purpose of satisfying such
prospective Purchaser that the Company has the ability to service the Mortgage
Loans as provided in this Agreement.
52 XXXXX FARGO RESTRICTED
ARTICLE VIII
THE COMPANY
Section 8.01 Indemnification; Third Party Claims.
The Company shall indemnify the Purchaser and hold it 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 that the Purchaser may sustain in any way related to the failure of
the Company to perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement. The Company immediately shall
notify the Purchaser if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Purchaser) 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 the Purchaser in respect
of such claim. The Company shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser promptly shall
reimburse the Company for all amounts advanced by it pursuant to the preceding
sentence except when the claim is in any way related to the Company's
indemnification pursuant to Section 3.03, or the failure of the Company to
service and administer the Mortgage Loans in strict compliance with the terms of
this Agreement.
Section 8.02 Merger or Consolidation of the Company.
The Company shall keep in full effect its existence, rights and
franchises and shall obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement or any of the Mortgage
Loans and to perform its duties under this Agreement.
Any person into which the Company may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Company shall be a party, or any Person succeeding to the business of the
Company, shall be the successor of the Company 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 which is a
HUD/VA-approved company in good standing. Furthermore, in the event the Company
transfers or otherwise disposes of all or substantially all of its assets to an
affiliate of the Company, such affiliate shall satisfy the condition above, and
shall also be fully liable to the Purchaser for all of the Company's obligations
and liabilities hereunder.
Section 8.03 Limitation on Liability of Company and Others.
Neither the Company nor any of the directors, officers, employees or
agents of the Company shall be under any liability to the Purchaser 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 Company or any such person against any
breach of warranties or representations made herein, or failure to perform its
obligations in
53 XXXXX FARGO RESTRICTED
strict compliance with any standard of care set forth in this Agreement or any
other liability which would otherwise be imposed under this Agreement. The
Company and any director, officer, employee or agent of the Company 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 Company
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 Company may, with the consent
of the Purchaser, undertake any such action which it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto. In such event, the Company shall be entitled to reimbursement from the
Purchaser of the reasonable legal expenses and costs of such action.
Section 8.04 Limitation on Resignation and Assignment by Company.
The Purchaser has entered into this Agreement with the Company and
subsequent purchaser will purchase the Mortgage Loans in reliance upon the
independent status of the Company, and the representations as to the adequacy of
its servicing facilities, plant, personnel, records and procedures, its
integrity, reputation and financial standing, and the continuance thereof.
Therefore, the Company shall neither assign this Agreement or the servicing
rights hereunder or sell or otherwise dispose of all of its property or assets
without the prior written consent of the Purchaser, which consent shall not be
unreasonably withheld.
The Company shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Company and the Purchaser or upon
the determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Company. Any such
determination permitting the resignation of the Company shall be evidenced by an
Opinion of Counsel to such effect delivered to the Purchaser which Opinion of
Counsel shall be in form and substance acceptable to the Purchaser. No such
resignation shall become effective until a successor shall have assumed the
Company's responsibilities and obligations hereunder in the manner provided in
Section 12.01.
Without in any way limiting the generality of this Section 8.04, in the
event that the Company either shall assign this Agreement or the servicing
responsibilities hereunder or sell or otherwise dispose of all or substantially
all of its property or assets, without the prior written consent of the
Purchaser, then the Purchaser shall have the right to terminate this Agreement
upon notice given as set forth in Section 10.01, without any payment of any
penalty or damages and without any liability whatsoever to the Company or any
third party.
ARTICLE IX
SECURITIZATION TRANSACTION
Section 9.01 Securitization Transactions; Whole Loan Transfers and Agency
Sales
The Purchaser and the Company agree that with respect to some or all of
the Mortgage Loans, the Purchaser, at its sole option, may effect Whole Loan
Transfers, Agency Sales or
54 XXXXX FARGO RESTRICTED
Securitization Transactions, retaining the Company as the servicer thereof or
subservicer if a master servicer is employed, or as applicable the
"seller/servicer." In the event that any Mortgage Loan transferred pursuant to
this Section 9.01 is rejected by the transferee, the Company shall continue to
service such rejected Mortgage Loan on behalf of the Purchaser in accordance
with the terms and provisions of this Agreement.
The Company shall cooperate with the Purchaser in connection with each
Whole Loan Transfer, Agency Sale or Securitization Transaction in accordance
with this Section 9.01. In connection therewith:
(a) the Company shall make all representations and warranties with
respect to the Mortgage Loans as of the Closing Date and with
respect to the Company itself as of the closing date of each
Whole Loan Transfer, Agency Sale or Securitization
Transaction;
(b) the Company shall negotiate in good faith and execute any
seller/servicer agreements or pooling and servicing agreements
required to effectuate the foregoing provided such agreements
create no greater obligation or cost on the part of the
Company than otherwise set forth in this Agreement;
(c) the Company shall provide such additional representations,
warranties, covenants, opinions of counsel, or certificates
of officers of the Company as are reasonably believed
necessary by the trustee, any Rating Agency or the
Purchaser, as the case may be, in connection with such Whole
Loan Transfers, Agency Sales or Securitization Transactions.
The Purchaser shall pay all third party costs associated
with the preparation of such information. The Company shall
execute any seller/servicer agreements required within a
reasonable period of time after receipt of such
seller/servicer agreements which time shall be sufficient
for the Company and Company's counsel to review such
seller/servicer agreements. Under this Agreement, the
Company shall retain a Servicing Fee for each Mortgage Loan
at the Servicing Fee Rate;
(d) in connection with any Securitization Transaction, the Company
shall (1) within five (5) Business Days following request by
the Purchaser or any Depositor, provide to the Purchaser and
such Depositor (or, as applicable, cause each Third-Party
Originator and each Subservicer to provide), in writing and in
form and substance reasonably satisfactory to the Purchaser
and such Depositor, the information and materials specified in
paragraphs (i), (ii), (iii) (vii) and (viii) of this
subsection (d), and (2) as promptly as practicable following
notice to or discovery by the Company, provide to the
Purchaser and any Depositor (in writing and in form and
substance reasonably satisfactory to the Purchaser and such
Depositor) the information specified in paragraph (iv) of this
subsection (d).
(i) if so requested by the Purchaser or any Depositor,
the Company shall provide such information regarding
(1) the Company, as originator of the Mortgage Loans
(including as an acquirer of Mortgage Loans from a
Qualified Correspondent), or (2) each Third-Party
Originator, and (3) as
55 XXXXX FARGO RESTRICTED
applicable, each Subservicer, as is requested for the
purpose of compliance with Items 1103(a)(1), 1105,
1110, 1117 and 1119 of Regulation AB. Such
information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origina-
tion program and how long the originator has
been engaged in originating residential
mortgage loans, which description shall
include a discussion of the originator's
experience in originating mortgage loans of
a similar type as the Mortgage Loans;
information regarding the size and
composition of the originator's origination
portfolio; and information that may be
material, in the good faith judgment of the
Purchaser, to an analysis of the performance
of the Mortgage Loans, including the
originators' credit-granting or underwriting
criteria for mortgage loans of similar
type(s) as the Mortgage Loans and such other
information as the Purchaser or any
Depositor may reasonably request for the
purpose of compliance with Item 1110(b)(2)
of Regulation AB;
(C) a description of any material legal or
governmental proceedings pending (or known
to be contemplated) against the Company,
each Third-Party Originator and each
Subservicer; and
(D) a description of any affiliation or
relationship (of a type described in Item
1119 of Regulation AB) between the Company,
each Third-Party Originator, each
Subservicer and any of the following parties
to a Securitization Transaction, as such
parties are identified to the Company by the
Purchaser or any Depositor in writing in
advance of a Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(ii) If so requested by the Purchaser or any Depositor,
the Company shall provide (or, as applicable, cause
each Third-Party Originator to provide) Static Pool
Information with respect to the mortgage loans (of a
similar type as the Mortgage Loans, as reasonably
identified by the Purchaser as provided below)
originated by (1) the Company, if the Company is an
56 XXXXX FARGO RESTRICTED
originator of Mortgage Loans (including as an
acquirer of Mortgage Loans from a Qualified
Correspondent), and/or (2) each Third-Party
Originator. Such Static Pool Information shall be
prepared by the Company (or Third-Party Originator)
on the basis of its reasonable, good faith
interpretation of the requirements of Item
1105(a)(1)-(3) of Regulation AB. To the extent that
there is reasonably available to the Company (or
Third-Party Originator) Static Pool Information with
respect to more than one mortgage loan type, the
Purchaser or any Depositor shall be entitled to
specify whether some or all of such information shall
be provided pursuant to this paragraph. The content
of such Static Pool Information may be in the form
customarily provided by the Company, and need not be
customized for the Purchaser or any Depositor. Such
Static Pool Information for each vintage origination
year or prior securitized pool, as applicable, shall
be presented in increments no less frequently than
quarterly over the life of the mortgage loans
included in the vintage origination year or prior
securitized pool. The most recent periodic increment
must be as of a date no later than 135 days prior to
the date of the prospectus or other offering document
in which the Static Pool Information is to be
included or incorporated by reference. The Static
Pool Information shall be provided in an electronic
format that provides a permanent record of the
information provided, such as a portable document
format (pdf) file, or other such electronic format
reasonably required by the Purchaser or the
Depositor, as applicable.
Promptly following notice or discovery of a material
error in Static Pool Information provided pursuant to
the immediately preceding paragraph (including an
omission to include therein information required to
be provided pursuant to such paragraph), the Company
shall provide corrected Static Pool Information to
the Purchaser or any Depositor, as applicable, in the
same format in which Static Pool Information was
previously provided to such party by the Company.
If so requested by the Purchaser or any Depositor,
the Company shall provide (or, as applicable, cause
each Third-Party Originator to provide), at the
expense of the requesting party (to the extent of any
additional incremental expense associated with
delivery pursuant to this Agreement), such statements
and agreed-upon procedures letters of certified
public accountants reasonably acceptable to the
Purchaser or Depositor, as applicable, pertaining to
Static Pool Information relating to prior securitized
pools for securitizations closed on or after January
1, 2006 or, in the case of Static Pool Information
with respect to the Company's or Third-Party
Originator's originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser
or such Depositor shall reasonably request. Such
statements and letters shall be addressed to and be
for the benefit of such parties as the Purchaser or
such Depositor shall designate, which may include, by
way of example, any sponsor, any
57 XXXXX FARGO RESTRICTED
Depositor and any broker dealer acting as
underwriter, placement agent or initial purchaser
with respect to a Securitization Transaction. Any
such statement or letter may take the form of a
standard, generally applicable document accompanied
by a reliance letter authorizing reliance by the
addressees designated by the Purchaser or such
Depositor.
(iii) If so requested by the Purchaser or any Depositor,
the Company shall provide such information regarding
the Company, as servicer of the Mortgage Loans, and
each Subservicer (each of the Company and each
Subservicer, for purposes of this paragraph, a
"Servicer"), as is requested for the purpose of
compliance with Items 1108, 1117 and 1119 of
Regulation AB. Such information shall include, at a
minimum:
(A) the Servicer's form of organization;
(B) a description of how long the Servicer has
been servicing residential mortgage loans; a
general discussion of the Servicer's
experience in servicing assets of any type
as well as a more detailed discussion of the
Servicer's experience in, and procedures
for, the servicing function it will perform
under this Agreement and any Reconstitution
Agreements; information regarding the size,
composition and growth of the Servicer's
portfolio of residential mortgage loans of a
type similar to the Mortgage Loans and
information on factors related to the
Servicer that may be material, in the good
faith judgment of the Purchaser or any
Depositor, to any analysis of the servicing
of the Mortgage Loans or the related
asset-backed securities, as applicable,
including, without limitation:
(1) whether any prior securitizations of
mortgage loans of a type similar to
the Mortgage Loans involving the
Servicer have defaulted or
experienced an early amortization or
other performance triggering event
because of servicing during the
three (3) year period immediately
preceding the related Securitization
Transaction;
(2) the extent of outsourcing the
Servicer utilizes;
(3) whether there has been previous
disclosure of material noncompliance
with the applicable servicing
criteria with respect to other
securitizations of residential
mortgage loans involving the
Servicer as a servicer during the
three (3) year period immediately
preceding the related Securitization
Transaction;
58 XXXXX FARGO RESTRICTED
(4) whether the Servicer has been
terminated as servicer in a
residential mortgage loan
securitization, either due to a
servicing default or to application
of a servicing performance test or
trigger; and
(5) such other information as the
Purchaser or any Depositor may
reasonably request for the purpose
of compliance with Item 1108(b)(2)
of Regulation AB.
(C) a description of any material changes during
the three (3) year period immediately
preceding the related Securitization
Transaction to the Servicer's policies or
procedures with respect to the servicing
function it will perform under this
Agreement and any Reconstitution Agreements
for mortgage loans of a type similar to the
Mortgage Loans;
(D) information regarding the Servicer's
financial condition, to the extent that
there is a material risk that an adverse
financial event or circumstance involving
the Servicer could have a material adverse
effect on the performance by the Company of
its servicing obligations under this
Agreement or any Reconstitution Agreement;
(E) information regarding advances made by the
Servicer on the Mortgage Loans and the
Servicer's overall servicing portfolio of
residential mortgage loans for the three (3)
year period immediately preceding the
related Securitization Transaction, which
may be limited to a statement by an
authorized officer of the Servicer to the
effect that the Servicer has made all
advances required to be made on residential
mortgage loans serviced by it during such
period, or, if such statement would not be
accurate, information regarding the
percentage and type of advances not made as
required, and the reasons for such failure
to advance;
(F) a description of the Servicer's processes
and procedures designed to address any
special or unique factors involved in
servicing loans of a similar type as the
Mortgage Loans;
(G) a description of the Servicer's processes
for handling delinquencies, losses,
bankruptcies and recoveries, such as through
liquidation of mortgaged properties, sale of
defaulted mortgage loans or workouts;
(H) information as to how the Servicer defines
or determines delinquencies and charge-offs,
including the effect of any grace
59 XXXXX FARGO RESTRICTED
period, re-aging, restructuring, partial
payments considered current or other
practices with respect to delinquency and
loss experience;
(I) a description of any material legal or
governmental proceedings pending (or known
to be contemplated) against the Servicer;
and
(J) a description of any affiliation or
relationship between the Servicer and any of
the following parties to a Securitization
Transaction, as such parties are identified
to the Servicer by the Purchaser or any
Depositor in writing in advance of such
Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider;
and
(9) any other material transaction party.
(iv) For the purpose of satisfying the reporting obliga-
tion under the Exchange Act with respect to any class
of asset-backed securities, the Company shall (or
shall cause each Subservicer and Third-Party
Originator to) (1) provide prompt notice to the
Purchaser, any Master Servicer and any Depositor in
writing of (A) any material litigation or
governmental proceedings involving the Company, any
Subservicer or any Third-Party Originator and (B) any
affiliations or relationships that develop following
the closing date of a Securitization Transaction
between the Company, any Subservicer or any
Third-Party Originator and any of the parties
specified in Section 9.01(d)(i)(D) (and any other
parties identified in writing by the requesting
party) with respect to such Securitization
Transaction, (C) any Event of Default under the terms
of this Agreement or any Reconstitution Agreement,
(D) any merger, consolidation or sale of
substantially all of the assets of the Company, and
(E) the Company's entry into an agreement with a
Subservicer to perform or assist in the performance
of any of the Company's obligations under this
Agreement or any Reconstitution Agreement and (2)
provide to the Purchaser and any Depositor a
description of such proceedings, affiliations or
relationships.
All notification pursuant to this Section 9.01(e)(iv), other
than those pursuant to Section 9.01(e)(iv)(A), should be sent
to:
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
60 XXXXX FARGO RESTRICTED
Attention: Conduit Seller Approval Dept.
Facsimile: (000) 000-0000
Email: xxxxxxxxxxxxxx@xxxx.xxx
With a copy to:
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Global Credit Administration
Facsimile: (000) 000-0000
Notifications pursuant to Section 9.01(e)(iv)(A)
should be sent to:
EMC Mortgage Corporation
Two Mac Xxxxxx Xxxxx
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Associate General Counsel for
Loan Administration
Facsimile: (000) 000-0000
With copies to:
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Global Credit Administration
Facsimile: (000) 000-0000
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Conduit Seller Approval Dept.
Facsimile: (000) 000-0000
Email: xxxxxxxxxxxxxx@xxxx.xxx
(v) As a condition to the succession to the Company or
any Subservicer as servicer or Subservicer under this
Agreement or any Reconstitution Agreement by any
Person (i) into which the Company or such Subservicer
may be merged or consolidated, or (ii) which may be
appointed as a successor to the Company or any
Subservicer, the Company shall provide to the
Purchaser, any Master Servicer and any Depositor, at
least fifteen (15) calendar days prior to the
effective date of such succession or appointment, (x)
written notice to the Purchaser and any Depositor of
such succession or appointment and (y) in writing and
in form and substance
61 XXXXX FARGO RESTRICTED
reasonably satisfactory to the Purchaser and such
Depositor, all information reasonably requested by
the Purchaser or any Depositor in order to comply
with is reporting obligation under Item 6.02 of Form
8-K with respect to any class of asset-backed
securities.
(vi) (A) The Company shall be deemed to represent
to the Purchaser, to any Master Servicer and
to any Depositor, as of the date on which
information is first provided to the
Purchaser, any Master Servicer or any
Depositor under this Section 9.01(d) that,
except as disclosed in writing to the
Purchaser, such Master Servicer or such
Depositor prior to such date: (1) the Company
is not aware and has not received notice that
any default, early amortization or other
performance triggering event has occurred as
to any other securitization due to any act or
failure to act of the Company; (2) the Company
has not been terminated as servicer in a
residential mortgage loan securitization,
either due to a servicing default or to
application of a servicing performance test or
trigger; (3) no material noncompliance with
the applicable servicing criteria with respect
to other securitizations of residential
mortgage loans involving the Company as
servicer has been disclosed or reported by the
Company; (4) no material changes to the
Company's policies or procedures with respect
to the servicing function it will perform
under this Agreement and any Reconstitution
Agreement for mortgage loans of a type similar
to the Mortgage Loans have occurred during the
three (3) year period immediately preceding
the related Securitization Transaction; (5)
there are no aspects of the Company's
financial condition that could have a material
adverse effect on the performance by the
Company of its servicing obligations under
this Agreement or any Reconstitution
Agreement; (6) there are no material legal or
governmental proceedings pending (or known to
be contemplated) against the Company, any
Subservicer or any Third-Party Originator; and
(7) there are no affiliations, relationships
or transactions relating to the Company, any
Subservicer or any Third-Party Originator with
respect to any Securitization Transaction and
any party thereto identified by the related
Depositor of a type described in Item 1119 of
Regulation AB.
(B) If so requested by the Purchaser, any Master
Servicer or any Depositor on any date
following the date on which information is
first provided to the Purchaser, any Master
Servicer or any Depositor under this Section
9.01(d), the Company shall, within five (5)
Business Days following such request,
confirm in writing the accuracy of the
representations and warranties set forth in
sub clause (A) above or, if any such
representation and warranty is not accurate
as of the date of such request, provide
reasonably
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adequate disclosure of the pertinent facts, in
writing, to the requesting party.
(vii) In addition to such information as the Company, as
servicer, is obligated to provide pursuant to other
provisions of this Agreement, not later than ten (10)
days prior to the deadline for the filing of any
distribution report on Form 10-D in respect of any
Securitization Transaction that includes any of the
Mortgage Loans serviced by the Company or any
Subservicer, the Company or such Subservicer, as
applicable, shall, to the extent the Company or such
Subservicer has knowledge, provide to the party
responsible for filing such report (including, if
applicable, the Master Servicer) notice of the
occurrence of any of the following events along with
all information, data, and materials related thereto
as may be required to be included in the related
distribution report on Form 10-D (as specified in the
provisions of Regulation AB referenced below):
(i) any material modifications, extensions or waivers
of pool asset terms, fees, penalties or payments
during the distribution period or that have
cumulatively become material over time (Item
1121(a)(11) of Regulation AB);
(ii) material breaches of pool asset representations
or warranties or transaction covenants (Item
1121(a)(12) of Regulation AB); and
(iii) information regarding new asset-backed
securities issuances backed by the same pool assets,
any pool asset changes (such as, additions,
substitutions or repurchases), and any material
changes in origination, underwriting or other
criteria for acquisition or selection of pool assets
(Item 1121(a)(14) of Regulation AB).
(viii) The Company shall provide to the Purchaser, any
Master Servicer and any Depositor, evidence of the
authorization of the person signing any certification
or statement, copies or other evidence of Fidelity
Bond Insurance and Errors and Omission Insurance
policy, financial information and reports, and such
other information related to the Company or any
Subservicer or the Company or such Subservicer's
performance hereunder.
(e) the Company shall indemnify the Purchaser, each affiliate of
the Purchaser, and each of the following parties participating
in a Securitization Transaction; each sponsor and issuing
entity; each Person (including, but not limited to, any Master
Servicer if applicable) responsible for the preparation,
execution or filing of any report required to be filed with
the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with
respect to such Securitization Transaction; each broker dealer
acting as underwriter, placement
63 XXXXX FARGO RESTRICTED
agent or initial purchaser, each Person who controls any of
such parties or the Depositor (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act);
and the respective present and former directors, officers,
employees, agents and affiliates of each of the foregoing and
of the Depositor (each, an "Indemnified Party"), and shall
hold each of them harmless from and against any claims,
losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs,
fees and expenses that any of them may sustain arising out of
or based upon:
(i) (A) any untrue statement of a material fact
contained or alleged to be contained in any
information, report, certification, data,
accountants' letter or other material provided in
written or electronic form under Sections 4.24, 6.04,
6.06, or 9.01 by or on behalf of the Company, or
provided under Sections 4.24, 6.04, 6.06, or 9.01 by
or on behalf of any Subservicer, Subcontractor or
Third-Party Originator (collectively, the "Company
Information"), or (B) the omission or alleged
omission to state in the Company Information a
material fact required to be stated in the Company
Information or necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading; provided,
by way of clarification, that clause (B) of this
paragraph shall be construed solely by reference to
the Company Information and not to any other
information communicated in connection with a sale or
purchase of securities, without regard to whether the
Company Information or any portion thereof is
presented together with or separately from such other
information;
(ii) any breach by the Company of its obligations under
Sections 4.24, 6.04, 6.06, 6.07 or 9.01, including
particularly any failure by the Company, any
Subservicer, any Subcontractor or any Third-Party
Originator to deliver any information, report,
certification, accountants' letter or other material
when and as required under Sections 4.24, 6.04, 6.06
or 9.01, including any failure by the Company to
identify pursuant to Sections 4.24, 6.04, 6.06 or
9.01 any Subcontractor "participating in the
servicing function" within the meaning of Item 1122
of Regulation AB;
(iii) any breach by the Company of a representation or
warranty set forth in Section 9.01(d)(iv)(A) or in a
writing furnished pursuant to Section 9.01(d)(iv)(B)
and made as of a date prior to the closing date of
the related Securitization Transaction, to the extent
that such breach is not cured by such closing date,
or any breach by the Company of a representation or
warranty in a writing furnished pursuant to Section
9.01(d)(iv)(B) to the extent made as of a date
subsequent to such closing date; or
(iv) the negligence, bad faith or willful misconduct of
the Company in connection with its performance under
Sections 4.24, 6.04, 6.06, 6.07 or 9.01.
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If the indemnification provided for herein is unavailable or
insufficient to hold harmless an Indemnified Party, then the
Company agrees that it shall contribute to the amount paid or
payable by such Indemnified Party as a result of any claims,
losses, damages or liabilities incurred by such Indemnified
Party in such proportion as is appropriate to reflect the
relative fault of such Indemnified Party on the one hand and
the Company on the other.
In the case of any failure of performance described in
sub-clause (ii) of this Section 9.01(e), the Company shall
promptly reimburse the Purchaser, any Depositor, as
applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with
the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to
Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with
respect to such Securitization Transaction, for all costs
reasonably incurred by each such party in order to obtain the
information, report, certification, accountants' letter or
other material not delivered as required by the Company, any
Subservicer, any Subcontractor or any Third-Party Originator.
This indemnification shall survive the termination of this
Agreement or the termination of any party to this Agreement.
(f) the Purchaser and a credit-worthy parent of the Purchaser,
reasonably acceptable to the Company, shall indemnify the
Company, each affiliate of the Company, each Person who
controls any of such parties or the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act) and the respective present and former
directors, officers, employees and agents of each of the
foregoing and of the Company, and shall hold each of them
harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs,
judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(i) any untrue statement of a material fact contained or
alleged to be contained in any offering materials
related to a Securitization Transaction, including
without limitation the registration statement,
prospectus, prospectus supplement, any private
placement memorandum, any offering circular, any
freewriting prospectuses, any ABS informational and
computational material, any computational materials,
and any amendments or supplements to the foregoing
(collectively, the "Securitization Materials") or
(ii) the omission or alleged omission to state in the
Securitization Materials a material fact required to
be stated in the Securitization Materials or
necessary in order to make the statements therein, in
the light of the circumstances under which they were
made, not misleading,
65 XXXXX FARGO RESTRICTED
but only to the extent that such untrue statement or alleged
untrue statement or omission or alleged omission is other than
a statement or omission arising out of, resulting from, or
based upon the Company Information.
This indemnification shall survive the termination of this
Agreement or the termination of any party to this Agreement
The Purchaser and the Company acknowledge and agree that the purpose of
Sections 4.24, 6.04, 6.06, 6.07 and 9.01 is to facilitate compliance by the
Purchaser and any Depositor with the provisions of Regulation AB and related
rules and regulations of the Commission. Although Regulation AB is applicable by
its terms only to offerings of asset-backed securities that are registered under
the Securities Act, the Company acknowledges that investors in privately offered
securities may require that the Purchaser or any Depositor provide comparable
disclosure in unregistered offerings. References in this Agreement to compliance
with Regulation AB include provision of comparable disclosure in private
offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder (or the provision in a private offering of disclosure comparable to
that required under the Securities Act). The Company acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Purchaser
any Master Servicer or any Depositor in good faith for delivery of information
under these provisions on the basis of evolving interpretations of Regulation
AB. In connection with any Securitization Transaction, the Company shall
cooperate fully with the Purchaser and any Master Servicer to deliver to the
Purchaser (including any of its assignees or designees), any Master Servicer and
any Depositor, any and all statements, reports, certifications, records and any
other information necessary in the good faith determination of the Purchaser,
the Master Servicer or any Depositor to permit the Purchaser, such Master
Servicer or such Depositor to comply with the provisions of Regulation AB,
together with such disclosures relating to the Company, any Subservicer, any
Third-Party Originator and the Mortgage Loans, or the servicing of the Mortgage
Loans, reasonably believed by the Purchaser or any Depositor to be necessary in
order to effect such compliance.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Company by providing timely notice of requests for
information under these provisions and by reasonably limiting such requests to
information required, in the Purchaser's reasonable judgment, to comply with
Regulation AB.
In the event the Purchaser has elected to have the Company hold record
title to the Mortgages, prior to the Reconstitution Date the Company shall
prepare an Assignment of Mortgage in blank or to the trustee or to the
subsequent purchaser from the Company acceptable to the trustee or subsequent
purchaser for each Mortgage Loan that is part of the Whole Loan Transfers,
Agency Sale or Securitization Transactions. The Purchaser shall pay all
preparation
66 XXXXX FARGO RESTRICTED
and recording costs associated therewith. The Company shall execute each
Assignment, track such Assignments of Mortgage to ensure they have been recorded
and deliver them as required by the trustee or subsequent purchaser upon the
Company's receipt thereof. Additionally, the Company shall prepare and execute,
at the direction of the Purchaser, any note endorsements in connection with any
and all seller/servicer agreements.
Notwithstanding any provisions of this Agreement to the contrary, all
Mortgage Loans sold or transferred to an Agency, shall be serviced in accordance
with the guidelines of the respective Agency. All Mortgage Loans (i) not sold or
transferred pursuant to Whole Loan Transfers, Agency Sales or Securitization
Transactions or (ii) that are subject to a Securitization Transaction for which
the related trust is terminated for any reason, shall remain subject to this
Agreement and shall continue to be serviced in accordance with the terms of this
Agreement and with respect thereto this Agreement shall remain in full force and
effect.
ARTICLE X
DEFAULT
Section 10.01 Events of Default.
Each of the following shall constitute an Event of Default on the part
of the Company:
(i) any failure by the Company to remit to the Purchaser any
payment required to be made under the terms of this Agreement
which continues unremedied for a period of five (5) days after
the date upon which written notice of such failure, requiring
the same to be remedied, shall have been given to the Company
by the Purchaser; or
(ii) failure by the Company duly to observe or perform in any
material respect any other of the covenants or agreements on
the part of the Company set forth in this Agreement which
continues unremedied for a period of sixty (60) days after the
date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Company by
the Purchaser or by the Custodian; or
(iii) failure by the Company to maintain its license to do business
in any jurisdiction where the Mortgaged Property is located if
such license is required; or
(iv) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, including bankruptcy, marshaling of
assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been
entered against the Company and such degree or order shall
have remained in force undischarged or unstayed for a period
of sixty (60) days; or
67 XXXXX FARGO RESTRICTED
(v) the Company shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Company or of or relating to
all or substantially all of its property; or
(vi) the Company shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take
advantage of any applicable insolvency, 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 (3) Business
Days;
(vii) the Company ceases to meet the qualifications of an Agency
servicer; or
(viii) the Company attempts to assign its right to servicing
compensation hereunder or to assign this Agreement or the
servicing responsibilities hereunder in violation of Section
8.04; or
(ix) an Event of Default as set forth in Section 6.07.
In each and every such case, so long as an Event of Default shall not
have been remedied, in addition to whatever rights the Purchaser may have at law
or equity to damages, including injunctive relief and specific performance, the
Purchaser, by notice in writing to the Company, may terminate all the rights and
obligations of the Company under this Agreement and in and to the Mortgage Loans
and the proceeds thereof.
Upon receipt by the Company of such written notice, all authority and
power of the Company under this Agreement, whether with respect to the Mortgage
Loans or otherwise, shall pass to and be vested in the successor appointed
pursuant to Section 12.01. Upon written request from any Purchaser, the Company
shall prepare, execute and deliver to the successor entity designated by the
Purchaser any and all documents and other instruments, place in such successor's
possession all Mortgage 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 Company's sole
expense. The Company shall cooperate with the Purchaser and such successor in
effecting the termination of the Company's responsibilities and rights
hereunder, including without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Company to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans.
If the Company is terminated pursuant to this Section 10.01, the
Company shall promptly reimburse the Purchaser (or any designee of the
Purchaser, such as a master servicer) and any Depositor, as applicable, for all
reasonable expenses incurrent by the Purchaser (or such designee) or such
Depositor, as such are incurred, in connection with the termination of the
Company as servicer and the transfer of servicing of the Mortgage Loans to a
successor servicer. The provisions of this paragraph shall not limit whatever
rights the Purchaser or any Depositor may have under other provisions of this
Agreement and/or any applicable Reconstitution
68 XXXXX FARGO RESTRICTED
Agreement or otherwise, whether in equity or at law, such as an action for
damages, specific performance or injunctive relief.
Section 10.02 Waiver of Defaults.
By a written notice, the Purchaser may waive any default by the Company
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.
ARTICLE XI
TERMINATION
Section 11.01 Termination.
This Agreement shall terminate upon either: (i) the later of the final
payment or other liquidation (or any advance with respect thereto) of the last
Mortgage Loan or the disposition of any REO Property with respect to the last
Mortgage Loan and the remittance of all funds due hereunder; or (ii) mutual
consent of the Company and the Purchaser in writing.
Section 11.02 Termination Without Cause.
The Purchaser may terminate, at its sole option, any rights the Company
may have hereunder, without cause as provided in this Section 11.02. Any such
notice of termination shall be in writing and delivered to the Company by
registered mail as provided in Section 12.05.
The Company shall be entitled to receive, as such liquidated damages,
upon the transfer of the servicing rights, an amount equal to: (i) 2.75% of the
aggregate outstanding principal amount of the Mortgage Loans as of the
termination date paid by the Purchaser to the Company with respect to all of the
Mortgage Loans for which a servicing fee rate of 0.250% is paid per annum, (ii)
3.25% of the aggregate outstanding principal amount of the Mortgage Loans as of
the termination date paid by the Purchaser to the Company with respect to all of
the Mortgage Loans for which a servicing fee rate of .375% is paid per annum,
and (iii) 3.75% of the aggregate outstanding principal amount of the Mortgage
Loans as of the termination date paid by the Purchaser to the Company with
respect to all of the Mortgage Loans for which a servicing fee rate of 0.44% or
more is paid per annum.
ARTICLE XII
MISCELLANEOUS PROVISIONS
69 XXXXX FARGO RESTRICTED
Section 12.01 Successor to Company.
Prior to termination of the Company's responsibilities and duties under
this Agreement pursuant to Sections 8.04, 10.01, 11.01 (ii) or 11.02, the
Purchaser shall, (i) succeed to and assume all of the Company's
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor having the characteristics set forth in Section 8.02 and
which shall succeed to all rights and assume all of the responsibilities, duties
and liabilities of the Company under this Agreement prior to the termination of
Company's responsibilities, duties and liabilities under this Agreement. In
connection with such appointment and assumption, the Purchaser may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree. In the event that the Company's
duties, responsibilities and liabilities under this Agreement should be
terminated pursuant to the aforementioned sections, the Company 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 Company pursuant to the aforementioned sections shall not become
effective until a successor shall be appointed pursuant to this Section 12.01
and shall in no event relieve the Company of the representations and warranties
made pursuant to Sections 3.01 and 3.02 and the remedies available to the
Purchaser under Section 3.03, it being understood and agreed that the provisions
of such Sections 3.01, 3.02, and 3.03 shall be applicable to the Company
notwithstanding any such sale, assignment, resignation or termination of the
Company, or the termination of this Agreement.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Company and to the Purchaser an instrument accepting such
appointment, wherein the successor shall make the representations and warranties
set forth in Section 3.01, except for the portion of subsection (h) relating to
sale of the mortgage loans and all of subsections (j) and (l) thereof, whereupon
such successor shall become fully vested with all the rights, powers, duties,
responsibilities, obligations and liabilities of the Company, with like effect
as if originally named as a party to this Agreement. Any termination or
resignation of the Company or termination of this Agreement pursuant to Section
8.04, 10.01, 11.01 or 11.02 shall not affect any claims that any Purchaser may
have against the Company arising out of the Company's actions or failure to act
prior to any such termination or resignation.
The Company shall deliver promptly to the successor servicer the funds
in the Custodial Account and Escrow Account and all Mortgage Files and related
documents and statements held by it hereunder and the Company 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 Company.
Upon a successor's acceptance of appointment as such, the Company shall
notify by mail the Purchaser of such appointment in accordance with the
procedures set forth in Section 12.05.
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Section 12.02 Amendment.
This Agreement may be amended from time to time by written agreement
signed by the Company and the Purchaser.
Section 12.03 Governing Law.
This Agreement shall be 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.
Each of the Company and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury in
respect or any litigation based on, or arising out of, under, or in connection
with, this Agreement, or any other documents and instruments executed in
connection herewith, or any course of conduct, course of dealing, statements
(whether oral or written), or actions of the Company or the Purchaser. This
provision is a material inducement for the Purchaser to enter into this
Agreement
Section 12.04 Duration of Agreement.
This Agreement shall continue in existence and effect until terminated
as herein provided. This Agreement shall continue notwithstanding transfers of
the Mortgage Loans by the Purchaser.
Section 12.05 Notices.
All demands, notices and communications hereunder shall be in writing
and shall be deemed to have been duly given if personally delivered at or mailed
by registered mail, postage prepaid, addressed as follows:
(i) if to the Company with respect to servicing and investor
reporting issues:
Xxxxx Fargo Bank, N.A.
1 Home Xxxxxx
Xxx Xxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, MAC X2302-033
Fax: 515/000-0000
71 XXXXX FARGO RESTRICTED
If to the Company with respect to all other issues:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
Attention: Structured Finance Manager, MAC X3906-012
Fax: 301/000-0000
In each instance with a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel MAC X2401-06T
or such other address as may hereafter be furnished to the
Purchaser in writing by the Company;
(ii) if to Purchaser:
EMC Mortgage Corporation
Mac Xxxxxx Xxxxx XX
000 Xxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxx, President
Section 12.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be held invalid for any reason whatsoever, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement.
Section 12.07 Relationship of Parties.
Nothing herein contained shall be deemed or construed to create a
partnership or joint venture between the parties hereto and the services of the
Company shall be rendered as an independent contractor and not as agent for the
Purchaser.
Section 12.08 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an
72 XXXXX FARGO RESTRICTED
original; such counterparts, together, shall constitute one and the same
agreement. Subject to Section 8.04, this Agreement shall inure to the benefit of
and be binding upon the Company and the Purchaser and their respective
successors and assigns. The parties agree that this Agreement and signature
pages thereof may be transmitted between them by facsimile and that faxed
signatures may constitute original signatures and that a faxed signature page
containing the signature (faxed or original) is binding on the parties.
Section 12.09 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected at the Company's expense in the event recordation is either necessary
under applicable law or requested by the Purchaser at its sole option. The
company shall only be responsible for the costs of recording the initial
Assignments of Mortgage. In no event shall the Company be responsible for the
cost of recording Assignments of Mortgage in connection with a subsequent sale
or transfer of the Mortgage Loans by the Purchaser.
Section 12.10 Assignment by Purchaser.
The Purchaser shall have the right, without the consent of the Company
but subject to the limit set forth in Section 2.02 hereof, to assign, in whole
or in part, its interest under this Agreement with respect to some or all of the
Mortgage Loans, and designate any person to exercise any rights of the Purchaser
hereunder, by executing an Assignment, Assumption and Recognition Agreement and
the assignee or designee shall accede to the rights and obligations hereunder of
the Purchaser with respect to such Mortgage Loans. All references to the
Purchaser in this Agreement shall be deemed to include its assignee or designee.
Section 12.11 Solicitation of Mortgagor.
Neither party shall, after the Closing Date, take any action to solicit
the refinancing of any Mortgage Loan. It is understood and agreed that neither
(i) promotions undertaken by either party or any affiliate which are directed to
the general public at large, including, without limitation, mass mailings based
upon commercially acquired mailing lists, newspaper, radio, television
advertisements nor (ii) serving the refinancing needs of a Mortgagor who,
without solicitation, contacts either party in connection with the refinance of
such Mortgage or Mortgage Loan, shall constitute solicitation under this
Section.
Section 12.12 Third-Party Beneficiary.
Each Master Servicer shall be considered a third-party beneficiary of
this Agreement, entitled to all the rights and benefits hereof as if it were a
direct party to this Agreement.
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[Intentionally Blank - Next Page Signature Page]
74
IN WITNESS WHEREOF, the Company and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the day and year first above written.
EMC MORTGAGE CORPORATION XXXXX FARGO BANK, N.A.
PURCHASER COMPANY
By:_________________________________ By:______________________________
Name:_______________________________ Name:____________________________
Title:______________________________ Title:___________________________
75 XXXXX FARGO RESTRICTED
STATE OF )
) ss:
COUNTY OF ___________ )
On the _____ day of _______________, 20___ before me, a Notary Public
in and for said State, personally appeared _________________________, known to
me to be _______________________ of Xxxxx Fargo Bank, N.A., the national banking
association that executed the within instrument and also known to me to be the
person who executed it on behalf of said bank, and acknowledged to me that such
bank executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand affixed my office seal
the day and year in this certificate first above written.
_______________________________________
Notary Public
My Commission expires__________________
76 XXXXX FARGO RESTRICTED
STATE OF )
) ss:
COUNTY OF _________________)
On the _____ day of _______________, 20___ before me, a Notary Public
in and for said State, personally appeared ______________________________, known
to me to be the ______________________________ of EMC Mortgage Corporation, the
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 affixed my office seal
the day and year in this certificate first above written.
_______________________________________
Notary Public
My Commission expires__________________
77 XXXXX FARGO RESTRICTED
EXHIBIT A
MORTGAGE LOAN SCHEDULE
EXHIBIT B
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be retained by the
Company in the Servicing File or delivered to the Custodian pursuant to Sections
2.01 and 2.03 of the Seller's Warranties and the Servicing Agreement to which
this Exhibit is attached (the "Agreement"):
1. The original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of without recourse"
and signed in the name of the Company by an authorized officer
(in the event that the Mortgage Loan was acquired by the
Company in a merger, the signature must be in the following
form: "[Company], successor by merger to [name of
predecessor]"; and in the event that the Mortgage Loan was
acquired or originated by the Company while doing business
under another name, the signature must be in the following
form: "[Company], formerly know as [previous name]").
2. The original of any guarantee executed in connection with the
Mortgage Note.
3. The recorded original related Mortgage pertaining to such
Mortgage Loan, together with any addenda and riders, or a copy
certified by Seller to be a true and correct copy of the
original recorded document, or if the related Mortgage is in
the process of being recorded, a photocopy of the related
Mortgage, certified by the Company or an officer of the
respective prior owner of such Mortgage Loan or by the
applicable title insurance company, closing/settlement/escrow
agent or company or closing attorney to be a true and correct
copy of the related Mortgage transmitted for recordation.
Provided, however, if the Purchaser requires a clerk certified
copy of the original recorded Mortgage, the Company shall
request such from the appropriate recording office and furnish
it to the Purchaser as soon a practicable and no event later
than 180 days of Purchaser's request;
4. The originals or certified true copies of any document sent
for recordation of all assumption, modification, consolidation
or extension agreements, with evidence of recording thereon.
5. Except for a MERS Mortgage Loan, the original Assignment of
Mortgage for each Mortgage Loan, in form and substance
acceptable for recording (except for the insertion of the name
of the assignee and recording information). The Assignment of
Mortgage must be duly recorded only if recordation is either
necessary under applicable law or commonly required by private
institutional mortgage investors in the area where the
Mortgaged Property is located or on direction of the
Purchaser. If the Assignment of Mortgage is to be recorded,
the Mortgage shall be assigned to the Purchaser. If the
Assignment of Mortgage is not to be recorded, the Assignment
of Mortgage shall be delivered in blank. If the Mortgage Loan
was acquired by the Company in a merger, the Assignment of
Mortgage must be made by "[Company], successor by merger to
[name of predecessor]." If the
Mortgage Loan was acquired or originated by the Company while
doing business under another name, the Assignment of Mortgage
must be by "[Company], formerly know as [previous name]."
Subject to the foregoing and where permitted under the
applicable laws of the jurisdiction wherein the Mortgaged
property is located, such Assignments of Mortgage may be made
by blanket assignments for Mortgage Loans secured by the
Mortgaged Properties located in the same county.
