MASTER MORTGAGE LOAN
PURCHASE AND SERVICING AGREEMENT
GREENWICH CAPITAL FINANCIAL
PRODUCTS, INC. ,
Purchaser
and
COUNTRYWIDE HOME LOANS,
INC. ,
Seller and Servicer
Dated as of April 1, 2003
Conventional Residential Fixed and
Adjustable Rate
Mortgage Loans
The following are excerpts of the
relevant servicing provisions from the:
MASTER MORTGAGE LOAN PURCHASE AND
SERVICING AGREEMENT
This is a MASTER MORTGAGE LOAN PURCHASE AND
SERVICING AGREEMENT (the " Agreement "), dated as of April
1, 2003, by and between GREENWICH CAPITAL FINANCIAL PRODUCTS, INC.,
having an office at 600 Steamboat Road, Greenwich, Connecticut
06830 (the " Purchaser ") and Countrywide Home Loans, Inc.,
having an office at 4500 Park Granada, Calabasas, California 91302
(the " Seller ").
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.
Agreement : This Master Mortgage Loan Purchase and
Servicing Agreement and all amendments hereof and supplements
hereto.
Assignment of Mortgage : An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient
under the laws of the jurisdiction wherein the related Mortgaged
Property is located to reflect the sale of the Mortgage to the
Purchaser.
BIF :
The Bank Insurance Fund, or any successor thereto.
Business Day : Any day other than (i) a Saturday or Sunday,
or (ii) a day on which banking and savings and loan institutions,
in the States of California or New York, or the state in which the
Seller's servicing operations are located, are authorized or
obligated by law or executive order to be closed.
Closing Date : The date this Agreement is executed and
delivered and the date or dates on which the Purchaser from time to
time shall purchase, and the Seller from time to time shall sell,
the Mortgage Loans listed on the related Mortgage Loan Schedule
with respect to the related Mortgage Loan Package.
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.
Custodial Account : The separate account or accounts created and
maintained pursuant to this Agreement, which shall be entitled
"Countrywide Home Loans, Inc. in trust for the
Purchaser".
Custodial Agreement : The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage
and other Mortgage Loan Documents, a form of which agreement is
annexed hereto as Exhibit 6 .
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.
Cut-off Date : The first day of the month in which the
related Closing Date occurs or such other date as agreed to by the
Purchaser and the Seller.
Determination Date : The 15th day of the month of the related
Remittance Date or if such 15th day is not a Business Day, the
Business Day immediately preceding such 15th day.
Due Date : The day of the month on which the Monthly
Payment is due on a Mortgage Loan, exclusive of any days of
grace.
Eligible Account : An account or accounts (i) maintained with a
depository institution the short term debt obligations of which are
rated by Standard & Poor's Ratings Group in one of its two (2)
highest rating categories at the time of any deposit therein, (ii)
the deposits of which are fully insured by the FDIC, or (iii)
maintained with an affiliate of the Seller that satisfies the
requirements set forth in either clause (i) or (ii) of this
definition. Eligible Accounts may bear interest
Escrow Account : The separate trust account or accounts created
and maintained pursuant to this Agreement which shall be entitled
"Countrywide Home Loans, Inc. in trust for the Purchaser and
various Mortgagors".
Event of Default : Any one of the conditions or circumstances
enumerated in Section 14.01.
Fair Market Value : With respect to any Mortgage Loan, the market
value of the related Mortgaged Property as mutually agreed upon by
the Seller and the Purchaser. In the event the Seller and the
Purchaser disagree as to such Fair Market Value, the Seller shall
have the option to select an appraiser from a list of three
independent appraisers selected by the Purchaser, each of whom
meets the minimum FNMA or FHLMC requisite qualifications for
appraisers. Such appraiser shall determine the Fair Market Value of
the Mortgaged Property in accordance with the then current
guidelines for the Seller's "full documentation program". Such
appraisal shall be in a form acceptable to FNMA or FHLMC and shall
be conclusive for the purposes of determining the Fair Market Value
of the Mortgaged Property. The fee for such appraisal shall be paid
by the Seller, except in the event such fee is incurred in
connection with calculating the Termination Fee in which case the
Purchaser shall pay the fee for such appraisal.
