Exhibit 99.5
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MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
FIRST REPUBLIC BANK
Seller and Servicer
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK, USA
Initial Purchaser
Dated as of December 1, 2005
Fixed Rate and Adjustable Rate Mortgage Loans
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TABLE OF CONTENTS
Page
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SECTION 1. Definitions................................................... 1
SECTION 2. Agreement to Purchase......................................... 14
SECTION 3. Mortgage Loan Schedules....................................... 14
SECTION 4. Purchase Price................................................ 14
SECTION 5. Examination of Mortgage Files................................. 15
SECTION 6. Conveyance from Seller to Initial Purchaser................... 15
Subsection 6.01. Conveyance of Mortgage Loans; Possession of
Servicing Files.................................... 15
Subsection 6.02. Books and Records.................................. 15
Subsection 6.03. Delivery of Mortgage Loan Documents................ 16
SECTION 7. Representations, Warranties and Covenants of the Seller:
Remedies for Breach........................................... 17
Subsection 7.01. Representations and Warranties Respecting the
Seller............................................. 17
Subsection 7.02. Representations and Warranties Regarding Individual
Mortgage Loans..................................... 19
Subsection 7.03. Remedies for Breach of Representations and
Warranties......................................... 30
Subsection 7.04. Repurchase of Certain Mortgage Loans............... 32
SECTION 8. Closing....................................................... 32
SECTION 9. Closing Documents............................................. 33
SECTION 10. Costs........................................................ 34
SECTION 11. Seller's Servicing Obligation................................ 34
SECTION 12. Removal of Mortgage Loans from Inclusion under this Agreement
Upon a Reconstitution on One or More Reconstitution Dates.... 34
SECTION 12A. Compliance with Regulation AB............................... 36
Subsection 12A.01. Intent of the Parties; Reasonableness.............. 36
Subsection 12A.02. Additional Representations and Warranties of the
Seller............................................. 37
Subsection 12A.03. Information to Be Provided by the Seller........... 38
Subsection 12A.04. Servicer Compliance Statement...................... 43
Subsection 12A.05. Report on Assessment of Compliance and Attestation. 44
Subsection 12A.06. Use of Subservicers and Subcontractors............. 45
Subsection 12A.07. Indemnification; Remedies.......................... 46
SECTION 13. The Seller................................................... 49
Subsection 13.01. Additional Indemnification by the Seller........... 49
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Subsection 13.02. Merger or Consolidation of the Seller.............. 49
Subsection 13.03. Limitation on Liability of the Seller and Others... 49
Subsection 13.04. Seller Not to Resign............................... 50
Subsection 13.05. Transfer of Servicing.............................. 50
SECTION 14. Default...................................................... 50
Subsection 14.01. Events of Default.................................. 50
Subsection 14.02. Waiver of Defaults................................. 52
SECTION 15. Termination.................................................. 52
SECTION 16. Successor to the Seller...................................... 52
SECTION 17. Financial Statements......................................... 53
SECTION 18. Mandatory Delivery; Grant of Security Interest............... 53
SECTION 19. Notices...................................................... 54
SECTION 20. Severability Clause.......................................... 54
SECTION 21. Counterparts................................................. 55
SECTION 22. Governing Law................................................ 55
SECTION 23. Intention of the Parties..................................... 55
SECTION 24. Successors and Assigns....................................... 55
SECTION 25. Waivers...................................................... 55
SECTION 26. Exhibits..................................................... 55
SECTION 27. General Interpretive Principles.............................. 55
SECTION 28. Nonsolicitation.............................................. 56
SECTION 29. Reproduction of Documents.................................... 56
SECTION 30. Further Agreements........................................... 56
SECTION 31. Amendment.................................................... 56
SECTION 32. Force Majeure................................................ 56
SECTION 33. Closing Documents Apply to Amended Agreement................. 57
SECTION 34. Third Party Beneficiary...................................... 57
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EXHIBITS
EXHIBIT 1 SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 2 FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 3 SECURITY RELEASE CERTIFICATION
EXHIBIT 4 ASSIGNMENT AND CONVEYANCE
EXHIBIT 5 CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 6 MORTGAGE LOAN DOCUMENTS
EXHIBIT 7 CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 8 ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 9 SERVICING ADDENDUM
EXHIBIT 10 FORM OF CONFIRMATION
EXHIBIT 11 FORM OF BACK-UP CERTIFICATION
EXHIBIT 12 SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
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MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT
This is a MORTGAGE LOAN PURCHASE AND SERVICING AGREEMENT, dated as of
December 1, 2005, by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA, having an office at 4
World Financial Center, 9th Floor, New York, New York 10080 (the "Initial
Purchaser", and the Initial Purchaser or the Person, if any, to which the
Initial Purchaser has assigned its rights and obligations hereunder as Purchaser
with respect to a Mortgage Loan, and each of their respective successors and
assigns, the "Purchaser") and First Republic Bank, having an office at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Seller"),
WITNESSETH:
WHEREAS, the Seller desires to sell, from time to time, to the Purchaser,
and the Purchaser desires to purchase, from time to time, from the Seller,
certain conventional fixed rate and adjustable rate residential first lien
mortgage loans and cooperative loans (collectively, the "Mortgage Loans") as
described herein on a servicing-retained basis, and which shall be delivered in
groups of whole loans on various dates as provided herein (each, a "Closing
Date");
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust or
other security instrument creating a first lien on a residential dwelling
located in the jurisdiction indicated on the Mortgage Loan Schedule for the
related Mortgage Loan Package, which is to be annexed hereto on each Closing
Date as Schedule I (or a supplement thereto); and
WHEREAS, the Purchaser and the Seller wish to prescribe the manner of the
conveyance, servicing and control of the Mortgage Loans.
NOW, THEREFORE, in consideration of the premises and mutual agreements set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Purchaser and the Seller agree
as follows:
SECTION 1. Definitions. For purposes of this Agreement the following
capitalized terms shall have the respective meanings set forth below.
Adjustable Rate Mortgage Loan: A Mortgage Loan which provides for the
adjustment of the Mortgage Interest Rate payable in respect thereto.
Adjustment Date: With respect to each Mortgage Loan, the date set forth in
the related Mortgage Note on which the Mortgage Interest Rate on such Mortgage
Loan is adjusted in accordance with the terms of the related Mortgage Note.
Agreement: This Mortgage Loan Purchase and Servicing Agreement including
all exhibits, schedules, amendments and supplements hereto, as may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
Appraised Value: With respect to any Mortgaged Property, the lesser of (i)
the value thereof as determined by an appraisal made for the originator of the
Mortgage Loan at the time
of origination of the Mortgage Loan by an appraiser who met the minimum
requirements of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac, and (ii) the purchase price paid for
the related Mortgaged Property by the Mortgagor with the proceeds of the
Mortgage Loan, provided, however, in the case of a Refinanced Mortgage Loan,
such value of the Mortgaged Property is based solely upon the value determined
by an appraisal made for the originator of such Refinanced Mortgage Loan at the
time of origination of such Refinanced Mortgage Loan by an appraiser who met the
minimum requirements of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac.
Assignment and Conveyance: An assignment and conveyance of the Mortgage
Loans purchased on a Closing Date in the form annexed hereto as Exhibit 4.
Assignment of Mortgage: An individual assignment of a 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 give
record notice of the sale of the related Mortgage Loan to the Purchaser.
Assignment of the Note and Pledge Agreement: With respect to a Cooperative
Loan, an assignment of the Note and Pledge Agreement.
Assignment of the Proprietary Lease: With respect to a Cooperative Loan, an
assignment of the related Proprietary Lease.
Business Day: Any day other than a Saturday or Sunday, or a day on which
banking and savings and loan institutions in the State of California or the
State of New York are authorized or obligated by law or executive order to be
closed.
Cash-Out Refinancing: A Refinanced Mortgage Loan the proceeds of which were
in excess of the principal balance of any existing first mortgage on the related
Mortgaged Property and related closing costs, and were used to pay any such
existing first mortgage, related closing costs and subordinate mortgages on the
related Mortgaged Property.
Closing Date: The date or dates on which the Purchaser from time to time
shall purchase and the Seller from time to time shall sell to the Purchaser, the
Mortgage Loans listed on the related Mortgage Loan Schedule with respect to the
related Mortgage Loan Package.
Closing Documents: With respect to any Closing Date, the documents required
pursuant to Section 9.
Code: The Internal Revenue Code of 1986, as amended, or any successor
statute thereto.
Commission: The United States Securities and Exchange Commission.
Company Information: As defined in Subsection 12A.07(a)(i).
Condemnation Proceeds: All awards, compensation and settlements in respect
of a taking of all or part of a Mortgaged Property by exercise of the power of
condemnation or the right of eminent domain.
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Confirmation: With respect to any Mortgage Loan Package purchased and sold
on any Closing Date, the letter agreement between the Purchaser and the Seller,
generally in the form annexed hereto as Exhibit 10 (including any exhibits,
schedules and attachments thereto), setting forth the terms and conditions of
such transaction and describing the Mortgage Loans to be purchased by the
Purchaser on such Closing Date. A Confirmation may relate to more than one
Mortgage Loan Package to be purchased on one or more Closing Dates hereunder.
Consent: A document executed by a Cooperative (i) consenting to the sale of
a Cooperative Apartment to the related Mortgagor and (ii) certifying that all
maintenance charges relating to the Cooperative Apartment have been paid.
Convertible Mortgage Loan: A Mortgage Loan that by its terms and subject to
certain conditions contained in the related Mortgage or Mortgage Note allows the
Mortgagor to convert the adjustable Mortgage Interest Rate on such Mortgage Loan
to a fixed Mortgage Interest Rate.
Cooperative: A private, non-profit cooperative apartment corporation which
owns all of the real property that comprises a Project, including the land,
separate dwelling units and all common areas.
Cooperative Apartment: The specific dwelling unit relating to a Cooperative
Loan.
Cooperative Lien Search: A search for (a) federal tax liens, mechanics'
liens, lis pendens, judgments of record or otherwise against (i) a Cooperative,
(ii) the seller of the related Cooperative Apartment and (iii) the related
Mortgagor if the related Cooperative Loan is a Refinanced Loan, (b) filings of
Financing Statements and (c) the deed of the related Project into the
Cooperative.
Cooperative Loan: A Mortgage Loan that is secured by a first lien on and a
perfected security interest in Cooperative Shares and the related Proprietary
Lease granting exclusive rights to occupy the related Cooperative Apartment in
the building owned by the related Cooperative.
Cooperative Shares: The shares of stock allocated to a Cooperative
Apartment, represented by a Stock Certificate, issued by the related Cooperative
and owned by the related Mortgagor.
Custodial Account: The separate trust account or accounts, each of which
shall be an Eligible Account, created and maintained pursuant to this Agreement,
which shall be entitled "First Republic Bank, as servicer, in trust for the
Purchaser and various Mortgagors, Fixed Rate and Adjustable Rate Mortgage
Loans", established at a financial institution acceptable to the Purchaser.
Custodial Agreement: The custodial agreement designated by the Purchaser
from time to time governing the retention of the originals of each Mortgage
Note, Mortgage, Assignment of Mortgage and other Mortgage Loan Documents.
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 therein provided.
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Cut-off Date: The first day of the calendar month in which the related
Closing Date occurs.
Deleted Mortgage-Loan: A Mortgage Loan replaced or to be replaced by a
Qualified Substitute Mortgage Loan.
Depositor: The depositor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Determination Date: With respect to each Distribution Date, the fifteenth
(15th) day of the calendar month in which such Distribution Date occurs or, if
such fifteenth (15th) day is not a Business Day, the Business Day immediately
preceding such fifteenth (15th) day.
Distribution Date: The eighteenth (18th) day of each month, commencing on
the eighteenth day of the month next following the month in which the related
Cut-off Date occurs, or if such eighteenth (18th) day is not a Busyness Day, the
first Business Day immediately following such eighteenth (18th) day.
Due Date: With respect, to each Distribution Date, the first day of the
calendar month in which such Distribution Date occurs, which is the day on which
the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to each Distribution Date, the period commencing
on the second day of the month preceding the month of the Distribution Date and
ending on the first day of the month of the Distribution Date.
Eligible Account: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
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 short-term unsecured debt obligations of such holding company) are
rated A-1 by S&P or Prime-1 by Moody's (or a comparable rating if another rating
agency is specified by the Initial Purchaser by written notice to the Seller) at
the time any amounts are held on deposit therein, (ii) an account or accounts
the deposits in which are fully insured by the FDIC or (iii) a trust account or
accounts maintained with a federal or state chartered depository institution or
trust company acting in its fiduciary capacity. Eligible Accounts may bear
interest.
Escrow Account: The separate trust account or accounts created and
maintained pursuant to this Agreement which shall be entitled "First Republic
Bank, as servicer, in trust for the Purchaser and various Mortgagors, Fixed Rate
and Adjustable Rate Mortgage Loans", established at a financial institution
acceptable to the Purchaser.
Escrow Payments: The amounts constituting ground rents, taxes, assessments,
water charges, sewer rents, Primary Insurance Policy premiums, fire and hazard
insurance premiums and other payments required to be escrowed by the Mortgagor
with the Mortgagee pursuant to the terms of any Mortgage Note or Mortgage.
Estoppel Letter: A document executed by a Cooperative certifying, with
respect to a Cooperative Apartment, (i) the appurtenant Proprietary Lease will
be in full force and effect as of
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the date of issuance thereof, (ii) the related Stock Certificate was registered
in the related Mortgagor's name and the Cooperative has not been notified of any
lien upon, pledge of, levy of execution on or disposition of such Stock
Certificate, and (iii) the Mortgagor is not in default under the appurtenant
Proprietary Lease and all charges due the Cooperative have been paid.
Event of Default: Any one of the events enumerated in Section 14.01.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇ or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor thereto.
Final Recovery Determination: With respect to any defaulted Mortgage Loan
or any REO Property (other than a Mortgage Loan or REO Property purchased by the
Seller pursuant to this Agreement), a determination made by the Seller that all
Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which
the Seller, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Seller shall maintain
records, prepared by a servicing officer of the Seller, of each Final Recovery
Determination.
Financing Statement: A financing statement in the form of a UCC-1 filed
pursuant to the Uniform Commercial Code to perfect a security interest in
Cooperative Shares and the related Pledge Instruments.
Financing Statement Change: A financing statement in the form of a UCC-3
filed to continue, terminate, release, assign or amend an existing Financing
Statement.
Fixed Rate Mortgage Loan: A Mortgage Loan with respect to which the
Mortgage Interest Rate set forth in the Mortgage Note is fixed for the term of
such Mortgage Loan.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation or any successor
thereto.
Gross Margin: With respect to any Fixed Rate Mortgage Loan, the fixed
percentage amount set forth in the related Mortgage Note and the related
Mortgage Loan Schedule that is added to the Index on each Adjustment Date in
accordance with the terms of the related Mortgage Note to determine the new
Mortgage Interest Rate for such Mortgage Loan.
HUD: The United States Department of Housing and Urban Development or any
successor thereto.
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the related Mortgage Loan Schedule and set forth in the related
Mortgage Note for the purpose of calculating the Mortgage Interest Rate thereon.
Initial Closing Date: The Closing Date on which the Initial Purchaser
purchases and the Seller sells the first Mortgage Loan Package hereunder.
Initial Purchaser: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA, or any successor.
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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.
Liquidation Proceeds: Amounts, other than Insurance Proceeds and
Condemnation Proceeds, received in connection with the liquidation of a
defaulted Mortgage Loan through 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.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan as of any
date of determination, the ratio on such date of the outstanding principal
amount of the Mortgage Loan to the Appraised Value of the Mortgaged Property.
Master Servicer: With respect to any Reconstitution, the "master servicer",
if any, identified in the related transaction documents.
Maximum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the maximum interest rate to which the
Mortgage Interest Rate on such Adjustable Rate Mortgage Loan may be increased on
any Adjustment Date.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
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.
MIN: The Mortgage Identification Number for any MERS Mortgage Loan.
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that is set forth on the related Mortgage Loan Schedule
and in the related Mortgage Note and is the minimum interest rate to which the
Mortgage Interest Rate on such Mortgage Loan may be decreased on any Adjustment
Date.
MOM Loan: Any Mortgage Loan as to which MERS is acting as mortgagee, solely
as nominee for the originator of such Mortgage Loan and its successors and
assigns.
Monthly Advance: The aggregate of the advances made by the Seller on any
Distribution Date pursuant to Section 11.21.
Monthly Payment: With respect to any Mortgage Loan, the scheduled combined
monthly payment of principal and interest payable by a Mortgagor under the
related Mortgage Note on each Due Date.
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc. or its successor in interest.
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Mortgage: With respect to a Mortgage Loan, the mortgage, deed of trust or
other instrument, which creates a first lien on either (i) with respect to a
Mortgage Loan other than a Cooperative Loan, the fee simple or leasehold estate
in the related Mortgaged Property or (ii) with respect to a Cooperative Loan,
the Proprietary Lease and related Cooperative Shares, which in either case
secures the Mortgage Note.
Mortgagee: The mortgagee or beneficiary named in a Mortgage and the
successors and assigns of such mortgagee or beneficiary.
Mortgage File: The items pertaining to a particular Mortgage Loan referred
to in Exhibit 5 annexed hereto, and any additional documents required to be
added to the Mortgage File pursuant to this Agreement or the related
Confirmation.
Mortgage Interest Rate: With respect to each Mortgage Loan, the annual rate
that interest accrues on such Mortgage Loan from time to time in accordance with
the provisions of the related Mortgage Note.
Mortgage Loan: Each first lien, residential mortgage loan, including any
Cooperative Loan, sold, assigned and transferred to the Purchaser pursuant to
this Agreement and the related Confirmation and identified on the Mortgage Loan
Schedule annexed to this Agreement on the related Closing Date, which Mortgage
Loan includes without limitation the Mortgage File, 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 documents listed in Exhibit 6 hereto.
Mortgage Loan Package: The Mortgage Loans listed on a Mortgage Loan
Schedule, delivered to the Custodian and the Purchaser at least five (5)
Business Days prior to the related Closing Date and attached to this Agreement
as Schedule I (or a supplement thereto) on the related Closing Date.
Mortgage Loan Schedule: With respect to each Mortgage Loan Package, the
schedule of Mortgage Loans to be attached hereto as Schedule I (or a supplement
thereto) on each Closing Date for the Mortgage Loan Package delivered on such
Closing Date in both hard copy and electronic form, such schedule setting forth
the following information with respect to each Mortgage Loan in the Mortgage
Loan Package: (1) the Seller's Mortgage Loan identifying number; (2) the
Mortgagor's first and last name; (3) the street address of the Mortgaged
Property including the state and zip code; (4) a code indicating whether the
Mortgaged Property is owner-occupied and, if so, whether it is the Mortgagor's
primary or secondary residence; (5) the type of Residential Dwelling
constituting the Mortgaged Property; (6) the original months to maturity; (7)
the origination date of the Mortgage Loan and the remaining months to maturity
from the Cut-off Date, based on the original amortization schedule; (8) the
Loan-to-Value Ratio at origination and the Cut-off Date; (9) the Mortgage
Interest Rate at origination and in effect immediately following the Cut-off
Date; (10) the date on which the first Monthly Payment was due on the Mortgage
Loan; (11) the stated maturity date; (12) the amount of the Monthly Payment at
origination; (13) the amount of the Monthly Payment as of the Cut-off Date; (14)
the
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last Due Date on which a Monthly Payment was actually applied to the unpaid
Stated Principal Balance; (15) the original principal amount of the Mortgage
Loan; (16) the Stated Principal Balance of the Mortgage Loan as of the close of
business on the Cut-off Date; (17) the first Adjustment Date and the Adjustment
Date frequency; (18) the Gross Margin; (19) a code indicating the purpose of the
loan (i.e., purchase financing, Rate/Term Refinancing, Cash-Out Refinancing);
(20) the Maximum Mortgage Interest Rate under the terms of the Mortgage Note;
(21) the Minimum Mortgage Interest Rate under the terms of the Mortgage Note;
(22) the Mortgage Interest Rate at origination; (23) the Periodic Rate Cap; (24)
the first Adjustment Date immediately following the Cut-off Date; (25) the
Index; (26) the date on which the first Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date; (27) a code indicating the documentation style (i.e., full,
alternative or reduced); (28) a code indicating if the Mortgage Loan is subject
to a Primary Insurance Policy; (29) the Appraised Value of the Mortgaged
Property; (30) the sale price of the Mortgaged Property, if applicable; (31) a
code indicating if the Mortgage Loan is an interest-only Mortgage Loan and, if
so, the term of the interest-only period of such Mortgage Loan; (32) a code
indicating if the Mortgage Loan is subject to a Prepayment Charge and if so, the
amount and term of such Prepayment Charge; (33) a code indicating if the
Mortgage Loan is a Cooperative Loan; (34) the initial Servicing Fee Rate as of
the Cut-off Date; (35) with respect to each MERS Mortgage Loan, the MIN; (36)
the ratio of the Monthly Payment to the Mortgagor's income; (37) the Mortgagor's
borrower credit score (i.e., FICO); (38) the ratio of the aggregate outstanding
principal amount of all debt secured by the Mortgaged Property to the Appraised
Value of the Mortgaged Property as of the Cut-off Date; (39) a code indicating
whether the Mortgage Loan is an Adjustable Rate Mortgage Loan or a Fixed Rate
Mortgage Loan. With respect to the Mortgage Loan Package in the aggregate, the
Mortgage Loan Schedule shall set forth the following information, as of the
related Cut-off Date: (1) the number of Mortgage Loans; (2) the current
principal balance of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate of the Mortgage Loans; and (4) the weighted average maturity of
the Mortgage Loans. Schedule I (or a supplement thereto) hereto shall be
supplemented as of each Closing Date to reflect the addition of the Mortgage
Loan Schedule with respect to the related Mortgage Loan Package; and (40)
identify whether title to such Mortgage Loan is in the name of a corporation or
a natural person.
Mortgage Note: The original executed note or other evidence of the Mortgage
Loan indebtedness of a Mortgagor.
Mortgaged Property: (a) With respect to each Mortgage Loan, the Mortgagor's
real property securing repayment of the related Note, consisting of a fee simple
interest in a single parcel of real property improved by a Residential Dwelling
and (b) with respect to each Cooperative Loan, the related Cooperative Shares
and Proprietary Lease.
Mortgagor: The obligor on a Mortgage Note, the owner of the Mortgaged
Property and the grantor or mortgagor named in the related Mortgage or Pledge
Agreement and such grantor's or mortgagor's successor's in title to the
Mortgaged Property.