6. Except for a MERS Mortgage Loan, the recorded original, or a
copy certified by the Company to be a true and correct copy of
the original recorded, intervening Assignment of the Mortgage
as is necessary to show a complete chain of title from the
respective loan originator to the respective prior owner of
such Mortgage Loan or, if any such original is unavailable
because it is in the process of being recorded, a photocopy of
such intervening Assignment certified by the Company or an
officer of the prior owner of such Mortgage Loan to be a true
and correct copy of such intervening Assignment submitted for
recordation. Provided, however, if the Purchaser requires a
clerk certified copy of the original recorded intervening
Assignment, the Company shall request such from the
appropriate recording office and furnish it to the Purchaser
as soon a practicable and no event later than 180 days of
Purchaser's request;
7. The evidence of the issuance of the electronic MIC or LGC as
applicable, where required pursuant to the Agreement.
8. The original mortgagee policy of title insurance or other
evidence of title such as a copy of the title commitment or
copy of the preliminary title commitment.
9. Any security agreement, chattel mortgage or equivalent
executed in connection with the Mortgage.
With respect to each Mortgage Loan, the Servicing File shall include each of the
following items to the extent in the possession of the Company or in the
possession of the Company's agent(s):
10. The original hazard insurance policy and, if required by law,
flood insurance policy, in accordance with Section 4.10 of the
Agreement.
11. Residential loan application.
12. Mortgage Loan closing statement.
13. Verification of employment and income, unless originated under
the Company's Limited Documentation program, Xxxxxx Xxx
Timesaver Plus.
14. Verification of acceptable evidence of source and amount of
down payment.
2
15. Credit report on the Mortgagor.
16. Residential appraisal report.
17. Photograph of the Mortgaged Property.
18. Survey of the Mortgage property, if required by the title
company or applicable law.
19. Copy of each instrument necessary to complete identification
of any exception set forth in the exception schedule in the
title policy, i.e. map or plat, restrictions, easements, sewer
agreements, home association declarations, etc.
20. All required disclosure statements.
21. If available, termite report, structural engineer's report,
water potability and septic certification.
22. Sales contract, if applicable.
23. Evidence of payment of taxes and insurance premiums, insurance
claim files, correspondence, current and historical
computerized data files, and all other processing,
underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are
required to document the Mortgage Loan or to service the
Mortgage Loan.
24. Amortization schedule, if available.
25. Payment history for any Mortgage Loan that has been closed for
more than ninety (90) days.
26. Original power of attorney, if applicable.
In the event an Officer's Certificate of the Company is delivered to
the Custodian because of a delay caused by the public recording office in
returning any recorded document, the Company shall deliver to the Custodian,
within 240 days of the Closing Date, an Officer's Certificate which shall (i)
identify the recorded document, (ii) state that the recorded document has not
been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. The Company shall be required to deliver to the
Custodian the applicable recorded document by the date specified in (iv) above.
An extension of the date specified in (iv) above may be requested from the
Purchaser, which consent shall not be unreasonably withheld.
3
Notwithstanding paragraphs 1 and 6 above, the Purchaser acknowledges
that the Company may deliver (i) a Mortgage Note for which the chain of
endorsements is not identical to that of the intervening Assignments with
respect to such Mortgage Note, which shall not affect the enforceability of such
Mortgage Note, and/or (ii) intervening Assignments which are not identical to
the chain of endorsements with respect to such Mortgage Note, which shall not
affect the validity of such intervening Assignments; provided, however, that
such acknowledgment shall in no way operate to negate the Purchaser's remedies
for the Company's breach of the representations and warranties under this
Agreement.
4
EXHIBIT C
CUSTODIAL AGREEMENT
EXHIBIT D
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
____________, 20__
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated
___________________, 20____ between _________________, a _________________
corporation having an office at _________________ ("Assignor") and
_________________, having an office at _________________ ("Assignee"):
For and in consideration of the sum of one dollar ($1.00) and other
valuable consideration the receipt and sufficiency of which are hereby
acknowledge, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee all of
the right, title and interest of Assignor, as Purchaser, in, to and under that
certain Seller's Warranties and Servicing Agreement, (the "Seller's Warranties
and Servicing Agreement"), dated as of _________________, by and between
_________________ (the "Purchaser"), and _________________ (the "Company"), and
the Mortgage Loans delivered thereunder by the Company to the Assignor, and that
certain Custodial Agreement, (the "Custodial Agreement"), dated as of
_________________, by and among the Company, the Purchaser and _________________
(the "Custodian").
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice of, and has no
knowledge of, any offsets, counterclaims or other defenses available to the
Company with respect to the Seller's Warranties and Servicing Agreement or the
Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under,
or agreed to any amendment or other modification of, the Seller's Warranties and
Servicing Agreement, the Custodial Agreement or the Mortgage Loans, including
without limitation the transfer of the servicing obligations under the Seller's
Warranties and Servicing Agreement. The Assignor has no knowledge of, and has
not received notice of, any waivers under or amendments or other modifications
of, or assignments of rights or obligations under, the Seller's Warranties and
Servicing Agreement or the Mortgage Loans; and
d. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other disposition of
the Mortgage Loans, any interest in the Mortgage Loans or any other similar
security from, or otherwise approached or negotiated with respect to the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action which
would constitute a distribution of the Mortgage Loans under the Securities Act
of 1933 (the "33 Act") or which would render the disposition of the Mortgage
Loans a violation of Section 5 of the 33 Act or require registration pursuant
thereto.
3. That Assignee warrants and represent to, and covenants with, the
Assignor and the Company pursuant to Section 12.10 of the Seller's Warranties
and Servicing Agreement that:
a. The Assignee agrees to be bound, as Purchaser, by all of
the terms, covenants and conditions of the Seller's Warranties and Servicing
Agreement, the Mortgage Loans and the Custodial Agreement, and from and after
the date hereof, the Assignee assumes for the benefit of each of the Company and
the Assignor all of the Assignor's obligations as purchaser thereunder;
b. The Assignee understands that the Mortgage Loans have not
been registered under the 33 Act or the securities laws of any state;
c. The purchase price being paid by the Assignee for the
Mortgage Loans are in excess of $250,000.00 and will be paid by cash remittance
of the full purchase price within 60 days of the sale;
d. The Assignee is acquiring the Mortgage Loans for investment
for its own account only and not for any other person. In this connection,
neither the Assignee nor any person authorized to act therefor has offered to
Mortgage Loans by means of any general advertising or general solicitation
within the meaning of Rule 502(c) of US Securities and Exchange Commission
Regulation D, promulgated under the 1933 Act;
e. The Assignee considers itself a substantial sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
f. The Assignee has been furnished with all information
regarding the Mortgage Loans that it has requested from the Assignor or the
Company;
g. Neither the Assignee nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans,
any interest in the Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other disposition of
the Mortgage Loans, any interest in the Mortgage Loans or any other similar
security from, or otherwise approached or negotiated with respect to the
Mortgage Loans, any interest in the Mortgage Loans or any other similar security
with, any person in any manner which would constitute a distribution of the
Mortgage Loans under the 33 Act or which would render the disposition of the
Mortgage Loans a violation of Section 5 of the 33 Act or require registration
pursuant thereto, nor will it act, nor has it authorized or will it authorize
any person to act, in such manner with respect to the Mortgage Loans; and
h. Either (1) the Assignee is not an employee benefit plan
("Plan") within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and
the Assignee is not directly or indirectly purchasing the Mortgage Loans on
behalf of, investment manager of, as named fiduciary of, as Trustee of, or with
assets of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not
result in a prohibited transaction under section 406 of ERISA or section 4975 of
the Code.
i. The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and the Seller's Warranties and
Servicing Agreements is:
___________________________________
___________________________________
___________________________________
Attention: _________________
The Assignee's wire transfer instructions for purposes of all
remittances and payments related to the Mortgage Loans and the Seller's
Warranties and Servicing Agreement is:
___________________________________
___________________________________
___________________________________
Attention: _________________
4. From and after the date hereof, the Company shall note the transfer
of the Mortgage Loans to the Assignee in its books and records, the Company
shall recognize the Assignee as the owner of the Mortgage Loans and the Company
shall service the Mortgage Loans for the benefit of the Assignee pursuant to the
Seller's Warranties and Servicing Agreement, the terms of which are incorporated
herein by reference. It is the intention of the Assignor, the Company and the
Assignee that the Seller's Warranties and Servicing Agreement shall be binding
upon and inure to the benefit of the Company and the Assignee and their
respective successors and assigns.
[Signatures Follow]
IN WITNESS WHEREOF, the parties have caused this Assignment, Assumption
and Recognition Agreement to be executed by their duly authorized officers as of
the date first above written.
___________________________________ ________________________________
Assignor Assignee
By:________________________________ By:_____________________________
Name:______________________________ Name:___________________________
Its:_______________________________ Its:____________________________
Tax Payer Identification No.: Tax Payer Identification No.:
___________________________________ ________________________________
EXHIBIT E
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
--------------------------------------------------------------------------------------------------------------------
REG AB REFERENCE SERVICING CRITERIA APPLICABLE INAPPLICABLE
SERVICING SERVICING
CRITERIA CRITERIA
--------------------------------------------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
--------------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any performance X
or other triggers and events of default in accordance with the
1122(d)(1)(i) transaction agreements.
--------------------------------------------------------------------------------------------------------------------
If any material servicing activities are outsourced to third X
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such
1122(d)(1)(ii) servicing activities.
--------------------------------------------------------------------------------------------------------------------
Any requirements in the transaction agreements to maintain a X
1122(d)(1)(iii) back-up servicer for the mortgage loans are maintained.
--------------------------------------------------------------------------------------------------------------------
A fidelity bond and errors and omissions policy is in effect X
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the
1122(d)(1)(iv) transaction agreements.
--------------------------------------------------------------------------------------------------------------------
CASH COLLECTION AND ADMINISTRATION
--------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans are deposited into the appropriate X
custodial bank accounts and related bank clearing accounts
no more than two business days following receipt, or such
1122(d)(2)(i) other number of days specified in the transaction agreements.
--------------------------------------------------------------------------------------------------------------------
Disbursements made via wire transfer on behalf of an obligor X
1122(d)(2)(ii) or to an investor are made only by authorized personnel.
--------------------------------------------------------------------------------------------------------------------
Advances of funds or guarantees regarding collections, cash X
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved as
1122(d)(2)(iii) specified in the transaction agreements.
--------------------------------------------------------------------------------------------------------------------
The related accounts for the transaction, such as cash X
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
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Each custodial account is maintained at a federally insured X
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
1122(d)(2)(v) Securities Exchange Act.
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Unissued checks are safeguarded so as to prevent X
1122(d)(2)(vi) unauthorized access.
--------------------------------------------------------------------------------------------------------------------
Reconciliations are prepared on a monthly basis for all X
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original
identification, or such other number of days specified in the
1122(d)(2)(vii) transaction agreements.
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INVESTOR REMITTANCES AND REPORTING
--------------------------------------------------------------------------------------------------------------------
Reports to investors, including those to be filed with the X
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements. Specifically,
such reports (A) are prepared in accordance with timeframes and
1122(d)(3)(i) other terms set forth in the transaction
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C) are
filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number
of mortgage loans serviced by the Servicer.
--------------------------------------------------------------------------------------------------------------------
Amounts due to investors are allocated and remitted in X
accordance with timeframes, distribution priority and other
1122(d)(3)(ii) terms set forth in the transaction agreements.
--------------------------------------------------------------------------------------------------------------------
Disbursements made to an investor are posted within two X
business days to the Servicer's investor records, or such
1122(d)(3)(iii) other number of days specified in the transaction agreements.
--------------------------------------------------------------------------------------------------------------------
Amounts remitted to investors per the investor reports agree
with X cancelled checks, or other form of payment, or
1122(d)(3)(iv) custodial bank statements.
--------------------------------------------------------------------------------------------------------------------
POOL ASSET ADMINISTRATION
--------------------------------------------------------------------------------------------------------------------
Collateral or security on mortgage loans is maintained as X
required by the transaction agreements or related mortgage loan
1122(d)(4)(i) documents.
--------------------------------------------------------------------------------------------------------------------
Mortgage loan and related documents are safeguarded as required X
1122(d)(4)(ii) by the transaction agreements
--------------------------------------------------------------------------------------------------------------------
Any additions, removals or substitutions to the asset pool are X
made, reviewed and approved in accordance with any conditions or
1122(d)(4)(iii) requirements in the transaction agreements.
--------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans, including any payoffs, made in X
accordance with the related mortgage loan documents are
posted to the Servicer's obligor records maintained no more
than two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated
to principal, interest or other items (e.g., escrow) in
1122(d)(4)(iv) accordance with the related mortgage loan documents.
--------------------------------------------------------------------------------------------------------------------
The Servicer's records regarding the mortgage loans agree X
with the Servicer's records with respect to an obligor's
1122(d)(4)(v) unpaid principal balance.
--------------------------------------------------------------------------------------------------------------------
Changes with respect to the terms or status of an obligor's X
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
1122(d)(4)(vi) asset documents.
--------------------------------------------------------------------------------------------------------------------
Loss mitigation or recovery actions (e.g., forbearance plans, X
modifications and deeds in lieu of foreclosure, foreclosures
and repossessions, as applicable) are initiated, conducted
and concluded in accordance with the timeframes or other
1122(d)(4)(vii) requirements established by the transaction agreements.
--------------------------------------------------------------------------------------------------------------------
Records documenting collection efforts are maintained during X
the period a mortgage loan is delinquent in accordance with
the transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities
in monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling plans
in cases where delinquency is deemed temporary (e.g.,
1122(d)(4)(viii) illness or unemployment).
--------------------------------------------------------------------------------------------------------------------
Adjustments to interest rates or rates of return for mortgage X
loans with variable rates are computed based on the related
1122(d)(4)(ix) mortgage loan documents.
--------------------------------------------------------------------------------------------------------------------
Regarding any funds held in trust for an obligor (such as escrow X
accounts): (A) such funds are analyzed, in accordance with the
obligor's mortgage loan documents, on at least an annual basis,
or such other period specified in the transaction agreements;
(B) interest on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and state
laws; and (C) such funds are returned to the obligor within 30
calendar days of full repayment of the related mortgage loans,
or such other number of days specified in the transaction
1122(d)(4)(x) agreements.
--------------------------------------------------------------------------------------------------------------------
Payments made on behalf of an obligor (such as tax or X
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the appropriate
bills or notices for such payments, provided that such
1122(d)(4)(xi) support has been received by the servicer at least 30
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
calendar days prior to these dates, or such other number of
days specified in the transaction agreements.
--------------------------------------------------------------------------------------------------------------------
Any late payment penalties in connection with any payment to be X
made on behalf of an obligor are paid from the Servicer's funds
and not charged to the obligor, unless the late payment was due
1122(d)(4)(xii) to the obligor's error or omission.
--------------------------------------------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are posted within X
two business days to the obligor's records maintained by
the servicer, or such other number of days specified in the
1122(d)(4)(xiii) transaction agreements.
--------------------------------------------------------------------------------------------------------------------
Delinquencies, charge-offs and uncollectible accounts are X
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements.
--------------------------------------------------------------------------------------------------------------------
Any external enhancement or other support, identified in Item X
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
1122(d)(4)(xv) maintained as set forth in the transaction agreements.
--------------------------------------------------------------------------------------------------------------------
EXHIBIT F
FORM OF SARBANES CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"), among
[IDENTIFY PARTIES]
I, ________________________________, the _______________________ of [Name of
Servicer], certify to [the Owner], [the Depositor], and the [Master Servicer]
[Securities Administrator] [Trustee], and their officers, with the knowledge and
intent that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the Servicer
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Servicer's compliance with
the servicing criteria set forth in Item 1122(d) of Regulation AB (the
"Servicing Criteria"), provided in accordance with Rules 13a-18 and
15d-18 under Securities Exchange Act of 1934, as amended (the "Exchange
Act") and Item 1122 of Regulation AB (the "Servicing Assessment"), the
registered public accounting firm's attestation report provided in
accordance with Rules 13a-18 and 15d-18 under the Exchange Act and
Section 1122(b) of Regulation AB (the "Attestation Report"), and all
servicing reports, officer's certificates and other information
relating to the servicing of the Mortgage Loans by the Servicer during
200[ ] that were delivered by the Servicer to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee] pursuant to the
Agreement (collectively, the "Servicer Servicing Information");
(2) Based on my knowledge, the Servicer Servicing Information, 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
the light of the circumstances under which such statements were made,
not misleading with respect to the period of time covered by the
Servicer Servicing Information;
(3) Based on my knowledge, all of the Servicer Servicing Information
required to be provided by the Servicer under the Agreement has been
provided to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee];
(4) I am responsible for reviewing the activities performed by the
Servicer under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Compliance Statement and
except as disclosed in the Compliance Statement, the Servicing
Assessment or the Attestation Report, the Servicer has fulfilled its
obligations under the Agreement; and
(5) The Compliance Statement, the Servicing Assessment and the Attestation
Report required to be provided by the Servicer pursuant to the
Agreement have been provided to the [Depositor] [Master Servicer]. Any
material instances of noncompliance described in such reports have been
disclosed to the [Depositor] [Master Servicer]. Any material instance
of noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date:
By:________________________________
Name:______________________________
Title:_____________________________
MORTGAGE LOAN PURCHASE AGREEMENT
This is a Purchase Agreement (the "Agreement"), dated as of January 1,
2007 by and between EMC Mortgage Corporation, having an office at 000 Xxxxxx
Xxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 (the "Purchaser") and Xxxxx Fargo
Bank, N.A., having an xxxxxx xx 0 Xxxx Xxxxxx, Xxx Xxxxxx, Xxxx 00000-0000 (the
"Seller").
W I T N E S S E T H
WHEREAS, the Seller agrees to sell, and the Purchaser agrees to
purchase, certain mortgage loans (the "Mortgage Loans") on a servicing retained
basis as described herein:
WHEREAS, the Mortgage Loans shall be delivered as whole loans;
WHEREAS, the parties intend hereby to set forth the terms and
conditions upon which the proposed transactions will be effected.
NOW THEREFORE, in consideration of the promises and the mutual
agreements set forth herein, the parties hereto agree as follows:
SECTION 1. All capitalized terms not otherwise defined herein have the
respective meanings set forth in the Seller's Warranties and Servicing
Agreement, dated as of the date herewith (the "Seller's Warranties and Servicing
Agreement"). The following terms are defined as follows (except as otherwise
agreed by the parties):
Cut-off Date: January 1, 2007
Closing Date: January 18, 2007
First Remittance Date: February 20, 2007
Servicing Fee Rate: 0.250%
SECTION 2. Agreement to Purchase. The Seller agrees to sell, and the
Purchaser agrees to purchase, Mortgage Loans having an aggregate principal
balance on the Cut-off Date in the amount indicated on the Mortgage Loan
Schedule or in such other amount as agreed by the Purchaser and the Seller as
evidenced by the scheduled principal balance of the Mortgage Loans accepted by
the Purchaser on the Closing Date. The Mortgage Loans will be delivered pursuant
to a Seller's Warranties and Servicing Agreement, between the Purchaser and the
Seller.
SECTION 3. Mortgage Schedules. The Seller has provided the Purchaser
with certain information constituting a listing of the Mortgage Loans to be
purchased under this Agreement (the "Mortgage Loan Schedule") substantially in
the form attached hereto as Exhibit 1. The Mortgage Loan Schedule shall conform
to the definition of "Mortgage Loan Schedule" under the Seller's Warranties and
Servicing Agreement.
SECTION 4. Purchase Price. The Purchase Price, as calculated pursuant
to the Seller's Warranties and Servicing Agreement, shall be paid by the
Purchaser to the Seller for the Mortgage Loans on the Closing Date.
The Purchaser shall be entitled to (1) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected after
the Cut-off Date (provided, however, that all scheduled payments of principal
due on or before the Cut-off Date and collected by the Seller after the Cut-off
Date shall belong to the Seller), and (3) all payments of interest on the
Mortgage Loans at the Mortgage Loan Remittance Rate (minus that portion of any
such payment which is allocable to the period prior to the Cut-off Date). The
principal balance of each Mortgage Loan as of the Cut-off Date is determined
after application of payments of principal due on or before the Cut-off Date
whether or not collected. Therefore, payments of scheduled principal and
interest prepaid for a due date beyond the Cut-off Date shall not be applied to
the principal balance as of the Cut-off Date. Such prepaid amounts (minus
interest at the Servicing Fee Rate) shall be the property of the Purchaser. The
Seller shall deposit any such prepaid amounts into the Custodial Account, which
account is established for the benefit of the Purchaser for subsequent
remittance by the Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files. Prior to the Closing Date,
the Seller shall (a) deliver to the Purchaser in escrow, for examination, the
Mortgage File for each Mortgage Loan, including a copy of the Assignment of
Mortgage, pertaining to each Mortgage Loan, or (b) make the Mortgage Files
available to the Purchaser for examination at the Seller's offices or such other
location as shall otherwise be agreed upon by the Purchaser and the Seller. Such
examination may be made by the Purchaser or by any prospective purchaser of the
Mortgage Loans from the Purchaser, at any time before or after the Closing Date
upon prior reasonable notice to the Seller. The fact that the Purchaser or any
prospective purchaser of the Mortgage Loans has conducted or has failed to
conduct any partial or complete examination of the Mortgage Files shall not
affect the Purchaser's (or any of its successor's) rights to demand repurchase,
substitution or other relief as provided under the related Seller's Warranties
and Servicing Agreement.
Prior to Seller's receipt of the Purchase Price, the Purchaser shall
cause the Custodian to act as bailee for the sole and exclusive benefit of the
Seller pursuant to the Custodial Agreement and act only in accordance with
Seller's instructions. Upon the Seller's receipt of the Purchase Price, the
Seller shall provide notification to the Custodian to release ownership of the
Mortgage Loan Documents specified above to the Purchaser. Such notification
shall be in a form of a written notice by facsimile or other electronic media,
with a copy sent to the Purchaser. Subsequent to such release, such Mortgage
Loan Documents shall be retained by the Custodian for the benefit of the
Purchaser. All Mortgage Loan Documents related to Mortgage Loans not purchased
by the Purchaser on the Closing Date, shall be maintained by the Custodian for
the benefit of the Seller and shall be returned to the Seller within two (2)
Business Days after the Closing Date.
SECTION 6. Representations, Warranties and Agreements of Seller. The
Seller agrees and acknowledges that it shall, as a condition to the consummation
of the transactions
contemplated hereby, make the representations and warranties specified in
Section 3.01 and 3.02 of the Seller's Warranties and Servicing Agreement, as of
the Closing Date. The meaning of the term "Agreement" as used in Sections 3.01
and 3.02 of the Seller's Warranties and Servicing Agreement shall include this
Agreement. The Seller, without conceding that the Mortgage Loans are securities,
hereby makes the following additional representations, warranties and agreements
which shall be deemed to have been made as of the Closing Date:
a) neither the Seller nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of any Mortgage Loans,
any interest in any Mortgage Loans or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Mortgage Loans, any interest in any Mortgage Loans
or any other similar security from, or otherwise approached or
negotiated with respect to any Mortgage Loans, any interest in any
Mortgage Loans or any other similar security with, any Person in any
manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action which
would constitute a distribution of the Mortgage Loans under the
Securities Act or which would render the disposition of any Mortgage
Loans a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will it act, nor has it authorized
or will it authorize any Person to act, in such manner with respect to
the Mortgage Loans; and
b) the Seller 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 Purchaser.
SECTION 7. Representation, Warranties and Agreement of Purchaser. The
Purchaser, without conceding that the Mortgage Loans are securities, hereby
makes the following representations, warranties and agreements, which shall have
been deemed to have been made as of the Closing Date.
a) the Purchaser understands that the Mortgage Loans have not been
registered under the Securities Act or the securities laws of any
state;
b) the Purchaser is acquiring the Mortgage Loans for its own account
only and not for any other Person;
c) the Purchaser considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of investment in the Mortgage Loans;
d) the Purchaser has been furnished with all information regarding the
Mortgage Loans which it has requested from the Seller or the Company;
and
e) neither the Purchaser nor anyone acting on its behalf offered,
transferred, pledged, sold or otherwise disposed of any Mortgage Loan,
any interest in any Mortgage Loan or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of any Mortgage Loan, any interest in any Mortgage Loan or
any other similar security from, or otherwise approached or negotiated
with respect to any Mortgage Loan, any interest in any Mortgage Loan or
any other
similar security with, any Person in any manner, or made any
general solicitation by means of general advertising or in any other
manner, or taken any other action which would constitute a distribution
of the Mortgage Loans under the Securities Act or which would render
the disposition of any Mortgage Loan a violation of Section 5 of the
Securities Act or require registration pursuant thereto, nor will it
act, nor has it authorized or will it authorize any Person to act, in
such manner with respect to the Mortgage Loans.
SECTION 8. Closing. The closing for the purchase and sale of the
Mortgage Loans, shall take place on the Closing Date. At the Purchaser's option,
the Closing shall be either: by telephone, confirmed by letter or wire as the
parties shall agree; or conducted in person, at such place as the parties shall
agree.
The closing shall be subject to each of the following conditions:
a) all of the representations and warranties of the Seller under this
Agreement and under each Seller's Warranties and Servicing Agreement
shall be true and correct as of the Closing Date and no event shall
have occurred which, with notice or the passage of time, would
constitute a default under this Agreement or an Event of Default under
the related Seller's Warranties and Servicing Agreement;
b) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all Closing Documents as specified in
Section 9 of this Agreement, in such forms as are agreed upon and
acceptable to the Purchaser, duly executed by all signatories other
than the Purchaser as required pursuant to the respective terms
thereof;
c) the Seller shall have delivered to the Custodian under the Seller's
Warranties and Servicing Agreement all documents required pursuant to
the related Custodial Agreement; and
d) all other terms and conditions of this Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds to
the account designated by the Seller.
SECTION 9. Closing Documents. With respect to the Mortgage Loans, the
Closing Documents shall consist of fully executed originals of the following
documents:
1. the Seller's Warranties and Servicing Agreement, dated as of
the Cut-off Date, in two counterparts;
2. this Agreement in two counterparts;
3. a copy of the Custodial Agreement, dated as of November 30,
1999 by and between EMC Mortgage Corporation as Owner, and
Xxxxx Fargo Bank, N.A. (formerly Xxxxx Fargo Bank Minnesota,
N.A.) as Custodian, attached to the Seller's Warranties and
Servicing Agreement ;
4. the Mortgage Loan Schedule, one copy to be attached to each
counterpart of the Seller's Warranties and Servicing
Agreement;
5. a trust receipt and certification, as required under the
Custodial Agreement; and
6. an Opinion of Counsel of the Seller, in the form of Exhibit 2
hereto.
SECTION 10. Costs. The Purchaser shall pay any commissions due its
salesmen, the legal fees and expenses of its attorneys and the costs and
expenses associated with the Custodian. The Seller shall be responsible for
reasonable costs and expenses associated with any preparation of the assignments
of mortgage. All other costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans, including fees for title policy
endorsements and continuations and the Seller's attorney fees, shall be paid by
the Seller.
SECTION 11. Servicing. The Mortgage Loans shall be serviced by the
Seller in accordance with the terms of the applicable Seller's Warranties and
Servicing Agreement. The Seller shall be entitled to servicing fees calculated
as provided therein, at the Servicing Fee Rate shown on the first page of this
Agreement unless otherwise agreed by the parties.
SECTION 12. Financial Statements. The Seller understands that in
connection with the Purchaser's marketing of the Mortgage Loans, the Purchaser
may request from the Seller and make available to prospective purchasers a
Consolidated Statement of Operations of the Seller for the most recently
completed two (2) fiscal years respecting which such a statement is available,
as well as a Consolidated Statement of Condition at the end of the last two (2)
fiscal years covered by such Consolidated Statement of Operations. The
Purchaser, upon request, shall also make available any comparable interim
statements to the extent any such statements have been prepared by the seller in
a format intended or otherwise suitable for the public at large. The Seller,
upon request, agrees to furnish promptly to the Purchaser copies of the
statements specified above. The Seller shall also make available information on
its servicing performance with respect to loans in its own mortgage banking
portfolio and loans serviced for others (if any), including foreclosure and
delinquency ratios.
The Seller also agrees to allow access to a knowledgeable (as shall be
determined by the Seller) financial or accounting officer for the purpose of
answering questions asked by any prospective purchaser regarding recent
developments affecting the Seller or the financial statements of the Seller.
SECTION 13. Mandatory Delivery. The sale and delivery on the Closing
Date of the Mortgage Loans described on the Mortgage Loan Schedule is mandatory,
it being specifically understood and agreed that each Mortgage Loan is unique
and identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the
losses and damages incurred by the Purchaser (including damages to prospective
purchasers of the Mortgage Loans) in the event of the Seller's failure to
deliver the Mortgage Loans on or before the Closing Date. All rights and
remedies of the Purchaser under this Agreement are distinct from, and cumulative
with, any other rights or remedies under this Agreement or afforded by law or
equity and all such rights and remedies may be exercised concurrently,
independently or successively.
SECTION 14. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
registered or certified mail, return receipt requested, or, if by other means,
when received by the other party at the address shown on the first page hereof,
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice of communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 15. Severability Clause. Any part, provision, representation or
warranty of this Agreement which is prohibited or which is held to be void or
unenforceable shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof. Any part,
provision, representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage Loan
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is as close as
possible to the economic effect of this Agreement without regard to such
invalidity.
SECTION 16. Counterparts. This Agreement may be executed simultaneously
in any number of counterparts. Each counterpart shall be deemed to be an
original, and all such counterparts shall constitute one and the same
instrument. The parties agree that this Agreement and signature pages thereof
may be transmitted between them by facsimile and that faxed signatures may
constitute original signatures and that a faxed signature page containing the
signature of an authorized individual (faxed or original) is binding on the
respective parties.
XXXXXXX 00. Xxxxx of Delivery and Governing Law. This Agreement shall
be 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 the laws of the State of New York, except to the extent
preempted by Federal Law.
Each of the Seller and the Purchaser hereby knowingly, voluntarily and
intentionally waives any and all rights it may have to a trial by jury in
respect of any litigation based on, or arising out of, under, or in connection
with, this Agreement, or any other documents and
instruments executed in connection herewith, or any course of conduct, course of
dealing, statements (whether oral or written), or actions of the Seller or the
Purchaser. This provision is a material inducement for the Purchaser to enter
into this Agreement.
SECTION 18. Further Agreements. The Purchaser and the Seller each agree
to execute and deliver to the other such additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
Without limiting the generality of the foregoing, the Seller shall
reasonably cooperate with the Purchaser in connection with the initial resales
of the Mortgage Loans by the Purchaser. In that connection, the Seller shall
provide to the Purchaser: (i) any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request, and (ii) such
additional representations, warranties, covenants, opinions of counsel, letters
from auditors and certificates of public officials or officers of the Seller as
are reasonably believed necessary by the Purchaser in connection with such
resales. Prior to incurring any out-of-pocket expenses pursuant to this
paragraph, the Seller shall notify the Purchaser in writing of the estimated
amount of such expense. The Purchaser shall reimburse the Seller for any such
expense following its receipt of appropriate details thereof.
SECTION 19. Intention of the Parties. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, an
undivided 100% ownership interest in the Mortgage Loans and not a debt
instrument of the Seller or another security. Accordingly, the parties hereto
each intend to treat the transaction for Federal income tax purposes as a sale
by the Seller, and a purchase by the Purchaser, of the Mortgage Loans. The
Purchaser shall have the right to review the Mortgage Loans and the related
Mortgage Files to determine the characteristics of the Mortgage Loans which
shall affect the Federal income tax consequences of owning the Mortgage Loans
and the Seller shall cooperate with all reasonable requests made by the
Purchaser in the course of such review.
SECTION 20. Successors and Assigns; Assignment of Purchase Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller and the Purchaser and the respective successors and assigns of the Seller
and the Purchaser. This Agreement shall not be assigned, pledged or hypothecated
by the Seller to a third party without the consent of the Purchaser.
SECTION 21. Waivers; Other Agreements. No term or provision of this
Agreement may be waived or modified unless such waiver or modification is in
writing and signed by the party against whom such waiver or modification is
sought to be enforced.
SECTION 22. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
SECTION 23. General Interpretive Principles. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
a) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular,
and the use of any gender herein shall be deemed to include the other
gender;
b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles;
c) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document
are to designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;
d) a reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to
Paragraphs and other subdivisions;
e) the words "herein", "hereof", "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular
provision; and
f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
SECTION 24. Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
[Signatures Follow]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
EMC MORTGAGE CORPORATION
(Purchaser)
By: ________________________________________
Name:_______________________________________
Title:______________________________________
XXXXX FARGO BANK, N.A.
(Seller)
By:_________________________________________
Name:_______________________________________
Title:______________________________________
EXHIBIT 1
MORTGAGE LOAN SCHEDULE
EXHIBIT 2
FORM OF OPINION OF COUNSEL
@
@
@
@
Re: Xxxxx Fargo Bank, N.A.
Mortgage Loan Series @
Dear Sir/Madam:
I am @ of Xxxxx Fargo Bank, N.A. and have acted as counsel to Xxxxx Fargo Bank,
N.A. (the "Company"), with respect to certain matters in connection with the
sale by the Company of the mortgage loans designated as Mortgage Loan Series @
(the "Mortgage Loans") pursuant to that certain Seller's Warranties and
Servicing Agreement and Mortgage Loan Purchase Agreement by and between the
Company and @ (the "Purchaser"), dated as of @, 20__, (the "Agreements"), which
sale is in the form of whole Mortgage Loans. Capitalized terms not otherwise
defined herein have the meanings set forth in the Seller's Warranties and
Servicing Agreement.
I have examined the following documents:
1. the Seller's Warranties and Servicing Agreement;
2. the Mortgage Loan Purchase Agreement;
3. the Custodial Agreement;
4. the form of endorsement of the Mortgage Notes; and
5. such other documents, records and papers as I have deemed necessary and
relevant as a basis for this opinion.
To the extent I have deemed necessary and proper, I have relied upon the
representations and warranties of the Company contained in the Agreements. I
have assumed the authenticity of all documents submitted to me as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
Based upon the foregoing, it is my opinion that;
1. The Company is a national banking association duly organized, validly
existing and in good standing under the laws of the United States.
2. The Company has the power to engage in the transactions contemplated by
the Agreements, the Custodial Agreement and all requisite power,
authority and legal right to execute and deliver the Agreements, the
Custodial Agreement and the Mortgage Loans, and to perform and observe
the terms and conditions of such instruments.
3. Each person who, as an officer or attorney-in-fact of the Company,
signed (a) the Agreements, each dated as of @, 20__, by and between the
Company and the Purchaser, and (b) any other document delivered prior
hereto or on the date hereof in connection with the sale and servicing
of the Mortgage Loans in accordance with the Agreements was, at the
respective times of such signing and delivery, and is, as of the date
hereof, duly elected or appointed, qualified and acting as such officer
or attorney-in-fact, and the signatures of such persons appearing on
such documents are their genuine signatures.
4. Each of the Agreements, the Custodial Agreement and the Mortgage Loans,
has been duly authorized, executed and delivered by the Company and is
a legal, valid and binding agreement enforceable in accordance with its
terms, subject to the effect of insolvency, liquidation,
conservatorship and other similar laws administered by the Federal
Deposit Insurance Corporation affecting the enforcement of contract
obligations of insured banks and subject to the application of the
rules of equity, including those respecting the availability of
specific performance, none of which will materially interfere with the
realization of the benefits provided thereunder or with the Purchaser's
ownership of the Mortgage Loans.
5. The Company has been duly authorized to allow any of its officers to
execute any and all documents by original or facsimile signature in
order to complete the transactions contemplated by the Agreements and
the Custodial Agreement and in order to execute the endorsements to the
Mortgage Notes and the assignments of the Mortgages, and the original
or facsimile signature of the officer at the Company executing the
Agreements, the Custodial Agreement, the endorsements to the Mortgage
Notes and the assignments of the Mortgages represents the legal and
valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the
Agreements, the Custodial Agreement or the sale and delivery of the
Mortgage Loans or the consummation of the transactions contemplated by
the Agreements and the Custodial Agreement; or (ii) any required
consent, approval, authorization or order has been obtained by the
Company.
7. Neither the consummation of the transactions contemplated by, nor the
fulfillment of the terms of the Agreements and the Custodial Agreement,
will conflict with or results in or will result in a breach of or
constitutes or will constitute a default under the charter or by-laws
of the Company, the terms of any indenture or other agreement or
instrument to which the Company is a party or by which it is bound or
to which it is subject, or violates
any statute or order, rule, regulations, writ, injunction or decree of
any court, governmental authority or regulatory body to which the
Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending or, to
the best of my knowledge, threatened against the Company which, in my
opinion, 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 Company or in any material
impairment of the right or ability of the Company to carry on its
business substantially as now conducted or in any material liability on
the part of the Company or which would draw into question the validity
of the Agreements, and the Custodial Agreement, or of any action taken
or to be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the ability of
the Company to perform under the terms of the Agreements and the
Custodial Agreement.
9. For purposes of the foregoing, I have not regarded any legal or
governmental actions, investigations or proceedings to be "threatened"
unless the potential litigant or governmental authority has manifested
to the legal department of the Company or an employee of the Company
responsible for the receipt of process a present intention to initiate
such proceedings; nor have I regarded any legal or governmental
actions, investigations or proceedings as including those that are
conducted by state or federal authorities in connection with their
routine regulatory activities. The sale of each Mortgage Note and
Mortgage as and in the manner contemplated by the Agreements is
sufficient fully to transfer all right, title and interest of the
Company thereto as noteholder and mortgagee, apart from the rights to
service the Mortgage Loans pursuant to the Agreements.
10. The form of endorsement that is to be used with respect to the Mortgage
Loans is legally valid and sufficient to duly endorse the Mortgage
Notes to the Purchaser. Upon the completion of the endorsement of the
Mortgage Notes and the completion of the assignments of the Mortgages,
and the recording thereof, the endorsement of the Mortgage Notes, the
delivery to the Custodian of the completed assignments of the
Mortgages, and the delivery of the original endorsed Mortgage Notes to
the Custodian would be sufficient to permit the entity to which such
Mortgage Note is initially endorsed at the Purchaser's direction, and
to whom such assignment of Mortgages is initially assigned at the
Purchaser's direction, to avail itself of all protection available
under applicable law against the claims of any present or future
creditors of the Company, and would be sufficient to prevent any other
sale, transfer, assignment, pledge or hypothecation of the Mortgages
and the Mortgage Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other person or
entity is entitled to rely hereon except that the purchaser or purchasers to
which you initially and directly resell the Mortgage Loans may rely on this
opinion as if it were addressed to them as of its date.
Sincerely,
@
@
@/@
________________________________________________________________________________
EMC MORTGAGE CORPORATION
Owner
GMAC MORTGAGE CORPORATION
Servicer
SERVICING AGREEMENT
Dated as of May 1, 2001
________________________________________________________________________________
EXHIBITS
Exhibit A Mortgage Loan Schedule
Exhibit B Custodial Account Letter Agreement
Exhibit C Escrow Account Letter Agreement
Exhibit D Form of Request for Release
Exhibit E Loan Level Scheduled-Scheduled Remittance Tape Layout
THIS IS A SERVICING AGREEMENT, dated as of May 1, 2001, and is executed
between EMC Mortgage Corporation (the "Owner") and GMAC Mortgage Corporation
(the "Servicer").
W I T N E S S E T H :
WHEREAS, the Owner is the owner of the Mortgage Loans;
WHEREAS, the Owner and the Servicer wish to prescribe the permanent
management, servicing and control of the Mortgage Loans;
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Owner and the Servicer agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meaning
specified in this Article:
Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices (including collection procedures) that are in
accordance with the Xxxxxx Xxx Guide.
Adjustment Date: As to each ARM Loan, the date on which the Mortgage
Interest Rate is adjusted in accordance with the terms of the related Mortgage
Note.
Agreement: This Servicing Agreement including all exhibits hereto,
amendments hereof and supplements hereto.
ARM Loans: First lien, conventional, 1-4 family residential Mortgage
Loans with interest rates which adjust from time to time in accordance with the
related Index and are subject to Periodic Rate Caps and Lifetime Rate Caps and
which do not permit conversion to fixed interest rates.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, or (ii) a
legal holiday in the States of New York, Iowa or the Commonwealth of
Pennsylvania, or (iii) a day on which banks in the States of New York, Iowa or
Pennsylvania are authorized or obligated by law or executive order to be closed.
Code: The Internal Revenue Code of 1986, as it may be amended from time
to time, or any successor statute thereto, and applicable U.S. Department of the
Treasury regulations issued pursuant thereto.
Condemnation Proceeds: All awards or 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.
Custodial Account: The separate demand account or accounts created and
maintained pursuant to Section 4.04 which shall be entitled "GMAC Mortgage
Corporation Custodial Account in trust for [Owner], Owner of Whole Loan
Mortgages and various Mortgagors" and shall be established at a Qualified
Depository, each of which accounts shall in no event contain funds in excess of
the FDIC insurance limits.
Custodian: Xxxxx Fargo Bank Minnesota, N.A., or such other custodian as
Owner shall designate.
Cut-off Date: As identified on the related Confirmation.
Determination Date: The 15th day (or if such 15th day is not a Business
Day, the Business Day immediately preceding such 15th day) of the month of the
Remittance Date.
Due Date: Each day on which payments of principal and interest are
required to be paid in accordance with the terms of the related Mortgage Note,
exclusive of any days of grace.
Due Period: With respect to any Remittance Date, the period commencing
on the second day of the month preceding the month of such Remittance Date and
ending on the first day of the month of the Remittance Date.
Effective Date: As identified on the related Confirmation.
Escrow Account: The separate trust account or accounts created and
maintained pursuant to Section 4.06 which shall be entitled "GMAC Mortgage
Corporation Escrow Account, in trust for [Owner], Owner of Whole Loan Mortgages
and various Mortgagors" and shall be established at a Qualified Depository, each
of which accounts shall in no event contain funds in excess of the FDIC
insurance limits.
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: Any one of the conditions or circumstances enumerated
in Section 9.01.
Xxxxxx Xxx: Xxxxxx Xxx, or any successor thereto.
Xxxxxx Mae Guide: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fidelity Bond: A fidelity bond to be maintained by the Servicer
pursuant to Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended from time to time.
Xxxxxxx Mac: Xxxxxxx Mac, or any successor thereto.
Xxxxxxx Mac Guide: The Xxxxxxx Mac Selling Guide and the Xxxxxxx Mac
Servicing Guide and all amendments or additions thereto.
Full Principal Prepayment: A Principal Prepayment made by a Mortgagor
of the entire principal balance of a Mortgage Loan.
GAAP: Generally accepted accounting procedures, consistently applied.
HUD: The United States Department of Housing and Urban Development or
any successor.
Index: With respect to each ARM Loan, on the related Adjustment Date,
the index used to determine the Mortgage Interest Rate on each such ARM Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Page 2
Lifetime Rate Cap: With respect to each ARM Loan, the maximum Mortgage
Interest Rate over the term of such Mortgage Loan, as specified in the related
Mortgage Note.
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 or otherwise, other than amounts
received following the acquisition of an REO Property pursuant to Section 4.13.
Margin: With respect to each ARM Loan, the fixed percentage amount set
forth in each related Mortgage Note which is added to the Index in order to
determine the related Mortgage Interest Rate.