FDIC :
The Federal Deposit Insurance Corporation, or any successor
thereto.
FHLMC : The Federal Home Loan Mortgage Corporation or
any successor thereto.
FNMA :
Fannie Mae or any successor thereto.
HUD :
The Department of Housing and Urban Development or any federal
agency or office thereof which may from time to time succeed to the
functions thereof.
Index : With respect to any Mortgage Loan, the index
set forth in the related Mortgage Note for the purpose of
calculating the interest rate thereon.
Insurance Proceeds : With respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Adjustment Date : With respect to an Adjustable Rate Mortgage
Loan, the date on which an adjustment to the Mortgage Interest Rate
on a Mortgage Note becomes effective.
Late Collections : With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly
Payments or as Liquidation Proceeds, Condemnation Proceeds, Primary
Mortgage Insurance Proceeds, Other Insurance Proceeds, proceeds of
any REO Disposition or otherwise, which represent late payments or
collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
Liquidation Proceeds : Amounts, other than Primary Mortgage Insurance
Proceeds, Condemnation Proceeds and Other Insurance Proceeds,
received by the Seller in connection with the liquidation of a
defaulted Mortgage Loan through trustee's sale, foreclosure sale or
otherwise, other than amounts received following the acquisition of
an REO Property pursuant to Section 11.13.
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.
Monthly Advance : The aggregate of the advances made by the
Seller on any Remittance Date pursuant to Section 11.19.
Monthly Payment : The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Mortgage : The mortgage, deed of trust or other
instrument securing a Mortgage Note, which creates a first lien on
an unsubordinated estate in fee simple in real property securing
the Mortgage Note; except that with respect to real property
located in the state of Hawaii, the mortgage, deed of trust or
other instrument securing the Mortgage Note may secure and create a
first lien upon a leasehold estate of the Mortgagor.
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 which Mortgage File may be maintained by
the Seller on microfilm (provided that (i) the Seller shall notify
the Purchaser in writing two (2) Business Days before any original
items in the Mortgage File are to be destroyed and the Seller shall
deliver said original items to the Purchaser upon the Purchaser's
request and (ii) following the destruction of said originals, the
Seller shall deliver a copy of said microfilm to the Purchaser upon
the Purchaser's request).
Mortgage Interest Rate : The annual rate at which interest accrues on
any Mortgage Loan, exclusive of any primary mortgage insurance
premium and, with respect to an Adjustable Rate Mortgage Loan, as
adjusted from time to time in accordance with the provisions of the
related Mortgage Note and in compliance with the related Lifetime
Mortgage Interest Rate Cap and Periodic Rate Cap of the related
Mortgage Note.
Mortgage Loan : An individual Mortgage Loan which is the
subject of this Agreement, each Mortgage Loan originally sold and
subject to this Agreement being identified on the related Mortgage
Loan Schedule, 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 Section 2 of the
Custodial Agreement pertaining to any Mortgage Loan.
Mortgage Loan Package : The pool of Mortgage Loans sold to the
Purchaser on the related Closing Date.
Mortgage Note : The note or other evidence of the indebtedness
of a Mortgagor secured by a Mortgage.
Mortgaged Property : The real property (or leasehold estate, if
applicable, in the case of a Mortgage Loan in the state of Hawaii)
securing repayment of the debt evidenced by a Mortgage
Note.
Mortgagor : The obligor on a Mortgage Note.
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 Seller, and
delivered to the Purchaser.
Opinion of Counsel : A written opinion of counsel, who may be an
employee of the party on behalf of whom the opinion is being given,
reasonably acceptable to the Purchaser.