Net Mortgage Rate: With respect to any Mortgage Loan (or the related REO
Property), as of any date of determination, a per annum rate of interest equal
to the then applicable Mortgage Interest Rate for such Mortgage Loan minus the
Servicing Fee Rate.
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Nonrecoverable Monthly Advance: Any Monthly Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Seller, will not, or, in the case of a
proposed Monthly Advance, would not be, ultimately recoverable from related late
payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or
REO Property as provided herein.
Officer's Certificate: A certificate signed by the Chairman of the Board or
the Vice Chairman of the Board or a President or a Vice President and by the
Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Person on behalf of whom such certificate is being delivered,
or, if the Person is not a corporation, by an individual performing
substantially similar duties.
Opinion of Counsel: A written opinion of counsel, who may be salaried
counsel for the Person on behalf of whom the opinion is being given, reasonably
acceptable to each Person to whom such opinion is addressed.
Periodic Rate Cap: With respect to each Adjustable Rate Mortgage Loan and
any Adjustment Date therefor, a number of percentage points per annum that is
set forth in the related Mortgage Loan Schedule and in the related Mortgage
Note, which is the maximum amount by which the Mortgage Interest Rate for such
Adjustable Rate Mortgage Loan may increase (without regard to the Maximum
Mortgage Interest Rate) or decrease (without regard to the Minimum Mortgage
Interest Rate) on such Adjustment Date from the Mortgage Interest Rate in effect
immediately prior to such Adjustment Date.
Person: An individual, corporation, limited liability company, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
Pledge Agreement: The specific agreement creating a first lien on and
pledge of the Cooperative Shares and the appurtenant Proprietary Lease securing
a Cooperative Loan.
Pledge Instruments: The Stock Power, the Assignment of the Proprietary
Lease and the Assignment of the Note and Pledge Agreement.
Preliminary Servicing Period: With respect to any Mortgage Loans, the
period commencing on the related Closing Date and ending on the date the Seller
enters into a Reconstitution Agreement that amends or restates the servicing
provisions of this Agreement, or any Reconstitution Date.
Prepayment Charge: With respect to any Mortgage Loan, any prepayment
penalty or premium thereon payable in connection with a principal prepayment on
such Mortgage Loan pursuant to the terms of the related Mortgage Note.
Primary Insurance Policy: A policy of primary mortgage guaranty insurance
issued by a Qualified Insurer.
Principal Prepayment: Any payment or other recovery of principal on a
Mortgage Loan that is received in advance of its scheduled Due Date, that is not
accompanied by an amount of
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interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment.
Project: All real property in a cooperative apartment owned by the related
Cooperative including the land, separate dwelling units and all common areas.
Proprietary Lease: A lease on a Cooperative Apartment evidencing the
possessory interest of the Mortgagor in such Cooperative Apartment.
Purchase Price: The price paid on the related Closing Date by the Purchaser
to the Seller pursuant to the related Confirmation in exchange for the Mortgage
Loans purchased on such Closing Date as calculated as provided in Section 4.
Qualified Correspondent: Any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Seller and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Seller, in accordance with underwriting
guidelines designated by the Seller ("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 Seller within one hundred eighty (180) days after origination; (iii) either
(x) the Designated Guidelines were, at the time such Mortgage Loans were
originated, used by the Seller in origination of mortgage loans of the same type
as the Mortgage Loans for the Seller's own account or (y) the Designated
Guidelines were, at the time such Mortgage Loans were underwritten, designated
by the Seller on a consistent basis for use by lenders in originating mortgage
loans to be purchased by the Seller; and (iv) the Seller employed, at the time
such Mortgage Loans were acquired by the Seller, 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
Seller.
Qualified Insurer: Any insurer that meets the requirements of ▇▇▇▇▇▇ ▇▇▇
and ▇▇▇▇▇▇▇ Mac.
Qualified Substitute Mortgage Loan: A mortgage loan substituted for a
Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the
date of such substitution, (i) have an outstanding principal balance, after
application of all scheduled payments of principal and interest due during or
prior to the month of substitution, not in excess of the Stated Principal
Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month
during which the substitution occurs, (ii) have a Mortgage Interest Rate not
less than (and not more than one percentage point in excess of) the Mortgage
Interest Rate of the Deleted Mortgage Loan, (iii) have a Net Mortgage Rate equal
to the Net Mortgage Rate of the Deleted Mortgage Loan, (iv) have a remaining
term to maturity not greater than (and not more than one year less than) that of
the Deleted Mortgage Loan, (v) have the same Due Date as the Due Date of the
Deleted Mortgage Loan, (vi) have a Loan-to-Value Ratio as of the date of
substitution equal to or lower than the Loan-to-Value Ratio of the Deleted
Mortgage Loan as of such date, (vii) be covered under a Primary Insurance Policy
if such mortgage loan has a Loan-to-Value Ratio in excess of
10
80%, (viii) conform to each representation and warranty set forth in Subsection
7.02 of this Agreement, (ix) be the same type of mortgage loan (i.e. fixed or
adjustable rate with the same Gross Margin and Index as the Deleted Mortgage
Loan) as the Deleted Mortgage Loan, and (x) not be a Cooperative Loan unless the
Deleted Mortgage Loan is a Cooperative Mortgage Loan.
Rate/Term Refinancing: A Refinanced Mortgage Loan, the proceeds of which
are not in excess of the existing first mortgage loan on the related Mortgaged
Property and related closing costs, and were used exclusively to satisfy the
then existing first mortgage loan of the Mortgagor on the related Mortgaged
Property and to pay related closing costs.
Recognition Agreement: An agreement whereby a Cooperative and a lender with
respect to a Cooperative Loan (i) acknowledge that such lender may make, or
intends to make, such Cooperative Loan, and (ii) make certain agreements with
respect to such Cooperative Loan.
Reconstitution: Any Pass Through Transfer or Whole Loan Transfer.
Reconstitution Agreements: The agreement or agreements entered into by the
Seller 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 Reconstitution as provided in Section 12.
Reconstitution Date: The date or dates on which any or all of the Mortgage
Loans serviced under this Agreement shall be removed from this Agreement and
included as part of a Whole Loan Transfer or Securitization Transaction pursuant
to Section 12 hereof. On such date or dates, the Mortgage Loans transferred
shall cease to be covered by this Agreement and the Seller's servicing
responsibilities shall cease under this Agreement with respect to the related
transferred Mortgage Loans.
Record Date: With respect to each Distribution Date, the last Business Day
of the month immediately preceding the month in which such Distribution Date
occurs.
Refinanced Mortgage Loan: A Mortgage Loan the proceeds of which were not
used to purchase the related Mortgaged Property.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 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
REMICs, which appear in Sections 860A through 860G 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.
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REO Account: The separate trust account or accounts created and maintained
pursuant to this Agreement which shall be entitled "First Republic Bank in trust
for the Purchaser, as of [date of acquisition of title], Fixed Rate and
Adjustable Rate Mortgage Loans".
REO Disposition: The final sale by the Seller of any REO Property.
REO Property: A Mortgaged Property acquired as a result of the liquidation
of a Mortgage Loan.
Repurchase Price: With respect to any Mortgage Loan, a price equal to (i)
the product of the Stated Principal Balance of such Mortgage Loan times the
greater of (x) the Purchase Price percentage as stated in the related
Confirmation and (y) 100%, plus (ii) interest on such Stated Principal Balance
at the Mortgage Interest Rate from and including the last Due Date through which
interest has been paid by or on behalf of the Mortgagor to the first day of the
month following the date of repurchase, less amounts received in respect of such
repurchased Mortgage Loan that are being held in the Custodial Account for
distribution in connection with such Mortgage Loan.
Residential Dwelling: Any one of the following: (i) a detached one-family
dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family
dwelling unit in an ▇▇▇▇▇▇ ▇▇▇ eligible condominium project, or (iv) a detached
one-family dwelling in a planned unit development, none of which is a mobile or
manufactured home.
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 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 Subsection 12A.03.
Servicing Addendum: The terms and conditions attached hereto as Exhibit 9
and incorporated in Section 11 that will govern the servicing of the Mortgage
Loans by Seller during the Preliminary Servicing Period.
Servicing Advances: All "out-of-pocket" costs and expenses that are
customary, reasonable and necessary and incurred by the Seller in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) preservation, restoration and repair of a Mortgaged Property, (ii)
any enforcement or judicial proceedings with respect to a Mortgage Loan,
including foreclosure actions and (iii) the management and liquidation of REO
Property.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
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Servicing Fee: With respect to each Mortgage Loan, the amount of the annual
servicing fee the Purchaser shall pay to the Seller, which shall, for each
calendar month, be equal to one-twelfth of the product of (a) the Servicing Fee
Rate and (b) the unpaid principal balance of the Mortgage Loan. Such fee shall
be payable monthly, computed using the same principal amount and period used to
compute any related interest payment on a Mortgage Loan is computed. The
obligation of the Purchaser to pay the Servicing Fee is limited to, and payable
solely from, the interest portion (including recoveries with respect to interest
from Liquidation Proceeds and other proceeds, to the extent permitted by Section
11.05) of the related Monthly Payment collected by the Seller, or as otherwise
provided under Section 11.05. If the Preliminary Servicing Period includes any
partial month, the Servicing Fee for such month shall be prorated at a per diem
rate based upon a 30-day month.
Servicing Fee Rate: The per annum rate at which the Servicing Fee accrues,
which rate shall initially be equal to the rate set forth with respect to each
Mortgage Loan in the Mortgage Loan Schedule and which rate shall be increased by
the amount of any increase in the Mortgage Interest Rate for any such Mortgage
Loan pursuant to the terms of the related Mortgage Note for any reason other
than an increase in the related Index, including due to termination of an
automatic debit or direct deposit discount.
Servicing File: With respect to each Mortgage Loan, the file retained by
the Seller consisting of originals of all documents in the Mortgage File that
are not delivered to the Purchaser or the Custodian and copies of the Mortgage
Loan Documents set forth in Exhibit 6 hereto.
S&P: Standard & Poor's Ratings Group or its successor in interest.
Stated Principal Balance: As to each Mortgage Loan as of any date of
determination, (i) the principal balance of the Mortgage Loan as of the Cut-off
Date after giving effect to payments of principal due on or before such date,
whether or not collected from the Mortgagor on or before such date, minus (ii)
all amounts previously distributed to the Purchaser with respect to the related
Mortgage Loan representing payments or recoveries of principal.
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 Seller
or a Subservicer.
Stock Certificates: The certificates evidencing ownership of the
Cooperative Shares issued by the Cooperative.
Stock Power: An assignment of the Stock Certificate or an assignment of the
Cooperative Shares issued by the Cooperative.
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Third-Party Originator: Each Person, other than a Qualified Correspondent,
that originated Mortgage Loans acquired by the Seller.
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.
SECTION 2. Agreement to Purchase. The Seller agrees to sell, and the
Purchaser agrees to purchase, from time-to-time, on a servicing-retained basis,
Mortgage Loans having an aggregate principal balance on the related Cut-off Date
in an amount as set forth in the related Confirmation, or in such other amount
as agreed by the Purchaser and the Seller as evidenced by the actual aggregate
principal balance of the Mortgage Loans accepted by the Purchaser on the related
Closing Date.
SECTION 3. Mortgage Loan Schedules. The Seller shall deliver the Mortgage
Loan Schedule for a Mortgage Loan Package to be purchased on a particular
Closing Date to the Purchaser at least five (5) Business Days prior to the
related Closing Date.
SECTION 4. Purchase Price. The Purchase Price for each Mortgage Loan listed
on the related Mortgage Loan Schedule shall be the percentage of par as stated
in the related Confirmation (subject to adjustment as provided therein),
multiplied by its Stated Principal Balance as of the related Cut-off Date. If so
provided in the related Confirmation, portions of the Mortgage Loans shall be
priced separately.
In addition to the Purchase Price as described above, the Initial Purchaser
shall pay to the Seller, at closing, accrued interest on the Stated Principal
Balance of each Mortgage Loan as of the related Cut-off Date at its Net Mortgage
Rate from the related Cut-off Date through the day prior to the related Closing
Date, both inclusive.
The Purchaser shall own and be entitled to receive with respect to each
Mortgage Loan purchased, (1) all scheduled principal due after the related
Cut-off Date, (2) all other recoveries of principal collected after the related
Cut-off Date (provided, however, that all scheduled payments of principal due on
or before the related Cut-off Date and collected by the Seller after the related
Cut-off Date shall belong to the Seller), and (3) all payments of interest on
the Mortgage Loans net of the Servicing fee (minus that portion of any such
interest payment that is allocable to the period prior to the related Cut-off
Date). The Stated Principal Balance of each Mortgage Loan as of the related
Cut-off Date is determined after application to the reduction of principal of
payments of principal due on or before the related Cut-off Date whether or not
collected. Therefore, for the purposes of this Agreement, payments of scheduled
principal and interest prepaid for a Due Date beyond the related Cut-off Date
shall not be applied to the principal balance as of the related Cut-off Date.
Such prepaid amounts (minus the applicable Servicing Fee) 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 remittance by the Seller to the Purchaser on the first related
Distribution Date. All payments of principal and interest, less the applicable
Servicing Fee, due on a Due Date following the related Cut-off Date shall belong
to the Purchaser.
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SECTION 5. Examination of Mortgage Files. In addition to the rights granted
to the Initial Purchaser under the related Confirmation to underwrite the
Mortgage Loans and review the Mortgage Files prior to the Closing Date, prior to
the related Closing Date, the Seller shall (a) deliver to the Custodian in
escrow, for examination with respect to each Mortgage Loan to be purchased on
such Closing Date, the related Mortgage File, including the Assignment of
Mortgage, pertaining to each Mortgage Loan, or (b) make the related Mortgage
File available to the Initial Purchaser for examination at the Seller's offices
or such other location as shall otherwise be agreed upon by the Initial
Purchaser and the Seller. Such examination may be made by the Initial Purchaser
or its designee at any reasonable time before or after the related Closing Date.
In connection with any such examination, the Initial Purchaser may not contact
any Mortgagor or any employer of a Mortgagor or any other third party for
purposes of verification of information in the Mortgage File or otherwise,
without the prior written consent of the Seller. If the Initial Purchaser makes
such examination prior to the related Closing Date and identifies any Mortgage
Loans that do not conform to the terms of the related Confirmation or the
Initial Purchaser's underwriting standards, such Mortgage Loans may, at the
Initial Purchaser's option, be rejected for purchase by the Initial Purchaser.
If not purchased by the Initial Purchaser, such Mortgage Loans shall be deleted
from the related Mortgage Loan Schedule. The Initial Purchaser may, at its
option and without notice to the Seller, purchase all or part of any Mortgage
Loan Package without conducting any partial or complete examination. The fact
that the Initial Purchaser has conducted or has determined not to conduct any
partial or complete examination of the Mortgage Files shall not affect the
Initial Purchaser's (or any of its successors') rights to demand repurchase or
other relief or remedy provided for in this Agreement.
SECTION 6. Conveyance from Seller to Initial Purchaser.
Subsection 6.01. Conveyance of Mortgage Loans; Possession of Servicing
Files.
The Seller, simultaneously with the payment of the Purchase Price, shall
execute and deliver to the Initial Purchaser an Assignment and Conveyance with
respect to the related Mortgage Loan Package in the form attached hereto as
Exhibit 4. The Servicing File retained by the Seller with respect to each
Mortgage Loan pursuant to this Agreement shall be appropriately identified in
the Seller's computer system to reflect clearly the sale of such related
Mortgage Loan to the Purchaser. The Seller shall release from its custody the
contents of any Servicing File retained by it only in accordance with this
Agreement, except when such release is required in connection with a repurchase
of any such Mortgage Loan pursuant to Subsection 7.03 or 7.04.
Subsection 6.02. Books and Records.
Record title to each Mortgage and the related Mortgage Note as of the
related Closing Date shall be in the name of the Seller, the Purchaser, the
Custodian or one or more designees of the Purchaser, as the Purchaser shall
designate. Notwithstanding the foregoing, beneficial ownership of each Mortgage
and the related Mortgage Note shall be vested solely in the Purchaser or the
appropriate designee of the Purchaser, as the case may be. All rights arising
out of the Mortgage Loans including, but not limited to, all funds received by
the Seller after the related Cut-off Date on or in connection with a Mortgage
Loan as provided in Section 4 shall be vested in the Purchaser or one or more
designees of the Purchaser. All such funds received on or in connection with a
Mortgage Loan as provided in Section 4 shall be received and held by the
15
Seller in trust for the benefit of the Purchaser or the assignee of the
Purchaser, as the case may be, as the owner of the Mortgage Loans pursuant to
the terms of this Agreement.
It is the express intention of the parties that the transactions
contemplated by this Agreement be, and be construed as, a sale of the Mortgage
Loans by the Seller and not a pledge of the Mortgage Loans by the Seller to the
Purchaser to secure a debt or other obligation of the Seller. Consequently, the
sale of each Mortgage Loan shall be reflected as a sale on the Seller's business
records, tax returns and financial statements.
Subsection 6.03. Delivery of Mortgage Loan Documents.
Pursuant to the Custodial Agreement, the Seller shall from time to time in
connection with each Closing Date, at least five (5) Business Days prior to such
Closing Date, deliver and release to the Custodian the Mortgage Loan Documents
with respect to each Mortgage Loan to be purchased and sold on the related
Closing Date and set forth on the related Mortgage Loan Schedule delivered with
such Mortgage Loan Documents.
The Custodian shall certify its receipt of all such Mortgage Loan Documents
required to be delivered pursuant to the Custodial Agreement for the related
Closing Date, as evidenced by the certification of the Custodian in the form
annexed to the Custodial Agreement. The Purchaser shall be responsible for
maintaining the Custodial Agreement during the Preliminary Servicing Period. The
fees and expenses of the Custodian during such period shall be paid by the
Purchaser.
The Seller shall forward to the Custodian original documents evidencing an
assumption, modification, consolidation or extension of any Mortgage Loan
entered into in accordance with this Agreement within two weeks of their
execution, provided, however, that the Seller shall provide the Custodian with a
certified true copy of any such document submitted for recordation within two
weeks 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 ninety
days of its submission for recordation.
In the event that new, replacement, substitute or additional Stock
Certificates are issued with respect to existing Cooperative Shares, the Seller
immediately shall deliver to the Custodian the new Stock Certificates, together
with the related Stock Powers in blank. Such new Stock Certificates shall be
subject to the related Pledge Instruments and shall be subject to all of the
terms, covenants and conditions of this Agreement.
In addition, in connection with the assignment of any MERS Mortgage Loan,
the Seller agrees that it will cause, at the Seller's expense, the MERS System
to indicate that such Mortgage Loans have been assigned by the Seller to the
Purchaser in accordance with this Agreement (or deleted, in the case of Mortgage
Loans that are repurchased in accordance with this Agreement) by including in
such computer files the information required by the MERS System to identify the
Purchaser as the beneficial holder of such Mortgage Loans. The Seller further
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 hereof.
16
If pursuant to the foregoing provisions the Seller repurchases a Mortgage
Loan that is a MERS Mortgage Loan, the Seller shall either (i) cause MERS to
execute and deliver an Assignment of Mortgage in recordable form to transfer the
Mortgage from MERS to the Seller and shall cause such Mortgage to be removed
from registration on the MERS System in accordance with MERS' rules and
regulations or (ii) cause MERS to designate on the MERS System the Seller or its
designee as the beneficial holder of such Mortgage Loan.
SECTION 7. Representations, Warranties and Covenants of the Seller:
Remedies for Breach.
Subsection 7.01. Representations and Warranties Respecting the Seller.
The Seller represents, warrants and covenants to the Purchaser as of the
initial Closing Date and each subsequent Closing Date or as of such date
specifically provided herein or in the applicable Assignment and Conveyance:
(i) The Seller is duly organized, validly existing and in good standing
under the laws of the state of Nevada and has all licenses necessary
to carry on its business as now being conducted. It is licensed in,
qualified to transact business in and is in good standing under the
laws of the state in which any Mortgaged Property is located and is
and will remain in compliance with the laws of each state in which any
Mortgaged Property is located to the extent necessary to ensure the
enforceability of each Mortgage Loan and the servicing of the Mortgage
Loan in accordance with the terms of this Agreement. No licenses or
approvals obtained by Seller have been suspended or revoked by any
court, administrative agency, arbitrator or governmental body and no
proceedings are pending which might result in such suspension or
revocation;
(ii) The Seller has the full power and authority to hold each Mortgage
Loan, to sell each Mortgage Loan, and to execute, deliver and perform,
and to enter into and consummate, all transactions contemplated by
this Agreement. The Seller has duly authorized the execution, delivery
and performance of this Agreement, has duly executed and delivered
this Agreement, and this Agreement, assuming due authorization,
execution and delivery by the Purchaser, constitutes a legal, valid
and binding obligation of the Seller, enforceable against it in
accordance with its terms except as the enforceability thereof may be
limited by bankruptcy, insolvency or reorganization;
(iii) The execution and delivery of this Agreement by the Seller and the
performance of and compliance with the terms of this Agreement will
not violate the Seller's articles of incorporation or by-laws or
constitute a default under or result in a breach or acceleration of,
any material contract, agreement or other instrument to which the
Seller is a parry or which may be applicable to the Seller or its
assets;
(iv) The Seller is not in violation of, and the execution and delivery of
this Agreement by the Seller and its performance and compliance with
the terms of this Agreement will not constitute a violation with
respect to, any order or decree of
17
any court or any order or regulation of any federal, state, municipal
or governmental agency having jurisdiction over the Seller or its
assets, which violation might have consequences that would materially
and adversely affect the condition (financial or otherwise) or the
operation of the Seller or its assets or might have consequences that
would materially and adversely affect the performance of its
obligations and duties hereunder;
(v) The Seller is an approved seller/servicer for ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇
Mac in good standing. No event has occurred, including but not limited
to a change in insurance coverage, which would make the Seller unable
to comply with ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or HUD eligibility requirements
or which would require notification to ▇▇▇▇▇▇ Mae, ▇▇▇▇▇▇▇ Mac or HUD;
(vi) The Seller 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;
(vii) The Mortgage Note, the Mortgage, the Assignment of Mortgage and any
other documents required to be delivered with respect to each Mortgage
Loan pursuant to the Custodial Agreement, have been delivered to the
Custodian all in compliance with the specific requirements of the
Custodial Agreement. With respect to each Mortgage Loan, the Seller is
in possession of a complete Mortgage File in compliance with Exhibit
5, except for such documents as have been delivered to the Custodian;
(viii) Immediately prior to the payment of the Purchase Price for each
Mortgage Loan, the Seller was the owner of record of the related
Mortgage and the indebtedness evidenced by the related Mortgage Note
and upon the payment of the Purchase Price by the Purchaser, in the
event that the Seller retains record title, the Seller shall retain
such record title to each Mortgage, each related Mortgage Note and the
related Mortgage Files with respect thereto in trust for the Purchaser
as the owner thereof and only for the purpose of servicing and
supervising the servicing of each Mortgage Loan;
(ix) There are no actions or proceedings against, or investigations of, the
Seller before any court, agency or administrative or other tribunal
(A) that might prohibit its entering into this Agreement, (B) seeking
to prevent the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement or (C) that might prohibit
or materially and adversely affect the performance by the Seller of
its obligations under, or the validity or enforceability of, this
Agreement;
(x) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery
and performance by the Seller of, or compliance by the Seller with,
this Agreement or the consummation of the transactions contemplated by
this Agreement, except for such consents, approvals, authorizations or
orders, if any, that have been obtained prior to the Closing Date;
18
(xi) The consummation of the transactions contemplated by this Agreement
are in the ordinary course of business of the Seller, and the
transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages and Pledge Agreements by the Seller pursuant to this
Agreement are not subject to the bulk transfer or any similar
statutory provisions;
(xii) The information delivered by the Seller to the Purchaser with respect
to the Seller's loan loss, foreclosure and delinquency experience for
the twenty-four (24) months immediately preceding the Closing Date on
mortgage loans underwritten to the same standards as the Mortgage
Loans and covering mortgaged properties similar to the Mortgaged
Properties is true and correct in all material respects;
(xiii) Neither this Agreement nor any written statement, report or other
document prepared and furnished or to be prepared and furnished by the
Seller pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement of
material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading;
(xiv) The transfer of the Mortgage Loans shall be treated as a sale on the
books and records of Seller, and Seller has determined that, and will
treat, the disposition of the Mortgage Loans pursuant to this
Agreement for tax and accounting purposes as a sale. Seller shall
maintain complete records for each Mortgage Loan which shall be
clearly marked to reflect the ownership of each Mortgage Loan by
Purchaser;
(xv) The consideration received by the Seller upon the sale of the Mortgage
loans constitutes fair consideration and reasonably equivalent value
for such Mortgage Loans;
(xvi) Seller is solvent and will not be rendered insolvent by the
consummation of the transactions contemplated hereby. The Seller is
not transferring any Mortgage loan with any intent to hinder, delay or
defraud any of its creditors; and
(xvii) The Seller is a member of MERS in good standing, and will comply in
all material respects with the rules and procedures of MERS in
connection with the servicing of the MERS Mortgage Loans for as long
as such Mortgage Loans are registered with MERS.