Monthly Advance: The aggregate of the advances made by the Servicer on
any Remittance Date pursuant to Section 5.03.
Monthly Payment: With respect to each Mortgage Loan, the scheduled
monthly payment of principal and interest thereon which is payable by the
related Mortgagor under the related Mortgage Note.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note which creates a first lien on an unsubordinated estate in fee
simple in real property securing the Mortgage Note.
Mortgage Interest Rate: The annual rate at which interest accrues on
any Mortgage Loan in accordance with the provisions of the related Mortgage
Note, and in the case of an ARM Loan, as adjusted from time to time on each
Adjustment Date for such Mortgage Loan to equal the Index for such Mortgage Loan
plus the Margin for such Mortgage Loan, and subject to the limitations on such
interest rate imposed by the Periodic Rate Cap and the Lifetime Rate Cap.
Mortgage Loan: An individual Mortgage Loan described herein, and as
further identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage Loan Documents, the Monthly Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan.
Mortgage Loan Documents: The original mortgage loan legal documents
held by the Custodian.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan, the
annual rate of interest remitted to the Owner, which shall be equal to the
related Mortgage Interest Rate minus the Servicing Fee Rate.
Mortgage Loan Schedule: The schedule of Mortgage Loans attached hereto
as Exhibit A, such schedule being acceptable to the Owner and the Servicer.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The underlying real property securing repayment of
a Mortgage Note, consisting of a single parcel of real estate considered to be
real estate under the laws of the State in which such real property is located,
which may include condominium units and planned unit developments, improved by a
residential dwelling.
Mortgagor: The obligor on a Mortgage Note. The Mortgagor is a natural
person who is a party to the Mortgage Note and Mortgage in an individual
capacity.
Nonrecoverable Advance: Any advance previously made by the Servicer
pursuant to Section 5.03 or any expenses incurred pursuant to Section 4.08
which, in the good faith judgment of the Servicer, may not be ultimately
recoverable by the Servicer from Liquidation Proceeds. The determination by the
Servicer that is has made a Nonrecoverable Advance, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Owner and detailing the
reasons for such determination.
OCC: Office of the Comptroller of the Currency, its successors and
assigns.
Page 3
Officers' Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Senior Vice President or
a Vice President or by the Treasurer or the Secretary or one of the Assistant
Treasurers or Assistant Secretaries of the Servicer, and delivered to the Owner
as required by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the party on behalf of whom the opinion is being given, reasonably
acceptable to the Owner.
OTS: Office of Thrift Supervision, its successors and assigns.
Owner: EMC Mortgage Corporation, its successors in interest and
assigns.
Partial Principal Prepayment: A Principal Prepayment by a Mortgagor of
a partial principal balance of a Mortgage Loan.
Pass-Through Transfer: The sale or transfer of same or all of the
Mortgage Loans to a trust as part of a publicly issued or privately placed,
rated or unrated Mortgage pass-through transaction.
Periodic Rate Cap: With respect to each ARM Loan, the maximum increase
or decrease in the Mortgage Interest Rate on any Adjustment Date.
Permitted Investments: Any one or more of the following obligations or
securities:
(i) direct obligations of, and obligations fully guaranteed 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; provided that obligations
of Xxxxxxx Mac or Xxxxxx Mae shall be Permitted Investments only if, at
the time of investment, they are rated in one of the two highest rating
categories by Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies Inc., Xxxxx'x Investors Service, Inc. and Fitch
IBCA Inc.;
(ii) (a) demand or time deposits, federal funds or bankers' acceptances
issued by any depository institution or trust company incorporated
under the laws of the United States of America or any state thereof and
subject to supervision and examination by federal and/or state banking
authorities, provided that the commercial paper and/or the short-term
deposit rating and/or the long-term unsecured debt obligations or
deposits of such depository institution or trust company at the time of
such investment or contractual commitment providing for such investment
are rated in one of the two highest rating categories by Standard &
Poor's Rating Services, a division of The XxXxxx-Xxxx Companies Inc.,
Xxxxx'x Investors Service, Inc. and Fitch IBCA Inc. and (b) any other
demand or time deposit or certificate of deposit that is fully insured
by the Federal Deposit Insurance Corporation;
(iii) repurchase obligations with respect to (a) any security described
in clause (i) above or (b) any other security issued or guaranteed by
an 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, in either case entered into with a depository
institution or trust company (acting as principal) described in clause
(ii)(a) above;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America
or any state thereof that are rated in one of the two highest rating
categories by Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies Inc., Xxxxx'x Investors Service, Inc. and Fitch
IBCA Inc. at the time of such investment or contractual commitment
providing for such investment; provided, however, that securities
issued by any particular corporation will not be Permitted Investments
to the extent that investments therein will cause the then outstanding
principal amount of securities issued by such corporation and held as
Permitted Investments to exceed 10% of the aggregate outstanding
principal balances and amounts of all the Permitted Investments;
Page 4
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance
thereof) which are rated in one of the two highest rating categories by
Standard & Poor's Rating Services, a division of The XxXxxx-Xxxx
Companies Inc., Xxxxx'x Investors Service, Inc. and Fitch IBCA Inc. at
the time of such investment;
(vi) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each of Standard &
Poor's Rating Services, a division of The XxXxxx-Xxxx Companies, Inc.,
Xxxxx'x Investors Service, Inc. and Fitch IBCA Inc.;
(vii) any money market funds the collateral of which consists of
obligations fully guaranteed 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 (which may include repurchase obligations
secured by collateral described in clause (i)) and other securities and
which money market funds are rated in one of the two highest rating
categories by Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies Inc., Xxxxx'x Investors Service, Inc. and Fitch
IBCA Inc.; and
(viii) GMAC Variable Denomination Adjustable Rate Demand Notes
constituting unsecured, senior debt obligations of General Motors
Acceptance Corporation as outlined in the prospectus dated June 17,
1998 and rated by Moody's in its highest short-term rating category
available and rated at least D-1 by Fitch;
provided, however, that no instrument or security shall be a Permitted
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Prepayment Interest Shortfall: The sum of the differences between
interest actually received in a Due Period as a result of a full or partial
prepayment or other unscheduled receipt of principal (including as a result of a
liquidation) on each Mortgage Loan as to which such a payment is received and
the interest portion of the Monthly Payment of such Mortgage Loan scheduled to
be due at the applicable Mortgage Loan Remittance Rate; provided, however,
Prepayment Interest Shortfalls shall not include Full Principal Prepayments
received on or before the 15th day of the month in which a Remittance Date
occurs which are remitted by the Servicer to the Owner on such Remittance Date.
Primary Mortgage Insurance Policy: Each primary policy of mortgage
insurance, or any replacement policy therefor obtained by the Servicer pursuant
to Section 4.08.
Prime Rate: The prime rate of U.S. money center banks as published from
time to time in The Wall Street Journal.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan, full or partial, which is received in advance of its scheduled
Due Date, including any prepayment penalty or premium thereon and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Qualified Appraiser: An appraiser, duly appointed by the Servicer, who
had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, which appraiser and the appraisal
made by such appraiser both satisfy the requirements of Title XI of FIRREA and
the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated.
Page 5
Qualified Depository: (a) The Custodian or (b) a depository, the
accounts of which are insured by the FDIC through the BIF or the SAIF and the
short term debt ratings and the long term deposit ratings of which are rated in
one of the two highest rating categories by Standard & Poor's Ratings Services,
a division of The XxXxxx-Xxxx Companies Inc., Xxxxx'x Investors Service, Inc.,
Fitch IBCA Duff & Xxxxxx.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by Xxxxxx
Mae and Xxxxxxx Mac.
REMIC: A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
REMIC Provisions: The provisions of the Federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions, and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The 18th day of any month, or if such 18th day is not
a Business Day, the first Business Day immediately preceding such 18th day.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Disposition Proceeds: Amounts received by the Servicer in
connection with a related REO Disposition.
REO Property: A Mortgaged Property acquired by the Servicer on behalf
of the Owner as described in Section 4.13.
SAIF: The Savings Association Insurance Fund, or any successor thereto.
Servicer: GMAC Mortgage Corporation, or any of its successors in
interest or any successor under this Agreement appointed as herein provided.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred prior to, on and subsequent to the Effective Date in the
performance by the Servicer of its servicing obligations relating to each
Mortgage Loan, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, (b) any enforcement,
administrative or judicial proceedings, or any legal work or advice specifically
related to servicing the Mortgage Loans, including but not limited to,
foreclosures, bankruptcies, condemnations, drug seizures, elections,
foreclosures by subordinate or superior lienholders, and other legal actions
incidental to the servicing of the Mortgage Loans (provided that such expenses
are reasonable and that the Servicer specifies the Mortgage Loan(s) to which
such expenses relate), (c) the management and liquidation of the Mortgaged
Property if the Mortgaged Property is acquired in full or partial satisfaction
of the Mortgage, (d) taxes, assessments, water rates, sewer rates and other
charges which are or may become a lien upon the Mortgaged Property, and Primary
Mortgage Insurance Policy premiums and fire and hazard insurance coverage and
(e) compliance with the obligations under Section 4.08.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Owner shall pay to the Servicer, which shall, for a period of one
full month, be equal to one-twelfth of the product of (a) the applicable
Servicing Fee Rate and (b) the outstanding principal balance of such Mortgage
Loan. Such fee shall be payable monthly, computed on the basis of the same
principal amount and period respecting which any related interest payment on a
Mortgage Loan is computed. The obligation of the Owner to pay the Servicing Fee
is limited to, and the Servicing Fee is payable solely from, the interest
portion (not including recoveries of interest from Liquidation Proceeds or
otherwise) of such Monthly Payment collected by the Servicer, or as otherwise
provided under Section 4.05.
Servicing Fee Rate: The Servicing Fee Rate shall be a rate per annum
equal to 0.25%.
Page 6
Servicing File: The documents, records and other items pertaining to a
particular Mortgage Loan, and any additional documents relating to such Mortgage
Loan as are in, or as may from time to time come into, the Servicer's
possession.
Servicing Officer: Any officer of the Servicer 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 to the
Owner upon request, as such list may from time to time be amended.
Stated Principal Balance: As to each Mortgage Loan as of any date of
determination, (i) the principal balance of such Mortgage Loan after giving
effect to payments of principal due, whether or not received, minus (ii) all
amounts previously distributed to the Owner with respect to the Mortgage Loan
representing payments or recoveries of principal or advances in lieu thereof.
Whole Loan Transfer: The sale or transfer of some or all of the
ownership interest in the Mortgage Loans by the Owner to one or more third
parties in whole loan or participation format, which third party may be Xxxxxx
Xxx or Xxxxxxx Mac.
ARTICLE II
SERVICING OF MORTGAGE LOANS;
POSSESSION OF SERVICING FILES;
BOOKS AND RECORDS;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01 Servicing of Mortgage Loans.
From and after the Effective Date, the Servicer does hereby agree to
service the Mortgage Loans, but subject to the terms of this Agreement. The
rights of the Owner to receive payments with respect to the Mortgage Loans shall
be as set forth in this Agreement.
Section 2.02 Maintenance of Servicing Files.
The Servicer shall maintain a Servicing File consisting of all
documents necessary to service the Mortgage Loans. The possession of each
Servicing File by the Servicer is for the sole purpose of servicing the Mortgage
Loan, and such retention and possession by the Servicer is in a custodial
capacity only. The Servicer acknowledges that the ownership of each Mortgage
Loan, including the Note, the Mortgage, all other Mortgage Loan Documents and
all rights, benefits, proceeds and obligations arising therefrom or in
connection therewith, has been vested in the Owner. All rights arising out of
the Mortgage Loans including, but not limited to, all funds received on or in
connection with the Mortgage Loans and all records or documents with respect to
the Mortgage Loans prepared by or which come into the possession of the Servicer
shall be received and held by the Servicer in trust for the exclusive benefit of
the Owner as the owner of the related Mortgage Loans. Any portion of the related
Servicing Files retained by the Servicer shall be appropriately identified in
the Servicer's computer system to clearly reflect the ownership of the related
Mortgage Loans by the Owner. The Servicer shall release its custody of the
contents of the related Servicing Files only in accordance with written
instructions of the Owner, except when such release is required as incidental to
the Servicer's servicing of the Mortgage Loans, such written instructions shall
not be required.
Section 2.03 Books and Records.
The Servicer shall be responsible for maintaining, and shall maintain,
a complete set of books and records for the Mortgage Loans which shall be
appropriately identified in the Servicer's computer system to clearly reflect
the ownership of the Mortgage Loan by the Owner. In particular, the Servicer
shall maintain in its possession, available for inspection by the Owner, or its
designee and shall deliver to the Owner upon demand, evidence of compliance with
all federal, state and local laws, rules and regulations, and requirements of
Xxxxxx Mae or Xxxxxxx Mac, as applicable, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the Flood Disaster Protection Act of 1973, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and eligibility
of any condominium project for approval by Fannie
Page 7
Mae and periodic inspection reports as required by Section 4.13. To the extent
that original documents are not required for purposes of realization of
Liquidation Proceeds or Insurance Proceeds, documents maintained by the Servicer
may be in the form of microfilm or microfiche or such other reliable means of
recreating original documents, including but not limited to, optical imagery
techniques so long as the Servicer complies with the requirements of the Xxxxxx
Xxx Guide.
The Servicer shall maintain with respect to each Mortgage Loan and
shall make available for inspection by any Owner or its designee the related
Servicing File (or copies thereof) upon reasonable request during the time the
Owner retains ownership of a Mortgage Loan and thereafter in accordance with
applicable laws and regulations.
Section 2.04. Transfer of Mortgage Loans.
The Servicer shall keep at its servicing office books and records in
which, subject to such reasonable regulations as it may prescribe from time to
time, the Servicer shall note transfers of Mortgage Loans. No transfer of a
Mortgage Loan may be made unless such transfer is in compliance with the terms
hereof. For the purposes of this Agreement, the Servicer shall be under no
obligation to deal with any person with respect to this Agreement or any
Mortgage Loan unless a notice of the transfer of such Mortgage Loan has been
delivered to the Servicer in accordance with this Section 2.04. The Owner may,
subject to the terms of this Agreement, sell and transfer one or more of the
Mortgage Loans in accordance with Sections 10.02 and 11.12, provided, however,
that the transferee will not be deemed to be an Owner hereunder binding upon the
Servicer unless such transferee shall agree in writing to be bound by the terms
of this Agreement and an assignment and assumption of this Agreement reasonably
acceptable to the Servicer. The Owner also shall advise the Servicer in writing
of the transfer. Upon receipt of notice of the permitted transfer, the Servicer
shall xxxx its books and records to reflect the ownership of the Mortgage Loans
of such assignee, and shall release the previous Owner from its obligations
hereunder with respect to the Mortgage Loans sold or transferred.
Section 2.05 Delivery of Mortgage Loan Documents.
The Servicer shall forward to the Custodian on behalf of the Owner
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with Section 4.01 or
6.01 promptly after their execution; provided, however, that the Servicer shall
provide the Custodian on behalf of the Owner with a certified true copy of any
such document submitted for recordation promptly after 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 180 days of its execution. If delivery is
not completed within 180 days solely due to delays in making such delivery by
reason of the fact that such documents shall not have been returned by the
appropriate recording office, the Servicer shall continue to use its best
efforts to effect delivery as soon as possible thereafter.
From time to time the Servicer may have a need for Mortgage Loan
Documents to be released by the Custodian. If the Servicer shall require any of
the Mortgage Loan Documents, the Servicer shall notify the Custodian in writing
of such request in the form of the request for release attached hereto as
Exhibit D. The Custodian shall deliver to the Servicer promptly, and in no event
later than within five (5) Business Days, any requested Mortgage Loan Document
previously delivered to the Custodian, provided that such documentation is
promptly returned to the Custodian when the Servicer no longer requires
possession of the document, and provided that during the time that any such
documentation is held by the Servicer, such possession is in trust for the
benefit of the Owner.
Section 2.06 Quality Control Procedures.
The Servicer must have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal documents,
credit documents, property appraisals, and underwriting decisions. The program
must be capable of evaluating and monitoring the overall quality of its
servicing activities. The purpose of the program is to ensure that the Mortgage
Loans are serviced in accordance with prudent mortgage banking practices and
accounting principles; guard against dishonest, fraudulent, or negligent acts;
and guard against errors and omissions by officers, employees, or other
authorized persons.
Page 8
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE SERVICER
The Servicer represents, warrants and covenants to the Owner that as of
the Effective Date or as of such date specifically provided herein:
(a) The Servicer is a validly existing corporation in good standing
under the laws of the State of its organization and is qualified to transact
business in, is in good standing under the laws of, and possesses all licenses
necessary for the conduct of its business in, each state in which any Mortgaged
Property is located or is otherwise exempt or not required under applicable law
to effect such qualification or license and no demand for such qualification or
license has been made upon the Servicer by any such state, and in any event the
Servicer is in compliance with the laws of each such State to the extent
necessary to ensure the enforceability of each Mortgage Loan and the servicing
of the Mortgage Loans in accordance with the terms of this Agreement;
(b) The Servicer has full power and authority to execute, deliver and
perform, and to enter into and consummate all transactions contemplated by this
Agreement and to conduct its business as presently conducted, has duly
authorized the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement, and this Agreement constitutes a legal,
valid and binding obligation of the Servicer, enforceable against it in
accordance with its terms subject to bankruptcy laws and other similar laws of
general application affecting rights of creditors and subject to the application
of the rules of equity, including those respecting the availability of specific
performance;
(c) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated thereby and hereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement
will conflict with any of the terms, conditions or provisions of the Servicer's
articles of incorporation or by-laws or materially conflict with or result in a
material breach of any of the terms, conditions or provisions of any legal
restriction or any agreement or instrument to which the Servicer is now a party
or by which it is bound, or constitute a default or result in an acceleration
under any of the foregoing, or result in the material violation of any law,
rule, regulation, order, judgment or decree to which the Servicer or its
property is subject;
(d) There is no litigation pending or, to the Seller's knowledge,
threatened with respect to the Servicer which is reasonably likely to have a
material adverse effect on the execution, delivery or enforceability of this
Agreement, or which is reasonably likely to have a material adverse effect on
the financial condition of the Servicer;
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of or compliance by the Servicer with this Agreement
or the consummation of the transactions contemplated by this Agreement except
for consents, approvals, authorizations and orders which have been obtained;
(f) The collection and servicing practices used by the Servicer, with
respect to each Mortgage Note and Mortgage have been in all material respects
legal. With respect to escrow deposits and payments that the Servicer collects,
all such payments are in the possession of, or under the control of, the
Servicer, and there exist no deficiencies in connection therewith for which
customary arrangements for repayment thereof have not been made. No escrow
deposits or other charges or payments due under the Mortgage Note have been
capitalized under any Mortgage or the related Mortgage Note;
(g) The Servicer is in good standing to service mortgage loans for
Xxxxxx Xxx and Xxxxxxx Mac and no event has occurred which would make the
Servicer unable to comply with eligibility requirements or which would require
notification to either Xxxxxx Mae or Xxxxxxx Mac;
(h) No written statement, report or other document furnished or to be
furnished pursuant to the Agreement contains or will contain any statement that
is or will be inaccurate or misleading in any material respect or omits to state
a material fact required to be stated therein or necessary to make the
information and statements therein not misleading;
Page 9
(i) No fraud or misrepresentation of a material fact with respect to
the servicing of a Mortgage Loan has taken place on the part of the Servicer;
(j) At the time Servicer commenced servicing the Mortgage Loans, either
(i) each Mortgagor was properly notified with respect to Servicer's servicing of
the related Mortgage Loan in accordance with the Xxxxxxxx Xxxxxxxx National
Affordable Housing Act of 1990, as the same may be amended from time to time,
and the regulations provided in accordance with the Real Estate Settlement
Procedures Act or (ii) such notification was not required;
(k) At the time Servicer commenced servicing the Mortgage Loans, all
applicable taxing authorities and insurance companies (including primary
mortgage insurance policy insurers, if applicable) and/or agents were notified
of the transfer of the servicing of the Mortgage Loans to Servicer, or its
designee, and Servicer currently receives all related notices, tax bills and
insurance statements. Additionally, any and all costs, fees and expenses
associated with the Servicer's commencement of the servicing of the Mortgage
Loans, including the costs of any insurer notifications, the transfer or
implementation of tax service contracts, flood certification contracts, and any
and all other servicing transfer-related costs and expenses have been paid for
by the Servicer and will, in no event, be the responsibility of the Owner; and
(l) The collection and servicing practices with respect to each
Mortgage Note and Mortgage have been in all material respects legal. With
respect to escrow deposits and payments that the Servicer collects, all such
payments are in the possession of, or under the control of, the Servicer, and
there exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. No escrow deposits or
other charges or payments due under the Mortgage Note have been capitalized
under any Mortgage or the related Mortgage Note.
ARTICLE IV
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 4.01 Servicer to Act as Servicer.
The Servicer, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and with
Accepted Servicing Practices (giving due consideration to the Owner's reliance
on the Servicer), and shall have full power and authority, acting alone, to do
or cause to be done any and all things in connection with such servicing and
administration which the Servicer may deem necessary or desirable and consistent
with the terms of this Agreement and with Accepted Servicing Practices and shall
exercise the same care that it customarily employs for its own account. Except
as set forth in this Agreement, the Servicer shall service the Mortgage Loans in
accordance with Accepted Servicing Practices in compliance with the servicing
provisions of the Xxxxxx Xxx Guide, which include, but are not limited to,
provisions regarding the liquidation of Mortgage Loans, the collection of
Mortgage Loan payments, the payment of taxes, insurance and other charges, the
maintenance of hazard insurance with a Qualified Insurer, the maintenance of
fidelity bond and errors and omissions insurance, inspections, the restoration
of Mortgaged Property, the maintenance of Primary Mortgage Insurance Policies,
insurance claims, and title insurance, management of REO Property, permitted
withdrawals with respect to REO Property, liquidation reports, and reports of
foreclosures and abandonments of Mortgaged Property, the transfer of Mortgaged
Property, the release of Mortgage Loan Documents, annual statements, and
examination of records and facilities. In the event of any conflict,
inconsistency or discrepancy between any of the servicing provisions of this
Agreement and any of the servicing provisions of the Xxxxxx Mae Guide, the
provisions of this Agreement shall control and be binding upon the Owner and the
Servicer. The Owner shall, upon reasonable request, deliver powers-of-attorney
to the Servicer sufficient to allow the Servicer as servicer to execute all
documentation requiring execution on behalf of Owner with respect to the
servicing of the Mortgage Loans, including satisfactions, partial releases,
modifications and foreclosure documentation or, in the alternative, shall as
promptly as reasonably possible, execute and return such documentation to the
Servicer.
Page 10
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
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 Owner, provided,
however, that unless the Servicer has obtained the prior written consent of the
Owner, the Servicer shall not permit any modification with respect to any
Mortgage Loan that would change the Mortgage Interest Rate, 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 has been agreed
to in writing by the Owner and which permits the deferral of interest or
principal payments on any Mortgage Loan, the Servicer shall, on the Business Day
immediately preceding the related Remittance Date in any month in which any such
principal or interest payment has been deferred, deposit in the Custodial
Account from its own funds, in accordance with Section 4.04 and Section 5.03,
the difference between (a) such month's principal and one month's interest at
the related 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 pursuant to Section 4.05. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and empowered,
to prepare, execute and deliver, 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 Servicer shall perform all of its servicing responsibilities
hereunder or may, with the Owner's prior written approval, cause a subservicer
to perform any such servicing responsibilities on its behalf, but the use by the
Servicer of a subservicer shall not release the Servicer from any of its
obligations hereunder and the Servicer shall remain responsible hereunder for
all acts and omissions of each subservicer as fully as if such acts and
omissions were those of the Servicer. Any such subservicer that the Owner shall
be requested to consent to must be a Xxxxxx Xxx approved seller/servicer or a
Xxxxxxx Mac seller/servicer in good standing and no event shall have occurred,
including but not limited to, a change in insurance coverage, which would make
it unable to comply with the eligibility requirements for lenders imposed by
Xxxxxx Xxx or for seller/servicers by Xxxxxxx Mac, or which would require
notification to Xxxxxx Xxx or Xxxxxxx Mac. The Servicer shall pay all fees and
expenses of each subservicer from its own funds, and a subservicer's fee shall
not exceed the Servicing Fee.
At the cost and expense of the Servicer, without any right of
reimbursement from the Custodial Account, the Servicer shall be entitled to
terminate the rights and responsibilities of a subservicer and arrange, with the
Owner's prior written approval, for any servicing responsibilities to be
performed by a successor subservicer meeting the requirements in the preceding
paragraph, provided, however, that nothing contained herein shall be deemed to
prevent or prohibit the Servicer, at the Servicer's option, from electing to
service the related Mortgage Loans itself. In the event that the Servicer's
responsibilities and duties under this Agreement are terminated pursuant to
Section 8.04, 9.01 or 10.01, and if requested to do so by the Owner, the
Servicer shall at its own cost and expense terminate the rights and
responsibilities of each subservicer effective as of the date of termination of
the Servicer. The Servicer shall pay all fees, expenses or penalties necessary
in order to terminate the rights and responsibilities of each subservicer from
the Servicer's own funds without reimbursement from the Owner.
Notwithstanding any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a subservicer or any
reference herein to actions taken through a subservicer or otherwise, the
Servicer shall not be relieved of its obligations to the Owner and shall be
obligated to the same extent and under the same terms and conditions as if it
alone were servicing and administering the Mortgage Loans. The Servicer shall be
entitled to enter into an agreement with a subservicer for indemnification of
the Servicer by the subservicer and nothing contained in this Agreement shall be
deemed to limit or modify such indemnification.
Any subservicing agreement and any other transactions or services
relating to the Mortgage Loans involving a subservicer shall be deemed to be
between such subservicer and Servicer alone, and the Owner shall have no
obligations, duties or liabilities with respect to such Subservicer including no
obligation, duty or liability of Owner to pay such subservicer's fees and
expenses. For purposes of distributions and advances by the Servicer pursuant to
this Agreement, the Servicer shall be deemed to have received a payment on a
Mortgage Loan when a subservicer has received such payment.
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Section 4.02 Collection of Mortgage Loan Payments.
Continuously from the Effective Date until the date each Mortgage Loan
ceases to be subject to this Agreement, the Servicer will proceed with
reasonable diligence to collect all payments due under each Mortgage Loan when
the same shall become due and payable and shall, to the extent such procedures
shall be consistent with this Agreement and the terms and provisions of related
Primary Mortgage Insurance Policy, follow such collection procedures as it
follows with respect to mortgage loans comparable to the Mortgage Loans and held
for its own account. Further, the Servicer will take reasonable care in
ascertaining and estimating annual ground rents, taxes, assessments, water
rates, fire and hazard insurance premiums, mortgage insurance premiums, and all
other charges that, as provided in the Mortgage, will become due and payable to
the end that the installments payable by the Mortgagors will be sufficient to
pay such charges as and when they become due and payable.
Section 4.03 Realization Upon Defaulted Mortgage Loans.
The Servicer shall use its reasonable efforts, consistent with the
procedures that the Servicer would use in servicing loans for its own account
and the requirements of the Xxxxxx Mae Guide, to foreclose upon or otherwise
comparably convert the ownership of properties securing such of the Mortgage
Loans as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 4.01. The Servicer shall use its reasonable efforts to realize upon
defaulted Mortgage Loans in such manner as will maximize the receipt of
principal and interest by the Owner, 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 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 Owner 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, as
contemplated in Section 4.05. The Servicer shall notify the Owner in writing of
the commencement of foreclosure proceedings. The Servicer shall be responsible
for all costs and expenses incurred by it in any such proceedings or functions
as Servicing Advances; provided, however, that it shall be entitled to
reimbursement therefor from the related Mortgaged Property, as contemplated in
Section 4.05. Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has reasonable cause to believe that a Mortgaged Property
is contaminated by hazardous or toxic substances or wastes, or if the Owner
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a qualified
inspector. Upon completion of the inspection, the Servicer shall promptly
provide the Owner with a written report of the environmental inspection. After
reviewing the environmental inspection report, the Owner shall determine how the
Servicer shall proceed with respect to the Mortgaged Property.
Section 4.04 Establishment of Custodial Accounts; Deposits in Custodial
Accounts.
The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own funds and
general assets and shall establish and maintain one or more Custodial Accounts.
Each Custodial Account shall be established with a Qualified Depository. To the
extent such funds are not deposited in a Custodial Account, such funds may be
invested in Permitted Investments for the benefit of the Owner (with any income
earned thereon for the benefit of the Servicer). Funds deposited in the
Custodial Account may be drawn on by the Servicer in accordance with Section
4.05. The creation of any Custodial Account shall be evidenced by a letter
agreement in the form shown in Exhibit B hereto. The original of such letter
agreement shall be furnished to the Owner upon request. The Servicer
acknowledges and agrees that the Servicer shall bear any losses incurred with
respect to Permitted Investments. The amount of any such losses shall be
immediately deposited by the Servicer in the Custodial Account, as appropriate,
out of the Servicer's own funds, with no right to reimbursement therefor.
The Servicer shall deposit in a mortgage clearing account on a daily
basis, and in the Custodial Account or Accounts no later than the second
Business Day after receipt of funds and retain therein the following payments
and collections:
Page 12
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans received after the Cut-off Date;
(ii) all payments on account of interest on the Mortgage Loans adjusted
to the related Mortgage Loan Remittance Rate received after the Cut-off Date;
(iii) all Liquidation Proceeds and REO Disposition Proceeds received
after the Cut-off Date;
(iv) any net amounts received by the Servicer after the Cut-off Date in
connection with any REO Property pursuant to Section 4.13;
(v) all Insurance Proceeds received after the Cut-off Date including
amounts required to be deposited pursuant to Sections 4.08 and 4.10, other than
proceeds to be held in the Escrow Account and applied to the restoration or
repair of the Mortgaged Property or released to the Mortgagor in accordance with
the Servicer's normal servicing procedures, the loan documents or applicable
law;
(vi) all Condemnation Proceeds affecting any Mortgaged Property
received after the Cut-off Date other than proceeds to be held in the Escrow
Account and applied to the restoration or repair of the Mortgaged Property or
released to the Mortgagor in accordance with the Servicer's normal servicing
procedures, the loan documents or applicable law;
(vii) any Monthly Advances as provided in Section 5.03;
(viii) any amounts received after the Cut-off Date and required to be
deposited in the Custodial Account pursuant to 6.02; and
(ix) with respect to each full or partial Principal Prepayment received
after the Cut-off date, any Prepayment Interest Shortfalls, to the extent of the
Servicer's aggregate Servicing Fee received with respect to the related Due
Period.
The foregoing requirements for deposit in the Custodial Account shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges and
assumption fees, to the extent permitted by Section 6.01, need not be deposited
by the Servicer in the Custodial Account. Any interest paid on funds deposited
in the Custodial Account by the Qualified Depository 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 4.05(iv).
Section 4.05 Permitted Withdrawals From the Custodial Account.
The Servicer may, from time to time, make withdrawals from the
Custodial Account for the following purposes:
(i) to make payments to the Owner in the amounts and in the manner
provided for in Section 5.01;
(ii) to reimburse itself for Monthly Advances, the Servicer's right to
reimburse itself pursuant to this subclause (ii) being limited to amounts
received on the related Mortgage Loan which represent late collections (net of
the related Servicing Fees) of principal and/or interest respecting which any
such advance was made;
(iii) to reimburse itself for unreimbursed Servicing Advances and
unreimbursed Monthly Advances, the Servicer's right to reimburse itself pursuant
to this subclause (iii) with respect to any Mortgage Loan being limited to
Liquidation Proceeds, Condemnation Proceeds and Insurance Proceeds received
after the Cut-off Date related to such Mortgage Loan;
(iv) to pay to itself as servicing compensation (a) any interest earned
on funds in the Custodial Account (all such interest to be withdrawn monthly not
later than each Remittance Date) and (b) any payable Servicing Fee;
Page 13
(v) to reimburse itself for any Nonrecoverable Advances:
(vi) to transfer funds to another Qualified Depository in accordance
with Section 4.09 hereof;
(vii) to remove funds inadvertently placed in the Custodial Account in
error by the Servicer; and
(viii) to clear and terminate the Custodial Account upon the
termination of this Agreement.
Section 4.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts. Each Escrow Account shall be established
with a Qualified Depository. To the extent such funds are not deposited in an
Escrow Account, such funds may be invested in Permitted Investments. Funds
deposited in an Escrow Account may be drawn on by the Servicer in accordance
with Section 4.07. The creation of any Escrow Account shall be evidenced by a
letter agreement in the form shown in Exhibit C. The original of such letter
agreement shall be furnished to the Owner upon request. The Servicer
acknowledges and agrees that the Servicer shall bear any losses incurred with
respect to Permitted Investments. The amount of any such losses shall be
immediately deposited by the Servicer in the Escrow Account, as appropriate, out
of the Servicer's own funds, with no right to reimbursement therefor.
The Servicer shall deposit in a mortgage clearing account on a daily
basis, and in the Escrow Account or Accounts no later than the second Business
Day after receipt of funds and retain therein:
(i) all Escrow Payments collected on account of the Mortgage Loans, for
the purpose of effecting timely payment of any items as are required under the
terms of this Agreement;
(ii) all Insurance Proceeds which are to be applied to the restoration
or repair of any Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose Escrow Payments are
insufficient to cover escrow disbursements.
The Servicer shall make withdrawals from an Escrow Account only to
effect such payments as are required under this Agreement, and for such other
purposes as shall be as set forth in and in accordance with Section 4.07. The
Servicer shall be entitled to retain any interest paid on funds deposited in an
Escrow Account by the Qualified Depository other than interest on escrowed funds
required by law to be paid to the Mortgagor and, to the extent required by law,
the Servicer shall pay interest on escrowed funds to the Mortgagor
notwithstanding that the Escrow Account is non-interest bearing or that interest
paid thereon is insufficient for such purposes.
Section 4.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, fire and hazard insurance premiums, Primary Mortgage Insurance
Policy premiums, if applicable, and comparable items;
(ii) to reimburse Servicer for any Servicing Advance made by Servicer
with respect to a related Mortgage Loan but only from amounts received on the
related Mortgage Loan which represent late payments or collections of Escrow
Payments thereunder;
(iii) to refund to the Mortgagor any funds as may be determined to be
overages;
(iv) for transfer to the Custodial Account in connection with an
acquisition of REO Property;
(v) for application to restoration or repair of the Mortgaged Property;
Page 14
(vi) to pay to the Servicer, or to the Mortgagor to the extent required
by law, any interest paid on the funds deposited in the Escrow Account;
(vii) to pay to the Mortgagors or other parties Insurance Proceeds
deposited in accordance with Section 4.06;
(viii) to remove funds inadvertently placed in an Escrow Account in
error by the Servicer; and
(ix) to clear and terminate the Escrow Account on the termination of
this Agreement.
As part of its servicing duties, the Servicer shall pay to the
Mortgagors interest on funds in an Escrow Account, to the extent required by
law, and to the extent that interest earned on funds in the Escrow Account is
insufficient, shall pay such interest from its own funds, without any
reimbursement therefor.
Section 4.08 Payment of Taxes, Insurance and Other Charges; Maintenance
of Primary Mortgage Insurance Policies; Collections Thereunder.
With respect to each Mortgage Loan, the Servicer shall maintain
accurate records reflecting the status of ground rents, taxes, assessments,
water rates and other charges which are or may become a lien upon the Mortgaged
Property and the status of Primary Mortgage Insurance Policy premiums and fire
and hazard insurance coverage and shall obtain, from time to time, all bills for
the payment of such charges, including renewal premiums and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, 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 or applicable law. To the extent that
the Mortgage does not provide for Escrow Payments, the Servicer shall determine
that any such payments are made by the Mortgagor at the time they first become
due. The Servicer assumes full responsibility for the timely payment of all such
bills and shall effect timely payments of all such bills irrespective of the
Mortgagor's faithful performance in the payment of same or the making of the
Escrow Payments and shall make advances from its own funds to effect such
payments.
The Servicer will maintain in full force and effect Primary Mortgage
Insurance Policies issued by a Qualified Insurer with respect to each Mortgage
Loan for which such coverage is herein required. Such coverage will be
maintained until the ratio of the current outstanding principal balance of the
related Mortgage Loan to the appraised value of the related Mortgaged Property,
based on the most recent appraisal of the Mortgaged Property performed by a
Qualified Appraiser, such appraisal to be included in the Servicing File, is
reduced to 80.00% or less. The Servicer will not cancel or refuse to renew any
Primary Mortgage Insurance Policy that is required to be kept in force under
this Agreement unless a replacement Primary Mortgage Insurance Policy for such
canceled or nonrenewed policy is obtained from and maintained with a Qualified
Insurer. The Servicer shall not take any action which would result in
noncoverage under any applicable Primary Mortgage Insurance Policy of any loss
which, but for the actions of the Servicer would have been covered thereunder.
In connection with any assumption or substitution agreement entered into or to
be entered into pursuant to Section 6.01, the Servicer shall promptly notify the
insurer under the related Primary Mortgage Insurance Policy, if any, of such
assumption or substitution of liability in accordance with the terms of such
policy and shall take all actions which may be required by such insurer as a
condition to the continuation of coverage under the Primary Mortgage Insurance
Policy. If such Primary Mortgage Insurance Policy is terminated as a result of
such assumption or substitution of liability, the Servicer shall obtain a
replacement Primary Mortgage Insurance Policy as provided above.
In connection with its activities as servicer, the Servicer agrees to
prepare and present, on behalf of itself and the Owner, claims to the insurer
under any Private Mortgage Insurance Policy in a timely fashion in accordance
with the terms of such Primary Mortgage Insurance Policy and, in this regard, to
take such action as shall be necessary to permit recovery under any Primary
Mortgage Insurance Policy respecting a defaulted Mortgage Loan. Pursuant to
Section 4.04, any amounts collected by the Servicer under any Primary Mortgage
Insurance Policy shall be deposited in the Custodial Account, subject to
withdrawal pursuant to Section 4.05.
Section 4.09 Transfer of Accounts.
Page 15
The Servicer may transfer the Custodial Account or the Escrow Account
to a different Qualified Depository from time to time. The Servicer shall notify
the Owner of any such transfer within 15 Business Days of transfer.
Section 4.10 Maintenance of Hazard Insurance.
The Servicer shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is customary in the area where
the Mortgaged Property is located in an amount which is equal to the lesser of
(i) the maximum insurable value of the improvements securing such Mortgage Loan
or (ii) the greater of (a) the outstanding principal balance of the Mortgage
Loan, and (b) the percentage such that the proceeds thereof shall be sufficient
to prevent the Mortgagor and/or the Mortgagee from becoming a co-insurer. If the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as being a special flood hazard area that
has federally-mandated flood insurance requirements, the Servicer will cause to
be maintained a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration with a generally acceptable
insurance carrier, in an amount representing coverage not less than the least of
(i) the outstanding principal balance of the Mortgage Loan, (ii) the maximum
insurable value of the improvements securing such Mortgage Loan or (iii) the
maximum amount of insurance which is available under the Flood Disaster
Protection Act of 1973, as amended. The Servicer shall also maintain on the REO
Property, fire and hazard insurance with extended coverage in an amount which is
at least equal to the maximum insurable value of the improvements which are a
part of such property, liability insurance and, to the extent required and
available under the Flood Disaster Protection Act of 1973, as amended, flood
insurance in an amount as provided above. 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 Mortgaged Property or REO
Property, or 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 4.05. It is understood and agreed that no other
additional insurance need be required by the Servicer or the Mortgagor or
maintained on property acquired in respect of the Mortgage Loans, other than
pursuant to the Xxxxxx Xxx Guide or such applicable state or federal laws and
regulations as shall at any time be in force and as shall require such
additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer and its successors and/or
assigns and shall provide for at least thirty days prior written notice of any
cancellation, reduction in the amount or material change in coverage to the
Servicer. 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 currently reflect a General Policy Rating in
Best's Key Rating Guide currently acceptable to Xxxxxx Mae and are licensed to
do business in the state wherein the property subject to the policy is located.
Section 4.11 Adjustments to Mortgage Interest Rate and Monthly Payment.
On each applicable Adjustment Date, the Mortgage Interest Rate shall be
adjusted, in compliance with the requirements of the related Mortgage and
Mortgage Note, to equal the sum of the Index plus the Margin (rounded in
accordance with the related Mortgage Note) subject to the applicable Periodic
Rate Cap and Lifetime Rate Cap, as set forth in the Mortgage Note. The Servicer
shall execute and deliver the notices required by each Mortgage and Mortgage
Note and applicable laws and regulations regarding interest rate adjustments.
Section 4.12 Fidelity Bond, Errors and Omissions Insurance.
The Servicer shall maintain, at its own expense, a blanket fidelity
bond and an errors and omissions insurance policy, with broad coverage with
responsible companies on all officers, employees or other persons acting in any
capacity with regard to the Mortgage Loans and who handle funds, money,
documents and papers relating to the Mortgage Loans. The Fidelity Bond and
errors and omissions insurance shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Servicer against losses, including
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of
such persons. Such Fidelity Bond and errors and omissions insurance shall also
protect and insure the Servicer against losses in connection with the failure to
maintain any insurance policies required pursuant to this Agreement and the
release or satisfaction of a Mortgage Loan without having obtained payment in
full of the indebtedness secured thereby. No provision of this Section 4.12
requiring the Fidelity Bond and errors and omissions insurance shall diminish or
relieve the Servicer from its duties and obligations as set forth in this
Agreement. The minimum coverage under any such Fidelity Bond and insurance
policy shall be at least equal to the corresponding amounts required by Xxxxxx
Xxx in the Xxxxxx Mae Guide or by
Page 16
Xxxxxxx Mac in the Xxxxxxx Mac Guide. The Servicer shall, upon request of Owner,
deliver to the Owner a certificate from the surety and the insurer as to the
existence of the Fidelity Bond and errors and omissions insurance policy and
shall obtain a statement from the surety and the insurer that such Fidelity Bond
or insurance policy shall in no event be terminated or materially modified
without thirty days prior written notice to the Owner. The Servicer shall notify
the Owner within five Business Days of receipt of notice that such Fidelity Bond
or insurance policy will be, or has been, materially modified or terminated. The
Owner and its successors or assigns as their interests may appear must be named
as loss payees on the Fidelity Bond and as additional insured on the errors and
omissions policy.
Section 4.13 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 certificate of sale
shall be taken in the name of the Owner or its designee. Any such Person or
Persons holding such title other than the Owner shall acknowledge in writing
that such title is being held as nominee for the benefit of the Owner.