Other Insurance Proceeds : Proceeds of any title policy, hazard policy,
pool policy or other insurance policy covering a Mortgage Loan,
other than the Primary Mortgage Insurance Policy, if any, to the
extent such proceeds are not to be applied to the restoration of
the related Mortgaged Property or released to the Mortgagor in
accordance with the procedures that the Seller would follow in
servicing mortgage loans held for its own account.
Payment Adjustment Date : With respect to each Adjustable Rate Mortgage
Loan, the date on which an adjustment to the Monthly Payment
pursuant to the related Mortgage Note becomes effective.
Pass-Through Transfer : The sale or transfer of some or all of the
Mortgage Loans to a trust to be formed as part of a publicly or
privately traded pass-through transaction retaining the Seller as
"servicer" thereunder.
Person : Any individual, corporation, partnership,
joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or
political subdivision thereof.
Prepayment Interest Shortfall Amount
: With respect to any Mortgage Loan
that was subject to a Principal Prepayment in full or in part
during any Due Period, which Principal Prepayment was applied to
such Mortgage Loan prior to such Mortgage Loan's Due Date in such
Due Period, the amount of interest (net of the related Servicing
Fee) that would have accrued on the amount of such Principal
Prepayment during the period commencing on the date as of which
such Principal Prepayment was applied to such Mortgage Loan and
ending on the day immediately preceding such Due Date,
inclusive.
Primary Mortgage Insurance Policy
: A policy of primary mortgage
guaranty insurance issued by a Qualified Insurer which conforms in
all respects to the description set forth in Subsection 7.02 (xxxi)
herein.
Principal Prepayment : Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due
Date, including any prepayment penalty or premium thereon, which is
not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent
to the month of prepayment.
Principal Prepayment Period
: As to any Remittance Date, the
calendar month preceding the month of distribution.
Purchaser : Greenwich Capital Financial Products, Inc. or
its successor in interest or any successor to or assignee of the
Purchaser under this Agreement as herein provided.
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
Whole Loan Transfer or a Pass-Through Transfer as set forth in
Section 12. Such agreement or agreements shall prescribe the rights
and obligations of the Seller in servicing the related Mortgage
Loans.
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 reconstituted as part of a Whole Loan Transfer
or Pass-Through Transfer pursuant to Section 12 hereof. On such
date, the Mortgage Loans transferred shall cease to be covered by
this Agreement and the Seller shall cease to service those Mortgage
Loans under this Agreement in accordance with the termination
provisions set forth in Section 12 hereof.
REMIC : A "real estate mortgage investment conduit"
within the meaning of Section 860D of the Internal Revenue
Code.
Remittance Date : The eighteenth (18th) day of any month, or if
such eighteenth (18th) day is not a Business Day, the first
Business Day immediately following.
REO Disposition : The final sale by the Seller of any REO
Property.
REO Property : A Mortgaged Property acquired by the Seller on
behalf of the Purchaser as described in Section 11.13 of the
Servicing Addendum attached as Exhibit 9 .
Repurchase Price : With respect to any Mortgage Loan, a price
equal to (i) the Stated Principal Balance of the Mortgage Loan plus
(ii) interest on such Stated Principal Balance at the Mortgage Loan
Remittance Rate from the last date through which interest has been
paid and distributed to the Purchaser to the date of repurchase,
less amounts received or advanced in respect of such repurchased
Mortgage Loan which are being held in the Custodial Account for
distribution in the month of repurchase.
SAIF :
The Savings Association Insurance Fund, or any successor
thereto.
Seller : Countrywide Home Loans, Inc., or any successor
to or assignee of the Seller under this Agreement as provided
herein.
Servicing Addendum : The terms and conditions attached hereto as
Exhibit 9 which will govern the servicing of the Mortgage Loans by
Seller during the period commencing on the related Closing Date and
ending on the date the Seller enters into a Reconstitution
Agreement.