Subsection 7.02. Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser that, as to each
Mortgage Loan, as of the related Closing Date for such Mortgage Loan:
(i) The information set forth in the related Mortgage Loan Schedule is
complete, true and correct;
19
(ii) The Mortgage Loan is in compliance with all requirements set forth in
the related Confirmation, and the characteristics of the related Mortgage Loan
Package as set forth in the related Confirmation are true and correct;
(iii) All payments required to be made up to the close of business on the
Closing Date for such Mortgage Loan under the terms of the Mortgage Note have
been made; the Seller has not advanced funds, or induced, solicited or knowingly
received any advance of funds from a party other than the owner of the related
Mortgaged Property, directly or indirectly, for the payment of any amount
required by the Mortgage Note or Mortgage; and there has been no delinquency,
exclusive of any period of grace, in any payment by the Mortgagor thereunder
during the last twelve months; and, if the Mortgage Loan is a Cooperative Loan,
no foreclosure action or private or public sale under the Uniform Commercial
Code has ever been threatened or commenced with respect to the Cooperative Loan;
(iv) There are no delinquent taxes, ground rents, water charges, sewer
rents, assessments, insurance premiums, leasehold payments, or other outstanding
charges affecting the related Mortgaged Property;
(v) The terms of the Mortgage Note and (x) with respect to each Mortgage
Loan that is not a Cooperative Loan, the Mortgage and (y) with respect to each
Cooperative Loan, the Pledge Agreement, the Proprietary Lease, and the Pledge
Instruments, have not been impaired, waived, altered or modified in any respect,
except by written instruments, recorded in the applicable public recording
office if necessary to maintain the lien priority of the Mortgage, and which
have been delivered to the Custodian; the substance of any such waiver,
alteration or modification has been approved by the insurer under the Primary
Insurance Policy, if any, and the title insurer, to the extent required by the
related policy, and is reflected on the related Mortgage Loan Schedule. The
Financing Statements with respect to each Cooperative Loan are in full force and
effect;
(vi) The Mortgage Note and, with respect to each Mortgage Loan that is not
a Cooperative Loan, the Mortgage and, with respect to each Cooperative Loan, the
Pledge Agreement are not subject to any right of rescission, set-off,
counterclaim or defense, including the defense of usury, nor will the operation
of any of the terms of the Mortgage Note and the Mortgage, or the exercise of
any right thereunder, render either the Mortgage or the Mortgage Note
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto and no Mortgagor was a debtor in any state or federal bankruptcy
or insolvency proceeding at the time the Mortgage Loan was originated;
(vii) All buildings upon the Mortgaged Property and with respect to any
Cooperative Loan, the related Project, are insured by an insurer acceptable to
▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located, pursuant to insurance policies conforming to the requirements of the
Servicing Addendum. All such insurance policies contain a standard mortgagee
clause naming the Seller, its successors and assigns as mortgagee and all
premiums thereon have been paid. If the Mortgaged Property is in an area
identified on a Flood Hazard
20
Map or Flood Insurance Rate Map issued by the Federal 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 which policy
conforms to the requirements of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and in an amount
representing coverage not less than the greater of (i) the lesser of (a) the
outstanding principal balance of the Mortgage Loan (plus any additional amount
required to prevent the Mortgagor from being deemed a co-insurer) or (b) the
amount necessary to fully compensate for any damage or loss to the improvements
which are a part of such property on a replacement cost basis, or (ii) the
maximum amount of insurance which is available under the National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended.
The Mortgage obligates the Mortgagor thereunder to maintain all such insurance
at the Mortgagor's cost and expense, and on the Mortgagor's failure to do so,
authorizes the holder of the Mortgage to maintain such insurance at Mortgagor's
cost and expense and to seek reimbursement therefor from the Mortgagor;
(viii) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth in lending, real estate settlement
procedures, predatory and abusive lending, consumer credit protection, equal
credit opportunity, fair housing or disclosure laws applicable to the
origination and servicing of mortgage loans of a type similar to the Mortgage
Loans have been complied with;
(ix) The Mortgage has not been satisfied, cancelled, 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 satisfaction, cancellation, subordination,
rescission or release. The Seller has not waived the performance by the
Mortgagor of any action, if the Mortgagor's failure to perform such action would
cause the Mortgage Loan to be in default, nor has the Seller waived any default
resulting from any action or inaction by the Mortgagor;
(x) The Mortgage is a valid, existing and enforceable first lien on the
Mortgaged Property, including all improvements on the Mortgaged Property, and
with respect to Cooperative Loans, including the Proprietary Lease and the
Cooperative Shares, subject only to (a) the lien of current real property taxes
and assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights-of-way, easements and other matters of the public record as
of the date of recording being acceptable to mortgage lending institutions
generally and specifically referred to in the lender's title insurance policy
delivered to the originator of the Mortgage Loan and which do not adversely
affect the Appraised Value of the Mortgaged Property, and (c) 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,
existing and enforceable first lien and first priority security interest on the
property described therein and the Seller has full right to sell and assign the
same to the Purchaser. The Mortgaged Property was not, as of the date of
origination of the Mortgage Loan, subject to a mortgage, deed of trust, deed to
secure debt or other security instrument creating a lien subordinate to the lien
of the Mortgage;
21
(xi) The Mortgage Note and (x) with respect to each Mortgage Loan, the
related Mortgage and (y) with respect to each Cooperative Loan, the Pledge
Agreement are genuine and each is the legal, valid and binding obligation of the
maker thereof, enforceable in accordance with its terms;
(xii) All parties to the Mortgage Note and (x) with respect to each
Mortgage Loan, the related Mortgage and (y) with respect to each Cooperative
Loan, the Pledge Agreement had legal capacity to enter into the Mortgage Loan
and to execute and deliver the Mortgage Note and the Mortgage or Pledge
Agreement, and the Mortgage Note and the Mortgage or Pledge Agreement have been
duly and properly executed by such parties;
(xiii) The proceeds of the Mortgage Loan have been fully disbursed to or
for the account of the Mortgagor and there is no obligation for the Mortgagee to
advance additional funds thereunder and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the Mortgagee pursuant to the Mortgage Note or Mortgage;
(xiv) The Seller is the sole legal, beneficial and equitable owner of the
Mortgage Note, and with respect to any Mortgage Loan that is not a Cooperative
Loan, the Mortgage and, with respect to any Mortgage Loan which is a
Cooperative, the Pledge Agreement, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity, lien,
pledge, charge, claim or security interest. Immediately upon the transfer and
assignment contemplated by this Agreement and subject to the terms hereof, the
Seller shall have transferred all of its right, title and interest in and to
each Mortgage Loan to the Purchaser, and the Purchaser will hold good,
marketable and indefeasible title, to and be the sole owner of each Mortgage
Loan subject to no liens or encumbrances arising through the Seller;
(xv) All parties that 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) in compliance with any and
all applicable "doing business" and licensing requirements of the laws of the
state wherein the Mortgaged Property is located;
(xvi) The Mortgage Loan is covered by an ALTA lender's title insurance
policy (that has an adjustable rate mortgage endorsement in the form of ALTA 6.0
or 6.1) and is acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and issued by a title
insurer acceptable to ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac and qualified to do business in
the jurisdiction where the Mortgaged Property is located, insuring (subject to
the exceptions contained in (x)(a) and (b) above) the Seller, its successors and
assigns as to the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan and against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment in the Mortgage Interest Rate and Monthly Payment.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress to and from the Mortgaged Property, and against encroachments by or
upon the Mortgaged Property or any interest therein. The Seller 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 full force and
effect upon the consummation of the transactions
22
contemplated by this Agreement. No claims have been made under such lender's
title insurance policy, and no prior holder of the related Mortgage, including
the Seller, has done, by act or omission, anything that would impair the
coverage of such lender's title insurance policy;
(xvii) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the Mortgage Note and no event that, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration, and the
Seller has not waived any default, breach, violation or event of acceleration;
(xviii) There are no mechanics' or similar liens or claims that have been
filed for work, labor or material (and no rights are outstanding that under law
could give rise to such lien) affecting the related Mortgaged Property that are
or may be liens prior to, or equal or coordinate with, the lien of the related
Mortgage;
(xix) All improvements that were considered in determining the Appraised
Value of the related Mortgaged Property lay wholly within the boundaries and
building restriction lines of the Mortgaged Property, and no improvements on
adjoining properties encroach upon the Mortgaged Property, except in each case
for non-complying improvements that do not materially adversely affect the
Appraised Value. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(xx) The Mortgage Loan was originated by the Seller or by a savings and
loan association, a savings bank, a commercial bank or similar banking
institution that is supervised and examined by a federal or state authority, or
by a mortgagee approved as such by the Secretary of HUD pursuant to Sections
2.03 and 2.11 of the National Housing Act.
(xxi) Principal payments on the Mortgage Loan commenced no more than sixty
days after the proceeds of the Mortgage Loan were disbursed. The Mortgage Loan
bears interest at the Mortgage Interest Rate. With respect to each Mortgage
Loan, the Mortgage Note is payable on the first day of each month in Monthly
Payments, which (i) in the case of a Fixed Rate Mortgage Loan are sufficient to
fully amortize the original principal balance over the original term thereof and
to pay interest at the related Mortgage Interest Rate, and (ii) in the case of
an Adjustable Rate Mortgage Loan, are changed on each Adjustment Date, and in
any case (except with respect to each Mortgage Loan identified on the related
Mortgage Loan Schedule as an interest-only Mortgage Loan) are sufficient to
fully amortize the original principal balance over the original term thereof and
to pay interest at the related Mortgage Interest Rate. The Index for each
Adjustable Rate Mortgage Loan is as defined in the Mortgage Loan Schedule and
Confirmation. With respect to each Mortgage Loan identified on the Mortgage Loan
Schedule as an interest-only Mortgage Loan, the interest-only period shall not
exceed ten (10) years and following the expiration of such interest-only period,
the remaining Monthly Payments shall be sufficient to fully amortize the
original principal balance over the remaining term of the Mortgage Loan. The
Mortgage Note does not permit negative amortization. No Mortgage Loan is a
Convertible Mortgage Loan;
(xxii) The origination, servicing and collection practices used by the
Seller with respect to each Mortgage Note and Mortgage have been in all material
respects legal, proper, prudent
23
and customary in the mortgage origination and servicing industry. The Mortgage
Loan has been serviced by the Seller and any predecessor servicer in accordance
with the terms of the Mortgage Note. With respect to escrow deposits and Escrow
Payments, if any, all such payments are in the possession of, or under the
control of, the Seller and there exist no deficiencies in connection therewith
for which customary arrangements for repayment thereof have not been made. No
escrow deposits or Escrow Payments or other charges or payments due the Seller
have been capitalized under any Mortgage or the related Mortgage Note and no
such escrow deposits or Escrow Payments are being held by the Seller for any
work on a Mortgaged Property that has not been completed;
(xxiii) The Mortgaged Property (and with respect to any Cooperative Loan,
the Cooperative Unit and related Project) is free of material damage and waste
and there is no proceeding pending for the total or partial condemnation
thereof;
(xxiv) The Mortgage and related Mortgage Note contain 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, (a) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (b) otherwise by
judicial foreclosure. The Mortgaged Property has not been subject to any
bankruptcy proceeding or foreclosure proceeding and the Mortgagor has not filed
for protection under applicable bankruptcy laws. There is no homestead or other
exemption available to the Mortgagor that would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage. The Mortgagor has not notified the Seller and the Seller has no
knowledge of any relief requested or allowed to the Mortgagor under the
Servicemembers' Civil Relief Act;
(xxv) The Mortgage Loan was underwritten in accordance with the
underwriting standards of the Seller in effect at the time the Mortgage Loan was
originated; and the Mortgage Note and Mortgage are on forms acceptable in the
secondary market for purchases and sales of comparable mortgage loans;
(xxvi) The Mortgage Note is not and has not been secured by any collateral
except the lien of the corresponding Mortgage on the Mortgaged Property and the
security interest of any applicable security agreement or chattel mortgage
referred to in (x) above;
(xxvii) The Mortgage File contains an appraisal of the related Mortgaged
Property which satisfied the standards of ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac and was
made and signed, prior to the approval of the Mortgage Loan application, by a
qualified appraiser, duly appointed by the Seller, who had no interest, direct
or indirect in the Mortgaged Property or in any loan made on the security
thereof, whose compensation is not affected by the approval or disapproval of
the Mortgage Loan and who met the minimum qualifications of ▇▇▇▇▇▇ Mae and
▇▇▇▇▇▇▇ Mac. Each appraisal of the Mortgage Loan was made in accordance with the
relevant provisions of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989;
(xxviii) 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 Purchaser
24
to the trustee under the deed of trust, except in connection with a trustee's
sale after default by the Mortgagor;
(xxix) No Mortgage Loan contains provisions pursuant to which Monthly
Payments are (a) paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, (b) paid by any source other than the Mortgagor or (c) contains any
other similar provisions that may constitute a "buydown" provision. The Mortgage
Loan is not a graduated payment mortgage loan and the Mortgage Loan does not
have a shared appreciation or other contingent interest feature;
(xxx) The Mortgagor has executed a statement to the effect that the
Mortgagor has received all disclosure materials required by applicable law with
respect to the making of adjustable rate mortgage loans and rescission materials
with respect to Refinanced Mortgage Loans, and such statement is and will remain
in the Mortgage File. All fees and charges (including finance charges) and
whether or not financed, assessed, collected or to be collected in connection
with the origination and servicing of each Mortgage Loan have been disclosed in
writing to the Mortgagor in accordance with applicable state and federal law and
regulation;
(xxxi) Except as disclosed on the Mortgage Loan Schedule, each Mortgage
Loan with an LTV at origination in excess of 80% is and will be subject to a
Primary Insurance Policy, issued by a Qualified Insurer, which insures that
portion of the Mortgage Loan in excess of the portion of the Appraised Value of
the Mortgaged Property required by ▇▇▇▇▇▇ Mae. All provisions of such Primary
Insurance 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
subject to any such Primary Insurance Policy obligates the Mortgagor thereunder
to maintain such insurance and to pay all premiums and charges in connection
therewith. The Mortgage Interest Rate for the Mortgage Loan does not include any
such insurance premium;
(xxxii) The Mortgaged Property is lawfully occupied under applicable law;
all inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy, have been made or obtained from the appropriate authorities;
(xxxiii) No error, omission, misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken place on the part
of any person, including without limitation the Mortgagor, any appraiser, any
builder or developer, or any other party involved in the origination of the
Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan;
(xxxiv) The Assignment of Mortgage, if any, is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(xxxv) Any principal advances made to the Mortgagor prior to the Cut-off
Date have been consolidated with the outstanding principal amount secured by the
Mortgage, and the secured principal amount, as consolidated, bears a single
interest rate and single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as
25
having first lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other title evidence
acceptable to ▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇ Mac. The consolidated principal amount does
not exceed the original principal amount of the Mortgage Loan;
(xxxvi) No Mortgage Loan has a balloon payment feature;
(xxxvii) If the Residential Dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets the eligibility requirements of ▇▇▇▇▇▇ Mae and ▇▇▇▇▇▇▇ Mac;
(xxxviii) No Mortgage Loan that is a Cash-out Refinancing was originated in
the State of Texas;
(xxxix) Interest on each Mortgage Loan is calculated on the basis of a
360-day year consisting of twelve 30-day months;
(xl) The Mortgaged Property is in material compliance with all applicable
environmental laws pertaining to environmental hazards including, without
limitation, asbestos, and neither the Seller nor, to the Seller's knowledge, the
related Mortgagor, has received any notice of any violation or potential
violation of such law. There is no pending action or proceeding directly
involving any Mortgaged Property of which the Seller is aware in which
compliance with any environmental law, rule or regulation is an issue;
(xli) No Mortgage Loan is (a) subject to, covered by or in violation of the
provisions of the Homeownership and Equity Protection Act of 1994, as amended,
(b) a "high cost", "covered", "abusive", "predatory", "home loan", "Oklahoma
Section 10" or "high risk" mortgage loan (or a similarly designated loan using
different terminology) under any federal, state or local law, including without
limitation, the provisions of the Georgia Fair Lending Act, New York Banking
Law, Section 6-1, the Arkansas Home Loan Protection Act, effective as of June
14, 2003, Kentucky State Statute KRS 360.100, effective as of June 25, 2003, the
New Jersey Home Ownership Security Act of ▇▇▇▇ (▇▇▇ "▇▇ ▇▇▇"), ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Home Loan Protection Act (N.M. Stat. ▇▇▇. Sections 58-21A-1 et seq.), the
Illinois High-Risk Home Loan Act (815 Ill. Comp. Stat. 137/1 et seq.), the
Oklahoma Home Ownership and Equity Protection Act, Nevada Assembly ▇▇▇▇ No. 284,
effective as of Oct. 1, 2003, the Minnesota Residential Mortgage Originator and
Servicer Licensing Act (MN Stat. Section 58.137), the South Carolina High-Cost
and Consumer Home Loans Act, effective January 1, 2004, the Massachusetts
Predatory Home Loan Practices Act, effective November 7, 2004 (Mass. ▇▇▇. Laws
Ch. 183C) or any other statute or regulation providing assignee liability to
holders of such mortgage loans, or (c) subject to or in violation of any such or
comparable federal, state or local statutes or regulations. The total combined
points and fees charged in connection with the origination of the Mortgage Loan
does not exceed 8% of the original principal balance of the Mortgage Loan;
(xlii) The Seller has not authorized the filing of and is not aware of any
financing statements against the Seller that include a description of collateral
covering the Mortgage Loans other than any financing statement related to the
sale of the Mortgage Loans to the Purchaser
26
pursuant to this Agreement or that has been released or terminated. The Seller
is not aware of any judgment or tax lien filings against the Seller;
(xliii) Each Mortgage Loan was originated (within the meaning of Section
3(a)(41) of the Securities Exchange Act of 1934, as amended) by an entity that
satisfied at the time of origination the requirements of Section 3(a)(41) of the
Securities Exchange Act of 1934, as amended;
(xliv) No Mortgage Loan is a High Cost Loan or Covered Loan. As used in
this paragraph, the terms "High Cost Loan" and "Covered Loan" have the meaning
assigned to them in the Standard & Poor's LEVELS(R) Version 5.6 Glossary
Revised, Appendix E, as most recently updated prior to the applicable Closing
Date (the "Glossary") where (i) a "High Cost Loan" is each loan identified in
the column "Category under applicable anti-predatory lending law" of the table
entitled "Standard & Poor's High Cost Loan Categorization" in the Glossary as
each such loan is defined in the applicable anti-predatory lending law of the
State or jurisdiction specified in such table and (ii) a "Covered Loan" is each
loan identified in the column "Category under applicable anti-predatory lending
law" of the table entitled "Standard & Poor's High Covered Loan Categorization"
in the Glossary as each such loan is defined in the applicable anti-predatory
lending law of the State or jurisdiction specified in such table;
(xlv) This Agreement constitutes a valid transfer and assignment to the
Purchaser of all right, title and interest of the Seller in and to the Mortgage
Loans, all monies due or to become due with respect thereto after the Cut-off
Date and all proceeds of the Mortgage Loans, subject to the terms hereof;
(xlvi) No Mortgagor was required to purchase any credit life, disability,
accident or health insurance product or debt cancellation agreement as a
condition of obtaining the extension of credit. No Mortgagor obtained a prepaid
single premium credit life, disability, accident or health insurance policy in
connection with the origination of the Mortgage Loan, and no proceeds from any
Mortgage Loan were used to finance single-premium credit insurance policies or
debt cancellation agreements as part of the origination of, or as a condition to
closing, such Mortgage Loan;
(xlvii) The Mortgage Loans were not selected from the outstanding fixed
rate and adjustable rate one to four-family mortgage loans in the Seller's
portfolio at the related Closing Date as to which the representations and
warranties set forth in this Agreement could be made in a manner so as to affect
adversely the interests of the Purchaser;
(xlviii) The Mortgage contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Loan
in the event that the Mortgaged Property is sold or transferred without the
prior written consent of the mortgagee thereunder;
(xlix) The Mortgage Loan was not prepaid in full prior to the Closing Date
and the Seller has not received notification from a Mortgagor that a prepayment
in full shall be made after the Closing Date;
(l) No Mortgage Loan is secured by commercial property or mixed-use
property;
27
(li) Each Mortgage Loan is eligible for sale in the secondary market or for
inclusion in a Securitization Transaction without unreasonable credit
enhancement;
(lii) Except as set forth on the related Mortgage Loan Schedule, none of
the Mortgage Loans are subject to a Prepayment Charge. With respect to each
Mortgage Loan that is subject to a Prepayment Charge, such Prepayment Charge is
permissible, enforceable and collectible under applicable federal, state and
local law;
(liii) With respect to each Cooperative Loan, each Pledge Agreement creates
a valid, enforceable and subsisting first security interest in the collateral
securing the related Mortgage Note subject only to (a) the lien of the related
Cooperative for unpaid assessments representing the Mortgagor's pro rata share
of the Cooperative's payments for its blanket mortgage, current and future real
property taxes, insurance premiums, maintenance fees and other assessments to
which like collateral is commonly subject and (b) other matters to which like
collateral is commonly subject which do not materially interfere with the
benefits of the security intended to be provided by the Pledge Agreement;
provided, however, that the appurtenant Proprietary Lease may be subordinated or
otherwise subject to the lien of any mortgage on the Project. There are no liens
against or security interests in the collateral which have priority over the
lender's security interest in the collateral, and such priority interest cannot
be created in the future;
(liv) With respect to each Cooperative Loan, all parties to the Mortgage
Note and the Mortgage Loan had legal capacity to execute and deliver the
Mortgage Note, the Pledge Agreement, the Proprietary Lease, the Stock Power, the
Recognition Agreement, the Financing Statement and the Assignment of the
Proprietary Lease and such documents have been duly and properly executed by
such parties. Each Stock Power (i) has all signatures guaranteed or (ii) if all
signatures are not guaranteed, then such Cooperative Shares will be transferred
by the stock transfer agent of the Cooperative if the Servicer undertakes to
convert the ownership of the collateral securing the related Cooperative Loan;
(lv) With respect to each Cooperative Loan, there is no default in
complying with the terms of the Mortgage Note, the Pledge Agreement and the
Proprietary Lease and all maintenance charges and assessments (including
assessments payable in the future installments, which previously became due and
owing) have been paid. The Seller has the right under the terms of the Mortgage
Note, Pledge Agreement and Recognition Agreement to pay any maintenance charges
or assessments owed by the Mortgagor;
(lvi) With respect to each Cooperative Loan, a Cooperative Lien Search has
been made by a company competent to make the same which company is acceptable to
▇▇▇▇▇▇ ▇▇▇ and qualified to do business in the jurisdiction where the
Cooperative Apartment is located;
(lvii) With respect to each Cooperative Loan, each Pledge Agreement
contains enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for the realization of the benefits of the security
provided thereby. The Pledge Agreement contains an enforceable provision for the
acceleration of the payment of the unpaid principal balance of the Mortgage Note
in the event the Cooperative Apartment is transferred or sold without the
consent of the holder thereof.