The Servicer shall notify the Owner in accordance with prudent
servicing practices of each acquisition of REO Property upon such acquisition,
and thereafter assume the responsibility for marketing such REO Property in
accordance with Accepted Servicing Practices. Thereafter, the Servicer shall
continue to provide certain administrative services to the Owner relating to
such REO Property as set forth in this Section 4.13. The REO Property must be
sold within three years following the end of the calendar year of the date of
acquisition, unless a REMIC election has been made with respect to the
arrangement under which the Mortgage Loans and REO Property are held and (i) the
Owner shall have been supplied with an Opinion of Counsel to the effect that the
holding by the related trust of such Mortgaged Property subsequent to such
three-year period (and specifying the period beyond such three-year period for
which the Mortgaged Property may be held) will not result in the imposition of
taxes on "prohibited transactions" of the related trust as defined in Section
860F of the Code, or cause the related REMIC to fail to qualify as a REMIC, in
which case the related trust may continue to hold such Mortgaged Property
(subject to any conditions contained in such Opinion of Counsel), or (ii) the
Owner (at the Servicer's expense) or the Servicer shall have applied for, prior
to the expiration of such three-year period, an extension of such three-year
period in the manner contemplated by Section 856(e)(3) of the Code, in which
case the three-year period shall be extended by the applicable period. If a
period longer than three years is permitted under the foregoing sentence and is
necessary to sell any REO Property, (i) the Servicer shall report monthly to the
Owner as to progress being made in selling such REO Property and (ii) if, with
the written consent of the Owner, a purchase money mortgage is taken in
connection with such sale, such purchase money mortgage shall name the Servicer
as mortgagee, and such purchase money mortgage shall not be held pursuant to
this Agreement, but instead a separate participation agreement between the
Servicer and Owner shall be entered into with respect to such purchase money
mortgage.
The Servicer shall not permit the creation of any "interests" (within
the meaning of Section 860G of the Code) in any REMIC. The Servicer shall not
enter into any arrangement by which a REMIC will receive a fee or other
compensation for services nor permit a REMIC to receive any income from assets
other than "qualified mortgages" as defined in Section 860G(a)(3) of the Code or
"permitted investments" as defined in Section 860G(a)(5) of the Code.
Notwithstanding any other provision of this Agreement, if a REMIC
election has been made, no Mortgaged Property held by a REMIC shall be rented
(or allowed to continue to be rented) or otherwise used for the production of
income by or on behalf of the related trust or sold in such a manner or pursuant
to any terms that would (i) cause such Mortgaged Property to fail to qualify at
any time as "foreclosure property" within a meaning of Section 860G(a)(8) of the
Code, (ii) subject the related trust to the imposition of any federal or state
income taxes on "net income from foreclosure property" with respect to such
Mortgaged Property within the meaning of Section 860G(c) of the Code, or (iii)
cause the sale of such Mortgaged Property to result in the receipt by the
related trust or any income from non-permitted assets as described in Section
860F(a) (2)(B) of the Code, unless the Servicer has agreed to indemnify and hold
harmless the related trust with respect to the imposition of any such taxes.
The Servicer shall, either itself or through an agent selected by the
Servicer, and in accordance with the Xxxxxx Xxx Guide, manage, conserve, protect
and operate each 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
Page 17
that similar property in the same locality as the REO Property is managed. Each
REO Disposition shall be carried out by the Servicer at such price and upon such
terms and conditions as the Servicer deems to be in the best interest of the
Owner. The REO Disposition Proceeds from the 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 shall reimburse itself
for any related Servicing Advances, or Monthly Advances made pursuant to Section
5.03.
The Servicer shall cause each REO Property to be inspected promptly
upon the acquisition of title thereto and shall cause each REO Property to be
inspected at least monthly thereafter or more frequently as may be required by
the circumstances. The Servicer shall make or cause the inspector to make a
written report of each such inspection. Such reports shall be retained in the
Servicing File and copies thereof shall be forwarded by the Servicer to the
Owner.
Notwithstanding anything to the contrary set forth in this Section
4.13, the parties hereto hereby agree that the Owner, at its option, shall be
entitled to manage, conserve, protect and operate each REO Property for its own
benefit (such option, an "REO Option"). In connection with the exercise of an
REO Option, the prior two paragraphs and the related provisions of Section 4.03
and Section 4.04(iii) (such provisions, the "REO Marketing Provisions") shall be
revised as follows. Following the acquisition of any Mortgaged Property, the
Servicer shall submit a detailed invoice to the Owner for all related Servicing
Advances and, upon exercising the REO Option, the Owner shall promptly reimburse
the Servicer for such amounts. In the event the REO Option is exercised with
respect to an REO Property, Section 4.04 (iii) shall not be applicable thereto.
References made in Section 4.03 with respect to the reimbursement of Servicing
Advances shall, for purposes of such REO Property, be deemed to be covered by
this paragraph. The Owner acknowledges that, in the event it exercises an REO
Option, with respect to the related REO Property, there shall be no breach by
the Servicer based upon or arising out of the Servicer's failure to comply with
the REO Marketing Provisions.
ARTICLE V
PAYMENTS TO THE OWNER
Section 5.01 Remittances.
On each Remittance Date, the Servicer shall remit to the Owner (i) all
amounts credited to the Custodial Account as of the close of business on the
related preceding Determination Date, except (a) Partial Principal Prepayments
received on or after the first day of the month in which the Remittance Date
occurs shall be remitted to the Owner on the next following Remittance Date, (b)
Full Principal Prepayments received on or before the 15th day of the month in
which a Remittance Date occurs shall be remitted to the Owner on the Remittance
Date of such month, and (c) Full Principal Prepayments received after the 15th
day of the month shall be remitted to the Owner on the next following Remittance
Date, each net of charges against or withdrawals from the Custodial Account
pursuant to Section 4.05, plus, to the extent not already deposited in the
Custodial Account, the sum of (ii) all Monthly Advances, if any, which the
Servicer is obligated to distribute pursuant to Section 5.03 and (iii) all
Prepayment Interest Shortfalls the Servicer is required to make up pursuant to
Section 4.04, minus (iv) any amounts attributable to Monthly Payments collected
after the Cut-off Date but due on a Due Date or Dates subsequent to the last day
of the related Due Period, which amounts shall be remitted on the related
Remittance Date next succeeding the Due Period for such amounts.
With respect to any remittance received by the Owner after the Business
Day on which such payment was due, the Servicer shall pay to the Owner interest
on any such late payment at an annual rate equal to the Prime Rate, adjusted as
of the date of each change, plus two percentage points, but in no event greater
than the maximum amount permitted by applicable law. Such interest shall be
deposited in the Custodial Account by the Servicer on the date such late payment
is made and shall cover the period commencing with the day following such
Business Day and ending with the Business Day on which such payment is made,
both inclusive. Such interest shall be remitted along with the distribution
payable on the next succeeding related 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.
Section 5.02 Statements to the Owner.
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The Servicer shall furnish to the Owner an individual Mortgage Loan
accounting report (a "Report"), as of the last Business Day of each month, in
the Servicer's assigned loan number order to document Mortgage Loan payment
activity on an individual Mortgage Loan basis. With respect to each month, such
Report shall be received by the Owner (i) no later than the fifth Business Day
of the following month of the related Remittance Date on a disk or tape or other
computer-readable format, in such format as may be mutually agreed upon by both
the Owner and the Servicer, and (ii) no later than the tenth Business Day of the
following month of the related Remittance Date in hard copy, which Report shall
contain the following:
(i) with respect to each Monthly Payment, the amount of such
remittance allocable to interest
(ii) the amount of servicing compensation received by the Servicer
during the prior distribution period;
(iii) the aggregate Stated Principal Balance of the Mortgage Loans;
(iv) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89
days, (3) 90 days or more; (b) as to which foreclosure has
commenced; and (c) as to which REO Property has been acquired;
and
(v) such other reports as may reasonably be required by the Owner.
The Servicer shall also provide a trial balance, sorted in the Owner's
assigned loan number order, and such other loan level scheduled-scheduled
remittance information as described on Exhibit E, in electronic tape form, with
each such Report.
The Servicer shall prepare and file any and all information statements
or other filings required to be delivered to any governmental taxing authority
or to Owner pursuant to any applicable law with respect to the Mortgage Loans
and the transactions contemplated hereby. In addition, the Servicer shall
provide the Owner with such information concerning the Mortgage Loans as is
necessary for the Owner to prepare its federal income tax return as the Owner
may reasonably request from time to time.
In addition, not more than 60 days after the end of each calendar year,
the Servicer shall furnish to each Person who was an Owner at any time during
such calendar year an annual statement in accordance with the requirements of
applicable federal income tax law as to the aggregate of remittances of
principal and interest for the applicable portion of such year.
Section 5.03 Monthly Advances by the Servicer.
Not later than the close of business on the Business Day preceding each
Remittance Date, the Servicer shall deposit in the Custodial Account an amount
equal to all payments not previously advanced by the Servicer, whether or not
deferred pursuant to Section 4.01, of Monthly Payments, adjusted to the related
Mortgage Loan Remittance Rate, which are delinquent at the close of business on
the related Determination Date; provided, however, that the amount of any such
deposit may be reduced by (i) the Amount Held for Future Distribution (as
defined below) then on deposit in the Custodial Account, plus (ii) with respect
to the initial Remittance Date, the Non-held Early Pay Amount (as defined
below). Any portion of the Amount Held for Future Distribution used to pay
Monthly Advances shall be replaced by the Servicer by deposit into the Custodial
Account on any future Remittance Date to the extent that the funds that are
available in the Custodial Account for remittance to the Owner on such
Remittance Date are less than the amount of payments required to be made to the
Owner on such Remittance Date.
The "Amount Held for Future Distribution" as to any Remittance Date
shall be the total of the amounts held in the Custodial Account at the close of
business on the preceding Determination Date which were received after the
Cut-off Date on account of (i) Liquidation Proceeds, Insurance Proceeds, and
Partial Principal Prepayments received or made in the month of such Remittance
Date, (ii) Full Principal Payments received after the 15th day of the month in
the month of such Remittance Date, and (iii) payments which represent early
receipt of scheduled payments of principal and interest due on a date or dates
subsequent to the related Due Date. The "Non-
Page 19
held Early Pay Amount" shall be the total of the amounts on account of payments
which represent early receipt of scheduled payments of principal and interest
received on or prior to the Cut-off Date.
The Servicer's obligation to make such Monthly Advances as to any
Mortgage Loan will continue through the final disposition or liquidation of the
Mortgaged Property, unless the Servicer deems such advance to be nonrecoverable
from Liquidation Proceeds, REO Disposition Proceeds or Insurance Proceeds with
respect to the applicable Mortgage Loan. In such latter event, the Servicer
shall deliver to the Owner an Officer's Certificate of the Servicer to the
effect that an officer of the Servicer has reviewed the related Servicing File
and has obtained a recent appraisal and has made the reasonable determination
that any additional advances are nonrecoverable from Liquidation or Insurance
Proceeds with respect to the applicable Mortgage Loan.
Section 5.04 Liquidation Reports.
Upon the foreclosure sale of any Mortgaged Property or the acquisition
thereof by the Owner pursuant to a deed-in-lieu of foreclosure, the Servicer
shall submit to the Owner a liquidation report with respect to such Mortgaged
Property in such form as the Servicer and the Owner shall agree. The Servicer
shall also provide reports on the status of REO Property containing such
information as Owner may reasonably require.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01 Assumption Agreements.
The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of a Mortgaged Property (whether by
absolute conveyance or by contract of, sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under any
"due-on-sale" clause to the extent permitted by law; provided, however, that the
Servicer shall not exercise any such rights if prohibited by law or the terms of
the Mortgage Note from doing so or if the exercise of such rights would impair
or threaten to impair any recovery under the related Primary Mortgage Insurance
Policy, if any. If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Servicer, with the
approval of the Owner (such approval not to be unreasonably withheld), will
enter into an assumption agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Where an assumption
is allowed pursuant to this Section 6.01, the Servicer, with the prior consent
of the primary mortgage insurer, if any, is authorized to enter into a
substitution of liability agreement with the person to whom the Mortgaged
Property has been conveyed or is proposed to be conveyed pursuant to which the
original mortgagor is released from liability and such Person is substituted as
mortgagor and becomes liable under the related Mortgage Note. Any such
substitution of liability agreement shall be in lieu of an assumption agreement.
In connection with any such assumption or substitution of liability,
the Servicer shall follow the underwriting practices and procedures of the
Xxxxxx Mae Guide. With respect to an assumption or substitution of liability,
the Mortgage Interest Rate borne by the related Mortgage Note and the amount of
the Monthly Payment may not be changed. The Servicer shall notify the Owner that
any such substitution of liability or assumption agreement has been completed by
forwarding to the Owner the original of any such substitution of liability or
assumption agreement, which document shall be added to the related Mortgage Loan
Documents and shall, for all purposes, be considered a part of such related
mortgage file to the same extent as all other documents and instruments
constituting a part thereof. All fees collected by the Servicer for entering
into an assumption or substitution of liability agreement shall belong to the
Servicer.
Notwithstanding the foregoing paragraphs of this section or any other
provision of this Agreement, the Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any
assumption of a Mortgage Loan by operation of law or any assumption which the
Servicer may be restricted by law from preventing, for any reason whatsoever.
For purposes of this Section 6.01, the term "assumption" is deemed to also
include a sale of the Mortgaged Property subject to the Mortgage that is not
accompanied by an assumption or substitution of liability agreement.
Page 20
Section 6.02 Satisfaction of Mortgages and Release of Mortgage Loan
Documents.
Upon the payment in full of any Mortgage Loan, the Servicer will
immediately notify the Custodian with a certification and request for release by
a Servicing Officer, which certification shall include a statement to the effect
that all amounts received in connection with such payment which are required to
be deposited in the Custodial Account pursuant to Section 4.04 have been so
deposited, and a request for delivery to the Servicer of the portion of the
Mortgage Loan Documents held by the Custodian, and unless the related Mortgage
Loans are the subject of a Pass-Through Transfer, such request is to be
acknowledged by the Owner. Upon receipt of such certification and request, the
Owner shall promptly release or cause the Custodian to promptly release the
related Mortgage Loan Documents to the Servicer and the Servicer shall prepare
and deliver for execution by the Owner or at the Owner's option execute under
the authority of a power of attorney delivered to the Servicer by the Owner any
satisfaction or release. No expense incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account.
In the event the Servicer satisfies or releases a Mortgage without
having obtained payment in full of the indebtedness secured by the Mortgage or
should it otherwise prejudice any right the Owner may have under the mortgage
instruments, the Servicer, upon written demand, shall remit within two Business
Days to the Owner the then outstanding principal balance of the related Mortgage
Loan by deposit thereof in the Custodial Account. The Servicer shall maintain
the Fidelity Bond 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.
From time to time and as appropriate for the servicing or foreclosure
of the Mortgage Loans, including for the purpose of collection under any Primary
Mortgage Insurance Policy, upon request of the Servicer and delivery to the
Custodian of a servicing receipt signed by a Servicing Officer (and unless the
related Mortgage Loans are the subject of a Pass-Through Transfer, acknowledged
by the Owner), the Custodian shall release the portion of the Mortgage Loan
Documents held by the Custodian to the Servicer. Such servicing receipt shall
obligate the Servicer to promptly return the related Mortgage Loan Documents to
the Custodian, when the need therefor by the Servicer no longer exists, unless
the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to
the Mortgage Loan have been deposited in the Custodial Account or such documents
have been delivered to an attorney, or to a public trustee or other public
official as required by law, for purposes of initiating or pursuing legal action
or other proceedings for the foreclosure of the Mortgaged Property either
judicially or non-judicially, and the Servicer has promptly delivered to the
Owner or the Custodian a certificate of a Servicing Officer certifying as to the
name and address of the Person to which such documents were delivered and the
purpose or purposes of such delivery. Upon receipt of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated, the servicing
receipt shall be released by the Owner or the Custodian, as applicable, to the
Servicer.
Section 6.03 Servicing Compensation.
As compensation for its services hereunder, the Servicer shall be
entitled to withdraw from the Custodial Account or to retain from interest
payments on the Mortgage Loans the amounts provided for as the Servicer's
Servicing Fee. Additional servicing compensation in the form of assumption fees,
as provided in Section 6.01, late payment charges and other ancillary fees shall
be retained by the Servicer to the extent not required to be deposited in the
Custodial Account. The Servicer shall be required to pay all expenses incurred
by it in connection with its servicing activities hereunder and shall not be
entitled to reimbursement therefor except as specifically provided for.
Section 6.04 Annual Statement as to Compliance.
The Servicer will deliver to the Owner not later than 90 days following
the end of each fiscal year of the Servicer, an Officers' Certificate stating,
as to each signatory thereof, that (i) a review of the activities of the
Servicer during the preceding calendar 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 Servicer has fulfilled
all of its obligations under this Agreement throughout such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officers and the nature and status thereof except for
such defaults as such Officers in their good faith judgment believe to be
immaterial.
Page 21
Section 6.05 Annual Independent Certified Public Accountants' Servicing
Report.
Not later than 90 days following the end of each fiscal year of the
Servicer, the Servicer at its expense shall cause a firm of independent public
accountants which is a member of the American Institute of Certified Public
Accountants to furnish a statement to the Owner to the effect that such firm has
examined certain documents and records relating to the Servicer's servicing of
mortgage loans of the same type as the Mortgage Loans pursuant to servicing
agreements substantially similar to this Agreement, which agreements may include
this Agreement, and that, on the basis of such an examination, conducted
substantially in accordance with the Uniform Single Attestation Program for
Mortgage Bankers, such firm is of the opinion that the Servicer's servicing has
been conducted in compliance with the agreements examined pursuant to this
Section 6.05, except for (i) such exceptions as such firm shall believe to be
immaterial, and (ii) such other exceptions as shall be set forth in such
statement.
Section 6.06 Owner's Right to Examine Servicer Records.
The Owner shall have the right to examine and audit, at its expense,
upon reasonable notice to the Servicer, during business hours or at such other
times as might be reasonable under applicable circumstances, any and all of the
books, records, documentation or other information of the Servicer, or held by
another for the Servicer or on its behalf or otherwise, which relate to the
performance or observance by the Servicer of the terms, covenants or conditions
of this Agreement.
The Servicer shall provide to the Owner and any supervisory agents or
examiners representing a state or federal governmental agency having
jurisdiction over the Owner, including but not limited to OTS, FDIC and other
similar entities, access to any documentation regarding the Mortgage Loans in
the possession of the Servicer which may be required by any applicable
regulations. Such access shall be afforded without charge, upon reasonable
request, during normal business hours and at the offices of the Servicer, and in
accordance with the applicable federal government agency, FDIC, OTS, or any
other similar regulations.
Section 6.07 Compliance with REMIC Provisions.
If a REMIC election has been made with respect to the arrangement under
which the Mortgage Loans and REO Property are held, the Servicer shall not take
any action, cause the REMIC to take any action or fail to take (or fail to cause
to be taken) any action that, under the REMIC Provisions, if taken or not taken,
as the case may be could (i) endanger the status of the REMIC as a REMIC or (ii)
result in the imposition of a tax upon the REMIC (including but not limited to
the tax on "prohibited transactions" as defined in Section 860F(a)(2) of the
Code and the tax on "contribution" to a REMIC set forth in Section 860G(d) of
the Code unless the Servicer has received an Opinion of Counsel (at the expense
of the party seeking to take such actions) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
Section 6.08 Non-solicitation.
The Servicer shall not knowingly conduct any solicitation exclusively
targeted to the Mortgagors for the purpose of inducing or encouraging the early
prepayment or refinancing of the related Mortgage Loans. It is understood and
agreed that promotions undertaken by the Servicer or any agent or affiliate of
the Servicer which are directed to the general public at large, including,
without limitation, mass mailings based on commercially acquired mailing lists,
newspaper, radio and television advertisements shall not constitute solicitation
under this section. Nothing contained herein shall prohibit the Servicer from
(i) distributing to Mortgagors any general advertising including information
brochures, coupon books, or other similar documentation which indicates services
the Seller offers, including refinances or (ii) providing financing of home
equity loans to Mortgagors at the Mortgagor's request.
Page 22
ARTICLE VII
REPORTS TO BE PREPARED BY SERVICER
Section 7.01 Servicer Shall Provide Information as Reasonably Required.
The Servicer shall furnish to the Owner upon request, during the term
of this Agreement, such periodic, special or other reports or information,
whether or not provided for herein, as shall be necessary, reasonable or
appropriate with respect to the purposes of this Agreement. The Servicer may
negotiate with the Owner for a reasonable fee for providing such report or
information, unless (i) the Servicer is required to supply such report or
information pursuant to any other section of this Agreement, or (ii) the report
or information has been requested in connection with Internal Revenue Service,
OTS, FDIC or other regulatory agency requirements. All such reports or
information shall be provided by and in accordance with all reasonable
instructions and directions given by the Owner. The Servicer agrees to execute
and deliver all such instruments and take all such action as the Owner, from
time to time, may reasonably request in order to effectuate the purpose and to
carry out the terms of this Agreement.
ARTICLE VIII
THE SERVICER
Section 8.01 Indemnification; Third Party Claims.
The Servicer agrees to indemnify the Owner and hold it harmless from
and against any and all claims, losses, damages, penalties, fines, forfeitures,
legal fees and related costs, judgments, and any other costs, fees and expenses
that the Owner may sustain in any way related to the failure of the Servicer to
perform in any way its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement and for breach of any representation
or warranty of the Servicer contained herein. The Servicer shall immediately
notify the Owner if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the consent of the Owner and with
counsel reasonably satisfactory to the Owner) 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 the Owner in respect of such claim but failure to so notify the Owner
shall not limit its obligations hereunder. The Servicer agrees that it will not
enter into any settlement of any such claim without the consent of the Owner
unless such settlement includes an unconditional release of the Owner from all
liability that is the subject matter of such claim. The provisions of this
Section 8.01 shall survive termination of this Agreement. In no event will
either Purchaser or Seller be liable to the other party to this Agreement for
incidental or consequential damages, including, without limitation, loss of
profit or loss of business or business opportunity, regardless of the form of
action whether in contract, tort or otherwise.
Section 8.02 Merger or Consolidation of the Servicer.
The Servicer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the state of its incorporation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or any of the Mortgage Loans and to perform its
duties under this Agreement.
Any Person into which the Servicer may be merged or consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Servicer shall be a party, or any Person succeeding to the business of the
Servicer whether or not related to loan servicing, shall be the successor of the
Servicer hereunder, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person shall
be an institution (i) having a GAAP net worth of not less than $25,000,000, (ii)
the deposits of which are insured by the FDIC, SAIF and/or BIF, or which is a
HUD-approved mortgagee whose primary business is in origination and servicing of
first lien mortgage loans, and (iii) which is a Xxxxxx Xxx or Xxxxxxx Mac
approved seller/servicer in good standing.
Page 23
Section 8.03 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the officers, employees or agents of
the Servicer shall be under any liability to the Owner 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 made in good faith; provided, however, that
this provision shall not protect the Servicer or any such person against any
breach of warranties or representations made herein, or failure to perform in
any way its obligations in compliance with any standard of care set forth in
this Agreement, or any liability which would otherwise be imposed by reason of
negligence or any breach of the terms and conditions of this Agreement. The
Servicer and any officer, employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
the Owner respecting any matters arising hereunder. The Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action which is
not incidental to its duties to service the Mortgage Loans in accordance with
this Agreement and which in its opinion may involve it in any expenses or
liability; provided, however, that the Servicer may, with the consent of the
Owner, which consent shall not be unreasonably withheld, undertake any such
action which it may deem necessary or desirable with respect to this Agreement
and the rights and duties of the parties hereto. In such event, the reasonable
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities for which the Owner will be liable, and
the Servicer shall be entitled to be reimbursed therefor from the Owner upon
written demand.
Section 8.04 Servicer Not to Resign.
The Servicer shall not resign from the obligations and duties hereby
imposed on it except by mutual consent of the Servicer and the Owner or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner which Opinion of
Counsel shall be in form and substance acceptable to the Owner. No such
resignation shall become effective until a successor shall have assumed the
Servicer's responsibilities and obligations hereunder in the manner provided in
Section 11.01.
Section 8.05 No Transfer of Servicing.
With respect to the retention of the Servicer to service the Mortgage
Loans hereunder, the Servicer acknowledges that the Owner has acted in reliance
upon the Servicer's independent status, the adequacy of its servicing
facilities, plan, personnel, records and procedures, its integrity, reputation
and financial standing and the continuance thereof. Without in any way limiting
the generality of this section, the Servicer shall not either assign this
Agreement or the servicing hereunder or delegate its rights or duties hereunder
or any portion thereof, or sell or otherwise dispose of all or substantially all
of its property or assets, without the prior written approval of the Owner,
which approval shall not be unreasonably withheld; provided that the Servicer
may assign the Agreement and the servicing hereunder without the consent of
Owner to an affiliate of the Servicer to which all servicing of the Servicer is
assigned so long as (i) such affiliate is a Xxxxxx Xxx and Xxxxxxx Mac approved
servicer and (ii) if it is intended that such affiliate be spun off to the
shareholders of the Servicer, such affiliate have a GAAP net worth of at least
$10,000,000 and (iii) such affiliate shall deliver to the Owner a certification
pursuant to which such affiliate shall agree to be bound by the terms and
conditions of this Agreement and shall certify that such affiliate is a Xxxxxx
Mae and Xxxxxxx Mac approved servicer in good standing.
ARTICLE IX
DEFAULT
Section 9.01 Events of Default.
In case one or more of the following Events of Default by the Servicer
shall occur and be continuing, that is to say:
(i) any failure by the Servicer to remit to the Owner any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of three (3) Business Days after written notice thereof (it being
understood that this subparagraph shall not affect Servicer's obligation
pursuant to Section 5.01 to
Page 24
pay default interest on any remittance received by the Owner after the Business
Day on which such payment was due); or
(ii) any failure on the part of the Servicer duly to observe or perform
in any material respect any other of the covenants or agreements on the part of
the Servicer set forth in this Agreement, the breach of which has a material
adverse effect and which continue unremedied for a period of sixty days (except
that such number of days shall be fifteen in the case of a failure to pay any
premium for any insurance policy required to be maintained under this Agreement
and such failure shall be deemed to have a material adverse effect) after the
date on which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Owner; 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, bankruptcy, readjustment of debt, marshaling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(iv) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(v) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(vi) the Servicer ceases to be approved by either Xxxxxx Mae or Xxxxxxx
Mac (to the extent such entities are then operating in a capacity similar to
that in which they operate on the Closing Date) as a mortgage loan servicer for
more than thirty days to the extent such entities perform similar functions; or
(vii) the Servicer attempts to assign its right to servicing
compensation hereunder or the Servicer attempts, without the consent of the
Owner, to sell or otherwise dispose of all or substantially all of its property
or assets or to assign this Agreement or the servicing responsibilities
hereunder or to delegate its duties hereunder or any portion thereof except as
otherwise permitted herein.
then, and in each and every such case, so long as an Event of Default
shall not have been remedied, the Owner, by notice in writing to the Servicer
may, in addition to whatever rights the Owner may have under Section 8.01 and at
law or equity to damages, including injunctive relief and specific performance,
terminate all the rights and obligations of the Servicer under this Agreement
and in and to the Mortgage Loans and the proceeds thereof without compensating
the Servicer for the same. On or after the receipt by the Servicer of such
written 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 the successor appointed pursuant to Section 11.01. Upon written
request from the Owner, the Servicer shall prepare, execute and deliver, any and
all documents and other instruments, place in such successor's possession all
Servicing Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the Servicer's sole expense. The Servicer
agrees to cooperate with the Owner and such successor in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to such successor for administration by it of
all cash amounts which shall at the time be credited by the Servicer to the
Custodial Account or Escrow Account or thereafter received with respect to the
Mortgage Loans or any REO Property.
Section 9.02 Waiver of Defaults.
The Owner may waive only by written notice any default by the Servicer
in the performance of its obligations hereunder and its consequences. Upon any
such waiver of a past default, such default shall cease to exist, and any 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 in writing.
Page 25
ARTICLE X
TERMINATION
Section 10.01 Termination.
The respective obligations and responsibilities of the Servicer shall
terminate upon: (i) the later of the final payment or other liquidation (or any
advance with respect thereto) of the last Mortgage Loan or the disposition of
all REO Property and the remittance of all funds due hereunder; or (ii) by
mutual consent of the Servicer and the Owner in writing; or (iii) termination by
the Owner pursuant to Section 9.01. Simultaneously with any such termination and
the transfer of servicing hereunder, the Servicer shall be entitled to be
reimbursed for any outstanding Servicing Advances and Monthly Advances.
Section 10.02 Removal of Mortgage Loans from Inclusion under this
Agreement upon a Whole Loan Transfer or a Pass-Through Transfer.
The Servicer acknowledges and the Owner agrees that with respect to
some or all of the Mortgage Loans, the Owner may effect either (1) one or more
Whole Loan Transfers, or (2) one or more Pass-Through Transfers.
The Servicer shall cooperate with the Owner in connection with any
Whole Loan Transfer or Pass-Through Transfer contemplated by the Owner pursuant
to this Section. In connection therewith, and without limitation, the Owner
shall deliver any reconstitution agreement or other document related to the
Whole Loan Transfer or Pass-Through Transfer to the Servicer at least 15 days
prior to such transfer (or 30 days if such transfer is to take place in March,
June, September or December) and the Servicer shall execute any such
reconstitution agreement which contains provisions substantially similar to
those herein or otherwise reasonably acceptable to the Owner and the Servicer
and which restates the representations and warranties contained in Article III
as of the date of transfer (except to the extent any such representation or
warranty is not accurate on such date).
With respect to each Whole Loan Transfer or Pass-Through Transfer, as
the case may be, effected by the Owner, Owner (i) shall reimburse Servicer for
all reasonable out-of-pocket third party costs and expenses related thereto and
(ii) shall pay Servicer a reasonable amount representing time and effort
expended by Servicer related thereto (which amount shall be reasonably agreed
upon by Servicer and Owner prior to the expenditure of such time and effort);
provided, however, that for each Whole Loan Transfer and/or Pass-Through
Transfer, the sum of such amounts described in subsections (i) and (ii) above
shall in no event exceed $5,000. For purposes of this paragraph, all Whole Loan
Transfers and/or Pass-Through Transfers made to the same entity within the same
accounting cycle shall be considered one Whole Loan Transfer or Pass-Through
Transfer.
All Mortgage Loans not sold or transferred pursuant to a Whole Loan
Transfer or Pass-Through Transfer shall be subject to this Agreement and shall
continue to be serviced in accordance with the terms of this Agreement and with
respect thereto this Agreement shall remain in full force and effect.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Successor to the Servicer.
Prior to termination of the Servicer's responsibilities and duties
under this Agreement pursuant to Sections 8.04, 9.01 or 10.01(ii), the Owner
shall (i) succeed to and assume all of the Servicer's responsibilities, rights,
duties and obligations under this Agreement, or (ii) appoint a successor having
the characteristics set forth in Section 8.02 hereof and which shall succeed to
all rights and assume all of the responsibilities, duties and liabilities of the
Servicer under this Agreement prior to the termination of the Servicer's
responsibilities, duties and liabilities under this Agreement. In connection
with such appointment and assumption, the Owner may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as the
Owner and such successor shall agree. In the event that the Servicer's duties,
responsibilities and liabilities under this Agreement
Page 26
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 and
shall in no event relieve the Servicer of the representations and warranties
made pursuant to Article III and the remedies available to the Owner under
Section 8.01, it being understood and agreed that the provisions of such Article
III and Section 8.01 shall be applicable to the Servicer notwithstanding any
such resignation or termination of the Servicer, or the termination of this
Agreement.
Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Servicer and to the Owner an instrument accepting such
appointment, 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 this Agreement pursuant to
Section 8.04, 9.01 or 10.01 shall not affect any claims that the Owner may have
against the Servicer arising prior to any such termination or resignation.
The Servicer shall promptly deliver to the successor the funds in the
Custodial Account and the Escrow Account and the Servicing Files and related
documents and statements held by it hereunder and the Servicer shall account for
all funds. The Servicer shall execute and deliver such instruments and do such
other things all as may reasonably be required to more fully and definitely vest
and confirm in the successor all such rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer. The successor shall make such
arrangements as it may deem appropriate to reimburse the Servicer for
unrecovered Servicing Advances which the successor retains hereunder and which
would otherwise have been recovered by the Servicer pursuant to this Agreement
but for the appointment of the successor servicer.
Upon a successor's acceptance of appointment as such, the Servicer
shall notify the Owner of such appointment.
Section 11.02 Amendment.
This Agreement may be amended from time to time by the Servicer and the
Owner by written agreement signed by the Servicer and the Owner.
Section 11.03 Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any of all 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
Owner at the Owner's expense on direction of the Owner accompanied by an opinion
of counsel to the effect that such recordation materially and beneficially
affects the interest of the Owner or is necessary for the administration or
servicing the Mortgage Loans.
Section 11.04 Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES
OF CONFLICTS OF LAWS. THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.05 Notices.
Any demands, notices or other communications permitted or required
hereunder shall be in writing and shall be deemed conclusively to have been
given if personally delivered at or mailed by registered mail, postage prepaid,
and return receipt requested or transmitted by telecopier and confirmed by a
similar mailed writing, as follows:
Page 27
(i) if to the Servicer:
000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xx. Xxxxx Xxxx
Telecopier No.: (000) 000-0000
(ii) if to the Owner:
Mac Xxxxxx Xxxxx XX,
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxx Xxxxx
Telecopier No.: (000) 000-0000
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice, or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
address (as evidenced, in the case of registered or certified mail, by the date
noted on the return receipt).
Section 11.06 Severability of Provisions.
Any part, provision, representation or warranty of this Agreement which
is prohibited or which is held to be void or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof. Any part, provision, representation or warranty of
this Agreement which is prohibited or unenforceable or is held to be void or
unenforceable in any jurisdiction shall be ineffective, as to such jurisdiction,
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
Section 11.07 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.
Section 11.08 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(i) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;
(ii) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(iii) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
Page 28
(iv) a reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(v) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(vi) the term "include" or "including" shall mean without limitation by
reason of enumeration.
Section 11.09 Reproduction of Documents.
This Agreement and all documents relating hereto, including, without
limitation, (i) consents, waivers and modifications which may hereafter be
executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
Section 11.10 Confidentiality of Information.
Each party recognizes that, in connection with this Agreement, it may
become privy to non-public information regarding the financial condition,
operations and prospects of the other party. Except as required to be disclosed
by law, each party agrees to keep all non-public information regarding the other
party strictly confidential, and to use all such information solely in order to
effectuate the purpose of this Agreement.
Section 11.11 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments of
Mortgage is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in which
any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Servicer at the Owner's expense.
Section 11.12 Assignment by the Owner.
The Owner shall have the right, without the consent of the Servicer
hereof, to assign, in whole or in part, its interest under this Agreement with
respect to some or all of the Mortgage Loans, and designate any person to
exercise any rights of the Owner hereunder, by executing an assignment and
assumption agreement reasonably acceptable to the Servicer and the assignee or
designee shall accede to the rights and obligations hereunder of the Owner with
respect to such Mortgage Loans. In no event shall Owner sell a partial interest
in any Mortgage Loan. All references to the Owner in this Agreement shall be
deemed to include its assignees or designees. It is understood and agreed
between the Owners and the Servicer that no more than five (5) Persons shall
have the right of owner under this Agreement at any one time.
Section 11.13 No Partnership.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Servicer shall be rendered as an independent contractor and not as agent for
Owner.
Section 11.14 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 8.04, this Agreement
shall inure to the benefit of and be binding upon the Servicer and the Owner and
their respective successors and assigns.
Page 29
Section 11.15 Entire Agreement.
Each of the Servicer and the Owner acknowledge that no representations,
agreements or promises were made to it by the other party or any of its
employees other than those representations, agreements or promises specifically
contained herein. This Agreement sets forth the entire understanding between the
parties hereto and shall be binding upon all successors of both parties.
Page 30
IN WITNESS WHEREOF, the Servicer and the Owner have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the date and year first above written.
GMAC MORTGAGE CORPORATION
Servicer
By:
---------------------------------------
Name:
Title:
EMC MORTGAGE CORPORATION
Owner
By:
---------------------------------------
EXHIBIT A
MORTGAGE LOAN SCHEDULE
EXHIBIT B
CUSTODIAL ACCOUNT LETTER AGREEMENT
(date)
To:______________________
_________________________
_________________________
(the "Depository")
As "Servicer" under the Servicing Agreement, dated as of
_______________, (the "Agreement"), we hereby authorize and request you to
establish an account, as a Custodial Account pursuant to Section 4.04 of the
Agreement, to be designated as "[Servicer] Custodial Account, in trust for
[Owner], Owner of Whole Loan Mortgages, and various Mortgagors." All deposits in
the account shall be subject to withdrawal therefrom by order signed by the
Servicer. You may refuse any deposit which would result in violation of the
requirement that the account be fully insured as described below. This letter is
submitted to you in duplicate. Please execute and return one original to us.
By:____________________
Name:__________________
Title:_________________
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. The full amount deposited at any time in the
account will be insured up to applicable limits by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund or the Savings Association Insurance
Fund or will be invested in Permitted Investments as defined in the Agreement.
[ ]
(name of Depository)
By:____________________
Name:__________________
Title:_________________
EXHIBIT C
ESCROW ACCOUNT LETTER AGREEMENT
(date)
To:___________________________
______________________________
______________________________
(the "Depository")
As "Servicer" under the Servicing Agreement, dated as of
________________________ (the "Agreement"), we hereby authorize and request you
to establish an account, as an Escrow Account pursuant to Section 4.06 of the
Agreement, to be designated as "[Servicer] Escrow Account, in trust for [Owner],
Owner of Whole Loan Mortgages, and various Mortgagors." All deposits in the
account shall be subject to withdrawal therefrom by order signed by the
Servicer. You may refuse any deposit which would result in violation of the
requirement that the account be fully insured as described below. This letter is
submitted to you in duplicate. Please execute and return one original to us.
By:____________________
Name:__________________
Title:_________________
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. The full amount deposited at any time in the
account will be insured up to applicable limits by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund or the Savings Association Insurance
Fund or will be invested in Permitted Investments as defined in the Agreement.
[ ]
(name of Depository)
By:____________________
Name:__________________
Title:_________________
EXHIBIT D
REQUEST FOR RELEASE
EXHIBIT E
LOAN LEVEL SCHEDULED-SCHEDULED
REMITTANCE TAPE LAYOUT
AMENDMENT NUMBER THREE
to the
SERVICING AGREEMENT
Dated as of December 20, 2005
between
EMC MORTGAGE CORPORATION,
as Owner
and
GMAC MORTGAGE CORPORATION,
as Servicer
This AMENDMENT NUMBER THREE (this "Amendment") is made and entered into
this 20th day of December, 2005, by and between EMC Mortgage Corporation, a
Delaware corporation, as owner (the "Owner") and GMAC Mortgage Corporation, as
servicer (the "Servicer") in connection with the Servicing Agreement, dated as
of May 1, 2001, between the above mentioned parties (the "Agreement"). This
Amendment is made pursuant to Section 11.02 of the Agreement.
RECITALS
WHEREAS, the parties hereto have entered into the Agreement;
WHEREAS, the Agreement provides that the parties thereto may enter into
an amendment to the Agreement;
WHEREAS, the parties hereto desire to amend the Agreement as set forth
in this Amendment; and
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows: 1. Capitalized terms used
herein and not defined herein shall have the meanings assigned to such terms in
the Agreement.
2. Article I of the Agreement is hereby amended effective as of the
date hereof by adding the following definitions to Section 1.01:
Commission or SEC: The Securities and Exchange Commission.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Master Servicer: With respect to any Securitization Transaction, the
"master servicer," if any, identified in the related transaction document.
Pass-Through Transfer: Any transaction involving either (1) a sale or
other transfer of some or all of the Mortgage Loans directly or indirectly to an
issuing entity in connection with an issuance of publicly offered or privately
placed, rated or unrated mortgage-backed securities or (2) an issuance of
publicly offered or privately placed, rated or unrated securities, the payments
on which are determined primarily by reference to one or more portfolios of
residential mortgage loans consisting, in whole or in part, of some or all of
the Mortgage Loans.
Qualified Correspondent: Any Person from which the Servicer purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Servicer and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Servicer, in accordance with underwriting
guidelines designated by the Servicer ("Designated Guidelines") or guidelines
that do not vary materially from such Designated Guidelines; (ii) such Mortgage
Loans were in fact underwritten as described in clause (i) above and were
acquired by the Servicer within 180 days after origination; (iii) either (x) the
Designated Guidelines were, at the time such Mortgage Loans were originated,
used by the Servicer in origination of mortgage loans of the same type as the
Mortgage Loans for the Servicer's own account or (y) the Designated Guidelines
were, at the time such Mortgage Loans were underwritten, designated by the
Servicer on a consistent basis for use by lenders in originating mortgage loans
to be purchased by the Servicer; and (iv) the Servicer employed, at the time
such Mortgage Loans were acquired by the Servicer, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it purchased
mortgage loans properly applied the underwriting criteria designated by the
Servicer.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1 100-229.1123, as amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff
of the Commission, or as may be provided by the Commission or its staff from
time to time.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a sale
or other transfer of some or all of the Mortgage Loans directly or indirectly to
an issuing entity in connection with an issuance of publicly offered or
privately placed, rated or unrated mortgage-backed securities or (2) an issuance
of publicly offered or privately placed, rated or unrated securities, the
2
payments on which are determined primarily by reference to one or more
portfolios of residential mortgage loans consisting, in whole or in part, of
some or all of the Mortgage Loans.
Servicing Criteria: As of any date of determination, the "servicing
criteria" set forth in Item 1122(d) of Regulation AB, or any amendments thereto,
a summary of the requirements of which as of the date hereof is attached hereto
as Exhibit G for convenience of reference only. In the event of a conflict or
inconsistency between the terms of Exhibit G and the text of Item 1122(d) of
Regulation AB, the text of Item 1122(d) of Regulation AB shall control (or those
Servicing Criteria otherwise mutually agreed to by the Owner, Servicer and any
Person that will be responsible for signing any Sarbanes Certification with
respect to a Securitization Transaction in response to evolving interpretations
of Regulation AB and incorporated into a revised Exhibit G).
Static Pool Information: Static pool information as described in Item 1
105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Servicer or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Servicer under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Servicer.
3. Article III of the Agreement is hereby amended effective as of the
date hereof by adding the following new clause (m):
(m) As of the date of each Pass-Through Transfer, and except as has
been otherwise disclosed to the Owner, any Master Servicer and any Depositor:
(1) the Servicer is not aware and has not received notice that any default or
servicing related performance trigger has occurred as to any other
securitization due to any act or failure to act of the Servicer; (2) no material
noncompliance with applicable servicing criteria as to any other securitization
involving residential mortgage loans involving the Servicer as servicer has been
disclosed or reported by the Servicer; (3) the Servicer has not been terminated
as servicer in a residential mortgage loan securitization, either due to a
servicing default or to application of a servicing performance test or trigger;
(4) no material changes to the Servicer's servicing policies and procedures with
respect to the servicing function it will perform under this Agreement or any
Reconstitution Agreement has occurred in the preceding three years; (5) there
are no aspects of the Servicer's financial condition that could have a material
adverse impact on the performance by the Servicer of its servicing obligations
hereunder; (6) there are no legal proceedings pending, or known to be
3
contemplated by governmental authorities, against the Servicer that could be
material to investors in the securities issued in such Pass-Through Transfer;
and (7) there are no affiliations, relationships or transactions relating to the
Servicer of a type that are described under Item 1119 of Regulation AB. 4.