Servicing Advances : All customary, reasonable and necessary "out
of pocket" costs and expenses incurred in the performance by the
Seller of its servicing obligations, including, but not limited to,
the cost of (i) the preservation, restoration and protection of the
Mortgaged Property, (ii) any enforcement or judicial proceedings,
including foreclosures, (iii) the management and liquidation of the
REO Property and (iv) compliance with the obligations under this
Agreement.
Servicing Fee : With respect to each Mortgage Loan, the amount
of the annual fee the Purchaser shall pay to the Seller, which
shall, for a period of one full month, be equal to one-twelfth of
the product of (a) the Servicing Fee Rate and (b) the Stated
Principal Balance of such Mortgage Loan. Such fee shall be payable
monthly, computed on the basis of the same principal amount and
period respecting which any related interest payment on a Mortgage
Loan is computed. The obligation of the Purchaser to pay the
Servicing Fee is limited to, and the Servicing Fee is payable
solely from, the interest portion of such Monthly Payment collected
by the Seller, or as otherwise provided under Section 11 hereof.
With respect to REO Property, the Servicing Fee shall be payable to
the Seller through REO Disposition in accordance with Section 11.13
of the Servicing Addendum which Servicing Fee shall be based upon
the Stated Principal Balance of the related Mortgage Loan at the
time of foreclosure as reduced by any income or proceeds received
by Purchaser in respect of such REO Property and applied to reduce
the outstanding principal balance of the foreclosed Mortgage
Loan.
Servicing File : With respect to each Mortgage Loan, the file
retained by the Seller consisting of (a) originals of all documents
in the Mortgage File other than those delivered to Purchaser or
copies of such documents maintained on microfilm (provided that (i)
the Seller shall notify the Purchaser in writing two (2) Business
Days before any original items in the Servicing File are to be
destroyed and the Seller shall deliver said originals to the
Purchaser upon the Purchaser's request and (ii) following the
destruction of said originals, the Seller shall deliver a copy of
said microfilm to the Purchaser upon the Purchaser's request) which
are not delivered to the Purchaser or the Custodian and (b) copies
of the Mortgage Loan Documents set forth in Section 2 of the
Custodial Agreement.
Servicing Officer : Any officer of the Seller involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose name appears on a list of servicing officers furnished
by the Seller to the Purchaser upon request, as such list may from
time to time be amended.
Stated Principal Balance : With respect to each Mortgage Loan as of the
date of such determination: (i) the unpaid 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
received, and without giving effect to payments received on or
before such date in respect of payments due after such date for
application on the scheduled Due Date, minus (ii) all amounts
previously distributed to the Purchaser with respect to the related
Mortgage Loan representing payments or recoveries of principal or
advances in lieu thereof.
Termination Fee : The amount paid to the Seller by the Purchaser
in the event of the Seller's termination without cause, as
servicer. Such fee shall equal the sum of (i) the greater of (A)
two and one-half percent (2½%) of the aggregate outstanding
principal amount of the Mortgage Loans, or (B) the fair market
value of the servicing rights, each as of the termination date,
plus (ii) all reasonable costs and expenses incurred by the Seller
in managing the transfer of the servicing, plus (iii) in the case
of REO Property, the greater of (Y) 100% of the Stated Principal
Balance of the Mortgage Loan encumbering the Mortgaged Property at
the time such Mortgaged Property was acquired and became REO
Property or (Z) the Fair Market Value of the REO Property at the
time of termination.
Underwriting Guidelines : As defined in the respective Purchase Price
and Terms Letter.
Updated Loan-to-Value Ratio
: With respect to any Mortgage Loan,
the outstanding principal balance of such Mortgage Loan as of the
date of determination divided by the Value of the related Mortgaged
Property as determined by the appraisal made for the originator at
the time of origination of the Mortgage Loan or in the event that
an appraisal was made since the origination of the Mortgage Loan
then the latest appraisal of the Mortgaged Property. Such appraisal
shall (i) be in a form acceptable to FNMA and FHLMC and (ii) meet
the then current guidelines for the Company's so called "full
documentation" program.