28
(lviii) In the case of a Cooperative Loan, the related Cooperative
Apartment is lawfully occupied under applicable law; all inspections, licenses
and certificates required to be made or issued with respect to all occupied
portions of the Cooperative Apartment and the related Project and, with respect
to the use and occupancy of the same, including but not limited to certificates
of occupancy, have been made or obtained from the appropriate authorities;
(lix) With respect to each Cooperative Loan, (i) the term of the related
Proprietary Lease is longer than the term of the Cooperative Loan, (ii) there is
no provision in any Proprietary Lease which requires the Mortgagor to offer for
sale the Cooperative Shares owned by such Mortgagor first to the Cooperative,
(iii) there is no prohibition in any Proprietary Lease against pledging the
Cooperative Shares or assigning the Proprietary Lease and (iv) the Recognition
Agreement is on a form of agreement published by the Aztech Document Systems,
Inc. or includes provisions that are no less favorable to the lender than those
contained in such agreement;
(lx) With respect to each Cooperative Loan, each original UCC financing
statement, continuation statement or other governmental filing or recordation
necessary to create or preserve the perfection and priority of the first
priority lien and security interest in the Cooperative Shares and Proprietary
Lease has been timely and properly made. Any security agreement, chattel
mortgage or equivalent document related to the Cooperative Loan establishes in
the Seller a valid and subsisting perfected first lien on and security interest
in the Mortgaged Property described therein, and the Seller has full right to
sell and assign the same;
(lxi) The Seller and any predecessor servicer has fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and Trans Union Credit Information
Seller (three of the credit repositories), on a monthly basis; and the Seller
will fully furnish, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (e.g., favorable and
unfavorable) on its borrower credit files to Equifax, Experian and Trans Credit
Information Seller (three of the credit repositories), on a monthly basis. As to
each consumer report (as defined in the Fair Credit Reporting Act, Public Law
91-508) or other credit information furnished by the Seller to the Purchaser,
that Seller has full right and authority and is not precluded by law or contract
from furnishing such information to the Purchaser and the Purchaser is not
precluded by the terms of the Mortgage Loan Documents from furnishing the same
to any subsequent or prospective purchaser of such Mortgage;
(lxii) The Seller has complied with all applicable anti-money laundering
laws and regulations, including without limitation the USA Patriot Act of 2001
(collectively, the "Anti-Money Laundering Laws"). The Seller has established an
anti-money laundering compliance program as required by the Anti-Money
Laundering Laws, has conducted the requisite due diligence in connection with
the origination of each Mortgage Loan for purposes of the Anti-Money Laundering
Laws, including with respect to the legitimacy of the applicable Mortgagor and
the origin of the assets used by the said Mortgagor to purchase the property in
question, and maintains, and will maintain, sufficient information to identify
the applicable Mortgagor for purposes of the Anti-Money Laundering Laws; no
Mortgage Loan is subject to nullification pursuant to Executive Order 13224 (the
"Executive Order") or the regulations promulgated by
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the Office of Foreign Assets Control of the United States Department of the
Treasury (the "OFAC Regulations") or in violation of the Executive Order or the
OFAC Regulations, and no Mortgagor is subject to the provisions of such
Executive Order or the OFAC Regulations nor listed as a "blocked person" for
purposes of the OFAC Regulations;
(lxiii) With respect to each Mortgage Loan, neither the related Mortgage
nor the related Mortgage Note requires the Mortgagor to submit to arbitration to
resolve any dispute arising out of or relating in any way to the Mortgage Loan
transaction;
(lxiv) 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);
(lxv) No Mortgage Loan originated or modified on or after October 1, 2002
and prior to March 7, 2003 is secured by a Mortgaged Property located in the
State of Georgia;
(lxvi) No Mortgage Loan is a "manufactured housing loan" pursuant to the NJ
Act, and one hundred percent of the amount financed of any purchase money Second
Lien Mortgage Loan subject to the NJ Act was used for the purchase of the
related Mortgaged Property; and
(lxvii) With respect to any Mortgage Loan where title to such Mortgage Loan
is held in the name of a corporation, such Mortgage Loan is (a) a residential
mortgage loan, (b) identified on the Mortgage Loan Schedule to indicate that
title is in the name of a corporation, and (c) guaranteed by a natural person.
Subsection 7.03. Remedies for Breach of Representations and Warranties.
It is understood and agreed that the representations and warranties set
forth in Subsections 7.01 and 7.02 shall survive the delivery of the Mortgage
Files and the sale of the Mortgage Loans to the Purchaser 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
lack of examination of any Mortgage File. Upon discovery by either the Seller or
the Purchaser of a breach of any of the foregoing representations and warranties
that 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 the 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 60 days of the earlier of either discovery by or notice to the
Seller of any breach of a representation or warranty that materially and
adversely affects the value of a Mortgage Loan or the Mortgage Loans, the Seller
shall use its best efforts promptly to cure such breach in all material respects
and, if such breach cannot be cured, the Seller shall, at the Purchaser's
option, repurchase such Mortgage Loan at the Repurchase Price. Notwithstanding
the preceding sentence, within 60 days of the earlier of either discovery by, or
notice to, the Seller of any breach of the representations or warranties set
forth in clauses (lxiv), (xli), (xlvi), (lxv), (lxi) and (lxiii) of Subsection
7.02, the Seller shall repurchase such Mortgage Loan at the Repurchase Price,
together with all expenses incurred by the Purchaser as a result of such
repurchase. The Seller shall, at the request of the Purchaser and assuming that
Seller has a Qualified Substitute Mortgage Loan, rather than repurchase the
Mortgage Loan as provided above, remove such
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Mortgage Loan and substitute in its place a Qualified Substitute Mortgage Loan
or Loans; provided that such substitution shall be effected not later than 120
days after the related Closing Date. If the Seller has no Qualified Substitute
Mortgage Loan, it shall repurchase the deficient Mortgage Loan. Any repurchase
of a Mortgage Loan(s) pursuant to the foregoing provisions of this Subsection
7.03 shall occur on a date designated by the Purchaser and shall be accomplished
by deposit in the Custodial Account of the amount of the Repurchase Price for
distribution to the Purchaser on the next scheduled Distribution Date.
At the time of repurchase of any deficient Mortgage Loan, the Purchaser and
the Seller shall arrange for the reassignment of the repurchased Mortgage Loan
to the Seller and the delivery to the Seller of any documents held by the
Custodian relating to the repurchased Mortgage Loan. When the Repurchase Price
is deposited in the Custodial Account, the Seller shall, simultaneously with
such deposit, give written notice to the Purchaser that such deposit has taken
place. Upon such repurchase the related Mortgage Loan Schedule shall be amended
to reflect the withdrawal of the repurchased Mortgage Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Seller substitutes a
Qualified Substitute Mortgage Loan or Loans, the Seller shall effect such
substitution by delivering to the Purchaser for such Qualified Substitute
Mortgage Loan or Loans the Mortgage Note, the Mortgage, the Assignment of
Mortgage and the other Mortgage Loan Documents as are required by this
Agreement, with the Mortgage Note endorsed as required herein. The Seller shall
deposit in the Custodial Account the Monthly Payment less the Servicing Fee due
on such Qualified Substitute Mortgage Loan or Loans in the month following the
date of such substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution will be retained by the
Seller. For the month of substitution, distributions to the Purchaser will
include the Monthly Payment due on such Deleted Mortgage Loan in the month of
substitution, and the Seller shall thereafter be entitled to retain all amounts
subsequently received by the Seller in respect of such Deleted Mortgage Loan.
The Seller shall give written notice to the Purchaser that such substitution has
taken place and shall amend the Mortgage Loan Schedule to reflect the removal of
such Deleted Mortgage Loan from the terms of this Agreement and the substitution
of the Qualified Substitute Mortgage Loan. Upon such substitution, such
Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of
this Agreement in all respects, and the Seller shall be deemed to have made with
respect to such Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the covenants, representations and warranties set forth in
Subsections 7.01 and 7.02.
For any month in which the Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Seller
will determine the amount (if any) by which the aggregate principal balance of
all such Qualified Substitute Mortgage Loans as of the date of substitution is
less than the aggregate Stated Principal Balance of all such Deleted Mortgage
Loans (after application of scheduled principal payments due in the month of
substitution). An amount equal to the product of the amount of such shortfall
and the greater of (x) the Purchase Price percentage for such Mortgage Loan set
forth in the related Confirmation and (y) 100% shall be distributed by the
Seller in the month of substitution pursuant to the Servicing Addendum.
Accordingly, on the date of such substitution, the Seller will deposit from its
own funds into the Custodial Account an amount equal to such amount.
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In addition to such cure; repurchase and substitution obligation, the
Seller shall indemnify the Purchaser and hold it harmless against any losses,
damages, penalties, fines, forfeitures, reasonable 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 Seller's representations and warranties contained in Section 7. It is
understood and agreed that the obligations of the Seller set forth in this
Subsection 7.03 to cure, repurchase or replace a defective Mortgage Loan and to
indemnify the Purchaser as provided in this Subsection 7.03 constitute the sole
remedies of the Purchaser respecting a breach of the foregoing representations
and warranties.
Subsection 7.04. Repurchase of Certain Mortgage Loans.
In the event that (i) the first Due Date for a Mortgage Loan is subsequent
to the Cut-off Date and the initial Monthly Payment is not made within 30 days
of such Due Date or (ii) a Monthly Payment due prior to the related Cut-off Date
is not made within 30 days of the related Due Date, then, in each such case, the
Seller will repurchase the affected Mortgage Loans at the Repurchase Price,
which shall be paid as provided for in Subsection 7.03. In the event that the
principal balance due on a Mortgage Loan is paid in full within ninety (90) days
following the related Closing Date, the Seller will pay to Purchaser within ten
business days of Purchaser notifying Seller of such prepayment an amount equal
to the product of (A) the amount of such prepayment, times (B) the excess, if
any, of the purchase price percentage, as set forth in the related Commitment
Letter, over 100%, less any Prepayment Charges permitted to be collected by the
Purchaser.
SECTION 8. Closing. The closing for each Mortgage Loan Package shall take
place on the related 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 for the Mortgage Loans to be purchased on each Closing Date
shall be subject to each of the following conditions:
(a) all of the representations and warranties of the Seller under this
Agreement shall be true and correct as of the related Closing Date and
no event shall have occurred which, with notice or the passage of
time, would constitute a default under this Agreement;
(b) the Initial Purchaser shall receive, or the Initial Purchaser's
attorneys shall have received in escrow, all Closing Documents as
specified in Section 9, in such forms as agreed upon and acceptable to
the Purchaser, duly executed by all signatories other than the
Purchaser as required pursuant to the terms hereof;
(c) the Seller shall have delivered and released to the Custodian all
documents required pursuant to this Agreement; and
(d) all other terms and conditions of this Agreement shall have been
complied with
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Subject to the foregoing conditions, the Initial Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price, plus accrued interest
pursuant to Section 4, by wire transfer of immediately available funds to the
account designated by the Seller.
SECTION 9. Closing Documents.
(a) On or before the Initial Closing Date, the Seller shall submit to the
Initial Purchaser fully executed originals of the following documents:
1. this Agreement, in four counterparts;
2. the Custodial Agreement, in six counterparts;
3. a Custodial Account Letter Agreement in the form attached as
Exhibit 7 hereto;
4. an Escrow Account Letter Agreement in the form attached as
Exhibit 8 hereto;
5. an Officer's Certificate, in the form of Exhibit 1 hereto,
including all attachments thereto; and
6. an Opinion of Counsel to the Seller, in the form of Exhibit 2
hereto.
(b) The Closing Documents for the Mortgage Loans to be purchased on each
Closing Date shall consist of fully executed originals of the following
documents:
1. the related Confirmation;
2. the related Mortgage Loan Schedule, one copy to be attached
hereto and one copy to be attached to the Custodian's counterpart
of the Custodial Agreement, as the Mortgage Loan Schedule
thereto;
3. a Custodian's certification, as required under the Custodial
Agreement, in a form acceptable to the Initial Purchaser;
4. an Officer's Certificate, in the form of Exhibit 1 hereto,
including all attachments thereto;
5. if requested by the Initial Purchaser, an Opinion of Counsel to
the Seller, in the form of Exhibit 2 hereto; ---------
6. a Security Release Certification, in the form of Exhibit 3 hereto
executed by any Person, as requested by the Initial Purchaser, if
any of the Mortgage Loans has at any time been subject to any
security interest, pledge or hypothecation for the benefit of
such Person;
7. a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if any
of the Mortgage
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Loans were acquired by the Seller by merger or acquired or
originated by the Seller while conducting business under a name
other than its present name, if applicable;
8. an Assignment and Conveyance in the form of Exhibit 4 hereto;
9. information with respect to the Seller's loan loss, foreclosure
and delinquency experience for the twenty-four (24) months
immediately preceding the Closing Date on mortgage loans
underwritten to the same standards as the Mortgage Loans and
covering mortgaged properties similar to the Mortgaged
Properties; and
10. the Seller's underwriting guidelines.
SECTION 10. Costs. The Purchaser shall pay any commissions due its salesmen
and the legal fees and expenses of its attorneys. All other costs and expenses
incurred in connection with the transfer and delivery of the Mortgage Loans,
including without limitation recording fees, fees for title policy endorsements
and continuations, fees for recording Assignments of Mortgage, the fees of the
Custodian and the Seller's attorney's fees, shall be paid by the Seller.
SECTION 11. Seller's Servicing Obligation. The Seller, as independent
contract servicer, shall service and administer the Mortgage Loans during the
Preliminary Servicing Period in accordance with the terms and provisions set
forth in the Servicing Addendum attached as Exhibit 9, which Servicing Addendum
is incorporated herein by reference.
SECTION 12. Removal of Mortgage Loans from Inclusion under this Agreement
Upon a Reconstitution on One or More Reconstitution Dates.
The Seller and the Initial Purchaser agree that with respect to some or all
of the Mortgage Loans, the Initial Purchaser may effect either:
(1) one or more Whole Loan Transfers; and/or
(2) one or more Securitization Transactions.
With respect to each Whole Loan Transfer or Securitization Transactions, as
the case may be, entered into by the Initial Purchaser, the Seller agrees:
(1) to cooperate fully with the Purchaser and any prospective purchaser
with respect to all reasonable requests and due diligence procedures
and with respect to the preparation (including, but not limited to,
the endorsement, delivery, assignment, and execution) of the Mortgage
Loan Documents and other related documents, and with respect to
servicing requirements reasonably requested by the rating agencies and
credit enhancers;
(2) to execute all Reconstitution Agreements provided that each of the
Seller and the Purchaser is given an opportunity to review and
reasonably negotiate in good faith the content of such documents not
specifically referenced or provided for herein;
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(3) with respect to any Whole Loan Transfer or Securitization Transaction,
the Seller shall make the representations and warranties contained in
Section 7 regarding the Seller and, if such Whole Loan Transfer or
Securitization Transaction occurs within 12 months of the Closing Date
or such later period as specified in the related Confirmation, the
Mortgage Loans as of the date of the Whole Loan Transfer or
Securitization Transaction, modified to the extent necessary to
accurately reflect the pool statistics of the Mortgage Loans as of the
date of such Whole Loan Transfer or Securitization Transaction and any
events or circumstances existing subsequent to the related Closing
Date(s);
(4) in the case of a Securitization Transaction, to deliver to the
Purchaser such information, reports, letters and certifications as are
required pursuant to Section 12A and to indemnify the Purchaser and
its affiliates as set forth in Section 12A;
(5) to deliver to the Purchaser for inclusion in any prospectus or other
offering material such publicly available information regarding the
Seller, its financial condition and its mortgage loan delinquency,
foreclosure and loss experience, underwriting and servicing criteria
and any additional information requested by the Purchaser, and to
deliver to the Purchaser any similar non-public, unaudited financial
information, in which case the Purchaser shall bear the cost of having
such information audited by certified public accountants if the
Purchaser desires such an audit, or as is otherwise reasonably
requested by the Purchaser and which the Seller is capable of
providing without unreasonable effort or expense, and to indemnify the
Purchaser and its affiliates and the underwriters, placement agents
and managers in any Securitization Transaction for material
misstatements or omissions or any alleged misstatements or omissions
contained (i) in such information and (ii) on the Mortgage Loan
Schedule;
(6) to deliver to the Purchaser and to any Person designated by the
Purchaser, at the Purchaser's expense, such statements and audit
letters of reputable, certified public accountants pertaining to
information provided by the Seller pursuant to clause 5 above as shall
be reasonably requested by the Purchaser;
(7) to deliver to the Purchaser, and to any Person designated by the
Purchaser, such legal documents and in-house Opinions of Counsel as
are customarily delivered by originators or servicers, as the case may
be, and reasonably determined by the Purchaser to be necessary in
connection with any Reconstitution, as the case may be, such in-house
Opinions of Counsel for a Securitization Transaction to be in the form
reasonably acceptable to the Purchaser, it being understood that the
cost of any opinions of outside special counsel that may be required
for a Reconstitution, as the case may be, shall be the responsibility
of the Purchaser;
(8) to negotiate and execute one or more subservicing agreements between
the Seller and any master servicer which is generally considered to be
a prudent master servicer in the secondary mortgage market, designated
by the Purchaser in its sole discretion after consultation with the
Seller and/or one or more custodial and servicing agreements among the
Purchaser, the Seller and a third party
35
custodian/trustee which is generally considered to be a prudent
custodian/trustee in the secondary mortgage market designated by the
Purchaser in its sole discretion after consultation with the Seller,
in either case for the purpose of pooling the Mortgage Loans with
other Mortgage Loans for resale or securitization upon terms
consistent with the servicing agreement for such securitization; and
(9) in connection with any securitization of any Mortgage Loans, to
execute a pooling and servicing agreement, which pooling and servicing
agreement may, at the Purchaser's direction, contain contractual
provisions including, but not limited to, a 24-day certificate payment
delay (54-day total payment delay), servicer advances of delinquent
scheduled payments of principal and interest through liquidation
(unless deemed non-recoverable) and prepayment interest shortfalls (to
the extent of the monthly servicing fee payable thereto), servicing
and mortgage loan representations and warranties which in form and
substance conform to the representations and warranties in this
Agreement and to secondary market standards for securities backed by
mortgage loans similar to the Mortgage Loans and such provisions with
regard to servicing responsibilities, investor reporting, segregation
and deposit of principal and interest payments, custody of the
Mortgage Loans, and other covenants as are required by the Purchaser
and one or more nationally recognized rating agencies for mortgage
pass-through transactions.
All Mortgage Loans not sold or transferred pursuant to a Reconstitution
shall be subject to this Agreement and shall continue to be serviced for the
remainder of the Preliminary Servicing Period in accordance with the terms of
this Agreement and with respect thereto this Agreement shall remain in full
force and effect.
SECTION 12A. Compliance with Regulation AB.
Subsection 12A.01. Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the purpose of
Section 12A of this Agreement 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 Seller 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 Seller acknowledges that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance
36
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 Seller 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
Seller, 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 Seller 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 of any conflict between Section 12A and any other term or
provision in this Agreement, the provisions of Section 12A shall control.
Subsection 12A.02. Additional Representations and Warranties of the Seller.