Article IV of the Agreement is hereby amended effective as of the date hereof by
adding the following new Section 4.14:
Section 4.14 Financial Statements.
Upon request by the Purchaser, the Servicer shall provide its financial
statements of its parent for the previous two fiscal years. 5. The Agreement is
hereby amended effective as of the date hereof by moving clauses (a) through (m)
of Article III to Section 3.01.
6. The Agreement is hereby amended effective as of the date hereof by
adding the following new Section 3.02:
Section 3.02 Updates.
(a) If so requested by the Owner or any Depositor on any date, the
Servicer shall, within five Business Days, and in no event later than seven
Business Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in clause (m) of this Article III or,
if any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
(b) If so requested by the Owner or any Depositor for the purpose of
satisfying its reporting obligation under the Exchange Act with respect to any
class of asset-backed securities, the Servicer shall (or shall cause each
Subservicer to) (i) notify the Owner, any Master Servicer and any Depositor in
writing of (A) any material litigation or governmental proceedings pending
against the Servicer or any Subservicer, (B) any affiliations or relationships
that develop following the closing date of a Pass-Through Transfer between the
Servicer or any Subservicer and any of the parties specified in clause (7) of
paragraph (m) of Section 3.01 (and any other parties identified in writing by
the requesting party) with respect to such Pass-Through Transfer, (C) any Event
of Default under the terms of this Agreement or any Reconstitution Agreement,
(D) any merger, consolidation or sale of substantially all of the assets of the
Servicer, and (E) the Servicer's entry into an agreement with a Subservicer to
perform or assist in the performance of any of the Servicer's obligations under
this Agreement or any Reconstitution Agreement and (ii) provide to the Owner and
any Depositor a description of such proceedings, affiliations or relationships.
All notification pursuant to this Section 3.02(b), other than those
pursuant to Section 3 .02(b)(i)(A), should be sent to:
4
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0 884
Attention: Conduit Seller Approval Dept.
Facsimile: (000) 000-0000
Email: xxxxxxxxxxxxxx@xxxx.xxx
With a copy to:
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx, Xxxx, XX 00000
Attention: Global Credit Administration
Facsimile: (000) 000-0000
Notifications pursuant to Section 3.01(b)(i)(A) should be sent to:
EMC Mortgage Corporation
Two Mac Xxxxxx Xxxxx
000 Xxxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Associate General Counsel for Loan Administration
Facsimile: (000) 000-0000
With copies to:
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx, Xxxx, XX 00000
Attention: Global Credit Administration
Facsimile: (000) 000-0000
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0 884
Attention: Conduit Seller Approval Dept.
Facsimile: (000) 000-0000
Email: xxxxxxxxxxxxxx@xxxx.xxx
(c) As a condition to the succession to the Servicer or any Subservicer
as servicer or subservicer under this Agreement or any Reconstitution Agreement
by any Person (i) into which the Servicer or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Servicer or
any Subservicer, the Servicer shall provide to the Owner, any Master Servicer
and any Depositor, at least fifteen (15) calendar days prior to the effective
date of such succession or appointment, (x) written notice to the Owner, any
Master Servicer and any Depositor of such succession or appointment and (y) in
writing and in form and substance
5
reasonably satisfactory to the Owner, any Master Servicer and such Depositor,
all information reasonably requested by the Owner, any Master Servicer or any
Depositor in order to comply with its reporting obligation under Item 6.02 of
Form 8-K with respect to any class of asset-backed securities.
7. Article IV of the Agreement is hereby amended effective as of the
date hereof by adding the following after the first sentence of Section 4.01:
In addition, the Servicer shall furnish information regarding the
borrower credit files related to such Mortgage Loan to credit reporting agencies
in compliance with the provisions of the Fair Credit Reporting Act and the
applicable implementing regulations.
8. Article IV of the Agreement is hereby amended effective as of the
date hereof by revising the first paragraph of Section 4.03 by adding the
following after the first sentence:
In determining the delinquency status of any Mortgage Loan, the
Servicer will use delinquency recognition policies as utilized by the Servicer
in connection with the servicing of mortgage loans on its own securitizations.
9. Article V of the Agreement is hereby amended effective as of the
date hereof by deleting Section 5.02 in its entirety and replacing it with the
following:
Section 5.02 Statements to the Owner.
The Servicer shall furnish to the Owner an individual Mortgage Loan
accounting report (a "Report"), as of the last Business Day of each month, in
the Servicer's assigned loan number order to document Mortgage Loan payment
activity on an individual Mortgage Loan basis. With respect to each month, such
Report shall be received by the Owner (i) no later than the fifth Business Day
of the following month of the related Remittance Date on a disk or tape or other
computer-readable format, in such format as may be mutually agreed upon by both
the Owner and the Servicer, and (ii) no later than the tenth Business Day of the
following month of the related Remittance Date in hard copy, which Report shall
contain the following:
(i) with respect to each Mortgage Loan and each Monthly Payment, the
amount of such remittance allocable to principal (including a separate breakdown
of any Principal Prepayment, including the date of such prepayment, and any
prepayment penalties or premiums, along with a detailed report of interest on
principal prepayment amounts remitted in accordance with Section 4.04);
(ii) with respect to each Mortgage Loan and each Monthly Payment, the
amount of such remittance allocable to interest;
(iii) with respect to each Mortgage Loan, the amount of servicing
compensation received by the Servicer during the prior distribution period;
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(iv) the Stated Principal Balance of each Mortgage Loan and the
aggregate Stated Principal Balance of all Mortgage Loans as of the first day of
the distribution period and the last day of the distribution period;
(v) with respect to each Mortgage Loan, the current Mortgage Interest
Rate;
(vi) with respect to each Mortgage Loan, the aggregate amount of any
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and REO
Disposition Proceeds received during the prior distribution period;
(vii) with respect to each Mortgage Loan, the amount of any Prepayment
Interest Shortfalls paid by the Servicer in accordance with Section 4.04(viii)
during the prior distribution period;
(viii) with respect to each Mortgage Loan, the Stated Principal Balance
of each Mortgage Loan (a) delinquent as grouped in the following intervals
through final liquidation of such Mortgage Loan: 30 to 59 days, 60 to 89 days,
90 days or more; (b) as to which foreclosure has commenced; and (c) as to which
REO Property has been acquired;
(ix) with respect to each Mortgage Loan, and in the aggregate for all
Mortgage Loans, the amount of any Monthly Advances made by the Servicer during
the prior distribution period;
(x) with respect to each Mortgage Loan, the amount of any Servicing
Advances made by the Servicer with respect to such Mortgage Loan, and the
aggregate amount of Servicing Advances for all Mortgage Loans during the prior
distribution period;
(xi) with respect to each Mortgage Loan, a description of any
Nonrecoverable Advances made by the Servicer with respect to such Mortgage Loan
including the amount, terms and general purpose of such Nonrecoverable Advances,
and the aggregate amount of Nonrecoverable Advances for all Mortgage Loans
during the prior distribution period;
(xii) with respect to any Mortgage Loan, a description of any material
modifications, extensions or waivers to the terms, fees, penalties or payments
of such Mortgage Loan during the prior distribution period or that have
cumulatively become material over time;
(xiii) with respect to each Mortgage Loan, the Stated Principal Balance
of any substitute Mortgage Loan provided by the Servicer and the Stated
Principal Balance of any Mortgage Loan that has been replaced by a substitute
Mortgage Loan in accordance with Section 3.03 herein;
(xiv) with respect to each Mortgage Loan, the Stated Principal Balance
of any Mortgage Loan that has been repurchased by the Servicer in accordance
with Section 3.03 herein.
7
For any Mortgage Loan in a Pass-Through Transfer, the Servicer shall
also furnish the following items in the Report to the Master Servicer, provided
that if these items are included in the report to the Owner they need not be
incorporated in the Report:
(i) the beginning and ending balances of the Custodial Account and
Escrow Account;
(ii) with respect to each Mortgage Loan, a description of any Monthly
Advances, Servicing Advances and Nonrecoverable Advances reimbursed to the
Servicer with respect to such Mortgage Loan during the prior distribution period
pursuant to Section 4.05, and the source of funds for such reimbursement, and
the aggregate amount of any Monthly Advances, Servicing Advances and
Nonrecoverable Advances reimbursed to the Servicer for all Mortgage Loans during
the prior distribution period pursuant to Section 4.05; and
(iii) a description of any material breach of a representation or
warranty set forth in Section 3.01 or Section 3.02 herein or of any other breach
of a covenant or condition contained herein and the status of any resolution of
such breach.
In addition, the Servicer shall provide to the Owner such other
information known or available to the Servicer that is necessary in order to
provide the distribution and pool performance information as required under Item
1121 of Regulation AB, as amended from time to time, as determined by the Owner
in its reasonable discretion. Notwithstanding the foregoing, the Servicer shall
be under no obligation to provide information that the Owner deems required
under Regulation AB if (i) the Servicer does not reasonably believe that such
information is required under Regulation AB and (ii) the Servicer is not
providing such information for (A) its own securitizations, or (B) any third
party securitizations with mortgage loans serviced by the Servicer[, unless the
Owner pays all reasonable actual costs incurred by the Servicer in connection
with the preparation and delivery of such information and the Servicer is given
reasonable time to establish the necessary systems and procedures to produce
such information; provided, however, that the costs incurred by the Servicer in
connection with establishing the necessary systems and procedures will be split
pro rata with any other purchaser that makes a request for similar information.
The Servicer shall also provide a monthly report, in the form of
Exhibit E hereto, or such other form as is mutually acceptable to the Servicer,
the Owner and any Master Servicer, Exhibit H or such other agreeable format with
respect to defaulted mortgage loans and Exhibit I, with respect to realized
losses and gains, with each such report.
The Servicer shall prepare and file any and all information statements
or other filings required to be delivered to any governmental taxing authority
or to Owner pursuant to any applicable law with respect to the Mortgage Loans
and the transactions contemplated hereby. In addition, the Servicer shall
provide Owner with such information concerning the Mortgage Loans as is
necessary for Owner to prepare its federal income tax return as Owner may
reasonably request from time to time.
In addition, not more than sixty (60) days after the end of each
calendar year, the Servicer shall furnish to each Person who was an Owner at any
time during such calendar year an annual
8
statement in accordance with the requirements of applicable federal income tax
law as to the aggregate of remittances for the applicable portion of such year.
10. Article VI of the Agreement is hereby amended effective as of the
date hereof by deleting Section 6.04 in its entirety and replacing it with the
following:
Section 6.04 Annual Statement as to Compliance; Annual Certification.
(a) The Servicer will deliver to the Owner and any Master Servicer,
using its best efforts to deliver on March 1, but in no event later than March
15, of each calendar year beginning in 2007, an Officers' Certificate acceptable
to the Owner (an "Annual Statement of Compliance") stating, as to each signatory
thereof, that (i) a review of the activities of the Servicer during the
preceding calendar year and of performance under this Agreement or other
applicable servicing agreement has been made under such officers' supervision
and (ii) to the best of such officers' knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this Agreement or other
applicable servicing agreement in all material respects throughout such year,
or, if there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature and
status of cure provisions thereof. Such Annual Statement of Compliance shall
contain no restrictions or limitations on its use.
(b) With respect to any Mortgage Loans that are the subject of a
Pass-Through Transfer, using its best efforts to deliver on March 1, but in no
event later than March 15, of each calendar year beginning in 2007, an officer
of the Servicer shall execute and deliver an Officers' Certificate (an "Annual
Certification") to the Owner, any Master Servicer and any related Depositor for
the benefit of each such entity and such entity's affiliates and the officers,
directors and agents of any such entity and such entity's affiliates, in the
form attached hereto as Exhibit F.
In the event that the Servicer fails to timely comply with this Section
6.04 after the cure period set forth herein, commencing on March 15th of the
related year, the Owner shall use its commercially reasonable efforts to obtain
written or verbal statements or assurances from the Commission, by March 30th of
the related year (or such extension of time granted by the Commission so that it
can review the facts surrounding any requests made by the Owner) that such
failure to provide the required Assessment of Compliance and Attestation Report
on a timely basis, and a one time additional failure by the Servicer to comply
with this Section 6.04, will not result in any adverse effect on the Owner or
its affiliates with respect to any Shelf Registration on Form S-3 of the Owner
or any of its affiliates. Any costs or expenses incurred by the Owner in
obtaining such statement or assurances from the Commission shall be reimbursed
to the Owner by the Servicer. In the event that the Owner is unable to receive
any such assurances from the Commission after the use of such commercially
reasonable efforts by March 30th (or any extension period granted by the
Commission) of the related year, such failure by the Servicer to comply with
this Section 6.04 shall be deemed an Event of Default, automatically at such
time, without notice and without any cure period, and Owner may, in addition to
whatever rights the Owner may have under Section 8.01, subject to the limitation
expressed therein, and at law or equity or to damages, including injunctive
relief and specific
9
performance, terminate all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof without
compensating the Servicer for the same, as provided in Section 9.01 . Such
termination shall be considered with cause pursuant to Section 10.01 of this
Agreement. This paragraph shall supersede any other provision in this Agreement
or any other agreement to the contrary.
Failure to provide the Annual Statement of Compliance or Annual
Certification will be treated as a failure of the Servicer to perform its duties
under the Agreement and will be subject to the indemnification provisions of
Section 8.01, subject to the limitation expressed therein, of the Agreement.
This indemnification is understood by the parties hereto to cover any gross
negligence, bad faith or willful misconduct of the Servicer in connection with
its performance hereunder. For any indemnification from the Servicer to any
Master Servicer, the Servicer in no event will be liable for punitive or
consequential damages, regardless of the form of action, whether in contract,
tort or otherwise.
If the indemnification provided for therein is unavailable or
insufficient to hold harmless the Owner, each affiliate of the Owner, and each
of the following parties participating in a Pass-Through Transfer: each sponsor
and issuing entity; each Person (including, but not limited to, any Master
Servicer, if applicable) responsible for the preparation, execution or filing of
any report required to be filed with the Commission with respect to such
Pass-Through Transfer, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Pass-Through Transfer; each broker dealer acting as underwriter, placement agent
or initial purchaser, each Person who controls any of such parties or the
Depositor (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act); and the respective present and former directors, officers,
employees, agents and affiliates of each of the foregoing and of the Depositor
(each, an "Indemnified Party"), then the Servicer agrees that it shall
contribute to the amount paid or payable by such Indemnified Party as a result
of any claims, losses, damages or liabilities incurred by such Indemnified Party
in such proportion as is appropriate to reflect the relative fault of such
Indemnified Party on the one hand and the Servicer on the other.
In the case of any failure of performance described above, the Servicer
shall promptly reimburse the Owner, any Depositor, as applicable, and each
Person responsible for the preparation, execution or filing of any report
required to be filed with the Commission with respect to such Securitization
Transaction, or for execution of a certification pursuant to Rule 13a-14(d) or
Rule 15d-14(d) under the Exchange Act with respect to such Securitization
Transaction, for all costs reasonably incurred by each such party in order to
obtain the information, report, certification, accountants' letter or other
material not delivered as required by the Servicer, any Subservicer or any
Subcontractor.
This indemnification shall survive the termination of this Agreement or
the termination of any party to this Agreement.
11. Article VI of the Agreement is hereby amended effective as of the
date hereof by deleting Section 6.05 in its entirety and replacing it with the
following:
10
Section 6.05 [Reserved].
12. Article VI of the Agreement is hereby amended effective as of the
date hereof by adding the following new Section 6.09:
Section 6.09 Assessment of Compliance with Servicing Criteria.
On and after January 1, 2006, the Servicer shall service and
administer, and shall cause each subservicer to servicer or administer, the
Mortgage Loans in accordance with all applicable requirements of the Servicing
Criteria.
With respect to any Mortgage Loans that are the subject of a
Pass-Through Transfer, the Servicer shall use its best efforts to deliver to the
Owner or its designee, any Master Servicer and any Depositor on March 1, but in
no event later than March 15 of each calendar year beginning in 2007 a report
(an "Assessment of Compliance") reasonably satisfactory to the Owner, any Master
Servicer and any Depositor regarding the Servicer's assessment of compliance
with the Servicing Criteria during the preceding calendar year as required by
Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB or as
otherwise required by the Master Servicer. Such report shall be addressed to the
Owner and such Depositor and signed by an authorized officer of the Servicer,
and shall address each of the Servicing Criteria specified on a certification
substantially in the form of Exhibit G hereto delivered to the Owner
concurrently with the execution of this Agreement.
With respect to any Mortgage Loans that are the subject of a
Pass-Through Transfer, the Servicer shall use its best efforts to deliver to the
Owner or its designee, any Master Servicer and any Depositor on March 1, but in
no event later than March 15 of each calendar year beginning in 2007 a report
(an "Attestation Report") by a registered public accounting firm that attests
to, and reports on, the Assessment of Compliance made by the Servicer, as
required by Rules 13a-18 and 1 5d- 18 of the Exchange Act and Item 1122(b) of
Regulation AB or as otherwise required by the Master Servicer, which Attestation
Report must be made in accordance with standards for attestation reports issued
or adopted by the Public Servicer Accounting Oversight Board.
The Servicer shall cause each Subservicer, and each Subcontractor
determined by the Servicer pursuant to Section 11.19 to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, to deliver
to the Owner, any Master Servicer and any Depositor an assessment of compliance
and accountants' attestation as and when provided in Sections 6.09. Each
assessment of compliance provided by a Subservicer shall address each of the
Servicing Criteria specified on a certification substantially in the form of
Exhibit G hereto delivered to the Owner concurrently with the execution of this
Agreement or, in the case of a Subservicer subsequently appointed as such, on or
prior to the date of such appointment.
In the event that the Servicer fails to timely comply with this Section
6.09 after the cure period set forth herein, commencing on March 15th of the
related year, the Owner shall use its commercially reasonable efforts to obtain
written or verbal statements or assurances from the Commission, by March 30th of
the related year (or such extension of time granted by the Commission so that it
can review the facts surrounding any requests made by the Owner) that
11
such failure to provide the required Assessment of Compliance and Attestation
Report on a timely basis, and a one time additional failure by the Servicer to
comply with this Section 6.09, will not result in any adverse effect on the
Owner or its affiliates with respect to any Shelf Registration on Form S-3 of
the Owner or any of its affiliates. Any costs or expenses incurred by the Owner
in obtaining such statement or assurances from the Commission shall be
reimbursed to the Owner by the Servicer. In the event that the Owner is unable
to receive any such assurances from the Commission after the use of such
commercially reasonable efforts by March 30th (or any extension period granted
by the Commission) of the related year, such failure by the Servicer to comply
with this Section 6.09 shall be deemed an Event of Default, automatically at
such time, without notice and without any cure period, and Owner may, in
addition to whatever rights the Owner may have under Section 8.01, subject to
the limitation expressed therein, and at law or equity or to damages, including
injunctive relief and specific performance, terminate all the rights and
obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof without compensating the Servicer for the same,
as provided in Section 9.01 . Such termination shall be considered with cause
pursuant to Section 10.01 of this Agreement. This paragraph shall supersede any
other provision in this Agreement or any other agreement to the contrary.
Failure to provide the Assessment of Compliance or Attestation Report
will be treated as a failure of the Servicer to perform its duties under the
Agreement and will be subject to the indemnification provisions of Section 8.01,
subject to the limitation expressed therein, of the Agreement. This
indemnification is understood by the parties hereto to cover any gross
negligence bad faith or willful misconduct of the Servicer in connection with
its performance hereunder. For any indemnification from the Servicer to any
Master Servicer, the Servicer in no event will be liable for punitive or
consequential damages, regardless of the form of action, whether in contract,
tort or otherwise.
If the indemnification provided for therein is unavailable or
insufficient to hold harmless the Owner, each affiliate of the Owner, and each
of the following parties participating in a Pass-Through Transfer: each sponsor
and issuing entity; each Person (including, but not limited to, any Master
Servicer, if applicable) responsible for the preparation, execution or filing of
any report required to be filed with the Commission with respect to such
Pass-Through Transfer, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to such
Pass-Through Transfer; each broker dealer acting as underwriter, placement agent
or initial purchaser, each Person who controls any of such parties or the
Depositor (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act); and the respective present and former directors, officers,
employees, agents and affiliates of each of the foregoing and of the Depositor
(each, an "Indemnified Party"), then the Servicer agrees that it shall
contribute to the amount paid or payable by such Indemnified Party as a result
of any claims, losses, damages or liabilities incurred by such Indemnified Party
in such proportion as is appropriate to reflect the relative fault of such
Indemnified Party on the one hand and the Servicer on the other.
In the case of any failure of performance described above, the Servicer
shall promptly reimburse the Owner, any Depositor, as applicable, and each
Person responsible for the preparation, execution or filing of any report
required to be filed with the Commission with
12
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction, for all costs reasonably incurred by each
such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the Servicer,
any Subservicer or any Subcontractor.
This indemnification shall survive the termination of this Agreement or
the termination of any party to this Agreement.
13. Article VI of the Agreement is hereby amended effective as of the
date hereof by adding the following new Section 6.10:
Section 6.10 Intent of the Parties; Reasonableness.
The Owner and the Servicer acknowledge and agree that a purpose of
Section 3.01(m), 4.14, Sections 5.02, 6.04, 6.09 and 10.02 of this Agreement is
to facilitate compliance by the Owner and any Depositor with the provisions of
Regulation AB and related rules and regulations of the Commission. None of the
Owner, any Master Servicer or any Depositor shall exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission thereunder. The
Servicer acknowledges that interpretations of the requirements of Regulation AB
may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Owner or any Depositor in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. In connection with any Pass-Through Transfer, the Servicer shall
cooperate fully with the Owner to deliver to the Owner (including any of its
assignees or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Owner or any Depositor to permit the Owner or such
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Servicer, any Subservicer, any Third-Party
Originator and the Mortgage Loans, or the servicing of the Mortgage Loans,
reasonably believed by the Owner or any Depositor to be necessary in order to
effect such compliance.
Notwithstanding anything to the contrary herein, the Servicer shall be
under no obligation to provide information that the Owner deems required under
Regulation AB if (i) the Servicer does not reasonably believe that such
information is required under Regulation AB and (ii) the Servicer is not
providing such information for its own securitizations unless the Owner pays all
reasonable costs incurred by the Servicer in connection with the preparation and
delivery of such information and the Servicer is given reasonable time to
establish the necessary systems and procedures to produce such information;
provided, however, that the costs incurred by the Servicer in connection with
establishing the necessary systems and procedures will be split pro rata with
any other purchaser that makes a request for similar information.
13
14. Article IX of the Agreement is hereby amended effective as of the
date hereof by deleting the first sentence of the last paragraph of Section 9.01
and replacing it with the following (new text underlined):
then, and in each and every such case, so long as an Event of Default
shall not have been remedied, the Owner, by notice in writing to the Servicer
(or as otherwise stated herein, in which case, automatically and without notice)
may, in addition to whatever rights the Owner may have under Section 8.01,
subject to the limitation expressed therein, and at law or equity to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of the Servicer (and if the Servicer is servicing any of the
Mortgage Loans in a Securitization Transaction, appoint a successor servicer
reasonably acceptable to any Master Servicer for such Securitization
Transaction) under this Agreement and in and to the Mortgage Loans and the
proceeds thereof without compensating the Servicer for the same. On or after the
receipt by the Servicer of such written 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 the successor appointed pursuant to
Section 11.01. Upon written request from the Owner, the Servicer shall prepare,
execute and deliver, any and all documents and other instruments, place in such
successor's possession all Servicing Files, and do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise, at the Servicer's sole
expense. The Servicer agrees to cooperate with the Owner and such successor in
effecting the termination of the Servicer's responsibilities and rights
hereunder, including, without limitation, the transfer to such successor for
administration by it of all cash amounts which shall at the time be credited by
the Servicer to the Custodial Account or Escrow Account or thereafter received
with respect to the Mortgage Loans or any REO Property.
15. Article IX of the Agreement is hereby amended effective as of the
date hereof by adding the following at the end of the last paragraph of Section
9.01:
The Servicer shall promptly reimburse the Owner (or any designee of the
Owner, such as a Master Servicer) and any Depositor, as applicable, for all
reasonable expenses incurred by the Owner (or such designee) or such Depositor,
as such are incurred, in connection with the termination of the Servicer as
servicer and the transfer of servicing of the Mortgage Loans to a successor
servicer. The provisions of this paragraph shall not limit whatever rights the
Owner or any Depositor may have under other provisions of this Agreement and/or
any applicable Reconstitution Agreement or otherwise, whether in equity or at
law, such as an action for damages, specific performance or injunctive relief.
16. Article X of the Agreement is hereby amended effective as of the
date hereof by restating Section 10.02 in its entirety as follows:
Section 10.02. Cooperation of Servicer with a Reconstitution.
The Servicer and the Owner agree that with respect to some or all of
the Mortgage Loans, on or after the related Closing Date, on one or more dates
(each a "Reconstitution Date") at the
14
Owner's sole option, the Owner may effect a sale (each, a "Reconstitution") of
some or all of the Mortgage Loans then subject to this Agreement, without
recourse, to:
(1) one or more third party purchasers in one or more in whole loan
transfers (each, a "Whole Loan Transfer"); or
(2) one or more trusts or other entities to be formed as part of one or
more Pass-Through Transfers.
With respect to each Whole Loan Transfer or Pass-Through Transfer, as
the case may be, the Servicer shall (i) following request by the Owner or any
Depositor, use best efforts to provide within five, and in no event later than
seven Business Days the Owner and such Depositor (or, as applicable, cause each
Subservicer to provide), in writing and in form and substance reasonably
satisfactory to the Owner and such Depositor, the information and materials
specified in paragraphs (a), (b), (c) and (d) of this Section, and (ii) as
promptly as practicable following notice to or discovery by the Servicer,
provide to the Owner and any Depositor (in writing and in form and substance
reasonably satisfactory to the Owner and such Depositor) the information
specified in paragraph (d) of this Section.
(a) If so requested by the Owner or any Depositor, the Servicer shall
provide such information regarding the Servicer, as servicer of the Mortgage
Loans, and each Subservicer (each of the Servicer and each Subservicer, for
purposes of this clause (a), a "Servicer"), as is requested for the purpose of
compliance with Item 1108 of Regulation AB. Such information shall include, at a
minimum:
(1) the Servicer's form of organization;
(2) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the Servicer's experience in
servicing assets of any type as well as a more detailed discussion of the
Servicer's experience in, and procedures for, the servicing function it will
perform under this Agreement and any Reconstitution Agreements; information
regarding the size, composition and growth of the Servicer's portfolio of
residential mortgage loans of a type similar to the Mortgage Loans and
information on factors related to the Servicer that may be material, in the good
faith judgment of the Owner or any Depositor, to any analysis of the servicing
of the Mortgage Loans or the related asset-backed securities, as applicable,
including, without limitation:
(i) whether any prior securitizations of mortgage loans of a
type similar to the Mortgage Loans involving the Servicer have defaulted or
experienced an early amortization or other performance triggering event because
of servicing during the three-year period immediately preceding the related
Securitization Transaction;
(ii) the extent of outsourcing the Servicer utilizes;
(iii) whether there has been previous disclosure of material
noncompliance with the applicable servicing criteria with respect to other
securitizations of
15
residential mortgage loans involving the Servicer as a servicer during the
three-year period immediately preceding the related Securitization Transaction;
(iv) whether the Servicer has been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing default or
to application of a servicing performance test or trigger; and
(v) such other information as the Owner or any Depositor may
reasonably request for the purpose of compliance with Item 1 108(b)(2) of
Regulation AB;
(3) a description of any material changes during the three-year period
immediately preceding the related Securitization Transaction to the Servicer's
policies or procedures with respect to the servicing function it will perform
under this Agreement and any Reconstitution Agreements for mortgage loans of a
type similar to the Mortgage Loans;
(4) information regarding the Servicer's financial condition, to the
extent that there is a material risk that an adverse financial event or
circumstance involving the Servicer could have a material adverse effect on the
performance by the Servicer of its servicing obligations under this Agreement or
any Reconstitution Agreement;
(5) information regarding advances made by the Servicer on the Mortgage
Loans and the Servicer's overall servicing portfolio of residential mortgage
loans for the three-year period immediately preceding the related Securitization
Transaction, which may be limited to a statement by an authorized officer of the
Servicer to the effect that the Servicer has made all advances required to be
made on residential mortgage loans serviced by it during such period, or, if
such statement would not be accurate, information regarding the percentage and
type of advances not made as required, and the reasons for such failure to
advance;
(6) a description of the Servicer's processes and procedures designed
to address any special or unique factors involved in servicing loans of a
similar type as the Mortgage Loans;
(7) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as through liquidation
of mortgaged properties, sale of defaulted mortgage loans or workouts; and
(8) information as to how the Servicer defines or determines
delinquencies and charge-offs, including the effect of any grace period,
re-aging, restructuring, partial payments considered current or other practices
with respect to delinquency and loss experience.
(b) If so requested by the Owner or any Depositor for the purpose of
satisfying its reporting obligation under the Exchange Act with respect to any
class of asset-backed securities, the Servicer shall (or shall cause each
Subservicer to) (i) notify the Servicer, any Master Servicer and any Depositor
in writing of (A) any material litigation or governmental proceedings involving
the Company or any Subservicer, (B) any affiliations or relationships that
develop following the closing date of a Securitization Transaction between the
Owner or any Subservicer
16
and any of the parties specified in clause (D) of paragraph (a) of this Section
(and any other parties identified in writing by the requesting party) with
respect to such Securitization Transaction, (C) any Event of Default under the
terms of this Agreement or any Reconstitution Agreement, (D) any merger,
consolidation or sale of substantially all of the assets of the Owner, and (E)
the Owner's entry into an agreement with a Subservicer to perform or assist in
the performance of any of the Owner's obligations under this Agreement or any
Reconstitution Agreement and (ii) provide to the Servicer and any Depositor a
description of such proceedings, affiliations or relationships.
As a condition to the succession to the Owner or any Subservicer as
servicer or subservicer under this Agreement or any Reconstitution Agreement by
any Person (i) into which the Owner or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Owner or any
Subservicer, the Owner shall provide to the Servicer, any Master Servicer, and
any Depositor, at least 15 calendar days prior to the effective date of such
succession or appointment, (x) written notice to the Servicer and any Depositor
of such succession or appointment and (y) in writing and in form and substance
reasonably satisfactory to the Servicer and such Depositor, all information
reasonably requested by the Servicer or any Depositor in order to comply with
its reporting obligation under Item 6.02 of Form 8-K with respect to any class
of asset-backed securities;
In addition to such information as the Owner, as servicer, is obligated
to provide pursuant to other provisions of this Agreement, not later than ten
days prior to the deadline for the filing of any distribution report on Form 1
0-D in respect of any Securitization Transaction that includes any of the
Mortgage Loans serviced by the Owner or any Subservicer, the Owner or such
Subservicer, as applicable, shall, to the extent the Owner or such Subservicer
has knowledge, provide to the party responsible for filing such report
(including, if applicable, the Master Servicer) notice of the occurrence of any
of the following events along with all information, data, and materials related
thereto as may be required to be included in the related distribution report on
Form 10-D (as specified in the provisions of Regulation AB referenced below):
(A) any material modifications, extensions or waivers of pool
asset terms, fees, penalties or payments during the distribution period or
that have cumulatively become material over time (Item 1121 (a)( 11) of
Regulation AB);
(B) material breaches of pool asset representations or warranties
or transaction covenants (Item 1 121(a)(12) of Regulation AB); and
(C) information regarding new asset-backed securities issuances
backed by the same pool assets, any pool asset changes (such as, additions,
substitutions or repurchases), and any material changes in origination,
underwriting or other criteria for acquisition or selection of pool assets
(Item 1121 (a)( 14) of Regulation AB); and
The Owner shall provide to the Servicer, any Master Servicer and any
Depositor, evidence of the authorization of the person signing any certification
or statement, copies or other evidence of Fidelity Bond Insurance and Errors and
Omission Insurance policy, financial
17
information and reports, and such other information related to the Owner or any
Subservicer or the Owner or such Subservicer's performance hereunder.
Notwithstanding the foregoing, the Servicer shall be under no
obligation to provide information that the Owner deems required under Regulation
AB if (i) the Servicer does not reasonably believe that such information is
required under Regulation AB and (ii) the Servicer is not providing such
information for (A) its own securitizations, or (B) any third party
securitizations with mortgage loans serviced by the Servicer, unless the Owner
pays all reasonable actual costs incurred by the Servicer in connection with the
preparation and delivery of such information and the Servicer is given
reasonable time to establish the necessary systems and procedures to produce
such information; provided, however, that the costs incurred by the Servicer in
connection with establishing the necessary systems and procedures will be split
pro rata with any other purchaser that makes a request for similar information..
All Mortgage Loans not sold or transferred pursuant to a Reconstitution
shall remain subject to, and serviced in accordance with the terms of, this
Agreement and the related Term Sheet, and with respect thereto this Agreement
and the related Term Sheet shall remain in full force and effect.
17. Article XI of the Agreement is hereby amended effective as of the
date hereof by adding the following new Section 11.16:
Section 11.16. Use of Subservicers and Subcontractors.
(a) The Servicer shall not hire or otherwise utilize the services of
any Subservicer to fulfill any of the obligations of the Servicer as servicer
under this Agreement or any Reconstitution Agreement unless the Servicer
complies with the provisions of paragraph (b) of this Section. The Servicer
shall not hire or otherwise utilize the services of any Subcontractor, and shall
not permit any Subservicer to hire or otherwise utilize the services of any
Subcontractor, to fulfill any of the obligations of the Servicer as servicer
under this Agreement or any Reconstitution Agreement unless the Servicer
complies with the provisions of paragraph (d) of this Section.
(b) It shall not be necessary for the Servicer to seek the consent of
the Owner to the utilization of any subservicer. The Servicer shall cause any
Subservicer used by the Servicer (or by any Subservicer) for the benefit of the
Owner and any Depositor to comply with the provisions of this Section and with
Sections 3.01(m), 4.14, 6.04, 6.09 and 10.02 of this Agreement to the same
extent as if such Subservicer were the Servicer, and to provide the information
required with respect to such Subservicer under Section 3.02(b) of this
Agreement. The Servicer shall be responsible for obtaining from each Subservicer
and delivering to the Owner, any Master Servicer and any Depositor any Annual
Statement of Compliance required to be delivered by such Subservicer under
Section 6.04(a), any Assessment of Compliance and Attestation Report required to
be delivered by such Subservicer under Section 6.09 and any Annual Certification
required under Section 6.04(b) as and when required to be delivered.
18
(c) The Servicer shall promptly upon request provide to the Owner, any
Master Servicer and any Depositor (or any designee of the Depositor, such as an
administrator) a written description (in form and substance satisfactory to the
Owner, any Master Servicer and such Depositor) of the role and function of each
Subcontractor utilized by the Servicer or any Subservicer, specifying (i) the
identity of each such Subcontractor, (ii) which (if any) of such Subcontractors
are "participating in the servicing function" within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.
(d) As a condition to the utilization of any Subcontractor determined
to be "participating in the servicing function" within the meaning of Item 1122
of Regulation AB, the Servicer shall cause any such Subcontractor used by the
Servicer (or by any Subservicer) for the benefit of the Owner and any Depositor
to comply with the provisions of Sections 6.09 and 10.02 of this Agreement to
the same extent as if such Subcontractor were the Servicer. The Servicer shall
be responsible for obtaining from each Subcontractor and delivering to the Owner
and any Depositor any Assessment of Compliance and Attestation Report and the
other certificates required to be delivered by such Subservicer and such
Subcontractor under Section 6.09, in each case as and when required to be
delivered.
18. Article XI of the Agreement is hereby amended effective as of the
date hereof by adding the following new Section 11.17:
For purposes of this Agreement, and with respect to any Mortgage Loan
in a Pass-Through Transfer, the related Master Servicer shall be considered a
third party beneficiary to this Agreement, entitled to all the rights and
benefits hereof as if it were a direct party to this Agreement, with respect to
such Mortgage Loans.
19. The Agreement is hereby amended effective as of the date hereof by
deleting Exhibit E in its entirety and replacing it with the following:
EXHIBIT E
REPORTING DATA FOR MONTHLY
REPORT STANDARD FILE LAYOUT - MASTER SERVICING
--------------------------------------------------------------------------------------------------------------------------------
COLUMN NAME DESCRIPTION DECIMAL FORMAT COMMENT MAX
SIZE
--------------------------------------------------------------------------------------------------------------------------------
SER_INVESTOR_NBR A value assigned by the Servicer to define a Text up to 10 digits 20
group of loans.
--------------------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan by Text up to 10 digits 10
the investor.
--------------------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10 digits 10
Servicer. This may be different than the LOAN_N
BR.
--------------------------------------------------------------------------------------------------------------------------------
BORROWER_NAME The borrower name as received in the file. It Maximum length of 30 (Last, 30
is not separated by first and last name. First)
--------------------------------------------------------------------------------------------------------------------------------
19
SCHED_PAY_AMT Scheduled monthly principal and scheduled 2 No commas(,) or dollar signs 11
interest payment that a borrower is expected ($)
to pay, P&I constant.
--------------------------------------------------------------------------------------------------------------------------------
NOTE_I NT_RATE The loan interest rate as reported by the 4 Max length of 6 6
Servicer.
--------------------------------------------------------------------------------------------------------------------------------
NET_INT_RATE The loan gross interest rate less the service 4 Max length of 6 6
fee rate as reported by the Servicer.
--------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_RATE The servicer's fee rate for a loan as reported 4 Max length of 6 6
by the Servicer.
--------------------------------------------------------------------------------------------------------------------------------
SERV_FEE_AMT The servicer's fee amount for a loan as 2 No commas(,) or dollar signs 11
reported by the Servicer. ($)
--------------------------------------------------------------------------------------------------------------------------------
NEW_PAY_AMT The new loan payment amount as reported by the 2 No commas(,) or dollar signs 11
Servicer. ($)
--------------------------------------------------------------------------------------------------------------------------------
NEW_LOAN_RATE The new loan rate as reported by the Servicer. 4 Max length of 6 6
--------------------------------------------------------------------------------------------------------------------------------
ARM_INDEX_RATE The index the Servicer is using to calculate a 4 Max length of 6 6
forecasted rate.
--------------------------------------------------------------------------------------------------------------------------------
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or dollar signs 11
beginning of the processing cycle. ($)
--------------------------------------------------------------------------------------------------------------------------------
ACTL_END_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or dollar signs 11
end of the processing cycle. ($)
--------------------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_D The date at the end of processing cycle that MM/DD/YYYY 10
ATE the borrower's next payment is due to the
Servicer, as reported by Servicer.
--------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_1 The first curtailment amount to be applied. 2 No commas(,) or dollar signs 11
($)
--------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_1 The curtailment date associated with the first MM/DD/YYYY 10
curtailment amount.
--------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or dollar signs 11
curtailment amount, if applicable. ($)
--------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or dollar signs 11
($)
--------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_2 The curtailment date associated with the second MM/DD/YYYY 10
curtailment amount.
--------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_ AMT_2 The curtailment interest on the second 2 No commas(,) or dollar signs 11
curtailment amount, if applicable. ($)
--------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or dollar signs 11
($)
--------------------------------------------------------------------------------------------------------------------------------
SERV_CURT_DATE_3 The curtailment date associated with the third MM/DD/YYYY 10
curtailment amount.
--------------------------------------------------------------------------------------------------------------------------------
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,) or dollar signs 11
curtailment amount, if applicable. ($)
--------------------------------------------------------------------------------------------------------------------------------
PIF_AMT The loan "paid in full" amount as reported by 2 No commas(,) or dollar signs 11
the Servicer. ($)
--------------------------------------------------------------------------------------------------------------------------------
PIF_DATE The paid in full date as reported by the MM/DD/YYYY 10
Servicer.
--------------------------------------------------------------------------------------------------------------------------------
ACTION_CODE The standard FNMA numeric code used to indicate Action Code Key: 2
the default/delinquent status of a particular 1 5=Bankruptcy,
loan. 30=Foreclosure, , 60=PIF,
63=Substitution,
65=Repurchase,70=REO
--------------------------------------------------------------------------------------------------------------------------------
INT_ADJ_AMT The amount of the interest adjustment as 2 No commas(,) or dollar signs 11
reported by the Servicer. ($)
--------------------------------------------------------------------------------------------------------------------------------
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, if 2 No commas(,) or dollar signs 11
applicable. ($)
--------------------------------------------------------------------------------------------------------------------------------
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if applicable. 2 No commas(,) or dollar signs 11
($)
--------------------------------------------------------------------------------------------------------------------------------
LOAN_LOSS_AMT The amount the Servicer is passing as a loss, 2 No commas(,) or dollar signs 11
if applicable. ($)
--------------------------------------------------------------------------------------------------------------------------------
20
--------------------------------------------------------------------------------------------------------------------------------
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount due 2 No commas(,) or dollar signs 11
at the beginning of the cycle date to be ($)
passed through to investors.
--------------------------------------------------------------------------------------------------------------------------------
SCHED_END_PRIN_BAL The scheduled principal balance due to 2 No commas(,) or dollar signs 11
investors at the end of a processing cycle. ($)
--------------------------------------------------------------------------------------------------------------------------------
SCHED_PRIN_AMT The scheduled principal amount as reported by 2 No commas(,) or dollar signs 11
the Servicer for the current cycle -- only ($)
applicable for Scheduled/Scheduled Loans.
--------------------------------------------------------------------------------------------------------------------------------
SCHED_NET_INT The scheduled gross interest amount less the 2 No commas(,) or dollar signs 11
service fee amount for the current cycle as ($)
reported by the Servicer -- only applicable for
Scheduled/Scheduled Loans.
--------------------------------------------------------------------------------------------------------------------------------
ACTL_PRIN_AMT The actual principal amount collected by the 2 No commas(,) or dollar signs 11
Servicer for the current reporting cycle -- ($)
only applicable for Actual/Actual Loans.
--------------------------------------------------------------------------------------------------------------------------------
ACTL_NET_INT The actual gross interest amount less the 2 No commas(,) or dollar signs 11
service fee amount for the current reporting ($)
cycle as reported by the Servicer -- only
applicable for Actual/Actual Loans.
--------------------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ AMT The penalty amount received when a borrower 2 No commas(,) or dollar signs 11
prepays on his loan as reported by the Servicer. ($)
--------------------------------------------------------------------------------------------------------------------------------
PREPAY_PENALTY_ The prepayment penalty amount for the loan 2 No commas(,) or dollar signs 11
WAIVED waived by the servicer. ($)
--------------------------------------------------------------------------------------------------------------------------------
MOD_DATE The Effective Payment Date of the Modification MM/DD/YYYY 10
for the loan.