Whole Loan Transfer : The sale or transfer by Purchaser of some or
all of the Mortgage Loans in a whole loan or participation
certificate format pursuant to a Reconstitution Agreement retaining
the Seller as "servicer" thereunder.
SECTION 11. Seller's Servicing
Obligations .
The Seller, as servicer, shall service and
administer the Mortgage Loans in accordance with the terms and
provisions set forth in Exhibit 9 which sections are hereby
incorporated in this Agreement in their entirety as if the same
were contained in this Section 11.
SECTION 12. Removal of Mortgage Loans from
Inclusion Under this Agreement Upon a Whole Loan Transfer or a
Pass-Through Transfer on One or More Reconstitution
Dates.
The Seller and the Purchaser agree that with
respect to any Mortgage Loan Package, the Purchaser may effect no
more than three (3) Whole Loan Transfers and/or Pass-Through
Transfers; provided, however, the Purchaser agrees to use
commercially reasonable efforts not to effect a Whole Loan Transfer
or a Pass-Through Transfer if the aggregate outstanding principal
balance of the Mortgage Loans subject to such Whole Loan Transfer
or Pass-Through Transfer is less than $10,000,000.
With respect to each Whole Loan Transfer or
Pass-Through Transfer, as the case may be, entered into by
Purchaser, Seller agrees:
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(1)
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to cooperate
fully with Purchaser and any prospective purchaser with respect to
all reasonable requests, and due diligence procedures, including
but not limited to providing statements and audit letters of
reputable, certified public accountants pertaining to information
provided by the Seller pursuant to clause 4 below as shall be
reasonably requested by the Purchaser,;
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(2)
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to execute all
Reconstitution Agreements provided that (i) such Reconstitution
Agreements are reasonably acceptable to the Seller, and (ii) 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 herein, and (iii)
such Reconstitution Agreement does not materially diminish
Seller’s rights or materially increase Seller’s
responsibilities under this Agreement;
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(3)
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with respect to
any Mortgage Loan that is subject to a Whole Loan Transfer or a
Pass-Through Transfer (a) the Seller shall make the representations
and warranties regarding such Mortgage Loan contained herein only
as of the related Closing Date, and (b) which occurs within twelve
months of the Closing Date for such Mortgage Loan, the Seller shall
restate the representations and warranties regarding the Seller set
forth in Subsection 7.01 as of the date of such Whole Loan Transfer
or Pass-Through Transfer;
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(4)
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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 most recently publicly disclosed
mortgage loan delinquency, foreclosure and loss experience as shall
be reasonably requested by the Purchaser and any additional
information which the Seller is capable of providing without
unreasonable effort or expense; provided however, that the
Purchaser, shall indemnify and hold harmless the Seller, each
affiliate designated by the Seller and each person who controls the
Seller or such affiliate from and against any and all losses,
claims, damages and liabilities arising from, with respect to
information not provided by the Seller pursuant to this Subsection
12(4), any untrue statement or alleged untrue statement of a
material fact contained in any information in the related offering
documents, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading, and the Seller shall
indemnify and hold harmless the Purchaser, each affiliate
designated by the Purchaser and each person who controls the
Purchaser or such affiliate from and against any and all losses,
claims, damages and liabilities arising from, with respect to
information provided by the Seller pursuant to this Subsection
12(4), any untrue statement or alleged untrue statement of a
material fact contained in any information in the related offering
documents, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading;
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(5)
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to deliver to
the Purchaser, and to any Person designated by the Purchaser, such
in-house opinions of counsel as are customarily delivered by
originators or servicers of mortgage loans, as the case may be, in
connection with Whole Loan Transfers or Pass-Through Transfers, as
the case may be, it being understood that the cost of any opinions
of outside special counsel that may be required for a Whole Loan
Transfer or Pass-Through Transfer, as the case may be, shall be the
responsibility of the Purchaser; and
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(6)
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to reasonably
cooperate with the Purchaser and any prospective purchaser with
respect to the preparation of Mortgage Loan Documents and such
other documents, and with respect to the servicing of the Mortgage
Loans in accordance with the requirements from time to time of the
rating agencies rating a Whole Loan Transfer or Pass-Through
Transfer, the credit enhancers providing credit enhancement thereon
and the requirements of the Purchaser's shelf registration
statement.