(a) The Seller 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 Subsection
12A.03 that, except as disclosed in writing to the Purchaser, such Master
Servicer or such Depositor prior to such date: (i) the Seller 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 Seller; (ii) the Seller 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;
(iii) no material noncompliance with the applicable servicing criteria with
respect to other securitizations of residential mortgage loans involving the
Seller as servicer has been disclosed or reported by the Seller; (iv) no
material changes to the Seller'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-year period immediately preceding the related
Securitization Transaction; (v) there are no aspects of the Seller's financial
condition that could have a material adverse effect on the performance by the
Seller of its servicing obligations under this Agreement or any Reconstitution
Agreement; (vi) there are no material legal or governmental proceedings pending
(or known to be contemplated) against the Seller, any Subservicer or any
Third-Party Originator; and (vii) there are no affiliations, relationships or
transactions relating to the Seller, 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.
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(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 Subsection 12A.03, the
Seller shall, within five (5) Business Days following such request, confirm in
writing the accuracy of the representations and warranties set forth in
paragraph (a) of this Subsection 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.
Subsection 12A.03. Information to Be Provided by the Seller.
In connection with any Securitization Transaction the Seller shall (i)
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 (a), (b), (c) and (g) of
this Subsection, and (ii) as promptly as practicable following notice to or
discovery by the Seller, 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 (d) of this Subsection.
(a) If so requested by the Purchaser or any Depositor, the Seller shall
provide such information regarding (i) the Seller, as originator of the Mortgage
Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, and (iii) as 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 origination 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 or any Depositor, 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) description of any material legal or governmental proceedings
pending (or known to be contemplated) against the Seller, each Third-Party
Originator and each Subservicer; and
(D) a description of any affiliation or relationship between the
Seller, each Third-Party Originator, each Subservicer and any of the
following parties to a Securitization
38
Transaction, as such parties are identified to the Seller 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.
(b) If so requested by the Purchaser or any Depositor, the Seller 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 (i) the Seller, if the Seller is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information shall be
prepared by the Seller (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 Seller
(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 Seller, 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 one hundred thirty-five (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 Seller 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 Seller.
If so requested by the Purchaser or any Depositor, the Seller 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
39
delivery pursuant to this Agreement), such 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 Seller'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 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 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.
(c) If so requested by the Purchaser or any Depositor, the Seller shall
provide such information regarding the Seller, as servicer of the Mortgage
Loans, and each Subservicer (each of the Seller 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-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-year period immediately
preceding the related Securitization Transaction;
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(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-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 Seller 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-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 period,
re-aging, restructuring, partial payments considered current or other
practices with respect to delinquency and loss experience; and
(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
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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.
(d) For the purpose of satisfying the reporting obligation under the
Exchange Act with respect to any class of asset-backed securities, the Seller
shall (or shall cause each Subservicer and Third-Party Originator to) (i)
provide prompt notice to the Purchaser, any Master Servicer and any Depositor in
writing of (A) any material litigation or governmental proceedings involving the
Seller, any Subservicer or any Third-Party Originator, (B) any affiliations or
relationships that develop following the closing date of a Securitization
Transaction between the Seller, any Subservicer or any Third-Party Originator
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 Seller, and (E)
the Seller's entry into an agreement with a Subservicer or Subcontractor to
perform or assist in the performance of any of the Seller's obligations under
this Agreement or any Reconstitution Agreement and (ii) provide to the Purchaser
and any Depositor a description of such proceedings, affiliations or
relationships.
(e) As a condition to the succession to the Seller or any Subservicer as
servicer or subservicer under this Agreement or any Reconstitution Agreement by
any Person (i) into which the Seller or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Seller or any
Subservicer, the Seller shall provide to the Purchaser and any Depositor, at
least 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
reasonably satisfactory to the Purchaser and such Depositor, all information
reasonably requested by the Purchaser 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.
(f) In addition to such information as the Seller, 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 Securitization Transaction that includes any of the
Mortgage Loans serviced by the Seller or any Subservicer, the Seller or such
Subservicer, as applicable, shall 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
42
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).
(g) The Seller shall provide to the Purchaser, any Master Servicer and any
Depositor, such additional information as such party may reasonably request,
including evidence of the authorization of the person signing any certification
or statement, financial information and reports, and such other information
related to the Seller or any Subservicer or the Seller or such Subservicer's
performance hereunder.
(h) As a condition to the succession to the Seller or any Subservicer as
servicer or subservicer under this Agreement or any Reconstitution Agreement by
any Person (i) into which the Seller or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Seller or any
Subservicer, the Seller shall provide to the Purchaser and any Depositor, at
least 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
reasonably satisfactory to the Purchaser and such Depositor, all information
reasonably requested by the Purchaser 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.
(i) In addition to such information as the Seller, as servicer, is
obligated to provide pursuant to other provisions of this Agreement, if so
requested by the Purchaser or any Depositor, the Seller shall provide such
information regarding the performance or servicing of the Mortgage Loans as is
reasonably required to facilitate preparation of distribution reports in
accordance with Item 1121 of Regulation AB. Such information shall be provided
concurrently with the monthly reports otherwise required to be delivered by the
servicer under this Agreement, commencing with the first such report due not
less than ten Business Days following such request.
Subsection 12A.04. Servicer Compliance Statement.
On or before March 1 of each calendar year, commencing in 2007, the Seller
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 Seller, to the effect
that (i) a review of the Seller's activities during the immediately
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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 (ii) to the best of
such officers' knowledge, based on such review, the Seller 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.
Subsection 12A.05. Report on Assessment of Compliance and Attestation.
(a) On or before March 1 of each calendar year, commencing in 2007, the
Seller 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
Seller'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, such Master Servicer
and such Depositor and signed by an authorized officer of the Seller,
and shall address each of the "Applicable Servicing Criteria"
specified on Exhibit 12 hereto;
(ii) deliver to the Purchaser, any Master Servicer and any Depositor a
report of a registered public accounting firm reasonably acceptable to
the Purchaser, such Master Servicer and such Depositor that attests
to, and reports on, the assessment of compliance made by the Seller
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
Seller pursuant to Subsection 12A.06(b) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB,
to deliver to the Purchaser, any Master Servicer and any Depositor an
assessment of compliance and accountants' attestation as and when
provided in paragraphs (a) and (b) of this Subsection; and
(iv) if requested by the Purchaser or any Depositor not later than February
1 of the calendar year in which such certification is to be delivered,
deliver to the Purchaser, 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 ▇▇▇▇▇▇▇▇-▇▇▇▇▇ 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 Seller, in the form attached hereto as Exhibit 11.
The Seller acknowledges that the parties identified in paragraph (iv) above
may rely on the certification provided by the Seller pursuant to such clause in
signing a Sarbanes
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Certification and filing such with the Commission. Neither the Purchaser nor any
Depositor will request delivery of a certification under paragraph (a)(iv) above
unless a Depositor is required under the Exchange Act to file an annual report
on Form 10-K with respect to an issuing entity whose asset pool includes
Mortgage Loans.
(b) Each assessment of compliance provided by a Subservicer pursuant to
Subsection 12A.05(a)(i) shall address each of the Servicing Criteria specified
on a certification substantially in the form of Exhibit 12 hereto delivered to
the Purchaser 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. An assessment of compliance provided by a Subcontractor pursuant to
Subsection 12A.05(a)(iii) need not address any elements of the Servicing
Criteria other than those specified by the Seller pursuant to Subsection 12A.06.
Subsection 12A.06. Use of Subservicers and Subcontractors.
The Seller shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Seller as servicer under
this Agreement or any Reconstitution Agreement unless the Seller complies with
the provisions of paragraph (a) of this Subsection. The Seller 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 Seller as servicer under this Agreement or
any Reconstitution Agreement unless the Seller complies with the provisions of
paragraph (b) of this Subsection.
(a) It shall not be necessary for the Seller to seek the consent of the
Purchaser, any Master Servicer or any Depositor to the utilization of any
Subservicer. The Seller shall cause any Subservicer used by the Seller (or by
any Subservicer) for the benefit of the Purchaser and any Depositor to comply
with the provisions of this Subsection and with Subsections 12A.02, 12A.03(c),
(e), (f) and (g), 12A.04, 12A.05 and 12A.07 of this Agreement to the same extent
as if such Subservicer were the Seller, and to provide the information required
with respect to such Subservicer under Subsection 12A.03(d) of this Agreement.
The Seller 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 Subsection 12A.04, any
assessment of compliance and attestation required to be delivered by such
Subservicer under Subsection 12A.05 and any certification required to be
delivered to the Person that will be responsible for signing the Sarbanes
Certification under Subsection 12A.05 as and when required to be delivered.
(b) It shall not be necessary for the Seller to seek the consent of the
Purchaser, any Master Servicer or any Depositor to the utilization of any
Subcontractor. The Seller 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 Depositor and such Master Servicer) of the role and function
of each Subcontractor utilized by the Seller 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.
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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 Seller shall cause any such Subcontractor used by the Seller
(or by any Subservicer) for the benefit of the Purchaser and any Depositor to
comply with the provisions of Subsections 12A.05 and 12A.07 of this Agreement to
the same extent as if such Subcontractor were the Seller. The Seller shall be
responsible for obtaining from each Subcontractor and delivering to the
Purchaser and any Depositor any assessment of compliance and attestation
required to be delivered by such Subcontractor under Subsection 12A.05, in each
case as and when required to be delivered.
Subsection 12A.07. Indemnification; Remedies.
(a) The Seller 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 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 this
Section 12A by or on behalf of the Seller, or provided under this Section
12A by or on behalf of any Subservicer, Subcontractor or Third-Party
Originator (collectively, the "Seller Information"), or (B) the omission or
alleged omission to state in the Seller Information a material fact
required to be stated in the Seller 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
Seller Information and not to any other information communicated in
connection with a sale or purchase of securities, without regard to whether
the Seller Information or any portion thereof is presented together with or
separately from such other information;
(ii) any breach by the Seller of its obligations under this Section 12A
including particularly any failure by the Seller, 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 this Section 12A, including any failure by the Seller to
identify pursuant to Subsection 12A.06(b) any Subcontractor "participating
in the servicing function" within the meaning of Item 1122 of Regulation
AB;
46
(iii) any breach by the Seller of a representation or warranty set forth in
Subsection 12A.02(a) or in a writing furnished pursuant to Subsection
12A.02(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 Seller of a representation or
warranty in a writing furnished pursuant to Subsection 12A.02(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 Seller in
connection with its performance under this Section 12A.
If the indemnification provided for herein is unavailable or
insufficient to hold harmless an Indemnified Party, then the Seller 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 Seller on
the other.
In the case of any failure of performance described in paragraph
(a)(ii) of this Subsection, the Seller 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 Seller, 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.
(b) (i) Any failure by the Seller, 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 this Section 12A, or any breach by the Seller of a representation or
warranty set forth in Subsection 12A.02(a) or in a writing furnished
pursuant to Subsection 12A.02(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 Seller of a
representation or warranty in a writing furnished pursuant to Subsection
12A.02(b) to the extent made as of a date subsequent to such closing date,
shall, except as provided in clause (ii) of this paragraph, immediately and
automatically, without notice or grace period, constitute an Event of
Default with respect to the Seller 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 Seller 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
Seller; provided that to the extent
47
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 Seller as servicer, such provision
shall be given effect.
(ii) Any failure by the Seller, any Subservicer or any Subcontractor to
deliver any information, report, certification or accountants' letter when
and as required under Subsections 12A.04 or 12A.05, including (except as
provided below) any failure by the Seller to identify pursuant to
Subsection 12A.06(b) 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
Seller 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 Seller as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement to the contrary) of any compensation to the Seller; provided that
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 Seller 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 Seller pursuant to this subparagraph
(b)(ii) if a failure of the Seller 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 Seller 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 incurred by the Purchaser (or such designee) or
such Depositor, as such are incurred, in connection with the termination of
the Seller 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.
Subsection 12A.08. Third Party Beneficiary.
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For purposes of this Section 12A and any related provisions thereto, 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..
SECTION 13. The Seller.
Subsection 13.01. Additional Indemnification by the Seller.
In addition to the indemnification provided in Subsection 7.03 but subject
to the limitations of Subsection 13.03, the Seller shall indemnify the Purchaser
and hold the Purchaser harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable 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 Seller to perform its obligations under
this Agreement including but not limited to its obligation to service and
administer the Mortgage Loans in strict compliance with the terms of this
Agreement or any Reconstitution Agreement entered into pursuant to Section 12.
Subsection 13.02. Merger or Consolidation of the Seller.
The Seller shall keep in full force and, effect its existence, rights and
franchises as a bank under the laws of the state of its formation except as
permitted herein, and shall obtain and preserve its qualification to do business
as a foreign corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement
or any of the Mortgage Loans, and to enable the Seller to perform its duties
under this Agreement.
Any Person into which the Seller may be merged or consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Seller shall be a party, or any Person succeeding to the business of the Seller,
shall be the successor of the Seller 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.
Subsection 13.03. Limitation on Liability of the Seller and Others.
Neither the Seller nor any of the officers, employees or agents of the
Seller shall be under any liability to the Purchaser for any action taken or for
refraining from the taking of any action in good faith in connection with the
servicing of the Mortgage Loans pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the Seller or
any such person against any breach of warranties or representations made herein,
or failure to perform its obligations in strict compliance with any standard of
care set forth in this Agreement, or any liability that would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Seller and any officer, employee or agent of the Seller 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 Seller shall not be
under any obligation to appear in, prosecute or defend any legal action that is
not incidental to its obligation to sell or duty to service the Mortgage Loans
in accordance with this Agreement and that in its opinion may result in its
incurring any expenses or liability; provided, however, that the Seller may,
with the consent of the Purchaser, undertake any such action that it may deem
necessary or desirable
49
in respect to this Agreement and the rights and duties of the parties hereto. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities for which the
Purchaser shall be liable and the Seller shall be entitled to reimbursement
therefor from the Purchaser upon written demand except when such expenses, costs
and liabilities are subject to the Seller's indemnification under Subsections
7.03 or 13.01.
Subsection 13.04. Seller Not to Resign.
The Seller shall not resign from the obligations and duties hereby imposed
on it except by mutual consent of the Seller and the Purchaser or upon the
determination that its servicing duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the Seller in which
event the Seller may resign as servicer. Any such determination permitting the
resignation of the Seller as servicer 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 and which shall be provided
at the cost of the Seller. No such resignation shall become effective until a
successor shall have assumed the Seller's responsibilities and obligations
hereunder in the manner provided in Section 16.
Subsection 13.05. Transfer of Servicing.
The Seller may not assign this Agreement or the servicing hereunder or
delegate its rights or duties hereunder or any portion thereof, without the
prior written consent of the Purchaser, which consent will not be unreasonably
withheld, provided, however, that no such consent shall be required in
connection with any merger, consolidation or other transaction permitted by
Subsection 13.02.
SECTION 14. Default.
Subsection 14.01. Events of Default.
In case one or more of the following Events of Default by the Seller shall
occur and be continuing:
(i) any failure by the Seller to remit to the Purchaser any payment
required to be made under the terms of this Agreement which continues
unremedied for a period of one Business Day after the date upon which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Seller by the Purchaser; or
(ii) failure on the part of the Seller duly to observe or perform in any
material respect any other of the covenants or agreements on the part
of the Seller set forth in this Agreement or in the Custodial
Agreement which continues 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 policy required to be
maintained under this Agreement) after the date on which written
notice of such failure, requiring the same to be remedied, shall have
been given to the Seller by the Purchaser or by the Custodian; or
50
(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,
marshalling of assets and liabilities or similar proceedings, or for
the winding-up or liquidation of its affairs, shall have been entered
against the Seller and such decree or order shall have remained in
force undischarged or unstayed for a period of sixty days; or
(iv) the Seller shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of
debt, marshalling of assets and liabilities or similar proceedings of
or relating to the Seller or of or relating to all or substantially
all of its property; or
(v) the Seller 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) failure by the Seller to be in compliance with the "doing business" or
licensing laws of any jurisdiction where a Mortgaged Property is
located, except where such failure will not materially adversely
affect the Seller's ability to service the related Mortgage Loan
pursuant to the terms hereof; or
(vii) the Seller ceases to meet the qualifications of either an ▇▇▇▇▇▇ ▇▇▇
or ▇▇▇▇▇▇▇ Mac seller/servicer; or
(viii) except as permitted hereunder, the Seller attempts to assign its
right to servicing compensation hereunder or attempts to assign this
Agreement or the servicing responsibilities hereunder or to delegate
its duties hereunder or any portion thereof; or
(ix) the Seller fails to duly perform, within the required time period, its
obligations under Sections 11.24, 11.25, 11.26 of the Servicing
Addendum or Subsections 12A.05 or 12A.06, which failure continues
unremedied for a period of three (3) days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given to the Seller by any party to this Agreement or
by any master servicer, trustee or depositor pursuant to a
Securitization Transaction or other securitization of the Mortgage
Loans;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Purchaser, by notice in writing, to the Seller may, in
addition to whatever rights the Purchaser may have at law or equity to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of the Seller as servicer under this Agreement. On or after the
receipt by the Seller of such written notice, all authority and power of the
Seller to service the Mortgage Loans under this Agreement shall on the date set
forth in such notice pass to and be vested in the successor appointed pursuant
to Section 16.
51
Subsection 14.02. Waiver of Defaults.
The Purchaser may waive any default by the Seller 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.
SECTION 15. Termination. The respective obligations and responsibilities of
the Seller, as servicer, shall terminate upon the distribution to the Purchaser
of the final payment or liquidation with respect to the last Mortgage Loan (or
advances of same by the Seller) or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure with respect to the last Mortgage
Loan and the remittance of all funds due hereunder unless replaced with respect
to all or a portion of the Mortgage Loans on an earlier date pursuant to a
Reconstitution Agreement or terminated pursuant to Section 14. The Seller may
not be terminated as servicer except pursuant to Section 14. Upon written
request from the Purchaser in connection with any such termination pursuant to
Section 14, the Seller shall prepare, execute and deliver, any and all documents
and other instruments, place in the Purchaser's possession all Mortgage 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 Seller's sole expense: The Seller agrees to cooperate with the
Purchaser and such successor in effecting the termination of the Seller's
responsibilities and rights hereunder as servicer, including, without
limitation, the transfer to such successor for administration by it of all cash
amounts which shall at the time be credited by the Seller to the Custodial
Account, REO Account or Escrow Account or thereafter received with respect to
the Mortgage Loans.
SECTION 16. Successor to the Seller. Prior to termination of Seller's
responsibilities and duties under this Agreement pursuant to Section 14, the
Purchaser shall (i) succeed to and assume all of the Seller's responsibilities,
rights, duties and obligations under this Agreement, or (ii) appoint a successor
which shall succeed to all rights and assume all of the responsibilities, duties
and liabilities of the Seller as servicer 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 Seller's duties,
responsibilities and liabilities as servicer under this Agreement should be
terminated pursuant to the aforementioned Sections, the Seller 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 that 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 the Purchaser or such successor. The
termination of the Seller as servicer pursuant to the aforementioned Section
shall not become effective until a successor shall be appointed pursuant to this
Section 16 and shall in no event relieve the Seller of the representations and
warranties made pursuant to Subsections 7.01 and 7.02 and the remedies available
to the Purchaser under Subsection 7.03 or 7.04, it being understood and agreed
that the provisions of such Subsections 7.01, 7.02 and 7.03 and 7.04 shall be
applicable to the Seller notwithstanding any such resignation or termination of
the Seller, or the termination of this Agreement.
52
Any successor appointed as provided herein shall execute, acknowledge and
deliver to the Seller and to the Purchaser an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities, obligations and liabilities of the
Seller, with like effect as if originally named as a party to this Agreement
provided, however, that such successor shall not assume, and Seller shall
indemnify such successor for, any and all liabilities arising out of the
Seller's acts as servicer. Any replacement or termination of the Seller as
servicer pursuant to Section 12 or 14 shall not affect any claims that the
Purchaser may have against the Seller arising prior to any such termination or
resignation or remedies with respect to such claims.
The Seller shall timely deliver to the successor the funds in the Custodial
Account, REO Account and the Escrow Account and the Mortgage Files and related
documents and statements held by it hereunder and the Seller shall account for
all funds. The Seller 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 Seller as servicer. The successor shall make
arrangements as it may deem appropriate to reimburse the Seller for amounts the
Seller actually expended as servicer pursuant to this Agreement that the
successor is entitled to retain hereunder and that would otherwise have been
recovered by the Seller pursuant to this Agreement but for the appointment of
the successor servicer.
SECTION 17. Financial Statements. The Seller understands that in connection
with the Purchaser's marketing of the Mortgage Loans, the Purchaser shall make
available to prospective purchasers the Seller's financial statements for the
most recently completed three fiscal years respecting which such statements are
available. The Seller also shall make available any comparable interim
statements to the extent any such statements have been prepared by the Seller
(and are available upon request to stockholders of the Seller or the public at
large). The Seller, if it has not already done so, agrees to furnish promptly to
the Purchaser copies of the statements specified above. The Seller also shall
make available information on its servicing performance with respect to mortgage
loans serviced for others, including delinquency ratios.
The Seller also agrees to allow access to knowledgeable financial,
accounting, origination and servicing officers of the Seller for the purpose of
answering questions asked by any prospective purchaser regarding recent
developments affecting the Seller, its loan origination or servicing practices
or the financial statements of the Seller.
SECTION 18. Mandatory Delivery; Grant of Security Interest. The sale and
delivery of each Mortgage Loan on or before the related Closing Date is
mandatory from and after the date of the execution of the related Confirmation,
it being specifically understood and agreed that each Mortgage Loan is unique
and identifiable on the date thereof and that an award of money damages would be
insufficient to compensate the Initial Purchaser for the losses and damages
incurred by the Initial Purchaser (including damages to prospective purchasers
of the Mortgage Loans) in the event of the Seller's failure to deliver each of
the related Mortgage Loans or one or more Mortgage Loans otherwise acceptable to
the Initial Purchaser on or before the related Closing Date. The Seller hereby
grants to the Initial Purchaser a lien on and a continuing security interest in
each Mortgage Loan and each document and instrument evidencing each such
Mortgage Loan to secure the performance by the Seller of its obligations
hereunder, and the
53
Seller agrees that it holds such Mortgage Loans in custody for the Initial
Purchaser subject to the Initial Purchaser's (i) right to reject any Mortgage
Loan under the terms of this Agreement and the related Confirmation, and (ii)
obligation to pay the related Purchase Price for the Mortgage Loans. 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 19. Notices. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given when received by
the other party at the address as follows:
(i) if to the Purchaser:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
With a copy to General Counsel at the same address
(ii) if to the Seller:
First Republic Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇
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
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 20. Severability Clause. Any part, provision, representation or
warranty of this Agreement that is prohibited or that 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 that 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.
54
SECTION 21. 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.
SECTION 22. Governing Law. The Agreement shall be construed in accordance
with the laws of the State of New York without regard to any conflicts of law
provisions 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.