--------------------------------------------------------------------------------------------------------------------------------
MOD_TYPE The Modification Type. Varchar - value can be alpha 30
or numeric
--------------------------------------------------------------------------------------------------------------------------------
DELINQ_P&I_ADVANCE_A The current outstanding principal and interest 2 No commas(,) or dollar signs 11
MT advances made by Servicer. ($)
--------------------------------------------------------------------------------------------------------------------------------
20. The Agreement is hereby amended effective as of the date hereof by
adding the following new Exhibit F:
EXHIBIT F
FORM OF SERVICER CERTIFICATION
Re: The [ ] agreement dated as of [ l, 200[ ] (the "Agreement"), among [IDENTIFY
PARTIES]
I,___________________________________________,
the_____________________________________________ of [NAME OF SERVICER]
(the "Company"), certify to [the Purchaser], [the Depositor], and the
[Master Servicer] [Securities Administrator] [Trustee], and their
officers, with the knowledge and intent that they will rely upon this
certification, that:
I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB
(the "Compliance Statement"), the report on assessment of the
Company's compliance with the servicing criteria set forth in
Item 1122(d) of Regulation AB (the "Servicing Criteria"),
provided in accordance with Rules 13a-18 and 15d-18 under
Securities Exchange Act of 1934, as amended (the "Exchange
21
Act") and Item 1122 of Regulation AB (the "Servicing Assessment"), the
registered public accounting firm's attestation report provided in
accordance with Rules 13a-18 and 1 5d- 18 under the Exchange Act and
Section 1122(b) of Regulation AB (the "Attestation Report"), and all
servicing reports, officer's certificates and other information
relating to the servicing of the Mortgage Loans by the Company during
200[ ] that were delivered by the Company to the [Depositor] [Master
Servicer] [Securities Administrator] [Trustee] pursuant to the
Agreement (collectively, the "Company Servicing Information");
Based on my knowledge, the Company Servicing Information,
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 the light of the circumstances under which such statements
were made, not misleading with respect to the period of time covered by
the Company Servicing Information;
Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the Agreement
has been provided to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee];
I am responsible for reviewing the activities performed by the
Company as servicer under the Agreement, and based on my knowledge and
the compliance review conducted in preparing the Compliance Statement
and except as disclosed in the Compliance Statement, the Servicing
Assessment or the Attestation Report, the Company has fulfilled its
obligations under the Agreement in all material respects; and
The Compliance Statement required to be delivered by the Company pursuant to
this Agreement, and the Servicing Assessment and Attestation Report required to
be provided by the Company and by any Subservicer and Subcontractor pursuant to
the Agreement, have been provided to the [Depositor] [Master Servicer]. Any
material instances of noncompliance described in such reports have been
disclosed to the [Depositor] [Master Servicer]. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such reports.
21. The Agreement is hereby amended effective as of the date hereof by
adding the following new Exhibit G:
EXHIBIT G
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Servicer] [Name of
Subservicer] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
22
------------------------------------------------------------------------------------------------------------------
APPLICABLE
SERVICING CRITERIA SERVICING CRITERIA
------------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
------------------------------------------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
------------------------------------------------------------------------------------------------------------------
11 22(d)(1 )(i) Policies and procedures are instituted to
monitor any performance or other triggers and events of
default in accordance with the transaction agreements.
-------------------- -------------------------
11 22(d)(1 )(ii) If any material servicing activities are
outsourced to third parties, policies and procedures are
instituted to monitor the third party's performance and
compliance with such servicing activities.
-------------------- -------------------------
11 22(d)(1 )(iii) Any requirements in the transaction
agreements to maintain a back-up servicer for the mortgage
loans are maintained.
-------------------- -------------------------
11 22(d)(1 )(iv) A fidelity bond and errors and omissions
policy is in effect on the party participating in the
servicing function throughout the reporting period in the
amount of coverage required by and otherwise in accordance
with the terms of the transaction agreements.
-------------------- -------------------------
CASH COLLECTION AND ADMINISTRATION
-------------------- -------------------------
11 22(d)(2)(i) Payments on mortgage loans are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no more
than two business days following receipt, or such other number of
days specified in the transaction agreements.
-------------------- -------------------------
11 22(d)(2)(ii) Disbursements made via wire transfer on behalf
of an obligor or to an investor are made only by authorized
personnel.
-------------------- -------------------------
11 22(d)(2)(iii) Advances of funds or guarantees regarding collections, cash flows or
distributions, and any interest or other fees charged for such
advances, are made, reviewed and approved as specified in the
transaction agreements.
-------------------- -------------------------
11 22(d)(2)(iv) The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of overcollateralization,
are separately maintained (e.g., with respect to commingling of
cash) as set forth in the transaction agreements.
-------------------- -------------------------
11 22(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction agreements.
For purposes of this criterion, "federally insured depository
institution" with respect to a foreign financial institution means a
foreign financial institution that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange Act.
-------------------- -------------------------
11 22(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized access.
-------------------- -------------------------
11 22(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B)
prepared within 30 calendar days after the bank statement
cutoff date, or such other number of days specified in the
transaction agreements; (C) reviewed and approved by someone
other than the person who prepared the reconciliation; and
(D) contain explanations for reconciling items. These
reconciling items are resolved within 90 calendar days of
their original identification, or such other number of days
specified in the transaction agreements.
-------------------- -------------------------
INVESTOR REMITTANCES AND REPORTING
-------------------- -------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared in
accordance with timeframes and other terms set forth in the
transaction agreements; (B) provide information calculated
in accordance with the terms specified in the transaction
agreements; (C) are filed with the Commission as required by
its rules and regulations; and (D) agree with investors' or
the trustee's records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
-------------------- -------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
-------------------- -------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or such
other number of days specified in the transaction
agreements.
-------------------- -------------------------
23
------------------------------------------------------------------------------------------------------------------
APPLICABLE
SERVICING CRITERIA SERVICING CRITERIA
------------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
------------------------------------------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
------------------------------------------------------------------------------------------------------------------
Amounts remitted to investors per the investor reports agree
with cancelled checks, or other form of payment, or
custodial bank
11 22(d)(3)(iv) statements.
-------------------- -------------------------
POOL ASSET ADMINISTRATION
-------------------- -------------------------
11 22(d)(4)(i) Collateral or security on mortgage loans is maintained as required
by the transaction agreements or related mortgage loan documents.
-------------------- -------------------------
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as
required by the transaction agreements
-------------------- -------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
-------------------- -------------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are
posted to the Servicer's obligor records maintained no more
than two business days after receipt, or such other number
of days specified in the transaction agreements, and
allocated to principal, interest or other items (e.g.,
escrow) in accordance with the related mortgage loan
documents.
-------------------- -------------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's
unpaid principal balance.
-------------------- -------------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
asset documents.
-------------------- -------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the
transaction agreements.
-------------------- -------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during the
period a mortgage loan is delinquent in accordance with the
transaction agreements. Such records are maintained on at least a
monthly basis, or such other period specified in the transaction
agreements, and describe the entity's activities in monitoring
delinquent mortgage loans including, for example, phone calls,
letters and payment rescheduling plans in cases where delinquency is
deemed temporary (e.g., illness or unemployment).
-------------------- -------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based on the
related mortgage loan documents.
-------------------- -------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's mortgage loan documents, on at least an
annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable
mortgage loan documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other
number of days specified in the transaction agreements.
-------------------- -------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the appropriate
bills or notices for such payments, provided that such
support has been received by the servicer at least 30
calendar days prior to these dates, or such other number of
days specified in the transaction agreements.
-------------------- -------------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment to
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late
payment was due to the obligor's error or omission.
-------------------- -------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within
two business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
transaction agreements.
-------------------- -------------------------
24
------------------------------------------------------------------------------------------------------------------
APPLICABLE
SERVICING CRITERIA SERVICING CRITERIA
------------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
------------------------------------------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
------------------------------------------------------------------------------------------------------------------
11 22(d)(4)(xiv) Delinquencies, charge-offs and uncollectible
accounts are recognized and recorded in accordance with the
transaction agreements. Any external enhancement or other
support, identified in Item 11 14(a)(1) through (3) or Item
1115 of Regulation AB, is maintained as set forth in the
11 22(d)(4)(xv) transaction agreements.
------------------------------------------------------------------------------------------------------------------
[NAME OF COMPANY] [NAME OF
SUBSERVICER]
Date:
------------------------------------
By:
-------------------------------------
Name:
Title:
22. The Agreement is hereby amended effective as of the date hereof by
adding the following new Exhibit H:
EXHIBIT H
REPORTING DATA FOR DEFAULTED LOANS
STANDARD FILE LAYOUT - DELINQUENCY REPORTING
----------------------------------------------------------------------------------------------------------------------
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT
COMMENT
----------------------------------------------------------------------------------------------------------------------
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer.
This may be different than the LOAN_NBR
----------------------------------------------------------------------------------------------------------------------
LOAN_NBR A unique identifier assigned to each loan
by the originator.
----------------------------------------------------------------------------------------------------------------------
CLIENT_NBR Servicer Client Number
----------------------------------------------------------------------------------------------------------------------
SERV_INVESTOR_NBR Contains a unique number as assigned by an
external servicer to identify a group of
loans in their system.
----------------------------------------------------------------------------------------------------------------------
BORROWER_FIRST_NAME First Name of the Borrower.
----------------------------------------------------------------------------------------------------------------------
BORROWER_LAST_NAME Last name of the borrower.
----------------------------------------------------------------------------------------------------------------------
PROP_ADDRESS Street Name and Number of Property
----------------------------------------------------------------------------------------------------------------------
PROP_STATE The state where the property located.
----------------------------------------------------------------------------------------------------------------------
PROP_ZIP Zip code where the property is located.
----------------------------------------------------------------------------------------------------------------------
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next payment
is due to MM/DD/YYYY the servicer at the
end of processing cycle, as reported by
Servicer.
----------------------------------------------------------------------------------------------------------------------
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
----------------------------------------------------------------------------------------------------------------------
25
----------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
----------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_CASE_NBR The case number assigned by the court to the
bankruptcy filing.
----------------------------------------------------------------------------------------------------------------------
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been MM/DD/YYYY
approved by the courts
----------------------------------------------------------------------------------------------------------------------
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. Either MM/DD/YYYY
by Dismissal, Discharged and/or a Motion For Relief
Was Granted.
----------------------------------------------------------------------------------------------------------------------
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The MM/DD/YYYY
Servicer
----------------------------------------------------------------------------------------------------------------------
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such
As;
----------------------------------------------------------------------------------------------------------------------
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation /Plan Is Scheduled To MM/DD/YYYY
End/Close
----------------------------------------------------------------------------------------------------------------------
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer with MM/DD/YYYY
instructions to begin foreclosure proceedings.
----------------------------------------------------------------------------------------------------------------------
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue MM/DD/YYYY
Foreclosure
----------------------------------------------------------------------------------------------------------------------
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a MM/DD/YYYY
Foreclosure Action
----------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected to MM/DD/YYYY
occur.
----------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure 2 No commas(,)
sale. or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------
EVICTION_START_DATE The date the servicer initiates eviction of the MM/DD/YYYY
borrower.
----------------------------------------------------------------------------------------------------------------------
EVICTION_COMPLETED_DATE The date the court revokes legal possession
of the MM/DD/YYYY property from the
borrower.
----------------------------------------------------------------------------------------------------------------------
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------
LIST_DATE The date an REO property is listed at a particular MM/DD/YYYY
price.
----------------------------------------------------------------------------------------------------------------------
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------
OFFER_DATE_TIME The date an offer is received by DA Admin or by the MM/DD/YYYY
Servicer.
----------------------------------------------------------------------------------------------------------------------
REO_CLOSING_DATE The date the REO sale of the property is scheduled to MM/DD/YYYY
close.
----------------------------------------------------------------------------------------------------------------------
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
OCCUPANT_CODE Classification of how the property is occupied.
----------------------------------------------------------------------------------------------------------------------
PROP_CONDITION_CODE A code that indicates the condition of the property.
----------------------------------------------------------------------------------------------------------------------
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
APP RAISAL_DATE The date the appraisal was done. MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
CURR_PROP_VAL The current "as is" value of the property based on 2
brokers price opinion or appraisal.
----------------------------------------------------------------------------------------------------------------------
REPAIRED_PROP_VAL The amount the property would be worth if repairs are 2
completed pursuant to a broker's price opinion or
appraisal.
----------------------------------------------------------------------------------------------------------------------
IF APPLICABLE:
----------------------------------------------------------------------------------------------------------------------
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
----------------------------------------------------------------------------------------------------------------------
DELINQ_REASON_CODE The circumstances which caused a borrower to stop
paying on a loan. Code indicates the reason why the
loan is in default for this cycle.
----------------------------------------------------------------------------------------------------------------------
26
----------------------------------------------------------------------------------------------------------------------
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
----------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim MM/DD/YYYY
Payment
----------------------------------------------------------------------------------------------------------------------
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By MM/DD/YYYY
The Pool Insurer
----------------------------------------------------------------------------------------------------------------------
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
----------------------------------------------------------------------------------------------------------------------
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,)
or dollar
signs ($)
----------------------------------------------------------------------------------------------------------------------
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING
The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
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
27
NOTE: Xxxxx Fargo Bank 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 Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The OCCUPANT CODE field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
28
The FNMA DELINQUENT REASON CODE field should show the Reason for
Delinquency as follows:
-------------------------------------------------------------
DELINQUENCY DELINQUENCY DESCRIPTION
CODE
-------------------------------------------------------------
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 FN MA-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
-------------------------------------------------------------
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
-------------------------------------------------------------
29
The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:
-------------------------------------------------------------
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
-------------------------------------------------------------
23. The Agreement is hereby amended effective as of the date hereof by
adding the following new Exhibit I:
EXHIBIT I
REPORTING DATA FOR REALIZED LOSSES AND GAINS
CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET
NOTE: DO NOT NET OR COMBINE ITEMS. SHOW ALL EXPENSES INDIVIDUALLY AND
ALL CREDITS AS SEPARATE LINE ITEMS. CLAIM PACKAGES ARE DUE ON THE
REMITTANCE REPORT DATE. LATE SUBMISSIONS MAY RESULT IN CLAIMS NOT BEING
PASSED UNTIL THE FOLLOWING MONTH. THE SERVICER IS RESPONSIBLE TO REMIT
ALL FUNDS PENDING LOSS APPROVAL AND /OR RESOLUTION OF ANY DISPUTED
ITEMS.
1.
2. The numbers on the 332 form correspond with the numbers listed below.
LIQUIDATION AND ACQUISITION EXPENSES:
30
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through
liquidation breaking out the net interest and servicing fees advanced is
required.
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. For documentation, an Amortization Schedule from date of default
through liquidation breaking out the net interest and servicing fees
advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage Loan as calculated on a monthly basis. For documentation, an
Amortization Schedule from date of default through liquidation breaking
out the net interest and servicing fees advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form -
breakdown required showing period of coverage, base tax, interest,
penalty. Advances prior to default require evidence of servicer
efforts to recover advances.
* For escrow advances - complete payment history (to calculate
advances from last positive escrow balance forward)
* Other expenses - copies of corporate advance history showing all
payments * REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
* Short Sale or Charge Off require P&L supporting the decision and WFB
's approved Officer Certificate
* Unusual or extraordinary items may require further documentation.
13. The total of lines 1 through 12.
3. CREDITS:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale, bid
instructions and Escrow Agent / Attorney Letter of Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332 form
22. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (1 8a) for Part A/Initial proceeds and
line (1 8b) for Part B/Supplemental proceeds.
TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)
31
23. The total derived from subtracting line 22 from 13. If the amount represents
a realized gain, show the amount in parenthesis ( ).
CALCULATION OF REALIZED LOSS/GAIN FORM 332
Prepared by:_____________________________________ Date:
Phone:_________________________________ Email Address:_________________
Servicer Loan No. Servicer Name Servicer Address
XXXXX FARGO BANK, N.A. LOAN NO._________________________________________
Borrower's Name:
Property Address:
LIQUIDATION TYPE: REO SALE 3RD PARTY SALE SHORT SALE CHARGE OFF
WAS THIS LOAN GRANTED A BANKRUPTCY DEFICIENCY OR CRAMDOWN YES NO
If "Yes", provide deficiency or cramdown amount
LIQUIDATION AND ACQUISITION EXPENSES:
(1) Actual Unpaid Principal Balance of Mortgage Loan $_____________ (1)
(2) Interest accrued at Net Rate ______________ (2)
(3) Accrued Servicing Fees ______________ (3)
(4) Attorney's Fees ______________ (4)
(5) Taxes (see page 2) ______________ (5)
(6) Property Maintenance ______________ (6)
(7) MI/Hazard Insurance Premiums (see page 2) ______________ (7)
(8) Utility Expenses ______________ (8)
(9) Appraisal/BPO ______________ (9)
(10) Property Inspections ______________ (10)
(11) FC Costs/Other Legal Expenses ______________ (11)
(12) Other (itemize) ______________ (12)
Cash for Keys________________________________ ______________ (12)
HOA/Condo Fees_______________________________ ______________ (12)
_____________________________________________ ______________ (12)
TOTAL EXPENSES CREDITS: $_____________ (13)
(14) Escrow Balance $_____________ (14)
(15) HIP Refund (15)
(16) Rental Receipts (16)
(17) Hazard Loss Proceeds (17)
32
(18) Primary Mortgage Insurance / Gov't Insurance (18a)
HUD Part A (18b)
HUD Part B (19)
(19) Pool Insurance Proceeds
(20) Proceeds from Sale of Acquired Property (20)
(21) Other (itemize) (21)
(21)
TOTAL CREDITS $_____________ (22)
TOTAL REALIZED LOSS (OR AMOUNT OF GAIN) $_____________ (23)
ESCROW DISBURSEMENT DETAIL
TYPE DATE PAID PERIOD OF TOTAL PAID BASE AMOUNT PENALTIES INTEREST
(TAX/INS.) COVERAGE
33
24. Except as amended above, the Agreement shall continue to be in full
force and effect in accordance with its terms.
25. This Amendment may be executed by one or more of the parties hereto
on any number of separate counterparts and of said counterparts taken together
shall be deemed to constitute one and the same instrument.
[SIGNATURE PAGES FOLLOW]
34
IN WITNESS WHEREOF, the following parties have caused their names to be
signed hereto by their respective officers thereunto duly authorized as of the
day and year first above written.
EMC MORTGAGE CORPORATION, as Owner
By:
----------------------------------------------
Name:
Title:
GMAC MORTGAGE CORPORATION, as Servicer
By:
----------------------------------------------
Name:
Title:
35
SCHEDULE II
Assignment, Assumption and Recognition Agreements
S-2-1
Execution Copy
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (the "Assignment
and Assumption Agreement"), dated as of March 15, 2007, by Bear Xxxxxxx Asset
Backed Securities I LLC (the "Assignor"), Citibank, N.A., not individually but
solely as trustee for the holders of Bear Xxxxxxx Asset Backed Securities Trust
2007-SD2, Asset-Backed Certificates, Series 2007-SD2 (the "Assignee") and EMC
Mortgage Corporation (the "Company"), acknowledged and agreed to by Xxxxx Fargo
Bank, National Association, as securities administrator (in such capacity, the
"Securities Administrator") and master servicer (in such capacity, the "Master
Servicer"), under the Pooling and Servicing Agreement, dated as February 1, 2007
(the "Pooling and Servicing Agreement"), by and among the Assignor, the
Securities Administrator, the Master Servicer and Assignee.
WHEREAS, the Assignor and the Company entered into that certain
Servicing Agreement dated as of February 1, 2007, (the "Servicing Agreement")
attached hereto as Exhibit A, pursuant to which the Company agreed to service
certain mortgage loans listed on Exhibit B annexed hereto, as such Exhibit may
be revised on any Subsequent Transfer Date provided in the Pooling and Servicing
Agreement, as applicable (the "Mortgage Loans") on behalf of Assignor.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Mortgage Loans serviced by the Company for the Assignor and its successors and
assigns pursuant to the Servicing Agreement shall be subject to the terms of
this Assignment and Assumption Agreement. Capitalized terms used herein but not
otherwise defined shall have the meanings assigned to them in the Servicing
Agreement.
Assignment and Assumption
-------------------------
1. Except as expressly provided for herein, the Assignor hereby
grants, transfers and assigns to the Assignee all of its right, title and
interest in, to and under (a) the Mortgage Loans and (b) the Servicing Agreement
with respect to the Mortgage Loans; provided, however, that the Assignor is not
assigning to the Assignee any of its right, title and interest, to and under the
Servicing Agreement with respect to any mortgage loan other than the Mortgage
Loans. Except as is otherwise expressly provided herein, the Assignor makes no
representations, warranties or covenants to the Assignee and the Assignee
acknowledges that the Assignor has no obligations to the Assignee under the
terms of the Servicing Agreement or otherwise relating to the transaction
contemplated herein (including, but not limited to, any obligation to indemnify
the Assignee).
Assignor acknowledges and agrees that upon execution of this Assignment
and Assumption Agreement, with respect to the Mortgage Loans, the Assignee shall
become the "Owner" under the Servicing Agreement, and all representations,
warranties and covenants by the "Servicer" to the "Owner" under the Servicing
Agreement including, but not limited to, the right to receive indemnification,
shall accrue to Assignee by virtue of this Assignment and Assumption Agreement.
Representations Warranties and Covenants
----------------------------------------
2. The Assignor warrants and represents to, and covenants with, the
Assignee that as of the date hereof:
(a) Attached hereto as Exhibit A is a true and accurate copy of the
Servicing Agreement, which agreement is in full force and effect
as of the date hereof and the provisions of which have not been
waived, further amended or modified in any respect, nor has any
notice of termination been given thereunder;
(b) The Assignor is the lawful owner of the Mortgage Loans with full
right to transfer the Mortgage Loans and any and all of its
interests, rights and obligations under the Servicing Agreement
as they relate to the Mortgage Loans, free and clear from any
and all claims and encumbrances; and upon the transfer of the
Mortgage Loans to the Assignee as contemplated herein, Assignee
shall have good title to each and every Mortgage Loan, as well
as any and all of the Assignor's interests, rights and
obligations under the Servicing Agreement as they relate to the
Mortgage Loans, free and clear of any and all liens, claims and
encumbrances;
(c) There are no offsets, counterclaims or other defenses available
to the Assignor with respect to the Mortgage Loans or the
Servicing Agreement;
(d) The Assignor has no knowledge of, and has not received notice
of, any waivers under, or any modification of, any Mortgage
Loan;
(e) The Assignor is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation, and has all requisite power and authority to
acquire, own and sell the Mortgage Loans;
(f) The Assignor has full corporate power and authority to execute,
deliver and perform its obligations under this Assignment and
Assumption Agreement, and to consummate the transactions set
forth herein. The consummation of the transactions contemplated
by this Assignment and Assumption Agreement is in the ordinary
course of the Assignor's business and will not conflict with, or
result in a breach of, any of the terms, conditions or
provisions of the Assignor's charter or by-laws or any legal
restriction, or any material agreement or instrument to which
the Assignor is now a party or by which it is bound, or result
in the violation of any law, rule, regulation, order, judgment
or decree to which Assignor or its property is subject. The
execution, delivery and performance by the Assignor of this
Assignment and Assumption Agreement and the consummation by it
of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on part of the
Assignor. This Assignment and Assumption Agreement has been duly
executed and delivered by the Assignor and, upon the due
authorization, execution and delivery by the Assignee and the
Company, will constitute the valid and legally binding
obligation of the Assignor enforceable against the Assignor in
accordance with its terms except as enforceability may be
limited by bankruptcy, reorganization,
2
insolvency, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and by general
principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(g) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required
to be obtained or made by the Assignor in connection with the
execution, delivery or performance by the Assignor of this
Assignment and Assumption Agreement, or the consummation by it
of the transactions contemplated hereby.
(h) Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the
Mortgage Loans or any interest in the Mortgage Loans, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of the Mortgage Loans, or any interest in the
Mortgage Loans or otherwise approached or negotiated with
respect to the Mortgage Loans, or any interest in the Mortgage
Loans with any Person in any manner, or made any general
solicitation by means of general advertising or in any other
manner, or taken any other action which would constitute a
distribution of the Mortgage Loans under the Securities Act of
1933, as amended (the "1933 Act") or which would render the
disposition of the Mortgage Loans a violation of Section 5 of
the 1933 Act or require registration pursuant thereto;
(i) The Assignor has received from the Company, and has delivered to
the Assignee, all documents required to be delivered to the
Assignor by the Company prior to the date hereof pursuant to the
Servicing Agreement with respect to the Mortgage Loans and has
not received, and has not requested from the Company, any
additional documents; and
(j) There is no action, suit, proceeding, investigation or
litigation pending or, to Assignor's knowledge, threatened,
which either in any instance or in the aggregate, if determined
adversely to Assignor, would adversely affect Assignor's
execution or delivery of, or the enforceability of, this AAR
Agreement, or the Assignor's ability to perform its obligations
under this AAR Agreement.
3. The Assignee warrants and represents to, and covenants with,
Assignor and Company that as of the date hereof:
(a) The Assignee is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization
and has all requisite power and authority to hold the Mortgage
Loans on behalf of the holders of Bear Xxxxxxx Asset Backed
Securities Trust 2007-SD2, Asset-Backed Certificates, Series
2007-SD2;
(b) The Assignee has full corporate power and authority to execute,
deliver and perform under its obligations this Assignment and
Assumption Agreement, and to consummate the transactions set
forth herein. The consummation of the transactions contemplated
by this Assignment and Assumption Agreement is in
3
the ordinary course of the Assignee's business and will not
conflict with, or result in a breach of, any of the terms,
conditions or provisions of the Assignee's charter or by-laws or
any legal restriction, or any material agreement or instrument
to which the Assignee is now a party or by which it is bound, or
result in the violation of any law, rule, regulation, order,
judgment or decree to which the Assignee or its property is
subject. The execution, delivery and performance by the Assignee
of this Assignment and Assumption Agreement and the consummation
by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on part of the
Assignee. This Assignment and Assumption Agreement has been duly
executed and delivered by the Assignee and, upon the due
authorization, execution and delivery by the Assignor and the
Company, will constitute the valid and legally binding
obligation of Assignee enforceable against the Assignee in
accordance with its terms except as enforceability may be
limited by bankruptcy, reorganization, insolvency, moratorium or
other similar laws now or hereafter in effect relating to
creditors' rights generally, and by general principles of equity
regardless of whether enforceability is considered in a
proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required
to be obtained or made by the Assignee in connection with the
execution, delivery or performance by the Assignee of this
Assignment and Assumption Agreement, or the consummation by it
of the transactions contemplated hereby; and
(d) The Assignee assumes all of the rights of the Assignor as
"Owner" under the Servicing Agreement with respect to the
Mortgage Loans.
4. The Company warrants and represents to, and covenants with, the
Assignor and the Assignee as of the date hereof:
(a) Attached hereto as Exhibit A is a true and accurate copy of the
Servicing Agreement, which agreement is in full force and effect
as of the date hereof and the provisions of which have not been
waived, further amended or modified in any respect, nor has any
notice of termination been given thereunder;
(b) The Company is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its
incorporation, and has all requisite power and authority to
service the Mortgage Loans and otherwise to perform its
obligations under the Servicing Agreement;
(c) The Company has full corporate power and authority to execute,
deliver and perform its obligations under this Assignment and
Assumption Agreement, and to consummate the transactions set
forth herein. The consummation of the transactions contemplated
by this Assignment and Assumption Agreement is in the ordinary
course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or
provisions of the Company's charter or by-laws or any legal
restriction, or any material agreement or
4
instrument to which the Company is now a party or by which it is
bound, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Company or its property
is subject. The execution, delivery and performance by the
Company of this Assignment and Assumption Agreement and the
consummation by it of the transactions contemplated hereby, have
been duly authorized by all necessary action on part of the
Company. This Assignment and Assumption Agreement has been duly
executed and delivered by the Company, and, upon the due
authorization, execution and delivery by Assignor and Assignee,
will constitute the valid and legally binding obligation of
Company, enforceable against the Company in accordance with its
terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally,
and by general principles of equity regardless of whether
enforceability is considered in a proceeding in equity or at
law;
(d) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required
to be obtained or made by the Company in connection with the
execution, delivery or performance by the Company of this
Assignment and Assumption Agreement, or the consummation by it
of the transactions contemplated hereby;
(e) The Company shall establish a Custodial Account and an Escrow
Account under the Servicing Agreement in favor of the Assignee
with respect to the Mortgage Loans separate from the Custodial
Account and Escrow Account previously established under the
Servicing Agreement in favor of Assignor; and
(f) Neither this Assignment and Assumption Agreement nor any
certification, statement, report or other agreement, document or
instrument furnished or to be furnished by the Company pursuant
to this Assignment and Assumption Agreement contains or will
contain any materially untrue statement of fact or omits or will
omit to state a material fact necessary to make the statements
contained therein not misleading; and
(g) Pursuant to Section 10.02 of the Servicing Agreement, the
Company hereby restates the representations and warranties set
forth in Article III of the Servicing Agreement with respect to
the Company as of the date hereof.
5. Company warrants and represents to, and covenants with the
Assignor as of the date hereof:
(a)
Company is not aware and has not received notice that any
default, early amortization or other performance triggering
event has occurred as to any other securitization due to any act
or failure to act of the Company;
(b) No material noncompliance with the applicable servicing criteria
with respect to other securitizations of residential mortgage
loans involving the Company as servicer has been disclosed or
reported by the Company;
5
(c) Company has not been terminated as servicer in a residential
mortgage loan securitization, either due to a servicing default
or to application of a servicing performance test or trigger;
(d) No material changes to the Company's policies or procedures with
respect to the servicing function it will perform under the
Servicing Agreement and this Assignment and Assumption Agreement
for mortgage loans of a type similar to the Mortgage Loans have
occurred during the three-year period immediately preceding the
date hereof;
(e) There are no aspects of the Company's financial condition that
could have a material adverse effect on the performance by the
Company of its servicing obligations under the Servicing
Agreement and this Assignment and Assumption Agreement;
(f) There are no material legal or governmental proceedings pending
(or known to be contemplated) against the Company, any
Subservicer or any third-party originator; and
(g) There are no affiliations, relationships or transactions
relating to the Company or any Subservicer with respect to this
securitization transaction and any party thereto of a type
described in Item 1119 of Regulation AB.
6. Notwithstanding anything to the contrary in the Servicing
Agreement, the Company shall (or shall cause any Third-Party Originator to) (i)
immediately notify Assignor in writing of (A) legal proceedings pending against
the Company, or proceedings known to be contemplated by governmental authorities
against the Company which in the judgment of the Company would be, in each case,
material to purchasers of securities backed by the Mortgage Loans and (B) any
affiliations or relationships of the type described in Item 1119(b) of
Regulation AB that develop following the date hereof between the Company and any
of the above listed parties or other parties identified in writing by the
Assignor with respect to the Securitization Transaction and (ii) provide to the
Assignor a description of such proceedings, affiliations or relationships.
Each such notice/update should be sent to the Assignor by e-mail to
xxxXXxxxxxxxxxxxxx@xxxx.xxx. Additionally, all such notifications, other than
those pursuant to (i)(A) above, should be sent to:
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Conduit Seller Approval Dept.
Facsimile: (000) 000-0000
Email: xxxxxxxxxxxxxx@xxxx.xxx
6
with copies to:
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Global Credit Administration
Facsimile: (000) 000-0000
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
Notifications pursuant to (i)(A) above should be sent to:
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Global Credit Administration
Facsimile: (000) 000-0000
7.
Assignor hereby agrees to indemnify and hold the Assignee (and
its successors and assigns) harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that Assignee (and its successors and assigns)
may sustain in any way related to any breach of the representations or
warranties of Assignor set forth in this Assignment and Assumption Agreement or
the breach of any covenant or condition contained herein.
8. The Company hereby acknowledges that Xxxxx Fargo Bank, N.A. and
any successor thereto, has been appointed as master servicer of the Mortgage
Loans pursuant to the Pooling and Servicing Agreement, and therefore has the
right to enforce all obligations of the Company, as they related to the Mortgage
Loans, under the Servicing Agreement that have been assigned hereby. Such right
will include, without limitation, the right to receive all remittances required
to be made by the Company under the Servicing Agreement, the right to receive
all monthly reports and other data required to be delivered by the Company under
the Servicing Agreement, the right to examine the books and records of the
Company, indemnification rights, and the right to exercise certain rights of
consent and approval relating to actions taken by the Company.
7
9. Notwithstanding any term hereof to the contrary, the execution
and delivery of this Assignment and Assumption Agreement by the Assignee is
solely in its capacity as trustee for the holders of Bear Xxxxxxx Asset Backed
Securities Trust 2007-SD2, Asset-Backed Certificates, Series 2007-SD2 and not
individually, and any recourse against the Assignee in respect of any
obligations it may have under or pursuant to the terms of this Assignment and
Assumption Agreement shall be limited solely to the assets it may hold as
trustee of Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2, Asset-Backed
Certificates, Series 2007-SD2.
Recognition of Assignee
-----------------------
10. From and after the date hereof, Company shall recognize Assignee
as owner of the Mortgage Loans and will service the Mortgage Loans for Assignee
as if Assignee and Company had entered into a separate servicing agreement for
the servicing of the Mortgage Loans in the form of the Servicing Agreement, the
terms of which are incorporated herein by reference. Notwithstanding anything to
the contrary contained herein or in the Servicing Agreement, Company
acknowledges that the Mortgage Loans will be part of one or more REMICs and
hereby agrees that in no event will it service the Mortgage Loans in a manner
that would (i) cause any REMIC to fail to qualify as a REMIC or (ii) result in
the imposition of a tax upon any REMIC (including but not limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the Code and the tax
on contributions to a REMIC set forth in Section 860G(d) of the Code). It is the
intention of Assignor, Company and Assignee that this Assignment and Assumption
Agreement shall be binding upon and for the benefit of the respective successors
and assigns of the parties hereto. Neither Company nor Assignor shall amend or
agree to amend, modify, waive, or otherwise alter any of the terms or provisions
of the Servicing Agreement which amendment, modification, waiver or other
alteration would in any way affect the Mortgage Loans without the prior written
consent of Assignee.
11. A copy of all assessments, attestations, reports and
certificates required to be delivered by the Company under this Assignment and
Assumption Agreement and the Servicing Agreement shall be delivered to the
Master Servicer by the date(s) specified herein or therein, and where such
documents are required to be addressed to any party, such addresses shall
include the Master Servicer and the Master Servicer shall be entitled to rely on
such documents.
12. Distributions shall be made by wire transfer of immediately
available funds to:
Bear Xxxxxxx BSABS 2007-SD2 Distribution Account
Xxxxx Fargo Bank, N.A.
ABA# 000000000
Account Name: SAS Clearing
Account # 0000000000
For Further Credit to: BSABS 2007-SD2, Distribution
Account #00000000
and the Company shall deliver all reports required to be delivered under the
Servicing Agreement to the Master Servicer at:
8
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager BSABS 2007-SD2
Telecopier No.: (000) 000-0000
13. Notices:
The Assignor's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment and Assumption Agreement is:
Bear Xxxxxxx Asset Backed Securities I LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Credit Administration
Facsimile: (000) 000-0000
The Assignee's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment and Assumption Agreement is:
Citibank, N.A., as trustee
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Structured Finance Agency & Trust
BSABS 2007-SD2
Telecopier No.: (000) 000-0000
The Company's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment and Assumption Agreement is:
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Conduit Seller Approval Dept.
Facsimile: (000) 000-0000
Miscellaneous:
--------------
14. Each party will pay any commissions it has incurred and the
Assignor shall pay the fees of its attorneys and the reasonable fees of the
attorneys of the Assignee and the Company in connection with the negotiations
for, documenting of and closing of the transactions contemplated by this
Assignment and Assumption Agreement.
15. This Assignment and Assumption Agreement shall be construed in
accordance with the laws of the State of New York, including Sections 5-1401 and
5-1402 of the New General Obligations Law, but otherwise without regard to
conflicts of law principles, and the
9
obligations, rights and remedies of the parties hereunder shall
be determined in accordance with such laws.
16. No term or provision of this Assignment and Assumption Agreement
may be waived or modified unless such waiver or modification is in writing and
signed by the party against whom such waiver or modification is sought to be
enforced.
17. This Assignment and Assumption Agreement shall inure to the
benefit of the successors and assigns of the parties hereto. Any entity into
which Assignor, Assignee or Company may be merged or consolidated shall, without
the requirement for any further writing, be deemed Assignor, Assignee or
Company, respectively, hereunder.
18. This Assignment and Assumption Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Servicing Agreement
to the extent of the Mortgage Loans by Assignor to Assignee and the termination
of the Servicing Agreement.
19. This Assignment and Assumption Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original and all such counterparts shall constitute one and the same
instrument.
20. In the event that any provision of this Assignment and
Assumption Agreement conflicts with any provision of the Servicing Agreement
with respect to the Mortgage Loans, the terms of this Assignment and Assumption
Agreement shall control.
21. Any new loan number assigned to a Mortgage Loan by the Assignee
shall be provided to the Company at the following address: EMC Mortgage
Corporation, 0000 Xxxx Xxxxx Xxxxx, Xxxxxxxxxx, XX 00000-0000, Attention:
General Counsel. In addition, if Assignee has changed its document custodian
from the previous custodian, such new custodian's name, address and contact
information shall be provided to the Company at the aforementioned address.
10
IN WITNESS WHEREOF, the parties hereto have executed this AAR Agreement
on the date first above written.
BEAR XXXXXXX ASSET BACKED CITIBANK, N.A., AS TRUSTEE FOR THE
SECURITIES I LLC, THE ASSIGNOR HOLDERS OF BEAR XXXXXXX ASSET BACKED
SECURITIES TRUST 2007-SD2,
ASSET-BACKED CERTIFICATES,
SERIES 2007-SD2, THE ASSIGNEE
By: By:
----------------------------------- ----------------------------------
Its: Its:
---------------------------------- ----------------------------------
EMC MORTGAGE CORPORATION, AS COMPANY
By:
-----------------------------------
Its:
----------------------------------
Acknowledged and agreed:
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
-----------------------------------
Its:
----------------------------------
11
Exhibit A
---------
Servicing Agreement, dated as of February 1, 2007, by and between Bear
Xxxxxxx Asset Backed Securities I LLC and EMC Mortgage Corporation.
12
Exhibit B
---------
Mortgage Loans
[available upon request]
13
Execution Copy
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (the "Assignment
and Assumption Agreement"), dated as of March 15, 2007, by EMC Mortgage
Corporation, a Delaware corporation (the "Assignor"), Citibank, N.A., not
individually but solely as trustee for the holders of Bear Xxxxxxx Asset Backed
Securities Trust 2007-SD2 Asset-Backed Certificates, Series 2007-SD2 (the
"Assignee") and Xxxxx Fargo Bank, N.A. (the "Company") and is acknowledged and
agreed to by Bear Xxxxxxx Asset Backed Securities I LLC as the depositor, and
Xxxxx Fargo Bank, National Association as master servicer.
WHEREAS, the Assignor purchased certain mortgage loans listed on
Exhibit A (the "Xxxxx Mortgage Loans") from the Company on a servicing-retained
basis;
WHEREAS, the Company is currently servicing the Xxxxx Mortgage Loans
pursuant to those certain Seller's Warranties and Servicing Agreements (the
"Original Warranties and Servicing Agreements"), set forth in Schedule 1
attached hereto;
WHEREAS, the Company is currently subservicing, for the benefit of the
Assignor, certain mortgage loans listed on Exhibit B (the "EMC Mortgage Loans"
and, together with the Xxxxx Mortgage Loans, the "Mortgage Loans") pursuant to
that certain Subservicing Agreement, dated as of May 1, 2005, by and between the
Assignor, as owner, and the Company, as servicer; and
WHEREAS, the Assignor and the Company desire that, from and after the
date hereof, all of the Mortgage Loans be serviced in accordance with the terms
and conditions of that certain Seller's Warranties and Servicing Agreement dated
as of January 1, 2007 (WFHM 6689, 6690, 6691, 6692, 6693 and 6694), (the
"Warranties and Servicing Agreement") between the Assignor and the Company,
attached hereto as Schedule 2.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Mortgage Loans shall hereby be serviced by the Company for the Assignor and its
successors and assigns pursuant to the Warranties and Servicing Agreement,
subject to the terms of this Assignment and Assumption Agreement. Capitalized
terms used herein but not otherwise defined shall have the meanings assigned to
them in the Warranties and Servicing Agreement.
Assignment and Assumption
-------------------------
1. Except as expressly provided for herein, the Assignor hereby
grants, transfers and assigns to the Assignee all of its right, title and
interest in, to and under (a) the Mortgage Loans and (b) the Warranties and
Servicing Agreement with respect to the Mortgage Loans; provided, however, that
the Assignor is not assigning to the Assignee any of its right, title and
interest, to and under the Warranties and Servicing Agreement with respect to
any mortgage loan other than the Mortgage Loans listed on Exhibits A and B.
Notwithstanding anything to the contrary contained herein, the Assignor
specifically reserves and does not assign to the Assignee any right, title and
interest in, to or under the representations and warranties contained in Section
3.01 and Section 3.02 of the Warranties and Servicing Agreement, and any
obligation of the
Company to cure, repurchase or substitute for a mortgage loan and to indemnify
the Assignor with respect to a breach of such representations and warranties
pursuant to Section 3.03 of the Warranties and Servicing Agreement, and the
Assignor is retaining the right to enforce the representations and warranties
and the obligations of the Company set forth in those sections against the
Company. Except as is otherwise expressly provided herein, the Assignor makes no
representations, warranties or covenants to the Assignee and the Assignee
acknowledges that the Assignor has no obligations to the Assignee under the
terms of the Warranties and Servicing Agreement or otherwise relating to the
transaction contemplated herein (including, but not limited to, any obligation
to indemnify the Assignee).