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All Mortgage Loans not sold or transferred
pursuant to a Whole Loan Transfer or Pass-Through Transfer shall be
subject to this Agreement and shall continue to be serviced in
accordance with the terms of this Agreement and with respect
thereto this Agreement shall remain in full force and effect. In
connection with the sale or transfer of any MERS Mortgage Loan, the
Seller shall cause MERS to designate on the MERS System the
assignee (or the related trust, for the benefit of the related
certificateholders) or its designee as the beneficial holder of
such Mortgage Loan
SECTION 13. The Seller .
Subsection 13.01. Additional Indemnification
by the Seller; Third Party Claims.
The Seller shall indemnify the Purchaser and
hold it harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees
and related costs, judgments, and any other costs, fees and
expenses that the Purchaser may sustain in any way related to the
failure of the Seller to perform its duties and service the
Mortgage Loans in compliance with the terms of this Agreement.
Notwithstanding the foregoing, the Purchaser shall indemnify the
Seller and hold it harmless against any and all claims, losses,
damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees
and expenses that the Seller may sustain in any way related to (a)
actions or inactions of the Seller which were taken or omitted upon
the instruction or direction of the Purchaser, or (b) the failure
of the Purchaser to perform its obligations under this Agreement,
including the provisions of Subsection 13.03. Each party to this
Agreement shall immediately notify the other if a claim is made
upon such party by a third party with respect to this Agreement or
the Mortgage Loans. Upon the prior written consent of Purchaser,
which consent shall not be unreasonably withheld, the Seller shall
assume the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree which may be entered
against it or the Purchaser in respect of such claim. The Purchaser
promptly shall reimburse the Seller for all amounts advanced by it
pursuant to the preceding sentence except when the claim is related
to the Seller's indemnification pursuant to Section 7; or the
failure of the Seller to service and administer the Mortgage Loans
in compliance with the terms of this Agreement.
Subsection 13.02. Merger or Consolidation of
the Seller .
The Seller will keep in full effect its
existence, rights and franchises as a corporation under the laws of
the state of its incorporation except as permitted herein, and will
obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of
this Agreement, or any of the Mortgage Loans and to perform its
duties under this Agreement.
Any Person into which the 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;
provided, however, that the successor or surviving Person shall be
an institution whose deposits are insured by FDIC or a company
whose business is the origination and servicing of mortgage loans,
unless otherwise consented to by the Purchaser, which consent shall
not be unreasonably withheld, shall be qualified to service
mortgage loans on behalf of FNMA or FHLMC and shall satisfy the
requirements of Section 16 with respect to the qualifications of a
successor to the Seller.
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 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 compliance with any standard of care set forth
in this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this
Agreement. The 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. Notwithstanding anything to the contrary
contained in this Agreement, unless one or more Event of Default by
the Seller shall occur and shall not have been remedied within the
time limits set forth in Section 14 of this Agreement, the
Purchaser shall not record or cause to be recorded an Assignment of
Mortgage with the recording office. To the extent the Purchaser
records with the recording office as permitted herein an Assignment
of Mortgage which designates the Purchaser as the holder of record
of the Mortgage, the Purchaser agrees that it shall (i) provide the
Seller with immediate notice of any action with respect to the
Mortgage or the related Mortgaged Property and ensure that the
Investor Accounting Department at the Seller receives such notice;
and (ii) immediately complete, sign and return to the Seller any
document reasonably requested by the Seller to comply with its
servicing obligations, including without limitation, any instrument
required to release the Mortgage upon payment in full of the
obligation or take any other action reasonably required by the
Seller. The Purchaser further agrees that the Seller shall have no
liability for the Purchaser’s failure to comply with the
subsections (i) or (ii) in the foregoing sentence. The Seller shall
not be under any obligation to appear in, prosecute or defend any
legal action which is not incidental to its duties to service the
Mortgage Loans in accordance with this Agreement and which in its
opinion may involve it in any expenses or liability; provided,
however, that the Seller may, with the consent of the Purchaser,
undertake any such action which it may deem necessary or desirable
in respect to this Agreement and the rights and duties of the
parties hereto. In such event, the legal expenses and costs of such
action and any liability resulting therefrom shall be expenses,
costs and liabilities for which the Purchaser will be liable, the
Seller shall be entitled to be reimbursed therefor from the
Purchaser upon written demand.