SECTION 23. Intention of the Parties. It is the intention of the parties
that the Initial Purchaser is purchasing, and the Seller is selling, 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 Initial Purchaser shall have the right to review the
Mortgage Loans and the related Mortgage Loan 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 Initial Purchaser in the course of such
review.
SECTION 24. Successors and Assigns. 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. The Purchaser
may assign this Agreement to any Person to whom any Mortgage Loan is transferred
whether pursuant to a sale or financing and to any Person to whom the servicing
or master servicing of any Mortgage Loan is sold or transferred. Upon any such
assignment, the Person to whom such assignment is made shall succeed to all
rights and obligations of the Purchaser under this Agreement to the extent of
the related Mortgage Loan or Mortgage Loans and this Agreement, to the extent of
the related Mortgage Loan or Loans, shall be deemed to be a separate and
distinct Agreement between the Seller and such Purchaser, and a separate and
distinct Agreement between the Seller and each other Purchaser to, the extent of
the other related Mortgage Loan or Loans. This Agreement shall not be assigned,
pledged or hypothecated by the Seller to a third party without the consent of
the Purchaser, except in connection with any merger, consolidation or other
transaction permitted by Subsection 13.02.
SECTION 25. Waivers. 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 26. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
SECTION 27. 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;
55
(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) 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 28. Nonsolicitation. Each of the Seller and the Purchaser covenants
and agrees that it shall not take any action to solicit the refinancing of any
Mortgage Loan following the date hereof or provide information to any other
entity to solicit the refinancing of any Mortgage Loan. In addition, neither the
Purchaser nor any of its agents, affiliates, or assignees shall solicit any
Mortgagor for any other financial products or services. The foregoing shall not
preclude either party from engaging in solicitations to the general public by
newspaper, radio, television or other media which are not directed toward the
Mortgagors or from refinancing the Mortgage Loan of any Mortgagor who, without
solicitation, contacts such party to request the refinancing of the related
Mortgage Loan.
SECTION 29. 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.
SECTION 30. Further Agreements. The Seller and the Purchaser each agree to
execute and deliver to the other such reasonable and appropriate additional
documents, instruments or agreements as may be necessary or appropriate to
effectuate the purposes of this Agreement.
SECTION 31. Amendment. This Agreement may be amended only by written
agreement signed by the Seller and Purchaser hereunder.
SECTION 32. Force Majeure. The Seller and the Purchaser shall be excused
for the period of any delay in the performance of any obligations under this
Agreement (other than the payment of money) when prevented from performing such
obligations by cause or causes
56
beyond their reasonable control, including, without limitation, civil commotion,
war, invasions, rebellion, hostilities, military or usurped power, sabotage,
pestilence, riots, fire or other casualty or acts of God.
SECTION 33. Closing Documents Apply to Amended Agreement. Each signatory
hereto acknowledges and agrees that each Closing Document for each Closing Date
(including, without limitation, the Initial Closing Date) is effective with
respect to, and is otherwise applicable to, this Agreement (and as may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof).
SECTION 34. Third Party Beneficiary. For purposes of this Agreement,
including but not limited to Subsection 11.24 and Section 12A, any Master
Servicer shall be considered a third party beneficiary to this Agreement
entitled to all the rights and benefits accruing to any Master Servicer herein
as if it were a direct party to this Agreement.
[SIGNATURES CONTAINED ON THE FOLLOWING PAGE]
57
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.
FIRST REPUBLIC BANK (Seller)
By:
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK, USA
(Initial Purchaser)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT 1
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly elected
____________ of First Republic Bank, a _____________ (the "Seller"), and further
certify, on behalf of the Seller as follows:
1. Attached hereto as Attachment I are a true and correct copy of the
Articles of Incorporation and by-laws of the Seller as are in full force and
effect on the date hereof.
2. No proceedings looking toward merger, liquidation, dissolution or
bankruptcy of the Seller are pending or contemplated.
3. Each person who, as an officer or attorney-in-fact of the Seller, signed
(a) the Mortgage Loan Purchase and Servicing Agreement (the "Purchase
Agreement"), dated as of December 1, 2005, by and between the Seller and ▇▇▇▇▇▇▇
▇▇▇▇▇ Bank, USA (the "Purchaser"); (b) the Confirmation, dated ___________,
200_, between the Seller and the Purchaser (the "Confirmation"); and (c) 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 Purchase
Agreement and the Confirmation 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. Attached hereto as Attachment II is a true and correct copy of the
resolutions duly adopted by the board of directors of the Seller on
____________, 200_ (the "Resolutions") with respect to the authorization and
approval of the sale and servicing of the Mortgage Loans; said Resolutions have
not been amended, modified, annulled or revoked and are in full force and effect
on the date hereof.
5. Attached hereto as Attachment III are Certificates of Good Standing of
the Seller dated ____________, 200_. No event has occurred since ____________,
200_ which has affected the good standing of the Seller under the laws of the
States of Nevada, New York and California.
6. All of the representations and warranties of the Seller contained in
Subsections 7.01 and 7.02 of the Purchase Agreement were true and correct in all
material respects as of the date of the Purchase Agreement and are true and
correct in all material respects as of the date hereof.
7. The Seller has performed all of its duties and has satisfied all the
material conditions on its part to be performed or satisfied prior to the
related Closing Date pursuant to the Purchase Agreement and the related
Confirmation.
All capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the seal of
the Seller.
Dated: __________________
[Seal]
FIRST REPUBLIC BANK
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title: Vice President
I, _____________________________________, Secretary of the Seller, hereby
certify that _____________________ is the duly elected, qualified and acting
Vice President of the Seller and that the signature appearing above is his
genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated: __________________
[Seal]
FIRST REPUBLIC BANK
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title: [Assistant] Secretary
EXHIBIT 2
[FORM OF OPINION OF COUNSEL TO THE SELLER]
________________
(Date)
▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: [_________]
Re: Mortgage Loan Purchase and Servicing Agreement, dated as of
December 1, 2005
Gentlemen:
I have acted as counsel to First Republic Bank, a ____________________ (the
"Seller"), in connection with the sale of certain mortgage loans by the Seller
to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA (the "Purchaser") pursuant to that certain Mortgage
Loan Purchase and Servicing Agreement, dated as of December 1, 2005, between the
Seller and the Purchaser (the "Purchase Agreement") and the Confirmation, dated
_________, 200___, between the Seller and the Purchaser (the "Confirmation").
Capitalized terms not otherwise defined herein have the meanings set forth in
the Purchase Agreement.
In connection with rendering this opinion letter, I, or attorneys working
under my direction, have examined, among other things, originals, certified
copies or copies otherwise identified to my satisfaction as being true copies of
the following:
A. The Purchase Agreement;
B. The Confirmation;
C. The Seller's Articles of Incorporation and by-laws, as amended to
date; and
D. Resolutions adopted by the Board of Directors of the Seller with
specific reference to actions relating to the transactions covered by
this opinion (the "Board Resolutions").
For the purpose of rendering this opinion, I have made such documentary,
factual and legal examinations as I deemed necessary under the circumstances. As
to factual matters, I have relied upon statements, certificates and other
assurances of public officials and of officers and other representatives of the
Seller, and upon such other certificates as I deemed appropriate, which factual
matters have not been independently established or verified by me. I have also
assumed, among other things, the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
me as originals, and the conformity to original documents of all documents
submitted to me as copies and the authenticity of the originals of such copied
documents.
Ex 2-1
On the basis of and subject to the foregoing examination, and in reliance
thereon, and subject to the assumptions, qualifications, exceptions and
limitations expressed herein, I am of the opinion that:
1. The Seller has been duly incorporated and is validly existing and in
good standing under the laws of the State of Nevada with corporate power and
authority to own its properties and conduct its business as presently conducted
by it. The Seller has the corporate power and authority to service the Mortgage
Loans, and to execute, deliver, and perform its obligations under the Purchase
Agreement and the Confirmation (sometimes collectively, the "Agreements").
2. The Agreements have been duly and validly authorized, executed and
delivered by the Seller.
3. The Agreements constitute valid, legal and binding obligations of the
Seller, enforceable against the Seller in accordance with their respective
terms.
4. No consent, approval, authorization or order of any state or federal
court or government agency or body is required for the execution, delivery and
performance by the Seller of the Agreements, or the consummation o(pound) the
transactions contemplated by the Agreements, except for those consents,
approvals, authorizations or orders which previously have been obtained.
5. Neither the servicing of the Mortgage Loans by the Seller as provided in
the Purchase Agreement, nor the fulfillment of the terms of or the consummation
of any other transactions contemplated in the Agreements, will result in a
breach of any term or provision of the articles of incorporation or by-laws of
the Seller, or, to the best of my knowledge, will conflict with, result in a
breach or violation of, or constitute a default under, (i) the terms of any
indenture or other agreement or instrument to which the Seller is a party or by
which it is bound, (ii) any State of California or Nevada or federal statute or
regulation applicable to the Seller, or (iii) any order of any State of
California or Nevada or federal court, regulatory body, administrative agency or
governmental body having jurisdiction over the Seller, except in any such case
where the default, breach or violation would not have a material adverse effect
on the Seller or its ability to perform its obligations under the Agreements.
6. There is no action, suit, proceeding or investigation pending or, to the
best of my knowledge, threatened against the Seller which, in my judgment,
either in any one instance or in the aggregate, would draw into question the
validity of the Agreements or which would be likely to impair materially the
ability of the Seller to perform under the terms of the Agreements.
The opinions above are subject to the following additional assumptions,
exceptions, qualifications and limitations:
A. I have assumed that all parties to the Agreements other than the Seller
have all requisite power and authority to execute,. deliver and perform their
respective obligations under each of the Agreements, and that the Agreements
have been duly authorized by all necessary corporate action on the part of such
parties, have been executed and delivered by such parties and constitute the
legal, valid and binding obligations of such parties.
Ex 2-2
B. My opinion expressed in paragraph 3 above is subject to the
qualifications that (i) the enforceability of the Agreements may be limited by
the effect of laws relating to (1) bankruptcy, reorganization, insolvency,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, including, without limitation, the effect of
statutory or other laws regarding fraudulent conveyances or preferential
transfers, and (2) general principles of equity upon the specific enforceability
of any of the remedies, covenants or other provisions of the Agreements and upon
the availability of injunctive relief or other equitable remedies and the
application of principles of equity (regardless of whether such enforceability
is considered in a proceeding in. equity or at law) as such principles relate
to, limit or affect the enforcement of creditors' rights generally and the
discretion of the court before which any proceeding for such enforcement may be
brought; and (ii) I express no opinion herein with respect to the validity,
legality, binding effect or enforceability of (a) provisions for indemnification
in the Agreements to the extent such provisions may be held to be unenforceable
as contrary to public policy or (b) Section 18 of the Purchase Agreement.
C. I have assumed, without independent check or certification, that there
are no agreements or understandings among the Seller, the Purchaser and any
other party which would expand, modify or otherwise affect the terms of the
documents described herein or the respective rights or obligations of the
parties thereunder.
I am admitted to practice in the State of California, and I render no
opinion herein as to matters involving the laws of any jurisdiction other than
the State of California and the Federal laws of the United States of America.
Very truly yours,
Ex 2-3
EXHIBIT 3
SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
__________________________, hereby relinquishes any and all right, title
and interest it may have in and to the Mortgage Loans described in Exhibit A
attached hereto upon purchase thereof by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA from the Seller
named below pursuant to that certain Mortgage Loan Purchase and Servicing
Agreement, dated as of December 1, 2005, as of the date and time of receipt by
____________________________ of $_____________ for such Mortgage Loans (the
"Date and Time of Sale"), and certifies that all notes, mortgages, assignments
and other documents in its possession relating to such Mortgage Loans have been
delivered and released to the Seller named below or its designees as of the Date
and Time of Sale.
Name and Address of Financial Institution
------------------------------------
(Name)
------------------------------------
(Address)
By:
---------------------------------
Ex 3-1
II. Certification of Release
The Seller named below hereby certifies to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA that, as
of the Date and Time of Sale of the above mentioned Mortgage Loans to ▇▇▇▇▇▇▇
▇▇▇▇▇ Bank, USA, the security interests in the Mortgage Loans released by the
above named corporation comprise all security interests relating to or affecting
any and all such Mortgage Loans. The Seller warrants that, as of such time,
there are and will be no other security interests affecting any or all of such
Mortgage Loans.
FIRST REPUBLIC BANK
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Ex 3-2
EXHIBIT 4
ASSIGNMENT AND CONVEYANCE
On this _________ day of ______________, 200 __, First Republic Bank
("Seller") as the Seller under that certain Mortgage Loan Purchase and Servicing
Agreement, dated as of December 1, 2005 (the "Agreement") does hereby sell,
transfer, assign, set over and convey to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA as Purchaser
under the Agreement, without recourse, but subject to the terms of the
Agreement, all rights, title and interest of the Seller in and to the Mortgage
Loans listed on the Mortgage Loan Schedule attached hereto, together with the
related Mortgage Files and all rights and obligations arising, under the
documents contained therein. Pursuant to Subsection 6.03 of the Agreement, the
Seller has delivered to the Custodian the documents for each Mortgage Loan to be
purchased as set forth in the Agreement. The contents of each related Servicing
File required to be retained by the Seller to service the Mortgage Loans
pursuant to the Agreement and thus not delivered to the Purchaser are and shall
be held in trust by the Seller for the benefit of the Purchaser as the owner
thereof. The Seller's possession of any portion of each such Servicing File is
at the will of the Purchaser for the sole purpose of facilitating servicing of
the related Mortgage Loan pursuant to the Agreement, and such retention and
possession by the Seller shall be in a custodial capacity only. The ownership of
each Mortgage Note, each Mortgage, and the contents of the Mortgage File and
Servicing File is vested 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 Seller shall immediately vest in the Purchaser and
shall be retained and maintained, in trust, by the Seller at the will of the
Purchaser in such custodial capacity only.
The Seller confirms to the Purchaser that the representation and warranties
set forth in Subsections 7.01 and 7.02 of the Agreement are true and correct as
of the date hereof, and that all statements made in the Seller's Officer's
Certificates and all Attachments thereto remain complete, true and correct in
all respects as of the date hereof.
Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.
FIRST REPUBLIC BANK
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Ex 4-1
EXHIBIT 5
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 which shall be retained by the Seller or delivered to the Custodian:
1. Mortgage Loan Documents.
2. Residential loan application.
3. Mortgage Loan closing statement.
4. Verification of employment and income.
5. Verification of acceptable evidence of source and amount of downpayment.
6. Credit report on Mortgagor.
7. Residential appraisal report.
8. Photograph of the Mortgaged Property.
9. Survey of the Mortgaged Property.
10. 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.
11. All required disclosure statements and statement of Mortgagor
confirming receipt thereof.
12. If available, termite report, structural engineer's report, water
potability and septic certification.
13. Sales contract for the purchase and sale of the Mortgaged Property, if
applicable.
14. Hazard insurance policy.
15. The original Primary Insurance Policy, if any, or the electronic
certificate number of any such policy and the identity of the named mortgagee.
16. Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, 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.
Ex 5-1
17. Amortization schedule, if available.
18. Payment history for Mortgage Loans that have been closed for more than
90 days.
19. With respect to each Cooperative Loan, a project file which shall
contain an offering plan and any additional information collected by the Seller
during its review of the Project
Ex 5-2
EXHIBIT 6
MORTGAGE LOAN DOCUMENTS
The Mortgage Loan Documents consist of the following:
(a) the original Mortgage Note bearing all intervening endorsements necessary
to show a complete chain of endorsements from the original payee to the
applicable Seller, endorsed in blank, "Pay to the order of ______________,
without recourse", and, if previously endorsed, signed in the name of the
last endorsee by a duly qualified officer of the last endorsee. If the
Mortgage Loan was acquired by the last endorsee in a merger, the
endorsement must be by "[name of last endorsee], successor by merger to
[name of predecessor]". If the Mortgage Loan was acquired or originated by
the last endorsee while doing business under another name, the endorsement
must be by "[name of last endorsee], formerly known as [previous name]";
(b) with respect to each Mortgage Loan that is not a MERS Mortgage Loan or a
Cooperative Loan, the original Assignment of Mortgage for each Mortgage
Loan, in form and substance acceptable for recording. The Mortgage shall be
assigned, with assignee's name left blank. If the Mortgage Loan was
acquired by the last assignee in a merger, the Assignment of Mortgage must
be made by "[name of last assignee], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the last
assignee while doing business under another name, the Assignment of
Mortgage must be by "[name of last assignee], formerly known as [previous
name]";
(c) the original of each guarantee executed in connection with the Mortgage
Note, if any;
(d) for each Mortgage Loan that is not a MERS Mortgage Loan or a Cooperative
Loan, the original recorded Mortgage with evidence of recording thereon,
and in the case of each MERS Mortgage Loan, the original Mortgage, noting
the presence of the MIN for that Mortgage Loan and either language
indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a
MOM Loan, or if such Mortgage Loan was not a MOM Loan at origination, the
original Mortgage and the assignment to MERS, with evidence of recording
thereon. If in connection with any Mortgage Loan, the applicable Seller has
not delivered or caused to be delivered the original Mortgage with evidence
of recording thereon on or prior to the related Closing Date because of a
delay caused by the public recording office where such Mortgage has been
delivered for recordation or because such Mortgage has been lost or because
such public recording office retains the original recorded Mortgage, the
applicable Seller shall deliver or cause to be delivered to the Custodian,
(i) in the case of a delay caused by the public recording office, a copy of
such Mortgage certified by the applicable Seller, escrow agent, title
insurer or closing attorney to be a true and complete copy of the original
recorded Mortgage as promptly as possible upon receipt thereof and,
Ex 6-1
in any event, within one hundred twenty (120) days following the related
Closing Date and (ii) in the case where a public recording office retains
the original recorded Mortgage or in the case where a Mortgage is lost
after recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete copy of
the original recorded Mortgage;
(e) originals of each assumption, substitution, modification, consolidation or
extension agreement, if any;
(f) except in the event that the original Mortgage is made to MFRS or the
Mortgage Loan is a Cooperative Loan, the originals of all intervening
assignments of mortgage with evidence of recording thereon evidencing a
complete chain of ownership from the originator of the Mortgage Loan to the
last assignee (or to MFRS, if the Mortgage Loan is registered on the MERS
System), or if any such intervening assignment of mortgage has not been
returned from the applicable public recording office or has been lost or if
such public recording office retains the original recorded intervening
assignments of mortgage, a photocopy of such intervening assignment of
mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the applicable Seller, escrow
agent, closing attorney or the title insurer insuring the Mortgage stating
that such intervening assignment of mortgage has been delivered to the
appropriate public recording office for recordation and that such original
recorded intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording office
to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the Custodian upon
receipt thereof by the party delivering the Officer's Certificate or by the
applicable Seller and, in any event, within seven hundred twenty (720) days
following the related Closing Date; or (ii) in the case of an intervening
assignment of mortgage where a public recording office retains the original
recorded intervening assignment of mortgage or in the case where an
intervening assignment of mortgage is lost after recordation in a public
recording office, a copy of such intervening assignment of mortgage with
recording information thereon certified by such public recording office to
be a true and complete copy of the original recorded intervening assignment
of mortgage;
(g) if the Mortgage Note, the Security Instrument, any Assignment of Mortgage
or any other related document has been signed by a Person on behalf of the
Mortgagor, the original power of attorney or other instrument that
authorized and empowered such Person to sign;
(h) the original lender's title insurance policy (or a marked title insurance
commitment, in the event that an original lender's title insurance policy
has not yet been issued) in the form of an ALTA mortgage title insurance
policy, containing each of the endorsements required by ▇▇▇▇▇▇ ▇▇▇ and
insuring the
Ex 6-2
Owner and its successors and assigns as to the first priority lien of the
Mortgage in the original principal amount of the Mortgage Loan;
(i) the original of any security agreement, chattel mortgage or equivalent
document executed in connection with the Security Instrument, if any;
(j) with respect to each Cooperative Loan,
(i) the original Assignment of the Note and Pledge Agreement for the
Cooperative Loan. The Assignment of Pledge Agreement shall be assigned
with assignee's name left blank. If the Cooperative Loan was acquired
by the last endorsee in a merger, the Assignment of the Pledge
Agreement must be made by "[last endorsee], successor by merger to
[name of predecessor]". If the Cooperative Loan was acquired or
originated by the last endorsee while doing business under another
name, the Assignment of Mortgage must be by "[last endorsee], formerly
known as [previous name]";
(ii) the original Stock Certificate and related Stock Power, in blank,
executed by the Mortgagor with such signature guaranteed and original
Stock Power, in blank executed by the last endorsee;
(iii) the original Proprietary Lease and the Assignment of the Proprietary
Lease executed by the Mortgagor in blank or if the Proprietary Lease
has been assigned by the Mortgagor to the last endorsee, then the last
endorsee must execute an assignment of the Assignment of the
Proprietary Lease in blank;
(iv) the original Recognition Agreement;
(v) the recorded county Financing Statements and Financing Statement
Changes;
(vi) an original Estoppel Letter and/or Consent; and
(vii) the original Cooperative Lien Search.
Ex 6-3
EXHIBIT 7
CUSTODIAL ACCOUNT LETTER AGREEMENT
______________200_
To: _____________________
_____________________
(the "Depository")
As Seller under the Mortgage Loan Purchase and Servicing Agreement, dated
as of December 1, 2004, we hereby authorize and request you to establish an
account, as a Custodial Account, to be designated as "First Republic Bank in
trust for the Purchaser and various Mortgagors, Fixed Rate and Adjustable Rate
Mortgage Loans". All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Seller. 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.
FIRST REPUBLIC BANK
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Ex 7-1
The undersigned, as Depository, hereby certifies that the above-described
account has been established under Account Number _______________ at the office
of the Depository indicated above, and agrees to honor withdrawals on such
account as provided above. The full amount deposited at any time in the account
will be insured to the extent legally permitted by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF").
----------------------------------------
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Ex 7-2
EXHIBIT 8
ESCROW ACCOUNT LETTER AGREEMENT
______________, ____, 200__
To: __________________
__________________
(the "Depository")
As Seller under the Mortgage Loan Purchase and Servicing Agreement, dated
as of December 1, 2004, we hereby authorize and request you to establish an
account, as an Escrow Account, to be designated as "First Republic Bank in trust
for the Purchaser and various Mortgagors, Fixed Rate and Adjustable Rate
Mortgage Loans". All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Seller. 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.