Representations Warranties and Covenants
----------------------------------------
2. The Assignor warrants and represents to, and covenants with, the
Assignee that as of the date hereof:
(a) Attached hereto as Schedule 2 is a true and accurate
copy of the Warranties and Servicing Agreement, which agreement is in
full force and effect as of the date hereof and the provisions of which
have not been waived, further amended or modified in any respect, nor
has any notice of termination been given thereunder;
(b) The Assignor is the lawful owner of the Mortgage Loans
with full right to transfer the Mortgage Loans and any and all of its
interests, rights and obligations under the Original Warranties and
Servicing Agreements and the Warranties and Servicing Agreement as they
relate to the Mortgage Loans, free and clear from any and all claims
and encumbrances; and upon the transfer of the Mortgage Loans to the
Assignee as contemplated herein, Assignee shall have good title to each
and every Mortgage Loan, as well as any and all of the Assignor's
interests, rights and obligations under the Warranties and Servicing
Agreement as they relate to the Mortgage Loans, free and clear of any
and all liens, claims and encumbrances;
(c) There are no offsets, counterclaims or other defenses
available to the Company with respect to the Mortgage Loans, the
Original Warranties and Servicing Agreements or the Warranties and
Servicing Agreement;
(d) The Assignor has no knowledge of, and has not received
notice of, any waivers under, or any modification of, any Mortgage
Loan;
(e) The Assignor is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
and has all requisite power and authority to acquire, own and sell the
Mortgage Loans;
(f) The Assignor has full corporate power and authority to
execute, deliver and perform its obligations under this Assignment and
Assumption Agreement, and to consummate the transactions set forth
herein. The consummation of the transactions contemplated by this
Assignment and Assumption Agreement is in the ordinary course of the
Assignor's business and will not conflict with, or result in a breach
of, any of the terms, conditions or provisions of the Assignor's
charter or by-laws or any legal restriction, or any material agreement
or instrument to which the Assignor is now a party
2
or by which it is bound, or result in the violation of any law, rule,
regulation, order, judgment or decree to which Assignor or its property
is subject. The execution, delivery and performance by the Assignor of
this Assignment and Assumption Agreement and the consummation by it of
the transactions contemplated hereby, have been duly authorized by all
necessary corporate action on part of the Assignor. This Assignment and
Assumption Agreement has been duly executed and delivered by the
Assignor and, upon the due authorization, execution and delivery by the
Assignee and the Company, will constitute the valid and legally binding
obligation of the Assignor enforceable against the Assignor in
accordance with its terms except as enforceability may be limited by
bankruptcy, reorganization, insolvency, moratorium or other similar
laws now or hereafter in effect relating to creditors' rights
generally, and by general principles of equity regardless of whether
enforceability is considered in a proceeding in equity or at law;
(g) No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is
required to be obtained or made by the Assignor in connection with the
execution, delivery or performance by the Assignor of this Assignment
and Assumption Agreement, or the consummation by it of the transactions
contemplated hereby. Neither the Assignor nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of
the Mortgage Loans or any interest in the Mortgage Loans, or solicited
any offer to buy or accept a transfer, pledge or other disposition of
the Mortgage Loans, or any interest in the Mortgage Loans or otherwise
approached or negotiated with respect to the Mortgage Loans, or any
interest in the Mortgage Loans with any Person in any manner, or made
any general solicitation by means of general advertising or in any
other manner, or taken any other action which would constitute a
distribution of the Mortgage Loans under the Securities Act of 1933, as
amended (the "1933 Act") or which would render the disposition of the
Mortgage Loans a violation of Section 5 of the 1933 Act or require
registration pursuant thereto; and
(h) The Assignor has received from the Company, and has
delivered to the Assignee, all documents required to be delivered to
the Assignor by the Company prior to the date hereof pursuant to the
Original Warranties and Servicing Agreements and the Warranties and
Servicing Agreement with respect to the Mortgage Loans and has not
received, and has not requested from the Company, any additional
documents.
3. The Assignee warrants and represents to, and covenants with,
Assignor and Company as of the date hereof:
(a) The Assignee is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization
and has all requisite power and authority to hold the Mortgage Loans on
behalf of the holders of Bear Xxxxxxx Asset Backed Securities Trust
2007-SD2, Asset-Backed Certificates, Series 2007-SD2;
(b) The Assignee has full corporate power and authority to
execute, deliver and perform under this Assignment and Assumption
Agreement, and to consummate the transactions set forth herein. The
consummation of the transactions contemplated by this
3
Assignment and Assumption Agreement is in the ordinary course of the
Assignee's business and will not conflict with, or result in a breach
of, any of the terms, conditions or provisions of the Assignee's
charter or by-laws or any legal restriction, or any material agreement
or instrument to which the Assignee is now a party or by which it is
bound, or result in the violation of any law, rule, regulation, order,
judgment or decree to which the Assignee or its property is subject.
The execution, delivery and performance by the Assignee of this
Assignment and Assumption Agreement and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all
necessary corporate action on part of the Assignee. This Assignment and
Assumption Agreement has been duly executed and delivered by the
Assignee and, upon the due authorization, execution and delivery by the
Assignor and the Company, will constitute the valid and legally binding
obligation of Assignee enforceable against the Assignee in accordance
with its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is
required to be obtained or made by the Assignee in connection with the
execution, delivery or performance by the Assignee of this Assignment
and Assumption Agreement, or the consummation by it of the transactions
contemplated hereby; and
(d) The Assignee assumes all of the rights of the Assignor
under the Warranties and Servicing Agreement with respect to the
Mortgage Loans other than the right to enforce the obligations of the
Company under the Warranties and Servicing Agreement.
4. The Company warrants and represents to, and covenants with, the
Assignor and the Assignee as of the date hereof:
(a) Attached hereto as Schedule 2 is a true and accurate
copy of the Warranties and Servicing Agreement, which agreement is in
full force and effect as of the date hereof and the provisions of which
have not been waived, further amended or modified in any respect, nor
has any notice of termination been given thereunder;
(b) The Company is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States, and has all requisite power and authority to service the
Mortgage Loans and otherwise to perform its obligations under the
Warranties and Servicing Agreement;
(c) The Company has full power and authority to execute,
deliver and perform its obligations under this Assignment and
Assumption Agreement, and to consummate the transactions set forth
herein. The consummation of the transactions contemplated by this
Assignment and Assumption Agreement is in the ordinary course of the
Company's business and will not conflict with, or result in a breach
of, any of the terms, conditions or provisions of the Company's charter
or by-laws or any legal restriction, or any material
4
agreement or instrument to which the Company is now a party or by which
it is bound, or result in the violation of any law, rule, regulation,
order, judgment or decree to which the Company or its property is
subject. The execution, delivery and performance by the Company of this
Assignment and Assumption Agreement and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all
necessary action on part of the Company. This Assignment and Assumption
Agreement has been duly executed and delivered by the Company, and,
upon the due authorization, execution and delivery by Assignor and
Assignee, will constitute the valid and legally binding obligation of
Company, enforceable against the Company in accordance with its terms
except as enforceability may be limited by the effect of insolvency,
liquidation, conservatorship and other similar laws administered by the
Federal Deposit Insurance Corporation affecting the enforcement of
contract obligations of insured banks and subject to the application of
the rules of equity;
(d) No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is
required to be obtained or made by the Company in connection with the
execution, delivery or performance by the Company of this Assignment
and Assumption Agreement, or the consummation by it of the transactions
contemplated hereby;
(e) The Company shall establish a Custodial Account and an
Escrow Account under the Warranties and Servicing Agreement in favor of
the Assignee with respect to the Mortgage Loans separate from the
Custodial Account and Escrow Account previously established under the
Warranties and Servicing Agreement in favor of Assignor; and
(f) Pursuant to Section 9.01 of the Warranties and Servicing
Agreement, the Company hereby restates the representations and
warranties set forth in Section 3.01 of the Warranties and Servicing
Agreement with respect to the Company as of the date hereof, other
than, in the case of the EMC Mortgage loans only, the representations
and warranties set forth in Section 3.01(b) (but only with respect to
the transfer, assignment and conveyance of the EMC Mortgage Loans),
Section 3.01(j) and Section 3.01(l).
5. Assignor hereby agrees to indemnify and hold the Assignee (and
its successors and assigns) harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that Assignee (and its successors and assigns)
may sustain in any way related to any breach of the representations or
warranties of Assignor set forth in this Assignment and Assumption Agreement or
the breach of any covenant or condition contained herein.
6. The Company hereby acknowledges that Xxxxx Fargo Bank, N.A. and
any successor thereto (the "Master Servicer"), has been appointed as master
servicer of the Mortgage Loans pursuant to the Pooling and Servicing Agreement
dated as of February 1, 2007 the "Pooling and Servicing Agreement"), among Bear
Xxxxxxx Asset Backed Securities I LLC, the Assignor, the Assignee and the Master
Servicer, and therefore has the right to enforce all obligations of the Company
under the Warranties and Servicing Agreement that have been assigned hereby.
Such right will include, without limitation, the right to receive all
remittances
5
required to be made by the Company under the Warranties and Servicing Agreement,
the right to receive all monthly reports and other data required to be delivered
by the Company under the Warranties and Servicing Agreement, the right to
examine the books and records of the Company, indemnification rights, and the
right to exercise certain rights of consent and approval relating to actions
taken by the Company.
7. Notwithstanding any term hereof to the contrary, the execution
and delivery of this Assignment and Assumption Agreement by the Assignee is
solely in its capacity as trustee for Bear Xxxxxxx Asset Backed Securities Trust
2007-SD2 Asset-Backed Certificates, Series 2007-SD2 and not individually, and
any recourse against the Assignee in respect of any obligations it may have
under or pursuant to the terms of this Assignment and Assumption Agreement shall
be limited solely to the assets it may hold as trustee of Bear Xxxxxxx Asset
Backed Securities Trust 2007-SD2 Asset-Backed Certificates, Series 2007-SD2.
Modification of the Warranties and Servicing Agreement
------------------------------------------------------
8. The Company and Assignor hereby amend the Warranties and
Servicing Agreement as follows:
(a) Article I of the Warranties and Servicing Agreement is
amended by adding the following definitions:
Certificates: The Bear Xxxxxxx Asset Backed Securities Trust
2007-SD2 Asset-Backed Certificates, Series 2007-SD2.
Pooling and Servicing Agreement: That certain Pooling and
Servicing Agreement, dated as of February 1, 2007, among Bear
Xxxxxxx Asset Backed Securities I LLC, the Trustee, the Master
Servicer, the Securities Administrator and EMC Mortgage
Corporation.
Securities Administrator: Xxxxx Fargo Bank, National Association
or its successors in interest.
Trustee: Citibank, N.A., or its successor in interest, or any
successor trustee appointed as provided in the Pooling and
Servicing Agreement.
(b) Article I of the Warranties and Servicing Agreement is
amended by deleting the definition of Master Servicer in its entirety
and replacing it with the following:
Master Servicer: Xxxxx Fargo Bank, National Association, or its
successors in interest who meet the qualifications of the
Pooling and Servicing Agreement and this Agreement.
(c) Article I of the Warranties and Servicing Agreement is
amended by deleting the definition of First Remittance Date in its
entirety and replacing it with the following:
6
First Remittance Date: March 16, 2007.
---------------------
(d) Article I of the Warranties and Servicing Agreement is
amended by deleting the definition of Remittance Date in its entirety
and replacing it with the following (new text underlined):
Remittance Date: The 18th day (or if such 18th day is not a
Business Day, the first Business Day immediately preceding such
18th day) of any month, beginning with the First Remittance
Date.
(e) Section 4.01 of the Warranties and Servicing Agreement
is hereby amended by deleting the word "Servicer" in the third
paragraph thereof, and replacing it with "Company".
(f) Section 4.05 of the Warranties and Servicing Agreement
is hereby amended by deleting the word "and" in subclause (viii)
thereof, by replacing the period with ";" at the end of subclause (ix),
and by adding the following new subclauses (x) and (xi):
"(x) notwithstanding any other provision of this
Section 4.05, to reimburse itself for any Monthly Advances or
Servicing Advances made in connection with a Mortgage Loan
modified pursuant to Section 4.01, to the extent that such
Advances or Servicing Advances have been added to the Stated
Principal Balance of the Mortgage Loan during the related Due
Period, the Company's right to reimburse itself pursuant to
this subclause (xi) being limited to amounts received on the
Mortgage Loans with respect to principal only; and
(xi) to reimburse itself for any Nonrecoverable
Advance."
(g) Section 4.16 of the Warranties and Servicing Agreement
is hereby amended by inserting at the end of the first sentence of the
fourth paragraph thereof the following proviso:
"and provided that the Company provides the Master Servicer
under such REMIC an Opinion of Counsel to the effect that the
holding of such REO Property for a period longer than three
(3) years will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F(a)(2) of
the Code and the tax on contributions to a REMIC set forth in
Section 860G(d) of the Code, or cause the transaction to fail
to qualify as a REMIC".
(h) Article V of the Warranties and Servicing Agreement is
hereby amended by deleting Section 5.02 in its entirety and replacing
it with the following:
Section 5.02 Statements to the Purchaser.
No later than the tenth (10th) calendar day (or if such tenth
(10th) day is not a Business Day, the first Business Day immediately
preceding such tenth (10th day) of each month, the Company shall
furnish to the Master Servicer an electronic file containing the
7
data specified in Exhibit G, which data shall reflect information as to
the period ending on the last day of the preceding month, Exhibit H
with respect to defaulted mortgage loans and Exhibit I, with respect to
realized losses and gains, with each such report.
(i) Section 6.02 of the Warranties and Servicing Agreement
is hereby amended by inserting at the end of the first sentence of the
second paragraph thereof the following:
", or, with respect to an EMC Mortgage Loan only, the Company
shall deposit in the Custodial Account the entire principal
balance plus all accrued interest on such Mortgage Loan on the
day preceding the next Remittance Date."
(j) Section 6.04 (Annual Statements as to Compliance) of the
Warranties and Servicing Agreement is hereby amended by deleting the
references to "the Purchaser, any Master Servicer and any Depositor"
and "the Purchaser, such Master Servicer and such Depositor" and
replacing each with "the Master Servicer".
(k) Section 6.06 (Report on Assessment of Compliance and
Attestation) of the Warranties and Servicing Agreement is hereby
amended by replacing the references to "the Purchaser, any Master
Servicer and any Depositor" and "the Purchaser, such Master Servicer
and such Depositor" with "the Master Servicer".
(l) Section 6.07(i) of the Warranties and Servicing
Agreement is hereby amended by deleting the reference to "Section
4.24".
(m) Section 10.01(ii) of the Warranties and Servicing
Agreement is hereby amended by inserting after "Agreement" the words
"(other than the Company's obligations under Sections 6.04 and 6.06)".
(n) Section 12.03 of the Warranties and Servicing Agreement
is hereby amended by inserting after the words "New York" the words
"without regard to conflict of law principles (other than Section
5-1401 of the New York General Obligations Law)".
(o) The Warranties and Servicing Agreement is hereby amended
as of the date hereof by inserting a new Exhibit G, a copy of which is
annexed hereto as Exhibit C.
(p) The Warranties and Servicing Agreement is hereby amended
as of the date hereof by inserting a new Exhibit H, a copy of which is
annexed hereto as Exhibit D.
(q) The Warranties and Servicing Agreement is hereby amended
as of the date hereof by inserting a new Exhibit I, a copy of which is
annexed hereto as Exhibit E.
Recognition of Assignee
-----------------------
9. From and after the date hereof, Company shall recognize Assignee
as owner of the Mortgage Loans and will service the Mortgage Loans for Assignee
as if Assignee and Company had entered into a separate servicing agreement for
the servicing of the Mortgage
8
Loans in the form of the Warranties and Servicing Agreement (as modified
herein), the terms of which are incorporated herein by reference.
Notwithstanding anything to the contrary contained herein or in the Warranties
and Servicing Agreement, Company acknowledges that the Mortgage Loans will be
part of a REMIC and hereby agrees that in no event will it service the Mortgage
Loans in a manner that would (i) cause any REMIC to fail to qualify as a REMIC
or (ii) result in the imposition of a tax upon any REMIC (including but not
limited to the tax on prohibited transactions as defined in Section 860F(a)(2)
of the Code and the tax on contributions to a REMIC set forth in Section 860G(d)
of the Code). It is the intention of Assignor, Company and Assignee that this
Assignment and Assumption Agreement shall be binding upon and for the benefit of
the respective successors and assigns of the parties hereto. Neither Company nor
Assignor shall amend or agree to amend, modify, waive, or otherwise alter any of
the terms or provisions of the Warranties and Servicing Agreement which
amendment, modification, waiver or other alteration would in any way affect the
Mortgage Loans without the prior written consent of Assignee.
Indemnification
---------------
10. The Company agrees to indemnify and hold harmless the Assignor
and Bear Xxxxxxx Asset Backed Securities I LLC (the "Depositor"), each
representative of the Assignor and each officer and director of the Depositor
who signed the Registration Statement, Bear, Xxxxxxx & Co. Inc. (the
"Underwriter") and each person, if any, who controls the Assignor, the Depositor
or any Underwriter within the meaning of either Section 15 of the 1933 Act or
Section 20 of the 1934 Act, and each of their respective affiliates (each an
"Indemnified Party" and collectively, the "Indemnified Parties"), against any
and all losses, claims, damages, penalties, fines, forfeitures or liabilities
that (i) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Free Writing Prospectus, dated
March 14, 2007 (the "Free Writing Prospectus") or the Prospectus Supplement,
dated March 14, 2007 (the "Prospectus Supplement"), each issued in connection
with the securitization of the Assigned Loans under the sections entitled
"SERVICING OF THE MORTGAGE LOANS - The Servicers - Xxxxx Fargo Bank", and "THE
MORTGAGE POOL - The Originators- Xxxxx Fargo Bank, N.A., as Originator,"
specifically provided by the Company for inclusion in the Term Sheet Supplement
and the Prospectus Supplement, respectively (the "Company Information"), or (ii)
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading; provided, by way of clarification, that clause (ii) of this
paragraph shall be construed solely by reference to the Company Information and
not to any other information communicated in connection with the Certificates,
without regard to whether the Company Information or any portion thereof is
presented together with or separately from such other information. The Company
shall in each case reimburse each Indemnified Party for any legal or other
costs, fees, or expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such loss, claim, damage,
penalty, fine, forfeiture, liability or action. The Company's liability under
this Section 10 shall be in addition to any other liability that the Company may
otherwise have.
The Assignor and the Depositor agree to indemnify and hold harmless the
Company, each representative and affiliate of the Company, each officer and
director of the Company, and each person, if any, who controls the Company
within the meaning of either Section 15 of the
9
1933 Act or Section 20 of the 1934 Act, and each of their respective affiliates
(each a "Xxxxx Fargo Party" and collectively, the "Xxxxx Fargo Parties"),
against any and all losses, claims, damages, penalties, fines, forfeitures or
liabilities to which each Xxxxx Fargo Party may become subject, under the 1933
Act, the 1934 Act or otherwise, to the extent that such losses, claims, damages,
penalties, fines, forfeitures or liabilities (or actions in respect thereof) (i)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Free Writing Prospectus or the Prospectus
Supplement, together with the related base prospectus, dated March 14, 2007 and
any related private placement memorandum, (in each case other than in the
related Company Information) or (ii) arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading and the Assignor and the
Depositor shall in each case reimburse each Xxxxx Fargo Party for any legal or
other, costs, fees or expenses reasonably incurred by such Xxxxx Fargo Party in
connection with investigating or defending any such loss, damage, penalty, fine,
forfeiture, liability, claim or action. The Assignor's and Depositor's liability
under this Section 10 shall be in addition to any other liability that the
Assignor or Depositor may otherwise have.
If the indemnification provided for in this Section 10 shall for any
reason be unavailable to an indemnified party under this section, then the party
which would otherwise be obligated to indemnify with respect thereto, on the one
hand, and the parties which would otherwise be entitled to be indemnified, on
the other hand, shall contribute to the aggregate losses, liabilities, claims,
damages, penalties, fines, forfeitures and expenses of the nature contemplated
herein and incurred by the parties hereto in such proportions that are
appropriate to reflect the relative benefit to the Assignor and the Depositor,
on one hand, and the Company, on the other hand, in connection with the
applicable misstatements or omissions as well as any other relevant equitable
considerations. Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any Person that was not guilty of such fraudulent
misrepresentation. For purposes of this section, each director, officer, partner
and controlling Person of the Assignor and the Depositor shall have the same
rights to contribution as such party.
Promptly after receipt by an indemnified party under this section of
notice of any claim or the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this section, notify the indemnifying party in writing of the claim
or the commencement thereof; but the omission to so notify the indemnifying
party shall not relieve it from any liability it may have to any indemnified
party otherwise than under this section. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that, by written notice delivered to each indemnified
party promptly after receiving the aforesaid notice from an indemnified party,
the indemnifying party elects to assume the defense thereof, it may participate
(jointly with any other indemnifying party similarly notified) with counsel
satisfactory to each indemnified party; provided, however, that if the
defendants in any such action include both an indemnified party and the
indemnifying party and the indemnified party or parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
indemnified parties that are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assert such legal defenses and to
10
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of such counsel, the indemnifying
party shall not be liable to such indemnified party under this paragraph for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, unless (i) such indemnified party shall
have employed separate counsel (plus any local counsel) in connection with the
assertion of legal defenses in accordance with the proviso to the immediately
preceding sentence, (ii) the indemnifying party shall not have employed counsel
satisfactory to such indemnified party to represent such indemnified party
within a reasonable time after notice of commencement of the action or (iii)
such indemnifying party shall have authorized the employment of counsel for such
indemnified party at the expense of the indemnifying party. No party shall be
liable for contribution with respect to any action or claim settled without its
consent, which consent shall not be unreasonably withheld. In no event shall any
indemnifying party be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
11. A copy of all assessments, attestations, reports and
certificates required to be delivered by the Company under this AAR Agreement
and the Purchase Agreement shall be delivered to the Master Servicer by the
date(s) specified herein or therein, and where such documents are required to be
addressed to any party, such addresses shall include the Master Servicer and the
Master Servicer shall be entitled to rely on such documents.
12. Distributions shall be made by wire transfer of immediately
available funds to:
Bear Xxxxxxx BSABS I 2007-SD2 Distribution Account
Xxxxx Fargo Bank, N.A.
ABA# 000000000
Account Name: SAS Clearing
Account # 0000000000
For Further Credit to: BSABS 2007-SD2, A/C#50994800
and the Company shall deliver all reports required to be delivered under the
Warranties and Servicing Agreement to the Master Servicer at:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager BSABS I 2007-SD2
Telecopier No.: (000) 000-0000
13. Notices:
The Assignor's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment and Assumption Agreement is:
11
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Conduit Seller Approval Dept.
Facsimile: (000) 000-0000
With a copy to:
Bear Xxxxxxx Mortgage Capital Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Credit Administration
The Assignee's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment and Assumption Agreement is:
Citibank,N.A., as trustee
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Structured Finance Agency BSABS I 2007-SD2
Telecopier No.: (000) 000-0000
The Company's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment and Assumption Agreement is:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxx, MAC X2302-033
With a copy to:
Xxxxx Fargo Bank, N.A.
1 Home Campus
Xxx Xxxxxx, Xxxx 00000-0000
Attention: General Counsel - MAC X2401-06T
Miscellaneous:
--------------
14. Each party will pay any commissions it has incurred and the
Assignor shall pay the fees of its attorneys and the reasonable fees of the
attorneys of the Assignee and the Company in connection with the negotiations
for, documenting of and closing of the transactions contemplated by this
Assignment and Assumption Agreement.
15. This Assignment and Assumption Agreement shall be construed in
accordance with the laws of the State of New York, including Sections 5-1401 and
5-1402 of the New General Obligations Law, but otherwise without regard to
conflicts of law principles, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
12
16. No term or provision of this Assignment and Assumption Agreement
may be waived or modified unless such waiver or modification is in writing and
signed by the party against whom such waiver or modification is sought to be
enforced.
17. This Assignment and Assumption Agreement shall inure to the
benefit of the successors and assigns of the parties hereto. Any entity into
which Assignor, Assignee or Company may be merged or consolidated shall, without
the requirement for any further writing, be deemed Assignor, Assignee or
Company, respectively, hereunder.
18. This Assignment and Assumption Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Warranties and
Servicing Agreement to the extent of the Mortgage Loans by Assignor to Assignee
and the termination of the Warranties and Servicing Agreement.
19. This Assignment and Assumption Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original and all such counterparts shall constitute one and the same
instrument.
20. In the event that any provision of this Assignment and
Assumption Agreement conflicts with any provision of the Warranties and
Servicing Agreement with respect to the Mortgage Loans, the terms of this
Assignment and Assumption Agreement shall control.
21. Any new loan number assigned to a Mortgage Loan by the Assignee
shall be provided to the Company at the following address: Xxxxx Fargo Bank,
N.A., 1 Home Campus, MAC X0000-000, Xxx Xxxxxx, Xxxx 00000-0000 Attention: Xxxx
X. Xxxxx. In addition, if Assignee has changed its document custodian from the
previous custodian, such new custodian's name, address and contact information
shall be provided to the Company at the aforementioned address.
13
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers as of the
date first above written.
CITIBANK, N.A., not individually but solely as
trustee for the holders of Bear Xxxxxxx Asset
Backed Securities Trust 2007-SD2 Asset-Backed
Certificates, Series 2007-SD2
By:
----------------------------------------------
Name:
Title:
MC MORTGAGE CORPORATION
By:
----------------------------------------------
Name:
Title:
XXXXX FARGO BANK, N.A., as Company
By:
----------------------------------------------
Name:
Title:
Acknowledged and Agreed
XXXXX FARGO BANK, N.A.,
as Master Servicer
By:
----------------------------
Name:
Title:
BEAR XXXXXXX ASSET BACKED
SECURITIES I LLC
As depositor
By:
----------------------------
Name:
Title:
14
Exhibit A
---------
Xxxxx Mortgage Loans
[available upon request]
A-1
Exhibit B
---------
EMC Mortgage Loans
[available upon request]
B-1
Exhibit C
---------
EXHIBIT G
REPORTING DATA FOR MONTHLY REPORT
STANDARD FILE LAYOUT - MASTER SERVICING
COLUMN NAME DESCRIPTION DECIMAL FORMAT MAX
COMMENT SIZE
SER_INVESTOR_NBR A value assigned by the Servicer to define a Text up to 10 20
group of loans. digits
LOAN_NBR A unique identifier assigned to each loan by the Text up to 10 10
investor. digits
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10 10
Servicer. This may be different than the digits
LOAN_NBR.
BORROWER_NAME The borrower name as received in the file. It Maximum length of 30
is not separated by first and last name. 30 (Last, First)
SCHED_PAY_AMT Scheduled monthly principal and scheduled 2 No commas(,) or 11
interest payment that a borrower is expected to dollar signs ($)
pay, P&I constant.
NOTE_INT_RATE The loan interest rate as reported by the 4 Max length of 6 6
Servicer.
NET_INT_RATE The loan gross interest rate less the service 4 Max length of 6 6
fee rate as reported by the Servicer.
SERV_FEE_RATE The servicer's fee rate for a loan as reported 4 Max length of 6 6
by the Servicer.
SERV_FEE_AMT The servicer's fee amount for a loan as reported 2 No commas(,) or 11
by the Servicer. dollar signs ($)
NEW_PAY_AMT The new loan payment amount as reported by the 2 No commas(,) or 11
Servicer. dollar signs ($)
NEW_LOAN_RATE The new loan rate as reported by the Servicer. 4 Max length of 6 6
ARM_INDEX_RATE The index the Servicer is using to calculate a 4 Max length of 6 6
forecasted rate.
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or 11
beginning of the processing cycle. dollar signs ($)
ACTL_END_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or 11
end of the processing cycle. dollar signs ($)
C-1
(continued)
STANDARD FILE LAYOUT - MASTER SERVICING
COLUMN NAME DESCRIPTION DECIMAL FORMAT MAX
COMMENT SIZE
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle that the MM/DD/YYYY 10
borrower's next payment is due to the Servicer,
as reported by Servicer.
SERV_CURT_AMT_1 The first curtailment amount to be applied. 2 No commas(,) or 11
dollar signs ($)
SERV_CURT_DATE_1 The curtailment date associated with the first MM/DD/YYYY 10
curtailment amount.
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or 11
curtailment amount, if applicable. dollar signs ($)
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or 11
dollar signs ($)
SERV_CURT_DATE_2 The curtailment date associated with the second MM/DD/YYYY 10
curtailment amount.
CURT_ADJ_ AMT_2 The curtailment interest on the second 2 No commas(,) or 11
curtailment amount, if applicable. dollar signs ($)
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,) or 11
dollar signs ($)
SERV_CURT_DATE_3 The curtailment date associated with the third MM/DD/YYYY 10
curtailment amount.
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,) or 11
curtailment amount, if applicable. dollar signs ($)
PIF_AMT The loan "paid in full" amount as reported by 2 No commas(,) or 11
the Servicer. dollar signs ($)
PIF_DATE The paid in full date as reported by the MM/DD/YYYY 10
Servicer.
Action Code Key: 2
15=Bankruptcy,
30=Foreclosure, ,
60=PIF,
63=Substitution,
65=Repurchase,70=REO
ACTION_CODE The standard FNMA numeric code used to indicate
the default/delinquent status of a particular
loan.
INT_ADJ_AMT The amount of the interest adjustment as 2 No commas(,) or 11
reported by the Servicer. dollar signs ($)
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, if 2 No commas(,) or 11
applicable. dollar signs ($)
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if applicable. 2 No commas(,) or 11
dollar signs ($)
LOAN_LOSS_AMT The amount the Servicer is passing as a loss, if 2 No commas(,) or 11
applicable. dollar signs ($)
C-2
(continued)
STANDARD FILE LAYOUT - MASTER SERVICING
COLUMN NAME DESCRIPTION DECIMAL FORMAT MAX
COMMENT SIZE
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount due 2 No commas(,) or 11
at the beginning of the cycle date to be passed dollar signs ($)
through to investors.
SCHED_END_PRIN_BAL The scheduled principal balance due to investors 2 No commas(,) or 11
at the end of a processing cycle. dollar signs ($)
SCHED_PRIN_AMT The scheduled principal amount as reported by 2 No commas(,) or 11
the Servicer for the current cycle -- only dollar signs ($)
applicable for Scheduled/Scheduled Loans.
SCHED_NET_INT The scheduled gross interest amount less the 2 No commas(,) or 11
service fee amount for the current cycle as dollar signs ($)
reported by the Servicer -- only applicable for
Scheduled/Scheduled Loans.
ACTL_PRIN_AMT The actual principal amount collected by the 2 No commas(,) or 11
Servicer for the current reporting cycle -- only dollar signs ($)
applicable for Actual/Actual Loans.
ACTL_NET_INT The actual gross interest amount less the 2 No commas(,) or 11
service fee amount for the current reporting dollar signs ($)
cycle as reported by the Servicer -- only
applicable for Actual/Actual Loans.
PREPAY_PENALTY_ AMT The penalty amount received when a borrower 2 No commas(,) or 11
prepays on his loan as reported by the dollar signs ($)
Servicer.
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan 2 No commas(,) or 11
waived by the servicer. dollar signs ($)
MOD_DATE The Effective Payment Date of the Modification MM/DD/YYYY 10
for the loan.
MOD_TYPE The Modification Type. Varchar - value 30
can be alpha or
numeric
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and interest 2 No commas(,) or 11
advances made by Servicer. dollar signs ($)
C-3
Exhibit D
---------
EXHIBIT H
STANDARD LAYOUT FOR MONTHLY DEFAULTED LOAN REPORT
EXHIBIT : STANDARD FILE LAYOUT - DELINQUENCY REPORTING
*The column/header names in BOLD are the minimum fields Xxxxx Fargo must
receive from every Servicer
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT COMMENT
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer.
This may be different than the LOAN_NBR
LOAN_NBR A unique identifier assigned to each loan by the
originator.
CLIENT_NBR Servicer Client Number
SERV_INVESTOR_NBR Contains a unique number as assigned by
an external servicer to identify a
group of loans in their system.
BORROWER_FIRST_NAME First Name of the Borrower.
BORROWER_LAST_NAME Last name of the borrower.
PROP_ADDRESS Street Name and Number of Property
PROP_STATE The state where the property located.
PROP_ZIP Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next
payment is due to MM/DD/YYYY the
servicer at the end of processing
cycle, as reported by Servicer.
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
BANKRUPTCY_CASE_NBR The case number assigned by the court to the
bankruptcy filing.
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been MM/DD/YYYY
approved by the courts
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. Either MM/DD/YYYY
by Dismissal, Discharged and/or a Motion For Relief
Was Granted.
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The MM/DD/YYYY
Servicer
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such
As;
D-1
(continued)
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT COMMENT
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation/Plan Is Scheduled To MM/DD/YYYY
End/Close
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer with MM/DD/YYYY
instructions to begin foreclosure proceedings.
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue MM/DD/YYYY
Foreclosure
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a MM/DD/YYYY
Foreclosure Action
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected to MM/DD/YYYY
occur.
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure 2 No commas(,)
sale. or
dollar
signs
($)
EVICTION_START_DATE The date the servicer initiates eviction of the MM/DD/YYYY
borrower.
EVICTION_COMPLETED_DATE The date the court revokes legal
possession of the MM/DD/YYYY property
from the borrower.
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,)
or dollar
signs ($)
LIST_DATE The date an REO property is listed at a particular MM/DD/YYYY
price.
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,)
or dollar
signs ($)
OFFER_DATE_TIME The date an offer is received by DA Admin or by the MM/DD/YYYY
Servicer.
REO_CLOSING_DATE The date the REO sale of the property is scheduled to MM/DD/YYYY
close.
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
OCCUPANT_CODE Classification of how the property is occupied.
PROP_CONDITION_CODE A code that indicates the condition of the property.
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
CURR_PROP_VAL The current "as is" value of the property based on 2
brokers price opinion or appraisal.
REPAIRED_PROP_VAL The amount the property would be worth if repairs are 2
completed pursuant to a broker's price opinion or
appraisal.
IF APPLICABLE:
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
DELINQ_REASON_CODE The circumstances which caused a borrower to stop
paying on a loan. Code indicates the reason why the
loan is in default for this cycle.
D-2
(continued)
COLUMN/HEADER NAME DESCRIPTION DECIMAL FORMAT COMMENT
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,)
or dollar
signs ($)
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim MM/DD/YYYY
Payment
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,)
or dollar
signs ($)
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By MM/DD/YYYY
The Pool Insurer
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,)
or dollar
signs ($)
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,)
or dollar
signs ($)
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,)
or dollar
signs ($)
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,)
or dollar
signs ($)
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,)
or dollar
signs ($)
D-3
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING
The LOSS MIT TYPE field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
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
NOTE: Xxxxx Fargo Bank 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 Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The OCCUPANT CODE field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The PROPERTY CONDITION field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
D-4
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED
The FNMA DELINQUENT REASON CODE field should show the Reason for Delinquency as
follows:
DELINQUENCY DELINQUENCY DESCRIPTION
CODE
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
D-5
019 FNMA-Casualty loss
022 FNMA-Energy environment costs
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
EXHIBIT 2: STANDARD FILE CODES - DELINQUENCY REPORTING, CONTINUED
The FNMA DELINQUENT STATUS CODE field should show the Status of Default as
follows:
STATUS CODE STATUS DESCRIPTION
09 Forbearance
17 Pre-foreclosure Sale Closing Plan Accepted
24 Government Seizure
26 Refinance
27 Assumption
28 Xxxxxxxxxxxx
00 Xxxxxx-Xxx
X-0
00 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
D-7
Exhibit E
---------
EXHIBIT I
REPORTING DATA FOR REALIZED LOSSES AND GAINS
CALCULATION OF REALIZED LOSS/GAIN FORM 332- INSTRUCTION SHEET
NOTE: DO NOT NET OR COMBINE ITEMS. SHOW ALL EXPENSES INDIVIDUALLY AND
ALL CREDITS AS SEPARATE LINE ITEMS. CLAIM PACKAGES ARE DUE ON THE
REMITTANCE REPORT DATE. LATE SUBMISSIONS MAY RESULT IN CLAIMS NOT BEING
PASSED UNTIL THE FOLLOWING MONTH. THE SERVICER IS RESPONSIBLE TO REMIT
ALL FUNDS PENDING LOSS APPROVAL AND /OR RESOLUTION OF ANY DISPUTED
ITEMS.
THE NUMBERS ON THE 332 FORM CORRESPOND WITH THE NUMBERS
LISTED BELOW.
LIQUIDATION AND ACQUISITION EXPENSES:
------------------------------------
1. The Actual Unpaid Principal Balance of the Mortgage Loan. For
documentation, an Amortization Schedule from date of default through liquidation
breaking out the net interest and servicing fees advanced is required.
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. For
documentation, an Amortization Schedule from date of default through liquidation
breaking out the net interest and servicing fees advanced is required.
3. Accrued Servicing Fees based upon the Scheduled Principal Balance of the
Mortgage Loan as calculated on a monthly basis. For documentation, an
Amortization Schedule from date of default through liquidation breaking out the
net interest and servicing fees advanced is required.
4-12. Complete as applicable. Required documentation:
* For taxes and insurance advances - see page 2 of 332 form -
breakdown required showing period of coverage, base tax,
interest, penalty. Advances prior to default require evidence
of servicer efforts to recover advances.
* For escrow advances - complete payment history
(to calculate advances from last positive escrow balance
forward)
* Other expenses - copies of corporate advance history
showing all payments
* REO repairs > $1500 require explanation
* REO repairs >$3000 require evidence of at least 2 bids.
E-1
* Short Sale or Charge Off require P&L supporting the decision
and WFB's approved Servicing Officer certification
* Unusual or extraordinary items may require further
documentation.
4. The total of lines 1 through 12.
Credits:
14-21. Complete as applicable. Required documentation:
* Copy of the HUD 1 from the REO sale. If a 3rd Party Sale,
bid instructions and Escrow Agent / Attorney Letter of
Proceeds Breakdown.
* Copy of EOB for any MI or gov't guarantee
* All other credits need to be clearly defined on the 332
form
5. The total of lines 14 through 21.
Please Note: For HUD/VA loans, use line (18a) for Part
A/Initial proceeds and line (18b) for Part
B/Supplemental proceeds.
TOTAL REALIZED LOSS (OR AMOUNT OF ANY GAIN)
-------------------------------------------
6. The total derived from subtracting line 22 from 13. If the
amount represents a realized gain, show the amount in parenthesis ( ).
E-2
CALCULATION OF REALIZED LOSS/GAIN FORM 332
Prepared by: __________________ Date: _______________
Phone: ______________________ Email Address:_____________________
Servicer Loan No. Servicer Name Servicer Address
XXXXX FARGO BANK, N.A. LOAN NO._____________________________
Borrower's Name: ______________________________________________________
Property Address: _____________________________________________________
LIQUIDATION TYPE: REO SALE 3RD PARTY SALE SHORT SALE CHARGE OFF
WAS THIS LOAN GRANTED A BANKRUPTCY DEFICIENCY OR CRAMDOWN YES NO
If "Yes", provide deficiency or cramdown amount _______________________
LIQUIDATION AND ACQUISITION EXPENSES:
(1) Actual Unpaid Principal Balance of Mortgage Loan $ __________ (1)
(2) Interest accrued at Net Rate ____________ (2)
(3) Accrued Servicing Fees ____________ (3)
(4) Attorney's Fees ____________ (4)
(5) Taxes (see page 2) ____________ (5)
(6) Property Maintenance ____________ (6)
(7) MI/Hazard Insurance Premiums (see page 2) ____________ (7)
(8) Utility Expenses ____________ (8)
(9) Appraisal/BPO ____________ (9)
(10) Property Inspections ____________ (10)
(11) FC Costs/Other Legal Expenses ____________ (11)
E-3
(12) Other (itemize) ____________ (12)
Cash for Keys__________________________ ____________ (12)
HOA/Condo Fees_______________________ ____________ (12)
______________________________________ ____________ (12)
TOTAL EXPENSES $ __________ (13)
CREDITS:
(14) Escrow Balance $ __________ (14)
(15) HIP Refund ____________ (15)
(16) Rental Receipts ____________ (16)
(17) Hazard Loss Proceeds ____________ (17)
(18) Primary Mortgage Insurance / Gov't Insurance ____________(18a)
HUD Part A
____________(18b)
HUD Part B
(19) Pool Insurance Proceeds ____________ (19)
(20) Proceeds from Sale of Acquired Property ____________ (20)
(21) Other (itemize) ____________ (21)
_________________________________________ ____________ (21)
TOTAL CREDITS $ __________ (22)
TOTAL REALIZED LOSS (OR AMOUNT OF GAIN) $ __________ (23)
E-4
ESCROW DISBURSEMENT DETAIL
TYPE DATE PAID PERIOD OF COVERAGE TOTAL PAID BASE AMOUNT PENALTIES INTEREST
(TAX /INS.)
E-5
Schedule 1
Servicing Agreements
1. Subservicing Agreement dated as of May 1, 2005, by and between
Xxxxx Fargo Bank, N.A., as servicer and EMC Mortgage Corporation, as owner.
2. Seller's Warranties and Servicing Agreement dated as of July 1,
2005 by and between EMC Mortgage Corporation, as purchaser and Xxxxx Fargo Bank,
N.A., as seller and servicer (regarding WFHM Mortgage Loan Pools 6344, 6345,
6346, 6347 and 6348).
3. Seller's Warranties and Servicing Agreement, dated and effective
as of April 1, 2006, by and between EMC Mortgage Corporation, as purchaser and
Xxxxx Fargo Bank, N.A., as seller and servicer (regarding WFHM Mortgage Loan
Pools 6518, 6519, 6520, 6521, 6522 and 6523).
4. Seller's Warranties and Servicing Agreement dated as of June 1,
2006 by and between EMC Mortgage Corporation, as purchaser and Xxxxx Fargo Bank,
N.A., as seller and servicer (regarding WFHM Mortgage Loan Pools 6543, 6544,
6545, 6546 and 6547).
5. Seller's Warranties and Servicing Agreement dated as of July 1,
2006 by and between EMC Mortgage Corporation, as purchaser and Xxxxx Fargo Bank,
N.A., as seller and servicer (regarding WFHM Mortgage Loan Pools 6567, 6568,
6569, 6570, 6571 and 6572).
6. Seller's Warranties and Servicing Agreement dated as of
September 1, 2006 by and between EMC Mortgage Corporation, as purchaser and
Xxxxx Fargo Bank, N.A., as seller and servicer (regarding WFHM Mortgage Loan
Pools 6603, 6604, 6605, 6606, 6607 and 6608).
7. Seller's Warranties and Servicing Agreement dated as of October
1, 2006 by and between EMC Mortgage Corporation, as purchaser and Xxxxx Fargo
Bank, N.A., as seller and servicer (regarding WFHM Mortgage Loan Pools 6638,
6639, 6640, 6641, and 6642).
8. Seller's Warranties and Servicing Agreement dated as of December
1, 2006 by and between EMC Mortgage Corporation, as purchaser and Xxxxx Fargo
Bank, N.A., as seller and servicer (regarding WFHM Mortgage Loan Pools 6655,
6656, 6657, 6658, 6659 and 6660).
9. Seller's Warranties and Servicing Agreement dated as of January
1, 2007 by and between EMC Mortgage Corporation, as purchaser and Xxxxx Fargo
Bank, N.A., as seller and servicer (regarding WFHM Mortgage Loan Pools 6689,
6690, 6691, 6692, 6693 and 6694).
S-1
Schedule 2
Seller's Warranties and Servicing Agreement, dated and effective as of
January 1, 2007, by and between EMC Mortgage Corporation, as purchaser and Xxxxx
Fargo Bank, N.A., as seller and servicer (regarding WFHM Mortgage Loan Pools
6689, 6690, 6691, 6692, 6693 and 6694).
[Provided upon request]
S-2
Execution Copy
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT (the "Assignment
and Assumption Agreement"), dated as of March 15, 2007, by EMC Mortgage
Corporation, a Delaware corporation (the "Assignor"), Citibank, National
Association, not individually but solely as trustee for the holders of Bear
Xxxxxxx Asset Backed Securities Trust 2007-SD2 Asset-Backed Certificates, Series
2007-SD2 (the "Assignee") and GMAC Mortgage LLC (formerly known as GMAC Mortgage
Corporation) (the "Company") and is acknowledged and agreed to by Bear Xxxxxxx
Asset Backed Securities I LLC as the depositor (the "Depositor") and Xxxxx Fargo
Bank, N.A., as master servicer (the "Master Servicer").