Subsection 13.04. Seller Not to Resign
.
The Seller shall not assign this Agreement or
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 duties hereunder are no longer permissible
under applicable law and such incapacity cannot be cured by the
Seller. Any such determination permitting the resignation of the
Seller shall be evidenced by an Opinion of Counsel to such effect
delivered to the Purchaser which Opinion of Counsel shall be in
form and substance acceptable to the Purchaser. No such resignation
shall become effective until a successor shall have assumed the
Seller's responsibilities and obligations hereunder in the manner
provided in Section 16.
Subsection 13.05. No Transfer of
Servicing .
With respect to the retention of the Seller to
service the Mortgage Loans hereunder, the Seller acknowledges that
the Purchaser has acted in reliance upon the Seller's independent
status, the adequacy of its servicing facilities, plan, personnel,
records and procedures, its integrity, reputation and financial
standing and the continuance thereof. Without in any way limiting
the generality of this Section, Seller shall not either assign this
Agreement or the servicing hereunder or delegate a substantial
portion of its rights or duties hereunder, or sell or otherwise
dispose of all or substantially all of its property or assets,
without the prior written approval of the Purchaser, which consent
will not be unreasonably withheld; provided, however, the Seller
may, with prior notice but without Purchaser’s consent,
assign its rights and obligations as servicer hereunder to an
entity if (i) such entity is directly or indirectly owned or
controlled by the Seller, (ii) such entity shall be qualified to
service mortgage loans on behalf of FNMA or FHLMC and shall satisfy
the requirements of Section 16 with respect to the qualifications
of a successor to the Seller, and (iii) the Seller guaranties the
performance by such entity of all obligations hereunder. Nothing in
this Agreement shall prohibit or limit the right of the Seller to
assign the servicing rights hereunder to Countrywide Home Loans
Servicing LP.
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 two (2)
Business Days 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 which continues unremedied for a period of thirty days
(except that such number of days shall be fifteen (15) 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
(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 (60) 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 maintain its license to
do business or service residential mortgage loans in any
jurisdiction where the Mortgaged Properties are located which
failure continues unremedied for a period of thirty (30) days;
or
(vii) the Seller ceases to meet the qualifications of
a FNMA or FHLMC seller/servicer and the failure to meet such
qualifications continues unremedied for a period of thirty (30)
days;
(viii) the Seller attempts, without the consent of the
Purchaser, to sell or otherwise dispose of all or substantially all
of its property or assets or to assign this Agreement or the
servicing responsibilities hereunder or to delegate a substantial
portion of its duties hereunder; or
(ix) the Seller fails to duly perform, within the
required time period, its obligations under Sections 11.25 and
11.26 of the Servicing Addendum, which failure continues unremedied
for a period of thirty (30) 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 responsible for master servicing the Mortgage
Loans pursuant to a securitization of such 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 under this Agreement and in and to the Mortgage Loans
and the proceeds thereof. On or after the receipt by the Seller of
such written notice, all authority and power of the Seller under
this Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the successor appointed
pursuant to Section 16. Upon written request from the Purchaser,
the Seller shall prepare, execute and deliver any and all documents
and other instruments, place in such successor'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,
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 or Escrow Account
or thereafter received with respect to the Mortgage
Loans.
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 .
Subsection 15.01. Termination
.