FIRST REPUBLIC BANK
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Ex 8-1
The undersigned, as Depository, hereby certifies that the above-described
account has been established under Account Number at the office of the
Depository indicated above, and agrees to honor withdrawals on such account as
provided above. The fall amount deposited at any time in the account will be
insured to the extent legally permitted by the Federal Deposit Insurance
Corporation through the Bank Insurance Fund ("BIF") or the Savings Association
Insurance Fund ("SAIF").
----------------------------------------
Depository
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
Ex 8-2
EXHIBIT 9
SERVICING ADDENDUM
Section 11.01 Seller to Act as Servicer.
The Seller, as independent contract servicer, shall service and administer
the Mortgage Loans in accordance with this Agreement 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 Seller may deem
necessary or desirable and consistent with the terms of this Agreement.
Consistent with the terms of this Agreement, the Seller 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 Seller's reasonable and prudent determination such waiver,
modification, postponement or indulgence is not materially adverse to the
Purchaser; provided, however, that the Seller shall not permit any modification
with respect to any Mortgage Loan that would change the Mortgage Interest Rate,
defer or forgive the payment thereof or of any principal or interest payments,
reduce the outstanding principal amount (except for actual payments of
principal), make additional advances of additional principal or extend the final
maturity date on such Mortgage Loan. Without limiting the generality of the
foregoing, the Seller 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 Property. If reasonably required by the Seller, the
Purchaser shall furnish the Seller with any powers of attorney and other
documents necessary or appropriate to enable the Seller to carry out its
servicing and administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Seller 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 mortgage servicing
practices of prudent lending institutions and the Purchaser's reliance on the
Seller.
The Seller shall cause to be maintained for each Cooperative Loan a copy of
the Financing Statements and shall file any such Financing Statements and
continuation statements as necessary, in accordance with the Uniform Commercial
Code applicable in the jurisdiction in which the related Cooperative Apartment
is located, to perfect and protect the security interest and lien of the
Purchaser.
Section 11.02 Collection of Mortgage Loan Payments.
Continuously from the date hereof until the principal and interest on all
Mortgage Loans are paid in full, the Seller shall proceed diligently 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 any related Primary Insurance Policy,
follow such collection procedures as it follows with respect to
Ex 9-1
mortgage loans comparable to the Mortgage Loans and held for its own account.
Further, the Seller shall take special 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 11.03 Realization Upon Defaulted Mortgage Loans.
(a) The Seller shall use its best efforts, consistent with the procedures
that the Seller would use in servicing loans for its own account, to foreclose
upon or otherwise comparably convert the ownership of such Mortgaged Properties
as to which the related Mortgage Loans were, and are continuing, in default and
as to which no satisfactory arrangements can be made for collection of
delinquent payments pursuant to Section 11.01. The Seller shall use its best
efforts to realize upon defaulted Mortgage Loans in such a manner as will
maximize the receipt of principal and interest by the Purchaser, 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 Seller shall not be required to expend
its own funds toward the restoration of such property in excess of $2,000 unless
it shall determine in its discretion (i) that such restoration will increase the
proceeds of liquidation of the related Mortgage Loan to Purchaser after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by the Seller through Insurance Proceeds or Liquidation Proceeds
from the related Mortgaged Property, as contemplated in Section 11.05. In the
event that any payment due under any Mortgage Loan 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 Seller shall take such action as it
shall deem to be in the best interest of the Purchaser. In the event that any
payment due under any Mortgage Loan remains delinquent for a period of 90 days
or more, the Seller shall commence foreclosure proceedings, provided that prior
to commencing foreclosure proceedings, the Seller shall notify the Purchaser in
writing of the Seller's intention to do so, and the Seller shall not commence
foreclosure proceedings if the Purchaser objects to such action within ten (10)
Business Days of receiving such notice. The Seller shall notify the Purchaser in
writing of the commencement of foreclosure proceedings. In such connection, the
Seller shall be responsible for all costs and expenses incurred by it in any
such proceedings; provided, however, that it shall be entitled to reimbursement
thereof from the related Mortgaged Property, as contemplated in Section 11.05.
(b) Notwithstanding the foregoing provisions of this Section 11.03, with
respect to any Mortgage Loan as to which the Seller has received actual notice
of, or has actual knowledge of, the presence of any toxic or hazardous substance
on the related Mortgaged Property the Seller shall not either (i) obtain title
to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action,
with respect to, such Mortgaged Property if, as a result of any such action, the
Purchaser would be considered to hold title to, to be a mortgagee-in-possession
of, or to be an owner or operator of such Mortgaged Property within the meaning
of the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Seller has
also previously determined, based on its reasonable judgment and a prudent
Ex 9-2
report prepared by a Person who regularly conducts environmental audits using
customary industry standards, that:
(1) such Mortgaged Property is in compliance with applicable environmental
laws or, if not, that it would be in the best economic interest of the
Purchaser to take such actions as are necessary to bring the Mortgaged
Property into compliance therewith; and
(2) there are no circumstances present at such Mortgaged Property relating
to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials
for which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such
action could be required, that it would be in the best economic
interest of the Purchaser to take such actions with respect to the
affected Mortgaged Property.
The cost of the environmental audit report contemplated by this Section
11.03 shall be advanced by the Seller, subject to the Seller's right to be
reimbursed therefor from the Custodial Account as provided in Section
11.05(vii).
If the Seller determines, as described above, that it is in the best
economic interest of the Purchaser to take such actions as are necessary to
bring any such Mortgaged Property into compliance with applicable environmental
laws, or to take such action with respect to the containment, clean-up or
remediation of hazardous substances, hazardous materials, hazardous wastes; or
petroleum-based materials affecting any such Mortgaged Property, then the Seller
shall take such action as it deems to be in the best economic interest of the
Purchaser. The cost of any such compliance, containment, cleanup or remediation
shall be advanced by the Seller, subject to the Seller's right to be reimbursed
therefor from the Custodial Account as provided in Section 11.05(vi).
(c) Proceeds received in connection with any Final Recovery Determination,
as well as any recovery resulting from a partial collection of Insurance
Proceeds or Liquidation Proceeds in respect of any Mortgage Loan, will be
applied in the following order of priority: first, to reimburse the Seller for
any related unreimbursed Servicing Advances, pursuant to Section 11.05(iii);
second, to accrued and unpaid interest on the Mortgage Loan, to the date of the
Final Recovery Determination, or to the Due Date prior to the Distribution Date
on which such amounts are to be distributed if not in connection with a Final
Recovery Determination; and third, as a recovery of principal of the Mortgage
Loan. If the amount of the recovery so allocated to interest is less than the
full amount of accrued and unpaid interest due on such Mortgage Loan, the amount
of such recovery will be allocated by the Seller as follows: first, to unpaid
Servicing Fees; and second, to the balance of the interest then due and owing.
Section 11.04 Establishment of Custodial Accounts; Deposits in Custodial
Accounts.
The Seller 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
Ex 9-3
establish and maintain one or more Custodial Accounts, in the form of time
deposit or demand accounts. The creation of any Custodial Account shall be
evidenced by a Custodial Account Letter Agreement in the form of Exhibit 7.
The Seller shall deposit in the Custodial Account on a daily basis, and
retain therein the following payments and collections received by it subsequent
to the Cut-off Date, or received by it prior to the Cut-off Date but allocable
to a period subsequent thereto, other than in respect of principal and interest
on the Mortgage Loans due on or before the Cut-off Date:
(i) all payments on account of principal on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be deposited
pursuant to Sections 11.10 and 11.11, 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
Seller's normal servicing procedures, the loan documents or applicable
law;
(v) all Condemnation Proceeds affecting any Mortgaged Property that are
not released to the Mortgagor in accordance with the Seller's normal
servicing procedures, the loan documents or applicable law;
(vi) all Monthly Advances;
(vii) all proceeds of any Mortgage Loan repurchased in accordance with
Subsections 7.03 and 7.04 and all amounts required to be deposited by
the Seller in connection with shortfalls in principal amount of
Qualified Substitute Mortgage Loans pursuant to Subsection 7.03;
(viii) any amounts required to be deposited by the Seller pursuant to
Section 11.11 in connection with the deductible clause in any blanket
hazard insurance policy. Such deposit shall be made from the Seller's
own funds, without reimbursement therefor;
(ix) any amounts required to be deposited by the Seller in connection with
any REO Property pursuant to Section 11.13;
(x) any amounts required to be deposited in the Custodial Account pursuant
to Sections 11.19 or 11.20; and
(xi) with respect to each Principal Prepayment in full, an amount (to be
paid by the Seller out of its own funds without reimbursement
therefor) which, when added to all amounts allocable to interest
received in connection with such Principal Prepayment, equals one
month's interest on the amount of principal so prepaid at the Mortgage
Interest Rate, provided, however, that in no event shall the
Ex 9-4
aggregate of deposits made by the Seller pursuant to this clause (xi)
exceed the aggregate amount of the Seller's servicing compensation for
all Mortgage Loans in the calendar month in which such deposits are
required.
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, Prepayment
Charges and assumption fees, to the extent permitted by Section 11.22, need not
be deposited by the Seller in the Custodial Account. Such Custodial Account
shall be an Eligible Account. Any interest or earnings on funds deposited in the
Custodial Account by the depository institution shall accrue to the benefit of
the Seller and the Seller shall be entitled to retain and withdraw such interest
from the Custodial Account pursuant to Section 11.05(iv). The Seller shall give
notice to the Purchaser of the location of the Custodial Account when
established and prior to any change thereof.
Section 11.05 Permitted Withdrawals From the Custodial Account.
The Seller may, from time to time, withdraw from the Custodial Account for
the following purposes:
(i) to make distributions to the Purchaser in the amounts and in the
manner provided for in Section 11.14;
(ii) to reimburse itself for Monthly Advances, the Seller'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) respecting which any
such advance was made it being understood that, in the case of such
reimbursement, the Seller's right thereto shall be prior to the rights
of Purchaser, except that, where the Seller is required to repurchase
a Mortgage Loan, pursuant to Subsection 7.03, the Seller's right to
such reimbursement shall be subsequent to the payment to the Purchaser
of the Repurchase Price pursuant to Subsection 7.03, and all other
amounts required to be paid to the Purchaser with respect to such
Mortgage Loans;
(iii) to reimburse itself for unreimbursed Servicing Advances, the Seller'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 Seller from the Mortgagor or
otherwise relating to the Mortgage Loan, it being understood that, in
the case of such reimbursement, the Seller's right thereto shall be
prior to the rights of the Purchaser, except that, where the Seller is
required to repurchase a Mortgage Loan, pursuant to Subsection 7.03,
the Seller's right to such reimbursement shall be subsequent to the
payment to the Purchaser of the Repurchase Price pursuant to
Subsection 7.03 and all other amounts required to be paid to the
Purchaser with respect to such Mortgage Loans;
(iv) to pay to itself pursuant to Section 11.22 as servicing compensation
(a) any interest earned on funds in the Custodial Account (all such
interest to be
Ex 9-5
withdrawn monthly not later than each Distribution Date), and (b) the
Servicing Fee from that portion of any payment or recovery as to
interest on a particular Mortgage Loan;
(v) to pay to itself with respect to each Mortgage Loan that has been
repurchased pursuant to Subsection 7.03 all amounts received thereon
and not required to be distributed as of the date on which the related
Repurchase Price is determined;
(vi) to reimburse the Seller for any Monthly Advance previously made which
the Seller has determined to be a Nonrecoverable Monthly Advance;
(vii) to pay, or to reimburse the Seller for advances in respect of,
expenses incurred in connection with any Mortgage Loan pursuant to
Section 11.03(b), but only to the extent of amounts received in
respect of the Mortgage Loans to which such expense is attributable;
(viii) to clear and terminate the Custodial Account on the termination of
this Agreement.
The Seller shall keep and maintain separate accounting, on a Mortgage Loan
by Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Custodial Account pursuant to such subclauses (ii) - (vii) above. The Seller
shall provide written notification in the form of an Officers' Certificate to
the Purchaser, on or prior to the next succeeding Distribution Date, upon making
any withdrawals from the Custodial Account pursuant to subclause (vi) above.
Section 11.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts.
The Seller shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan that 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, in the form of time deposit or demand
accounts. The creation of any Escrow Account shall be evidenced by Escrow
Account Letter Agreement in the form of Exhibit 8.
The Seller shall deposit in the Escrow Account or Accounts on a daily
basis, and retain therein, (i) all Escrow Payments collected on account of the
Mortgage Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement, and (ii) all Insurance Proceeds that
are to be applied to the restoration or repair of any Mortgaged Property. The
Seller shall make withdrawals therefrom only to effect such payments as are
required under this Agreement, and for such other purposes as shall be as set
forth or in accordance with Section 11.08. The Seller 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 and, to the extent required by law, the Seller 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 11.07 Permitted Withdrawals From Escrow Account.
Ex 9-6
Withdrawals from the Escrow Account may be made by the Seller (i) to effect
timely payments of ground rents, taxes, assessments, water rates, hazard
insurance premiums, Primary Insurance Policy premiums, if applicable, and
comparable items, (ii) to reimburse the Seller for any Servicing Advance made by
the Seller 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 accordance with the terms of this Agreement, (v) for application to
restoration or repair of the Mortgaged Property, (vi) to pay to the Seller, or
to the Mortgagor to the extent required by law, any interest paid on the funds
deposited in the Escrow Account, or (vii) to clear and terminate the Escrow
Account on the termination of this Agreement.
Section 11.08 Payment of Taxes, Insurance and Other Charges; Maintenance of
Primary Insurance Policies; Collections Thereunder.
With respect to each Mortgage Loan, the Seller shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water rates
and other charges that are or may become a lien upon the Mortgaged Property and
the status of Primary 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 insurance 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 Seller in amounts sufficient for such purposes, as allowed
under the terms of the Mortgage and applicable law. To the extent that the
Mortgage does not provide for Escrow Payments, the Seller shall determine that
any such payments are made by the Mortgagor at the time they first become due.
The Seller 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 Seller shall maintain in full force and effect, a Primary Insurance
Policy, issued by a Qualified Insurer, with respect to each Mortgage Loan for
which such coverage is required. Such coverage shall be maintained until the
Loan-to-Value Ratio of the related Mortgage Loan is reduced to that amount for
which ▇▇▇▇▇▇ ▇▇▇ no longer requires such insurance to be maintained. The Seller
will not cancel or refuse to renew any Primary Insurance Policy in effect on the
Closing Date that is required to be kept in force under this Agreement unless a
replacement Primary Insurance Policy for such cancelled or non-renewed policy is
obtained from and maintained with a Qualified Insurer. The Seller shall not take
any action that would result in non-coverage under any applicable Primary
Insurance Policy of any loss that, but for the actions of the Seller, would have
been covered thereunder. In connection with any assumption or substitution
agreement entered into or to be entered into pursuant to Section 11.19, the
Seller shall promptly notify the insurer under the related Primary Insurance
Policy, if any, of such assumption or substitution of liability in accordance
with the terms of such policy and shall take all actions that may be required by
such insurer as a condition to the continuation of coverage under the Primary
Insurance Policy. If such Primary Insurance Policy is terminated as a result of
Ex 9-7
such assumption or substitution of liability, the Seller shall obtain a
replacement Primary Insurance Policy as provided above.
In connection with its activities as servicer, the Seller agrees to prepare
and present, on behalf of itself, and the Purchaser, claims to the insurer under
any Primary Insurance Policy in a timely fashion in accordance with the terms of
such policies and, in this regard, to take such action as shall be necessary to
permit recovery under any Primary Insurance Policy respecting a defaulted
Mortgage Loan. Pursuant to Section 11.04, any amounts collected by the Seller
under any Primary Insurance Policy shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Section 11.05.
Section 11.09 Transfer of Accounts.
The Seller may transfer the Custodial Account or the Escrow Account to a
different depository institution from time to time. Such transfer shall be made
only after delivering written notice of the transfer to the Purchaser together
with a fully executed original of the Custodial Account Letter Agreement or
Escrow Account Letter Agreement, as the case may be. In any case, the Custodial
Account and Escrow Account shall be Eligible Accounts.
Section 11.10 Maintenance of Hazard Insurance.
The Seller 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 that is at least equal to the lesser
of (i) the amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost basis, (ii)
the outstanding principal balance of the Mortgage Loan, or (iii) the maximum
insurable value of the Mortgaged Property. If the Mortgaged Property is in an
area identified on a Flood Hazard Boundary Map or Flood Insurance Rate Map
issued by the Flood Emergency Management Agency as having special flood hazards
and such flood insurance has been made available, the Seller 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 lesser
of (i) the outstanding principal balance of the Mortgage Loan (plus any
additional amount required to prevent the Mortgagor from being deemed a
co-insurer) or (ii) the maximum amount of insurance that is available under the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, as amended. The Seller also shall maintain on any REO Property, fire and
hazard insurance with extended coverage in an amount which is at least equal to
the lesser of (i) the maximum insurable value of the improvements which are a
part of such property and (ii) the outstanding principal balance of the related
Mortgage Loan (plus any additional amount required to prevent the Mortgagor from
being deemed a co-insurer) at the time it became an REO Property plus accrued
interest at the Mortgage Interest Rate and related Servicing Advances, liability
insurance and, to the extent required and available under the National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of 1973, as amended,
flood insurance in an amount as provided above. Pursuant to Section 11.04, any
amounts collected by the Seller 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 Seller's normal servicing procedures, shall be deposited in the
Custodial
Ex 9-8
Account, subject to withdrawal pursuant to Section 11.05. Any cost incurred by
the Seller in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Purchaser, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake, or
other additional insurance need be required by the Seller of the Mortgagor or
maintained on property acquired in respect of the Mortgage Loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. All such policies shall be
endorsed with standard mortgagee clauses with loss payable to the Seller, or
upon request to the Purchaser, and shall provide for at least thirty days prior
written notice to the Seller of any cancellation, reduction in the amount of, or
material change in, coverage. The Seller shall not interfere with the
Mortgagor's freedom of choice in selecting either its insurance carrier or its
agent, provided, however, that the Seller shall not accept any such insurance
policies from insurance companies unless such companies currently reflect a
General Policy Rating of A:VI or better in Best's Key Rating Guide and are
licensed to do business in the state wherein the property subject to the policy
is located.
Section 11.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Seller 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 11.10 and otherwise complies
with all other requirements of Section 11.10, the Seller shall conclusively be
deemed to have satisfied its obligations as set forth in Section 11.10, it being
understood and agreed that such policy may contain a deductible clause, in which
case the Seller shall, in the event that there shall not have been maintained on
the related Mortgaged Property or REO Property a policy complying with Section
11.10, and there shall have been one or more losses that 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 Seller
agrees to prepare and present, on behalf of the Purchaser, claims under any such
blanket policy in a timely fashion in accordance with the terms of such policy.
Upon request of the Purchaser, the Seller shall cause to be delivered to the
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 days prior written notice to the Purchaser.
Section 11.12 Fidelity Bond, Errors and Omissions Insurance.
The Seller 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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac on all
officers, employees or other persons acting in any capacity with regard to the
Mortgage Loans 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
Seller against losses, including forgery, theft, embezzlement, fraud, errors and
omissions and negligent acts of such persons. Such fidelity bond shall also
protect and insure the Seller against losses in connection with the failure to
maintain any insurance policies required pursuant to this
Ex 9-9
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 11.12 requiring the fidelity bond and errors and omissions
insurance shall diminish or relieve the Seller from its duties and obligations
as set forth in this Agreement. The minimum coverage under any such bond and
insurance policy shall be at least equal to the corresponding amounts required
by ▇▇▇▇▇▇ Mae in the ▇▇▇▇▇▇ ▇▇▇ Servicing Guide or by ▇▇▇▇▇▇▇ Mac in the ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇' and Servicers' Guide. Upon request of the Purchaser, the Seller
shall cause to be delivered to the Purchaser a certified true copy of the
fidelity bond and insurance policy and 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 Purchaser.
Section 11.13 Title, Management and Disposition of REO Property.
In the event that title to the 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 person designated by the Purchaser, or in the
event such person 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 Seller from an
attorney duly licensed to practice law in the state where the REO Property is
located. Any Person or Persons holding such title other than the Purchaser shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Purchaser.
The Seller shall either itself or through an agent selected by the Seller,
manage, conserve, protect and operate each REO Property (and may temporarily
rent the same) 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. If a
REMIC election is or is to be made with respect to the arrangement under which
the Mortgage Loans and any REO Property are held, the Seller shall manage,
conserve, protect and operate each REO Property in a manner that does not cause
such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code or result in the receipt by such REMIC
of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" within
the meaning of Section 860G(c)(2) of the Code. The Seller 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 annually thereafter. The
Seller shall make or cause to be made a written report of each such inspection.
Such reports shall be retained in the Mortgage File and copies thereof shall be
forwarded by the Seller to the Purchaser. The Seller shall use its best efforts
to dispose of the REO Property as soon as possible and shall sell such REO
Property in any event within one year after title has been taken to such REO
Property, unless the Seller determines, and gives appropriate notice to the
Purchaser, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than one year is necessary to sell any REO
property, (i) the Seller 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 Seller as mortgagee, and
a separate servicing agreement between the Seller and the Purchaser shall be
Ex 9-10
entered into with respect to such purchase money mortgage. Notwithstanding the
foregoing, if a REMIC election is made with respect to the arrangement under
which the Mortgage Loans and the REO Property are held, such REO Property shall
be disposed of within two years or such other period as maybe permitted under
Section 860G(a)(8) of the Code.
With respect to each REO Property, the Seller shall segregate and hold all
funds collected and received in connection with the operation of the REO
Property separate and apart from its own funds or general assets and shall
establish and maintain a separate REO Account for each REO Property in the form
of a non-interest bearing demand account, unless an Opinion of Counsel is
obtained by the Seller to the effect that the classification as a grantor trust
or REMIC for federal income tax purposes of the arrangement under which the
Mortgage Loans and the REO Property is held will not be adversely affected by
holding such funds in another manner. Each REO Account shall be established with
the Seller or, with the prior consent of the Purchaser, with a commercial bank,
a mutual savings bank or a savings association. The creation of any REO Account
shall be evidenced by a letter agreement substantially in the form of the
Custodial Account Letter Agreement attached as Exhibit 7 hereto. An original of
such letter agreement shall be furnished to any Purchaser upon request.
The Seller shall deposit or cause to be deposited, on a daily basis in each
REO 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 11.10 hereof and the fees of any managing
agent acting on behalf of the Seller. The Seller shall not be entitled to retain
interest paid or other earnings, if any, on funds deposited in such REO Account.
On or before each Determination Date, the Seller shall withdraw from each REO
Account and deposit into the Custodial Account the net income from the REO
Property on deposit in the REO Account.