WHEREAS, the Assignor and the Company entered into that certain
Servicing Agreement dated as of May 1, 2001, as amended by Amendment Number One
thereto dated as of October 1, 2001, Amendment Number Two thereto dated as of
July 31, 2002 and Amendment Number Three thereto dated as of December 20, 2005
(as amended, the "Servicing Agreement") attached hereto as Exhibit A, pursuant
to which the Company agreed to service the Mortgage Loans listed on Exhibit B
annexed hereto (the "Mortgage Loans") on behalf of Assignor.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree that the
Mortgage Loans now serviced by the Company for the Assignor and its successors
and assigns pursuant to the Servicing Agreement shall be subject to the terms of
this Assignment and Assumption Agreement. Capitalized terms used herein but not
otherwise defined shall have the meanings assigned to them in the Servicing
Agreement.
Assignment and Assumption
-------------------------
1. Except as expressly provided for herein, the Assignor hereby
grants, transfers and assigns to the Assignee all of its right, title and
interest in, to and under (a) the Mortgage Loans and (b) the Servicing Agreement
with respect to the Mortgage Loans; provided, however, that the Assignor is not
assigning to the Assignee any of its right, title and interest, to and under the
Servicing Agreement with respect to any mortgage loan other than the Mortgage
Loans listed on Exhibit A. Notwithstanding anything to the contrary contained
herein, the Assignor specifically reserves and does not assign to the Assignee
any right, title and interest in, to or under the representations and warranties
contained in Article III of the Servicing Agreement, and any obligation of the
Company to cure, repurchase or substitute for a mortgage loan and to indemnify
the Assignor with respect to a breach of such representations and warranties
pursuant to Section 8.01 of the Servicing Agreement, and the Assignor is
retaining the right to enforce the representations and warranties and the
obligations of the Company set forth in those sections against the Company.
Except as is otherwise expressly provided herein, the Assignor makes no
representations, warranties or covenants to the Assignee and the Assignee
acknowledges that the Assignor has no obligations to the Assignee under the
terms of the Servicing Agreement or otherwise relating to the transaction
contemplated herein (including, but not limited to, any obligation to indemnify
the Assignee).
Representations Warranties and Covenants
----------------------------------------
2. The Assignor warrants and represents to, and covenants with, the
Assignee that as of the date hereof:
(a) Attached hereto as Exhibit B is a true and accurate copy
of the Servicing Agreement, which agreement is in full force and effect as of
the date hereof and the provisions of which have not been waived, further
amended or modified in any respect, nor has any notice of termination been given
thereunder;
(b) The Assignor is the lawful owner of the Mortgage Loans
with full right to transfer the Mortgage Loans and any and all of its interests,
rights and obligations under the Servicing Agreement as they relate to the
Mortgage Loans, free and clear from any and all claims and encumbrances; and
upon the transfer of the Mortgage Loans to the Assignee as contemplated herein,
Assignee shall have good title to each and every Mortgage Loan, as well as any
and all of the Assignee's interests, rights and obligations under the Servicing
Agreement as they relate to the Mortgage Loans, free and clear of any and all
liens, claims and encumbrances;
(c) There are no offsets, counterclaims or other defenses
available to the Company with respect to the Mortgage Loans or the Servicing
Agreement;
(d) The Assignor has no knowledge of, and has not received
notice of, any waivers under, or any modification of, any Mortgage Loan;
(e) The Assignor is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, and has
all requisite power and authority to acquire, own and sell the Mortgage Loans;
(f) The Assignor has full corporate power and authority to
execute, deliver and perform its obligations under this Assignment and
Assumption Agreement, and to consummate the transactions set forth herein. The
consummation of the transactions contemplated by this Assignment and Assumption
Agreement is in the ordinary course of the Assignor's business and will not
conflict with, or result in a breach of, any of the terms, conditions or
provisions of the Assignor's charter or by-laws or any legal restriction, or any
material agreement or instrument to which the Assignor is now a party or by
which it is bound, or result in the violation of any law, rule, regulation,
order, judgment or decree to which Assignor or its property is subject. The
execution, delivery and performance by the Assignor of this Assignment and
Assumption Agreement and the consummation by it of the transactions contemplated
hereby, have been duly authorized by all necessary corporate action on part of
the Assignor. This Assignment and Assumption Agreement has been duly executed
and delivered by the Assignor and, upon the due authorization, execution and
delivery by the Assignee and the Company, will constitute the valid and legally
binding obligation of the Assignor enforceable against the Assignor in
accordance with its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and by general principles of
equity regardless of whether enforceability is considered in a proceeding in
equity or at law;
-2-
(g) No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required to
be obtained or made by the Assignor in connection with the execution, delivery
or performance by the Assignor of this Assignment and Assumption Agreement, or
the consummation by it of the transactions contemplated hereby.
(h) Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans
or any interest in the Mortgage Loans, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Mortgage Loans, or any interest in
the Mortgage Loans or otherwise approached or negotiated with respect to the
Mortgage Loans, or any interest in the Mortgage Loans with any Person in any
manner, or made any general solicitation by means of general advertising or in
any other manner, or taken any other action which would constitute a
distribution of the Mortgage Loans under the Securities Act of 1933, as amended
(the "1933 Act") or which would render the disposition of the Mortgage Loans a
violation of Section 5 of the 1933 Act or require registration pursuant thereto;
(i) The Assignor has received from the Company, and has
delivered to the Assignee, all documents required to be delivered to the
Assignor by the Company prior to the date hereof pursuant to the Servicing
Agreement with respect to the Mortgage Loans and has not received, and has not
requested from the Company, any additional documents; and
(j) There is no action, suit, proceeding, investigation or
litigation pending or, to Assignor's knowledge, threatened, which either in any
instance or in the aggregate, if determined adversely to Assignor, would
adversely affect Assignor's execution or delivery of, or the enforceability of,
this AAR Agreement, or the Assignor's ability to perform its obligations under
this AAR Agreement.
3. The Assignee warrants and represents to, and covenants with,
Assignor and Company as of the date hereof:
(a) The Assignee is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization and has all
requisite power and authority to hold the Mortgage Loans on behalf of the
holders of Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2 Asset-Backed
Certificates, Series 2007-SD2;
(b) The Assignee has full corporate power and authority to
execute, deliver and perform under this Assignment and Assumption Agreement, and
to consummate the transactions set forth herein. The consummation of the
transactions contemplated by this Assignment and Assumption Agreement is in the
ordinary course of the Assignee's business and will not conflict with, or result
in a breach of, any of the terms, conditions or provisions of the Assignee's
charter or by-laws or any legal restriction, or any material agreement or
instrument to which the Assignee is now a party or by which it is bound, or
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Assignee or its property is subject. The execution, delivery and
performance by the Assignee of this Assignment and Assumption Agreement and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action on part of the Assignee. This
Assignment and Assumption Agreement has been duly executed and delivered by the
Assignee and, upon the due
-3-
authorization, execution and delivery by the Assignor and the Company, will
constitute the valid and legally binding obligation of Assignee enforceable
against the Assignee in accordance with its terms except as enforceability may
be limited by bankruptcy, reorganization, insolvency, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally,
and by general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required to
be obtained or made by the Assignee in connection with the execution, delivery
or performance by the Assignee of this Assignment and Assumption Agreement, or
the consummation by it of the transactions contemplated hereby; and
(d) The Assignee assumes all of the rights of the Purchaser
under the Servicing Agreement with respect to the Mortgage Loans other than the
right to enforce the obligations of the Company under the Servicing Agreement.
4. The Company warrants and represents to, and covenants with, the
Assignor and the Assignee as of the date hereof:
(a) Attached hereto as Exhibit B is a true and accurate copy
of the Servicing Agreement, which agreement is in full force and effect as of
the date hereof and the provisions of which have not been waived, further
amended or modified in any respect, nor has any notice of termination been given
thereunder;
(b) The Company is a Delaware limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority to service the Mortgage Loans
and otherwise to perform its obligations under the Servicing Agreement;
(c) The Company has full power and authority to execute,
deliver and perform its obligations under this Assignment and Assumption
Agreement, and to consummate the transactions set forth herein. The consummation
of the transactions contemplated by this Assignment and Assumption Agreement is
in the ordinary course of the Company's business and will not conflict with, or
result in a breach of, any of the terms, conditions or provisions of the
Company's organizational documents or any legal restriction, or any material
agreement or instrument to which the Company is now a party or by which it is
bound, or result in the violation of any law, rule, regulation, order, judgment
or decree to which the Company or its property is subject. The execution,
delivery and performance by the Company of this Assignment and Assumption
Agreement and the consummation by it of the transactions contemplated hereby,
have been duly authorized by all necessary action on part of the Company. This
Assignment and Assumption Agreement has been duly executed and delivered by the
Company, and, upon the due authorization, execution and delivery by Assignor and
Assignee, will constitute the valid and legally binding obligation of Company,
enforceable against the Company in accordance with its terms except as
enforceability may be limited by bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, and by general principles of equity regardless of
whether enforceability is considered in a proceeding in equity or at law;
-4-
(d) No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required to
be obtained or made by the Company in connection with the execution, delivery or
performance by the Company of this Assignment and Assumption Agreement, or the
consummation by it of the transactions contemplated hereby;
(e) The Company shall establish a Custodial Account and an
Escrow Account under the Servicing Agreement in favor of the Assignee with
respect to the Mortgage Loans separate from the Custodial Account and Escrow
Account previously established under the Servicing Agreement in favor of
Assignor;
(f) Pursuant to Section 10.02 of the Servicing Agreement,
the Company hereby restates the representations and warranties set forth in
Article III of the Servicing Agreement with respect to the Company as of the
date hereof; and
(g) Neither this Assignment and Assumption Agreement nor any
certification, statement, report or other agreement, document or instrument
furnished or to be furnished by the Company pursuant to this Assignment and
Assumption Agreement contains or will contain any untrue statement of fact or
omits or will omit to state a fact necessary to make the statements contained
therein not materially misleading.
5. Notwithstanding anything to the contrary in the Servicing
Agreement, the Company shall (or shall cause any Third-Party Originator to) (i)
immediately notify Assignor and BSABS I in writing of (A) legal proceedings
pending against the Company, or proceedings known to be contemplated by
governmental authorities against the Company which in the judgment of the
Company would be, in each case, material to purchasers of securities backed by
the Mortgage Loans and (B) any affiliations or relationships of the type
described in Item 1119(b) of Regulation AB that develop following the date
hereof between the Company and any of the above listed parties or other parties
identified in writing by the Assignor or BSABS I with respect to the
Securitization Transaction and (ii) provide to the Assignor and BSABS I a
description of such proceedings, affiliations or relationships.
Each notice/update regarding Regulation AB should be sent to the
Assignor by e-mail to xxxXXxxxxxxxxxxxxx@xxxx.xxx. Additionally, all such
notifications, other than those pursuant to (i)(A) above, should be sent to:
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Conduit Seller Approval Dept.
Facsimile: (000) 000-0000
Email: xxxxxxxxxxxxxx@xxxx.xxx
with copies to:
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
-5-
Attention: Global Credit Administration
Facsimile: (000) 000-0000
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
Notifications pursuant to (i)(A) above should be sent to:
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Bear, Xxxxxxx & Co. Inc.
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Global Credit Administration
Facsimile: (000) 000-0000
6. Assignor hereby agrees to indemnify and hold the Assignee (and
its successors and assigns) harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses that Assignee (and its successors and assigns)
may sustain in any way related to any breach of the representations or
warranties of Assignor set forth in this Assignment and Assumption Agreement or
the breach of any covenant or condition contained herein.
7. The Company hereby acknowledges that Xxxxx Fargo Bank, N.A. and
any successor thereto has been appointed as master servicer of the Mortgage
Loans pursuant to the Pooling and Servicing Agreement dated as of February 1,
2007 the "Pooling and Servicing Agreement"), among the Depositor, the Assignor,
the Assignee and the Master Servicer, and therefore has the right to enforce all
obligations of the Company under the Servicing Agreement that have been assigned
hereby. Such rights will include, without limitation, as they relate to the
Mortgage Loans, the right to receive all remittances required to be made by the
Company under the Servicing Agreement, the right to receive all monthly reports
and other data required to be delivered by the Company under the Servicing
Agreement, the right to examine the books and records of the Company,
indemnification rights, and the right to exercise certain rights of consent and
approval relating to actions taken by the Company.
8. Notwithstanding any term hereof to the contrary, the execution
and delivery of this Assignment and Assumption Agreement by the Assignee is
solely in its capacity as trustee for Bear Xxxxxxx Asset Backed Securities Trust
2007-SD2 Asset-Backed Certificates, Series
-6-
2007-SD2 and not individually, and any recourse against the Assignee in respect
of any obligations it may have under or pursuant to the terms of this Assignment
and Assumption Agreement shall be limited solely to the assets it may hold as
trustee of Bear Xxxxxxx Asset Backed Securities Trust 2007-SD2 Asset-Backed
Certificates, Series 2007-SD2.
Modification of Servicing Agreement
-----------------------------------
i. Section 1.01 of the Servicing Agreement is amended by deleting
the definition of Business Day in its entirety and replacing it
with the following (deleted text stricken and new text
underlined):
Business Day: Any day other than (i) a Saturday or Sunday, or
(ii) a legal holiday in the States of New York, Iowa, Maryland,
Minnesota or the Commonwealth of Pennsylvania, or (iii) a day on
which banks in the States of New York, Iowa, Maryland, Minnesota
or Pennsylvania are authorized or obligated by law or executive
order to be closed.
ii. Section 1.01 of the Servicing Agreement is amended by deleting
the definition of Custodian in its entirety and replacing it
with the following (deleted text stricken and new text
underlined):
Custodian: Xxxxx Fargo Bank Minnesota, N.A., or such other
custodian as Owner shall designate.
iii. Section 3.01(a) of the Servicing Agreement is hereby amended by
deleting the word "corporation" thereof and replacing it with
"limited liability company".
iv. Section 3.01(c) of the Servicing Agreement is hereby amended by
deleting the word "articles of incorporation or by-laws" thereof
and replacing it with "organizational documents".
v. Section 6.04 of the Servicing Agreement is hereby amended by
deleting the references to "2007" and replacing each with
"2008".
vi. Section 6.09 of the Servicing Agreement is hereby amended by
deleting the references to "2007" and replacing each with
"2008".
vii. Section 9.01(ii) of the Servicing Agreement is hereby amended by
inserting "(other than Section 6.04 and Section 6.09)"
immediately before the first comma of such section.
viii. Section 9.01 is further amended by adding "; or" at the end of
subclause (vii) and adding the following new subclause (viii):
(viii) any failure on the part of the Servicer to comply with
its obligations under Section 6.04 and Section 6.09 within the
timeframe set forth therein.
-7-
ix. Section 11.04 of the Servicing Agreement is hereby amended by
inserting at the end of the first sentence thereof, "(OTHER THAN
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW)".
x. The Servicing Agreement is hereby amended as of the date hereof
by adding a new Exhibit G, a copy of which is annexed hereto as
Exhibit C.
xi. The Servicing Agreement is hereby amended as of the date hereof
by adding a new Exhibit E, a copy of which is annexed hereto as
Exhibit D.
xii. The Servicing Agreement is hereby amended as of the date hereof
by adding a new Exhibit H, a copy of which is annexed hereto as
Exhibit E.
Recognition of Assignee
-----------------------
9. From and after the date hereof, Company shall recognize Assignee
as owner of the Mortgage Loans and will service the Mortgage Loans for Assignee
as if Assignee and Company had entered into a separate servicing agreement for
the servicing of the Mortgage Loans in the form of the Servicing Agreement (as
modified herein), the terms of which are incorporated herein by reference.
Notwithstanding anything to the contrary contained herein or in the Servicing
Agreement, Company acknowledges that the Mortgage Loans will be part of a REMIC
and hereby agrees that in no event will it service the Mortgage Loans in a
manner that would (i) cause any REMIC to fail to qualify as a REMIC or (ii)
result in the imposition of a tax upon any REMIC (including but not limited to
the tax on prohibited transactions as defined in Section 860F(a)(2) of the Code
and the tax on contributions to a REMIC set forth in Section 860G(d) of the
Code). It is the intention of Assignor, Company and Assignee that this
Assignment and Assumption Agreement shall be binding upon and for the benefit of
the respective successors and assigns of the parties hereto. Neither Company nor
Assignor shall amend or agree to amend, modify, waive, or otherwise alter any of
the terms or provisions of the Servicing Agreement which amendment,
modification, waiver or other alteration would in any way affect the Mortgage
Loans without the prior written consent of Assignee.
10. A copy of all assessments, attestations, reports and
certificates required to be delivered by the Company under this AAR Agreement
and the Purchase Agreement shall be delivered to the Master Servicer by the
date(s) specified herein or therein, and where such documents are required to be
addressed to any party, such addresses shall include the Master Servicer and the
Master Servicer shall be entitled to rely on such documents.
11. Distributions shall be made by wire transfer of immediately
available funds to: Bear Xxxxxxx BSABS 2007-SD2 Distribution
Account Xxxxx Fargo Bank, N.A.
ABA# 000000000
Account Name: SAS Clearing
Account # 0000000000
For Further Credit to: BSABS 2007-SD2, A/C# 50994800
-8-
and the Company shall deliver all reports required to be delivered under the
Servicing Agreement to the Master Servicer at:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager BSABS 2007-SD2
Telecopier No.: (000) 000-0000
12. Notices:
The Assignor's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment and Assumption Agreement is:
EMC Mortgage Corporation
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Conduit Seller Approval Dept.
Facsimile: (000) 000-0000
With a copy to:
Bear Xxxxxxx Mortgage Capital Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Global Credit Administration
The Assignee's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment and Assumption Agreement is:
Citibank, N.A., as trustee
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Structured Finance Agency & Trust - BSABS 2007-SD2
Telecopier No.: (000) 000-0000
With a copy to:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager BSABS 2007-SD2
Telecopier No.: (000) 000-0000
The Company's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment and Assumption Agreement is:
-9-
GMAC Mortgage, LLC
000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx Xxxx
Telecopier No: (000) 000-0000
Miscellaneous:
--------------
13. Each party will pay any commissions it has incurred and the
Assignor shall pay the fees of its attorneys and the reasonable fees of the
attorneys of the Assignee and the Company in connection with the negotiations
for, documenting of and closing of the transactions contemplated by this
Assignment and Assumption Agreement.
14. This Assignment and Assumption Agreement shall be construed in
accordance with the laws of the State of New York, including Sections 5-1401 and
5-1402 of the New General Obligations Law, but otherwise without regard to
conflicts of law principles, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
15. No term or provision of this Assignment and Assumption Agreement
may be waived or modified unless such waiver or modification is in writing and
signed by the party against whom such waiver or modification is sought to be
enforced.
16. This Assignment and Assumption Agreement shall inure to the
benefit of the successors and assigns of the parties hereto. Any entity into
which Assignor, Assignee or Company may be merged or consolidated shall, without
the requirement for any further writing, be deemed Assignor, Assignee or
Company, respectively, hereunder.
17. This Assignment and Assumption Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Servicing Agreement
to the extent of the Mortgage Loans by Assignor to Assignee and the termination
of the Servicing Agreement.
18. This Assignment and Assumption Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original and all such counterparts shall constitute one and the same
instrument.
19. In the event that any provision of this Assignment and
Assumption Agreement conflicts with any provision of the Servicing Agreement
with respect to the Mortgage Loans, the terms of this Assignment and Assumption
Agreement shall control.
20. Any new loan number assigned to a Mortgage Loan by the Assignee
shall be provided to the Company at the following address: GMAC Mortgage, LLC
000 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000, Attention: Xxxxx Xxxx. In
addition, if Assignee has changed its document custodian from the previous
custodian, such new custodian's name, address and contact information shall be
provided to the Company at the aforementioned address.
-10-
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers as of the
date first above written.
CITIBANK, N.A., not individually but
solely as trustee for the holders of
Bear Xxxxxxx Asset Backed Securities
Trust 2007-SD2 Asset-Backed
Certificates, Series 2007-SD2
By:
-------------------------------------
Name:
Title:
EMC MORTGAGE CORPORATION
By:
-------------------------------------
Name:
Title:
GMAC MORTGAGE, LLC
as Company
By:
-------------------------------------
Name:
Title:
Acknowledged and Agreed
XXXXX FARGO BANK, N.A.,
as Master Servicer
By:
-------------------------------------
Name:
Title
BEAR XXXXXXX ASSET BACKED
SECURITIES I LLC
As depositor
By:
-------------------------------------
Name:
Title
Exhibit A
---------
Servicing Agreement dated as of May 1, 2001, between EMC Mortgage
Corporation and GMAC Mortgage LLC, as amended by Amendment Number One thereto
dated as of October 1, 2001, Amendment Number Two thereto dated as of July 31,
2002 and Amendment Number Three thereto dated as of December 20, 2005 (as
amended, the "Servicing Agreement").
[Provided upon request]
A-1
Exhibit B
---------
Mortgage Loans
[available upon request]
B-1
Exhibit C
---------
EXHIBIT G
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
SERVICING CRITERIA TO BE ADDRESSED
IN ASSESSMENT OF COMPLIANCE
(RMBS unless otherwise noted)
Key:
X - obligation
Where there are multiple checks for criteria the attesting party will
identify in their management assertion that they are attesting only to the
portion of the distribution chain they are responsible for in the related
transaction agreements.
REGAB Reference Servicing Criteria Servicers
General Servicing Considerations
Policies and procedures are instituted to monitor any performance or other X
1122(d)(1)(i) triggers and events of default in accordance with the transaction agreements.
If any material servicing activities are outsourced to third parties, X
policies and procedures are instituted to monitor the third party's
1122(d)(1)(ii) performance and compliance with such servicing activities.
Any requirements in the transaction agreements to maintain X
1122(d)(1)(iii) a back-up servicer for the Pool Assets are maintained.
A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the amount of
coverage required by and otherwise in accordance with the
1122(d)(1)(iv) terms of the transaction agreements.
Cash Collection and Administration
Payments on pool assets are deposited into the appropriate X
custodial bank accounts and related bank clearing
accounts no more than two business days following receipt,
or such other number of days specified in the transaction
1122(d)(2)(i) agreements.
Disbursements made via wire transfer on behalf of an obligor or to an X
1122(d)(2)(ii) investor are made only by authorized personnel.
Advances of funds or guarantees regarding collections, X
cash flows or distributions, and any interest or other
fees charged for such advances, are
C-1
REGAB Reference Servicing Criteria Servicers
1122(d)(2)(iii) made, reviewed and approved as specified in the transaction agreements.
The related accounts for the transaction, such as cash reserve accounts or X
accounts established as a form of over collateralization, are separately
maintained (e.g., with respect to commingling of cash) as set forth in the
1122(d)(2)(iv) transaction agreements.
Each custodial account is maintained at a federally X
insured depository institution as set forth in the
transaction agreements. For purposes of this criterion,
"federally insured depository institution" with respect to
a foreign financial institution means a foreign financial
institution that meets the requirements of
1122(d)(2)(v) Rule 13k-1(b)(1) of the Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent
unauthorized access. X
Reconciliations are prepared on a monthly basis for all X
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts.
These reconciliations are (A) mathematically accurate; (B)
prepared within 30 calendar days after the bank statement
cutoff date, or such other number of days specified in the
transaction agreements; (C) reviewed and approved by
someone other than the person who prepared the
reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved
within 90 calendar days of their original identification,
or such other number of days specified in the transaction
1122(d)(2)(vii) agreements.
Investor Remittances and Reporting
Reports to investors, including those to be filed with the X
Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared
in accordance with timeframes and other terms set forth in
the transaction agreements; (B) provide information
calculated in accordance with the terms specified in the
transaction agreements; (C) are filed with the Commission
as required by its rules and regulations; and (D) agree
with investors' or the trustee's records as to the total
unpaid principal balance and number of Pool
1122(d)(3)(i) Assets serviced by the Servicer.
Amounts due to investors are allocated and remitted in X
accordance with timeframes, distribution priority and
1122(d)(3)(ii) other terms set forth in the transaction agreements.
Disbursements made to an investor are posted within two X
business days to the Servicer's investor records, or
such other number of days specified in the transaction
1122(d)(3)(iii) agreements.
Amounts remitted to investors per the investor reports X
agree with cancelled checks, or other form of payment,
1122(d)(3)(iv) or custodial bank statements.
Pool Asset Administration
Collateral or security on pool assets is maintained as X
required by the
C-2
REGAB Reference Servicing Criteria Servicers
X 1122(d)(4)(i) transaction agreements or related pool asset documents.
Pool assets and related documents are safeguarded as X
1122(d)(4)(ii) required by the transaction agreements
Any additions, removals or substitutions to the asset pool X
are made, reviewed and approved in accordance with any
1122(d)(4)(iii) conditions or requirements in the transaction agreements.
Payments on pool assets, including any payoffs, made in X
accordance with the related pool asset documents are
posted to the Servicer's obligor records maintained no
more than two business days after receipt, or such other
number of days specified in the transaction agreements,
and allocated to principal, interest or other items (e.g.,
escrow) in accordance with the related pool asset
1122(d)(4)(iv) documents.
The Servicer's records regarding the pool assets agree X
with the Servicer's records with respect to an
1122(d)(4)(v) obligor's unpaid principal balance.
Changes with respect to the terms or status of an X
obligor's pool assets (e.g., loan modifications or
re-agings) are made, reviewed and approved by authorized
personnel in accordance with the transaction agreements
1122(d)(4)(vi) and related pool asset documents.
Loss mitigation or recovery actions (e.g., forbearance X
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the
1122(d)(4)(vii) transaction agreements.
Records documenting collection efforts are maintained X
during the period a pool asset is delinquent in
accordance with the transaction agreements. Such records
are maintained on at least a monthly basis, or such other
period specified in the transaction agreements, and
describe the entity's activities in monitoring delinquent
pool assets including, for example, phone calls, letters
and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g.,
1122(d)(4)(viii) illness or unemployment).
Adjustments to interest rates or rates of return for pool X
assets with variable rates are computed based on the
1122(d)(4)(ix) related pool asset documents.
Regarding any funds held in trust for an obligor (such as X
escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's pool asset documents, on at
least an annual basis, or such other period specified in
the transaction agreements; (B) interest on such funds is
paid, or credited, to obligors in accordance with
applicable pool asset documents and state laws; and (C)
such funds are returned to the obligor within 30 calendar
days of full repayment of the related pool assets, or such
other number of days specified in the transaction
1122(d)(4)(x) agreements.
Payments made on behalf of an obligor (such as tax or X
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided
1122(d)(4)(xi) that such support
C-3
REGAB Reference Servicing Criteria Servicers
has been received by the servicer at least 30 calendar
days prior to these dates, or such other number of days
specified in the transaction agreements.
Any late payment penalties in connection with any payment X
to be made on behalf of an obligor are paid from the
Servicer's funds and not charged to the obligor, unless
the late payment was due to the obligor's error or
1122(d)(4)(xii) omission.
Disbursements made on behalf of an obligor are posted X
within two business days to the obligor's records
maintained by the servicer, or such other number of
1122(d)(4)(xiii) days specified in the transaction agreements.
Delinquencies, charge-offs and uncollectible accounts are X
recognized and recorded in accordance with the
1122(d)(4)(xiv) transaction agreements.
Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB,
is maintained as set forth in the transaction
1122(d)(4)(xv) agreements.
[NAME OF OWNER] [NAME OF SUBSERVICER]
Date:
----------------------------------
By:
----------------------------------
Name:
Title:
C-4
Exhibit D
---------
EXHIBIT E
Standard Loan Level File Layout -
Master Servicing
Exhibit 1: Layout
Column Name Description Decimal Format Max
Comment Size
Each File Requires the Following Fields:
SER_INVESTOR_NBR A value assigned by the Servicer to define a Text up to 20
group of loans. digits 20
LOAN_NBR A unique identifier assigned to each loan by Text up to 10
the investor. digits 10
SERVICER_LOAN_NBR A unique number assigned to a loan by the Text up to 10
Servicer. This may be different than the digits 10
LOAN_NBR.
SCHED_PAY_AMT Scheduled monthly principal and scheduled 2 No commas(,) or
interest payment that a borrower is expected to dollar signs ($) 11
pay, P&I constant.
NOTE_INT_RATE The loan interest rate as reported by the 4 Max length of 6 6
Servicer.
NET_INT_RATE The loan gross interest rate less the service 4 Max length of 6 6
fee rate as reported by the Servicer.
SERV_FEE_RATE The servicer's fee rate for a loan as reported 4 Max length of 6 6
by the Servicer.
SERV_FEE_AMT The servicer's fee amount for a loan as 2 No commas(,) or
reported by the Servicer. dollar signs ($) 11
NEW_PAY_AMT The new loan payment amount as reported by the 2 No commas(,) or
Servicer. dollar signs ($) 11
NEW_LOAN_RATE The new loan rate as reported by the Servicer. 4 Max length of 6
6
ARM_INDEX_RATE The index the Servicer is using to calculate a 4 Max length of 6
forecasted rate.
6
ACTL_BEG_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or
beginning of the processing cycle. dollar signs ($) 11
ACTL_END_PRIN_BAL The borrower's actual principal balance at the 2 No commas(,) or
end of the processing cycle. dollar signs ($) 11
BORR_NEXT_PAY_DUE_DATE The date at the end of processing cycle that MM/DD/YYYY
the borrower's next payment is due to the 10
Servicer, as reported by Servicer.
SERV_CURT_AMT_1 The first curtailment amount to be applied. 2 No commas(,) or
dollar signs ($) 11
SERV_CURT_DATE_1 The curtailment date associated with the first MM/DD/YYYY
curtailment amount. 10
CURT_ADJ_ AMT_1 The curtailment interest on the first 2 No commas(,) or
curtailment amount, if applicable. dollar signs ($) 11
SERV_CURT_AMT_2 The second curtailment amount to be applied. 2 No commas(,) or
dollar signs ($) 11
SERV_CURT_DATE_2 The curtailment date associated with the second MM/DD/YYYY
curtailment amount. 10
CURT_ADJ_ AMT_2 The curtailment interest on the second 2 No commas(,) or
curtailment amount, if applicable. dollar signs ($) 11
Exhibit 1: Continued Standard Loan Level File Layout
Column Name Description Decimal Format Max
Comment Size
SERV_CURT_AMT_3 The third curtailment amount to be applied. 2 No commas(,)
or dollar 11
signs ($)
SERV_CURT_DATE_3 The curtailment date associated with the third MM/DD/YYYY
curtailment amount. 10
CURT_ADJ_AMT_3 The curtailment interest on the third 2 No commas(,)
curtailment amount, if applicable. or dollar 11
signs ($)
PIF_AMT The loan "paid in full" amount as reported by 2 No commas(,)
the Servicer. or dollar 11
signs ($)
PIF_DATE The paid in full date as reported by the MM/DD/YYYY
Servicer. 10
ACTION_CODE The standard FNMA numeric code used to indicate Action Code
the default/delinquent status of a particular Key: 2
loan. 15=Bankruptcy,
30=Foreclosure,
60=PIF,
63=Substitution,
65=Repurchase,70
=REO
INT_ADJ_AMT The amount of the interest adjustment as 2 No commas(,)
reported by the Servicer. or dollar 11
signs ($)
SOLDIER_SAILOR_ADJ_AMT The Soldier and Sailor Adjustment amount, if 2 No commas(,)
applicable. or dollar 11
signs ($)
NON_ADV_LOAN_AMT The Non Recoverable Loan Amount, if applicable. 2 No commas(,)
or dollar 11
signs ($)
LOAN_LOSS_AMT The amount the Servicer is passing as a loss, if 2 No commas(,)
applicable. or dollar 11
signs ($)
Plus the Following Applicable Fields:
SCHED_BEG_PRIN_BAL The scheduled outstanding principal amount 2 No commas(,)
due at the beginning of the cycle date to be or dollar 11
passed through to investors. signs ($)
SCHED_END_PRIN_BAL The scheduled principal balance due to 2 No commas(,)
investors at the end of a processing cycle. or dollar 11
signs ($)
SCHED_PRIN_AMT The scheduled principal amount as reported by 2 No commas(,)
the Servicer for the current cycle -- only or dollar 11
applicable for Scheduled/Scheduled Loans. signs ($)
SCHED_NET_INT The scheduled gross interest amount less the 2 No commas(,)
service fee amount for the current cycle as or dollar 11
reported by the Servicer -- only applicable signs ($)
for Scheduled/Scheduled Loans.
ACTL_PRIN_AMT The actual principal amount collected by the 2 No commas(,)
Servicer for the current reporting cycle -- or dollar 11
only applicable for Actual/Actual Loans. signs ($)
ACTL_NET_INT The actual gross interest amount less the 2 No commas(,)
service fee amount for the current reporting or dollar 11
cycle as reported by the Servicer -- only signs ($)
applicable for Actual/Actual Loans.
PREPAY_PENALTY_ AMT The penalty amount received when a borrower 2 No commas(,)
prepays on his loan as reported by the or dollar 11
Servicer. signs ($)
PREPAY_PENALTY_ WAIVED The prepayment penalty amount for the loan 2 No commas(,)
waived by the servicer. or dollar 11
signs ($)
Exhibit 1: Continued Standard Loan Level File Layout
Column Name Description Decimal Format Max
Comment Size
MOD_DATE The Effective Payment Date of the MM/DD/YYYY
Modification for the loan. 10
MOD_TYPE The Modification Type. Varchar - value
can be alpha or 30
numeric
DELINQ_P&I_ADVANCE_AMT The current outstanding principal and 2 No commas(,)
interest advances made by Servicer. or dollar 11
signs ($)
BREACH_FLAG Flag to indicate if the repurchase of a loan Y=Breach
is due to a breach of Representations and 1
Warranties
N=NO Breach
Let blank if
N/A
Exhibit E
---------
EXHIBIT H
Exhibit : Standard File Layout - Delinquency Reporting
*The column/header names in bold are the minimum fields Xxxxx Fargo must receive from every Servicer
Column/Header Name Description Decimal Format
Comment
SERVICER_LOAN_NBR A unique number assigned to a loan by the Servicer.
This may be different than the LOAN_NBR
LOAN_NBR A unique identifier assigned to each loan by the
originator.
CLIENT_NBR Servicer Client Number
SERV_INVESTOR_NBR Contains a unique number as
assigned by an external servicer
to identify a group of loans in
their system.
BORROWER_FIRST_NAME First Name of the Borrower.
BORROWER_LAST_NAME Last name of the borrower.
PROP_ADDRESS Street Name and Number of Property
PROP_STATE The state where the property located.
PROP_ZIP Zip code where the property is located.
BORR_NEXT_PAY_DUE_DATE The date that the borrower's next
payment is due to MM/DD/YYYY the
servicer at the end of processing
cycle, as reported by Servicer.
LOAN_TYPE Loan Type (i.e. FHA, VA, Conv)
BANKRUPTCY_FILED_DATE The date a particular bankruptcy claim was filed. MM/DD/YYYY
BANKRUPTCY_CHAPTER_CODE The chapter under which the bankruptcy was filed.
BANKRUPTCY_CASE_NBR The case number assigned by the court to the
bankruptcy filing.
POST_PETITION_DUE_DATE The payment due date once the bankruptcy has been MM/DD/YYYY
approved by the courts
BANKRUPTCY_DCHRG_DISM_DATE The Date The Loan Is Removed From Bankruptcy. Either MM/DD/YYYY
by Dismissal, Discharged and/or a Motion For Relief
Was Granted.
LOSS_MIT_APPR_DATE The Date The Loss Mitigation Was Approved By The MM/DD/YYYY
Servicer
LOSS_MIT_TYPE The Type Of Loss Mitigation Approved For A Loan Such
As;
LOSS_MIT_EST_COMP_DATE The Date The Loss Mitigation/Plan Is Scheduled To MM/DD/YYYY
End/Close
LOSS_MIT_ACT_COMP_DATE The Date The Loss Mitigation Is Actually Completed MM/DD/YYYY
FRCLSR_APPROVED_DATE The date DA Admin sends a letter to the servicer with MM/DD/YYYY
instructions to begin foreclosure proceedings.
ATTORNEY_REFERRAL_DATE Date File Was Referred To Attorney to Pursue MM/DD/YYYY
Foreclosure
FIRST_LEGAL_DATE Notice of 1st legal filed by an Attorney in a MM/DD/YYYY
Foreclosure Action
FRCLSR_SALE_EXPECTED_DATE The date by which a foreclosure sale is expected to MM/DD/YYYY
occur.
FRCLSR_SALE_DATE The actual date of the foreclosure sale. MM/DD/YYYY
FRCLSR_SALE_AMT The amount a property sold for at the foreclosure sale. 2 No commas(,)
or dollar
signs ($)
EVICTION_START_DATE The date the servicer initiates eviction of the MM/DD/YYYY
borrower.
EVICTION_COMPLETED_DATE The date the court revokes legal
possession of the MM/DD/YYYY
property from the borrower.
LIST_PRICE The price at which an REO property is marketed. 2 No commas(,)
or dollar
signs ($)
LIST_DATE The date an REO property is listed at a particular MM/DD/YYYY
price.
OFFER_AMT The dollar value of an offer for an REO property. 2 No commas(,)
or dollar
signs ($)
OFFER_DATE_TIME The date an offer is received by DA Admin or by the MM/DD/YYYY
Servicer.
REO_CLOSING_DATE The date the REO sale of the property is scheduled to MM/DD/YYYY
close.
REO_ACTUAL_CLOSING_DATE Actual Date Of REO Sale MM/DD/YYYY
OCCUPANT_CODE Classification of how the property is occupied.
PROP_CONDITION_CODE A code that indicates the condition of the property.
PROP_INSPECTION_DATE The date a property inspection is performed. MM/DD/YYYY
APPRAISAL_DATE The date the appraisal was done. MM/DD/YYYY
CURR_PROP_VAL The current "as is" value of the property based on 2
brokers price opinion or appraisal.
REPAIRED_PROP_VAL The amount the property would be worth if repairs are 2
completed pursuant to a broker's price opinion or
appraisal.
If applicable:
-------------
DELINQ_STATUS_CODE FNMA Code Describing Status of Loan
DELINQ_REASON_CODE The circumstances which caused a borrower to stop
paying on a loan. Code indicates the reason why the
loan is in default for this cycle.
MI_CLAIM_FILED_DATE Date Mortgage Insurance Claim Was Filed With Mortgage MM/DD/YYYY
Insurance Company.
MI_CLAIM_AMT Amount of Mortgage Insurance Claim Filed No commas(,)
or dollar
signs ($)
MI_CLAIM_PAID_DATE Date Mortgage Insurance Company Disbursed Claim Payment MM/DD/YYYY
MI_CLAIM_AMT_PAID Amount Mortgage Insurance Company Paid On Claim 2 No commas(,)
or dollar
signs ($)
POOL_CLAIM_FILED_DATE Date Claim Was Filed With Pool Insurance Company MM/DD/YYYY
POOL_CLAIM_AMT Amount of Claim Filed With Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
POOL_CLAIM_PAID_DATE Date Claim Was Settled and The Check Was Issued By The MM/DD/YYYY
Pool Insurer
POOL_CLAIM_AMT_PAID Amount Paid On Claim By Pool Insurance Company 2 No commas(,)
or dollar
signs ($)
FHA_PART_A_CLAIM_FILED_DATE Date FHA Part A Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_A_CLAIM_AMT Amount of FHA Part A Claim Filed 2 No commas(,)
or dollar
signs ($)
FHA_PART_A_CLAIM_PAID_DATE Date HUD Disbursed Part A Claim Payment MM/DD/YYYY
FHA_PART_A_CLAIM_PAID_AMT Amount HUD Paid on Part A Claim 2 No commas(,)
or dollar
signs ($)
FHA_PART_B_CLAIM_FILED_DATE Date FHA Part B Claim Was Filed With HUD MM/DD/YYYY
FHA_PART_B_CLAIM_AMT Amount of FHA Part B Claim Filed 2 No commas(,)
or dollar
signs ($)
FHA_PART_B_CLAIM_PAID_DATE Date HUD Disbursed Part B Claim Payment MM/DD/YYYY
FHA_PART_B_CLAIM_PAID_AMT Amount HUD Paid on Part B Claim 2 No commas(,)
or dollar
signs ($)
VA_CLAIM_FILED_DATE Date VA Claim Was Filed With the Veterans Admin MM/DD/YYYY
VA_CLAIM_PAID_DATE Date Veterans Admin. Disbursed VA Claim Payment MM/DD/YYYY
VA_CLAIM_PAID_AMT Amount Veterans Admin. Paid on VA Claim 2 No commas(,)
or dollar
signs ($)
MOTION_FOR_RELIEF_DATE The date the Motion for Relief was filed 10 MM/DD/YYYY
FRCLSR_BID_AMT The foreclosure sale bid amount No commas(,) or
11 dollar signs ($)
FRCLSR_SALE_TYPE The foreclosure sales results: REO, Third Party,
Conveyance to HUD/VA
REO_PROCEEDS The net proceeds from the sale of the REO property. No commas(,) or
dollar signs ($)
BPO_DATE The date the BPO was done.
CURRENT_FICO The current FICO score
HAZARD_CLAIM_FILED_DATE The date the Hazard Claim was filed with the Hazard MM/DD/YYYY
Insurance Company. 10
HAZARD_CLAIM_AMT The amount of the Hazard Insurance Claim filed. No commas(,) or
11 dollar signs ($)
HAZARD_CLAIM_PAID_DATE The date the Hazard Insurance Company disbursed the MM/DD/YYYY
claim payment. 10
HAZARD_CLAIM_PAID_AMT The amount the Hazard Insurance Company paid on the No commas(,) or
claim. 11 dollar signs ($)
ACTION_CODE Indicates loan status Number
NOD_DATE MM/DD/YYYY
NOI_DATE MM/DD/YYYY
ACTUAL_PAYMENT_PLAN_START_DATE MM/DD/YYYY
ACTUAL_PAYMENT_ PLAN_END_DATE
ACTUAL_REO_START_DATE MM/DD/YYYY
REO_SALES_PRICE Number
REALIZED_LOSS/GAIN As defined in the Servicing Agreement Number
Exhibit 2: Standard File Codes - Delinquency Reporting
The Loss Mit Type field should show the approved Loss Mitigation Code as
follows:
o ASUM- Approved Assumption
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
NOTE: Xxxxx Fargo Bank 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 Xxxxx
Fargo Bank with a description of each of the Loss Mitigation Types prior to
sending the file.
The Occupant Code field should show the current status of the property code as
follows:
o Mortgagor
o Tenant
o Unknown
o Vacant
The Property Condition field should show the last reported condition of the
property as follows:
o Damaged
o Excellent
o Fair
o Gone
o Good
o Poor
o Special Hazard
o Unknown
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as
follows:
Delinquency Delinquency Description
Code
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
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
Exhibit 2: Standard File Codes - Delinquency Reporting, Continued
The FNMA Delinquent Reason Code field should show the Reason for Delinquency as
follows:
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
SCHEDULE III
Yield Maintenance Agreements Projected Principal Balances
Please see Schedule B in the Prospectus Supplement
S-3-1
SCHEDULE IV
Coupon Strip Reserve Account Schedule
Please see Schedule C in the Prospectus Supplement
S-4-1