The Seller shall furnish to the Purchaser on each Distribution 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 Purchaser shall reasonably request.
Each REO Disposition shall be carried out by the Seller at such price and
upon such terms and conditions as the Seller deems to be in the best interest of
the Purchaser only with the prior written consent of the Purchaser. If as of the
date title to any REO Property was acquired by the Seller there were outstanding
unreimbursed Servicing Advances with respect to the REO Property, the Seller,
upon an REO Disposition of such REO Property, shall be entitled to reimbursement
for any related unreimbursed Servicing Advances from proceeds received in
connection with such REO Disposition. The proceeds from the REO Disposition, net
of any payment to the Seller as provided above, shall be deposited in the REO
Account and shall be transferred to the Custodial Account on the Determination
Date in the month following receipt thereof for distribution on the succeeding
Distribution Date in accordance with Section 11.14.
Section 11.14 Distributions.
Ex 9-11
On each Distribution Date, the Seller shall distribute to the Purchaser all
amounts credited to the Custodial Account as of the close of business on the
preceding Determination Date, net of charges against or withdrawals from the
Custodial Account pursuant to Section 11.05; plus (ii) all Monthly Advances, if
any, which the Seller is obligated to distribute pursuant to Section 11.21,
minus (iii) any amounts attributable to Principal Prepayments received after the
last day of the calendar month immediately preceding the related Distribution
Date and (iv) any amounts attributable to Monthly Payments collected but due on
a Due Date or Dates subsequent to the preceding Determination Date.
All distributions made to the Purchaser on each Distribution Date will be
made to the Purchaser of record on the preceding Record Date, and shall be based
on the Mortgage Loans owned and held by the Purchaser, and shall be made by wire
transfer of immediately available funds to the account of the Purchaser at a
bank or other entity having appropriate facilities therefor, if the Purchaser
shall have so notified the Seller or by check mailed to the address of the
Purchaser.
With respect to any remittance received by the Purchaser on or after the
second Business Day following the Business Day on which such payment was due,
the Seller shall pay to the Purchaser interest on any such late payment at an
annual rate equal to the rate of interest as is publicly announced from time to
time at its principal office by JPMorgan Chase Bank, New York, New York, as its
prime lending rate, adjusted as of the date of each change, plus three
percentage points, but in no event greater than the maximum amount permitted by
applicable law. Such interest shall be paid by the Seller to the Purchaser on
the date such late payment is made and shall cover the period commencing with
the day following such second Business Day and ending with the Business Day on
which such payment is made, both inclusive. Such interest shall be remitted
along with such late payment. The payment by the Seller of any such interest
shall not be deemed an extension of time for payment or a waiver of any Event of
Default.
Section 11.15 Remittance Reports.
No later than the fifth Business Day of each month, the Seller shall
furnish to the Purchaser or its designee a computer tape or electronic
transmission containing such monthly data as reasonably requested by the Seller
from time to time.
On the Business Day following each Determination Date, the Seller shall
deliver to the Purchaser or its designee by telecopy (or by such other means as
the Seller and the Purchaser may agree from time to time) a computer tape
containing, and a hard copy of, the determination data with respect to the
related Distribution Date, together with such other information with respect to
the Mortgage Loans as the Purchaser may reasonably require to allocate
distributions made pursuant to this Agreement and provide appropriate statements
with respect to such distributions. On the same date, the Seller shall forward
to the Purchaser by overnight mail a computer readable magnetic tape containing
the information set forth in the Remittance Report with respect to the related
Distribution Date.
Section 11.16 Statements to the Purchaser.
Ex 9-12
Not later than five (5) days after each Distribution Date, the Seller shall
forward to the Purchaser or its designee a statement prepared by the Seller
setting forth the status of the Custodial Account as of the close of business on
such Distribution Date and showing, for the period covered by such statement,
the aggregate amount of deposits into and withdrawals from the Custodial Account
of each category of deposit specified in Section 11.04 and each category of
withdrawal specified in Section 11.05.
In addition, not more than sixty days after the end of each calendar year,
the Seller shall furnish to each Person who was the Purchaser at any time during
such calendar year, (i) as to the aggregate of remittances for the applicable
portion of such year, an annual statement in accordance with the requirements of
applicable federal income tax law, and (ii) listing of the principal balances of
the Mortgage Loans outstanding at the end of such calendar year.
The Seller shall prepare and file any and all tax returns, information
statements or other filings required to be delivered to any governmental taxing
authority or to any Purchaser pursuant to any applicable law with respect to the
Mortgage Loans and the transactions contemplated hereby. In addition, the Seller
shall provide the Purchaser with such information concerning the Mortgage Loans
as is necessary for the Purchaser to prepare its federal income tax return as
any Purchaser may reasonably request from time to time.
Section 11.17 Real Estate Owned Reports.
Together with the statement furnished pursuant to Section 11.02, with
respect to any REO Property, the Seller shall furnish to the Purchaser a
statement covering the Seller'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, together with the operating statement. Such statement shall
be accompanied by such other information as the Purchaser shall reasonably
request.
Section 11.18 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 Seller
shall submit to the Purchaser a liquidation report with respect to such
Mortgaged Property.
Section 11.19 Assumption Agreements.
The Seller shall, to the extent it has knowledge of any conveyance or
prospective conveyance by any Mortgagor of the 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 applicable thereto; provided, however, that the Seller
shall not exercise any 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 Primary Insurance Policy, if any. If the Seller reasonably believes
it is unable under applicable law to enforce such "due-on-sale" clause, the
Seller shall 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
Ex 9-13
applicable state law, the Mortgagor remains liable thereon. Where an assumption
is allowed pursuant to this Section 11.19, the Seller, with the prior written
consent of the insurer under the Primary Insurance Policy, 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
Seller shall follow the underwriting practices and procedures of prudent
mortgage lenders in the state in which the related Mortgaged Property is
located. With respect to an assumption or substitution of liability, Mortgage
Interest Rate, the amount of the Monthly Payment, and the final maturity date of
such Mortgage Note may not be changed. The Seller shall notify the Purchaser
that any such substitution of liability or assumption agreement has been
completed by forwarding to the Purchaser the original of any such substitution
of liability or assumption agreement, which document shall be added to the
related Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. Any fee collected by the Seller for entering into
an assumption or substitution of liability agreement in excess of 1% of the
outstanding principal balance of the Mortgage Loan shall be deposited in the
Custodial Account pursuant to Section 11.04.
Notwithstanding the foregoing paragraphs of this Section or any other
provision of this Agreement, the Seller 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
Seller may be restricted by law from preventing, for any reason whatsoever. For
purposes of this Section 11.19, 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 11.20 Satisfaction of Mortgages and Release of Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the Seller
of a notification that payment in full will be escrowed in a manner customary
for such purposes, the Seller will immediately notify the Purchaser by a
certification of a servicing officer of the Seller (a "Servicing Officer"),
which certification shall include a statement to the effect that all amounts
received or to be received in connection with such payment which are required to
be deposited in the Custodial Account pursuant to Section 11.04 have been or
will be so deposited, and shall request execution of any document necessary to
satisfy the Mortgage Loan and delivery to it of the portion of the Mortgage File
held by the Purchaser or the Purchaser's designee. Upon receipt of such
certification and request, the Purchaser, shall promptly release the related
mortgage documents to the Seller and the Seller shall prepare and process 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 or the Purchaser.
In the event the Seller satisfies or releases a Mortgage without having
obtained payment in full of the indebtedness secured by the Mortgage or should
the Seller otherwise prejudice any right the Purchaser may have under the
mortgage instruments, the Seller, upon written demand,
Ex 9-14
shall remit to the Purchaser the then outstanding principal balance of and any
accrued interest on the related Mortgage Loan by deposit thereof in the
Custodial Account. The Seller shall maintain the fidelity bond insuring the
Seller 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 Loan, including for this purpose collection under any Primary
Insurance Policy, the Purchaser shall, upon request of the Seller and delivery
to the Purchaser of a servicing receipt signed by a Servicing Officer, release
the requested portion of the Mortgage File held by the Purchaser to the Seller.
Such servicing receipt shall obligate the Seller to return the related Mortgage
documents to the Purchaser when the need therefor by the Seller 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 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 Seller
has delivered to the Purchaser 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. Upon
receipt of a certificate of a Servicing Officer stating that such Mortgage Loan
was liquidated, the servicing receipt shall be released by the Purchaser to the
Seller.
Section 11.21 Monthly Advances by the Seller.
(a) Not later than the close of business on the Business Day preceding each
Distribution Date, the Seller shall deposit in the Custodial Account an amount
equal to all payments not previously advanced by the Seller, whether or not
deferred pursuant to Section 11.01, of principal (due after the Cut-off Date)
and interest not allocable to the period prior to the Cut-off Date, at the
Mortgage Interest Rate net of the Servicing Fee, which were due on a Mortgage
Loan and delinquent at the close of business on the related Determination Date
("Monthly Advances"); provided, however, that to the extent there are funds on
deposit in the Custodial Account that are not otherwise required to be
distributed to the Purchaser on the Distribution Date, the Seller may remit such
funds in lieu of making advances of its own funds.
(b) The obligation of the Seller to make such Monthly Advances is
mandatory, notwithstanding any other provision of this Agreement, and, with
respect to any Mortgage Loan or REO Property, shall continue until a Final
Recovery Determination in connection therewith; provided that, notwithstanding
anything herein to the contrary, no Monthly Advance shall be required to be made
hereunder by the Seller if such Monthly Advance would, if made, constitute a
Nonrecoverable Monthly Advance. The determination by the Seller that it has made
a Nonrecoverable Monthly Advance or that any proposed Monthly Advance, if made,
would constitute a Nonrecoverable Monthly Advance, shall be evidenced by an
Officers' Certificate delivered to the Purchaser.
Section 11.22 Servicing Compensation.
As compensation for its services hereunder, the Seller shall, subject to
Section 11.04(xi), be entitled to withdraw from the Custodial Account or to
retain from interest payments on the
Ex 9-15
Mortgage Loans the amounts provided for as the Seller's Servicing Fee.
Additional servicing compensation in the form of assumption fees, as provided in
Section 11.19, Prepayment Charges and late payment charges or otherwise shall be
retained by the Seller and are not required to be deposited in the Custodial
Account. The Seller 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 11.23 Notification of Adjustments.
On each Adjustment Date, the Seller shall make interest rate adjustments
for each Mortgage Loan in compliance with the requirements of the related
Mortgage and Mortgage Note. The Seller shall execute and deliver the notices
required by each Mortgage and Mortgage Note regarding interest rate adjustments.
The Seller also shall provide timely notification to the Owner of all applicable
data and information regarding such interest rate adjustments and the Seller's
methods of implementing such interest rate adjustments. Upon the discovery by
the Seller or the Owner that the Seller has failed to adjust a Mortgage Interest
Rate or a Monthly Payment pursuant to the terms of the related Mortgage Note and
Mortgage, the Seller shall immediately deposit in the Custodial Account from its
own funds the amount of any interest loss caused thereby without reimbursement
therefor.
Section 11.24 Statement as to Compliance.
(a) The Seller will deliver to the Purchaser not later than March 1 of each
year, an Officers' Certificate (each, an "Annual Statement of Compliance")
stating, as to each signatory thereof, that (i) a review of the activities
of the Seller during the preceding 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 Seller 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 officer and the nature and
status thereof. Copies of such statement shall be provided by the Purchaser
to any Person identified as a prospective purchaser of the Mortgage Loans.
(b) For so long as the Mortgage Loans are being master serviced by a Master
Servicer, by March 1 of each year (or if not a Business Day, the
immediately preceding Business Day), or at any other time upon thirty (30)
days written request, an officer of the Seller shall execute and deliver an
officer's certificate in the form of Exhibit 11 hereto to the Master
Servicer for the benefit of such Master Servicer and its officers,
directors and affiliates.
The Seller 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 Seller or any of its officers, directors, agents or affiliates of its
obligations under this Section 11.24 or the negligence, bad faith or willful
misconduct of the Seller in connection therewith. If the indemnification
provided for herein is unavailable or insufficient to hold harmless the Master
Servicer, then the Seller agrees that it shall contribute to
Ex 9-16
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 Seller on the other in connection with a breach of the Seller's
obligations under this Section 11.24 or the Seller's negligence, bad faith or
willful misconduct in connection therewith.
Section 11.25 Independent Public Accountants' Servicing Report.
On or before February 28 of each year, the Seller at its expense shall
cause a firm of independent public accountants (which may also render other
services to the Seller) which is a member of the American Institute of Certified
Public Accountants to furnish a statement to the Purchaser or its designee to
the effect that such firm has examined certain documents and records relating to
the servicing of the Mortgage Loans under this Agreement or of mortgage loans
under pooling and servicing agreements (including the Mortgage Loans and this
Agreement) substantially similar one to another (such statement to have attached
thereto a schedule setting forth the pooling and servicing agreements covered
thereby) and that, on the basis of such examination conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers,
such firm confirms that such servicing has been conducted in compliance with
such pooling and servicing agreements except for such significant exceptions or
errors in records that, in the opinion of such firm, the Uniform Single
Attestation Program for Mortgage Bankers requires it to report. Copies of such
statement shall be provided by the Purchaser to any Person identified as a
prospective purchaser of the Mortgage Loans.
Section 11.26 [Reserved].
Section 11.27 Access to Certain Documentation.
The Seller shall provide to the Office of Thrift Supervision, the FDIC and
any other federal or state banking or insurance regulatory authority that may
exercise authority over the Purchaser access to the documentation regarding the
Mortgage Loans serviced by the Seller required by applicable laws and
regulations. Such access shall be afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the
Seller. In addition, access to the documentation will be provided to the
Purchaser and any Person identified to the Seller by the Purchaser without
charge, upon reasonable request during normal business hours at the offices of
the Seller.
Section 11.28 Reports and Returns to be Filed by the Seller.
The Seller shall file information reports with respect to the receipt of
mortgage interest received in a trade or business, reports of foreclosures and
abandonments of any Mortgaged Property and information returns relating to
cancellation of indebtedness income with respect to any Mortgaged Property as
required by Sections 6050H, 6050J) and 6050P of the Code. Such reports shall be
in form and substance sufficient to meet the reporting requirements imposed by
such Sections 6050H, 6050J and 6050P of the Code.
The Seller will transmit full-file credit reporting data for each Mortgage
Loan pursuant to ▇▇▇▇▇▇ Mae Guide Announcement 95-19 and, for each Mortgage
Loan, the Seller agrees that it
Ex 9-17
shall report one of the following statuses each month: new origination, current,
delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.
Section 11.29 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 Seller 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 "contributions" to a REMIC set forth in Section 860G(d) of
the Code) unless the Seller has received an Opinion of Counsel (at the expense
of the party seeking to take such action) to the effect that the contemplated
action will not endanger such REMIC status or result in the imposition of any
such tax.
Ex 9-18
EXHIBIT 10
FORM OF CONFIRMATION
FIRST REPUBLIC BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
As of [Trade Date]
▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, USA
TO: 4 World Financial Center, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: [_________]
FROM: First Republic Bank ("Seller")
RE: Confirmation of Terms
This letter will serve as confirmation of the agreement by the Seller to
sell and the agreement by the Purchaser to purchase, without recourse and on a
servicing-retained basis, certain first lien, fixed rate and adjustable rate,
residential mortgage loans (the "Mortgage Loans"), having an original term to
maturity of approximately [___] years and an unpaid principal balance of
approximately $[_] million (based upon the unpaid principal balance of the
Mortgage Loans as of the Cut-off Date) with the characteristics and under the
terms set forth below. The Mortgage Loans are those loans more particularly
described below and in Exhibit A, which is made a part hereof and which
generally describes the characteristics of the pool of Mortgage Loans to be
purchased. The Mortgage Loans were originated by the Seller. Seller owns the
servicing rights for the Mortgage Loans and is currently servicing the Mortgage
Loans. The terms and provisions of this transaction, including the purchase
price for the Mortgage Loans and the corresponding servicing rights, are
described below.
1. Unpaid Principal Balance $_________ (+/- ___%
2. Cut-off Date [______________] or such other date as
mutually agreed to by the Seller and
Purchaser.
3. Closing Date [______________] or such other date as may
be agreed upon between the parties hereto.
4. Gross Weighted Average Coupon (+/- 5 basis points)
5. Purchase Price Percentage ________%. The Purchase Price Percentage
will be subject to adjustment for any
changes
Ex 10-1
in pool composition occurring prior to the
Closing Date, including, without
limitation, changes resulting from the
rejection of Mortgage Loans for purchase by
Purchaser pursuant to its due diligence
review (as described below).
Increases or decreases in Gross Weighted
Average Coupon ("WAC") on the aggregate
pool of Mortgage Loans purchased on the
Closing Date will result in an adjustment
to the Purchase Price Percentage as
follows:
For any reduction in WAC, the Purchase
Price Percentage will be adjusted downward
by the product of [____] and the amount of
such reduction in WAC.
For any increase in WAC, the Purchase Price
Percentage will be adjusted upward by the
product of [_____] and the amount of such.
increase in WAC.
6. Purchase Price The scheduled principal balance of the
Mortgage Loans (assuming application of the
scheduled [Cut-off date] principal payment)
multiplied by the Purchase Price Percentage
plus accrued interest at the net mortgage
interest rate for each of the Mortgage
Loans from and including the Cut-off Date
through and including the day prior to the
Closing Date (assuming a year of twelve
thirty-day months).
7. Agreement This transaction is subject to the terms of
the Mortgage Loan Purchase and Servicing
Agreement (the "Agreement") between the
Seller and the Purchaser, dated as of
December 1, 2005, as the same may be
amended, supplemented or otherwise modified
from time to time in accordance with the
terms thereof.
8. Closing The closing may occur via facsimile
transmission.
9. Further Assurances The Purchaser and Seller further agree that
upon reasonable request they shall do such
other and further acts and deeds, and shall
Ex 10-2
execute, acknowledge and deliver and record
such other documents and instruments as may
be reasonably necessary from time to time
to evidence, confirm or carry out the
intent and purposes of this letter.
10. Expenses Each party will bear its own costs, fees
and expenses (including the costs, fees and
expenses of its attorneys).
11. Choice of Law This letter shall be governed by the laws
of the State of New York applicable to
contracts executed and performed in that
state without regard to principles of
conflicts of laws.
12. Entire Agreement This letter, together with the Agreement,
sets forth the entire understanding of the
parties relating to the subject matter
hereof to date and supersedes and cancels
any prior communications, understandings
and agreements (other than the Agreement)
between the parties. This letter may not be
amended or modified except by the parties
in writing. This letter may be
simultaneously executed in several
counterparts, each of which shall be deemed
to be an original, and all such
counterparts shall together constitute but
one and the same agreement.
13. Assignment This letter shall inure to the benefit of
and be binding upon the Seller and
Purchaser and their respective successors.
No party's rights or obligations under this
letter may be assigned and/or assumed by
any other person.
14. Severability Any part, provision, representation or
warranty of this letter that is prohibited
or that 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 letter 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
Ex 10-3
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
that prohibits or renders void or
unenforceable any provision hereof. If the
invalidity of any part, provision,
representation or warranty of this letter
shall deprive any party of the economic
benefit intended to be conferred by this
letter, 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 letter without regard to such
invalidity.
Ex 10-4
Please acknowledge your acceptance and agreement to the foregoing by
signing and returning this confirmation letter via facsimile and overnight
courier to [Seller contact] (Telephone Number _______________; Facsimile Number
_______________ at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Thank you.
Very Truly Yours,
FIRST REPUBLIC BANK
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CONFIRMED AND AGREED TO:
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK, USA
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Ex 10-1
EXHIBIT A
EXHIBIT 11
FORM OF ANNUAL CERTIFICATION
I am the _______________________ of [NAME OF SELLER] and, in such capacity,
the officer in charge of the Seller's responsibility on Exhibit [__] to the
Agreement. I hereby 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:
(1) I have reviewed the servicer compliance statement of the Seller
provided in accordance with Item 1123 of Regulation AB (the "Compliance
Statement"), the report on assessment of the Seller'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"), that were delivered to the
[Depositor] [Master Servicer] [Securities Administrator] [Trustee] pursuant
to the Agreement (collectively, the "Seller Servicing Information");
(2) Based on my knowledge, the reports and information comprising the
Seller 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 as of the period covered by or
the date of such reports or information or the date of this certification;
(3) Based on my knowledge, all of the Seller Servicing Information
required to be provided by the Seller 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
Seller 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 Seller has fulfilled its obligations under the
Agreement in all material respects; and
(5) The Compliance Statement required to be delivered by the Seller
pursuant to the Agreement, and the Servicing Assessment and Attestation
Report required to be provided by the Seller and by any Subservicer or
Subcontractor pursuant to the Agreement, have been provided to the
[Depositor] [Master Servicer]. The Servicing Assessment and the Attestation
Report cover all items of the servicing criteria identified on Exhibit 12
to the Agreement as applicable to the Seller. Any material instances of
noncompliance described in such reports have been disclosed to the
[Depositor] [Master
12-1
Servicer]. Any material instance of noncompliance with the Servicing
Criteria has been disclosed in such reports. The following material
instances of noncompliance identified in the Servicing Assessment and the
Attestation Report relate to the performance or obligations of the Seller
under the Agreement: ____________ (if none, state "None.")
Date:
----------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
12-2
EXHIBIT 12
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Seller] [Name of
Subservicer] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
SERVICING CRITERIA APPLICABLE
-------------------------------------------------------------------------------- SERVICING
REFERENCE CRITERIA CRITERIA
--------- -------- ----------
GENERAL SERVICING CONSIDERATIONS
1122(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. X
1122(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. X
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a
back-up servicer for the mortgage loans are maintained. X
1122(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. X
CASH COLLECTION AND ADMINISTRATION
1122(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. X
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor
or to an investor are made only by authorized personnel. X
1122(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. X
1122(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. X
1122(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. X
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 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. X
Ex 11-1
SERVICING CRITERIA APPLICABLE
-------------------------------------------------------------------------------- SERVICING
REFERENCE CRITERIA CRITERIA
--------- -------- ----------
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. X
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. [X]
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. [X]
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree
with cancelled checks, or other form of payment, or custodial
bank statements. [X]
POOL ASSET ADMINISTRATION
1122(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. X
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. X
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. X
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. X
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 X
Ex 11-2
SERVICING CRITERIA APPLICABLE
-------------------------------------------------------------------------------- SERVICING
REFERENCE CRITERIA CRITERIA
--------- -------- ----------
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. X
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. X
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. X
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. X
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. X
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements. X
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. [X]
Ex 11-3