The respective obligations and responsibilities
of the Seller shall terminate upon: (i) the later of the final
payment or other liquidation (or any advance with respect thereto)
of the last Mortgage Loan or the disposition of all REO Property
and the remittance of all funds due hereunder; or (ii) by mutual
consent of the Seller and the Purchaser in writing or (iii) the
repurchase by the Seller of all outstanding Mortgage Loans and REO
Property at a price equal to (a) in the case of a Mortgage Loan,
100% of the Stated Principal Balance of each Mortgage Loan on the
date of such repurchase plus accrued interest thereon through the
last day of the month of repurchase, and (b) in the case of REO
Property, the lesser of (1) 100% of the Stated Principal Balance of
the Mortgage Loan encumbering the Mortgaged Property at the time
such Mortgaged Property was acquired and became REO Property or (2)
the Fair Market Value of the REO Property at the time of
repurchase.
The right of the Seller to repurchase all
outstanding Mortgage Loans pursuant to (iii) above shall be
conditional upon the outstanding Stated Principal Balances of such
Mortgage Loans at the time of any such repurchase aggregating less
than 10% of the aggregate Stated Principal Balances of the Mortgage
Loans on the related Cut-off Date.
Subsection 15.02. Termination Without
Cause .
The Purchaser may, at its sole option, terminate
any rights the Seller may have hereunder, without cause, upon sixty
(60) days prior written notice. Any such notice of termination
shall be in writing and delivered to the Seller as provided in
Section 16 of this Agreement. In the event of such termination, the
Seller shall be entitled to the Termination Fee.
SECTION 16. Successor to the Seller
.
Prior to termination of Seller's
responsibilities and duties under this Agreement pursuant to
Subsection 15.01(ii) or 15.02, 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
having a net worth of not less than $15,000,000 and which shall
succeed to all rights and assume all of the responsibilities,
duties and liabilities of the Seller under this Agreement prior to
the termination of Seller's responsibilities, duties and
liabilities under this Agreement. In connection with such
appointment and assumption, the Purchaser may make such
arrangements for the compensation of such successor out of payments
on Mortgage Loans as it and such successor shall agree. In the
event that the Seller's duties, responsibilities and liabilities
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 which it is obligated to
exercise under this Agreement, and shall take no action whatsoever
that might impair or prejudice the rights or financial condition of
its successor. The resignation or removal of Seller pursuant to the
aforementioned Sections shall not become effective until a
successor shall be appointed pursuant to this Section and shall in
no event relieve the Seller of the representations and warranties
made pursuant to Subsections 7.01, 7.02, 7.03 and 7.04 and the
remedies available to the Purchaser thereunder, it being understood
and agreed that the provisions of such Subsection 7.01, 7.02, 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.
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 and
the Custodial Agreement. In connection with any such resignation or
removal of Seller, either (i) the successor shall represent and
warrant that it is a member of MERS in good standing and shall
agree to comply in all material respects with the rules and
procedures of MERS in connection with the servicing of the Mortgage
Loans that are registered with MERS, or (ii) the Seller shall
cooperate with such successor in causing MERS to execute and
deliver an assignment of Mortgage in recordable form to transfer
the Mortgage from MERS to the Purchaser and to execute and deliver
such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan
or servicing of such Mortgage Loan on the MERS System to the
successor servicer. The Seller shall file or cause to be filed any
such assignment in the appropriate recording office. The Successor
Servicer shall cause such assignment to be delivered to the
Custodian promptly upon receipt of the original with evidence of
recording thereon or a copy certified by the public recording
office in which such assignment was recorded. Any termination of
this Agreement pursuant to Subsection 13.04, 14.01, 15.01, or 15.02
shall not affect any claims that the Purchaser may have against the
Seller arising prior to any such termination or
resignation.
The Seller shall timely deliver to the successor
the funds in the Custodial 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. The
successor shall make arrangements at the time of transfer of the
servicing responsibilities to the successor servicer to reimburse
the Seller for amounts the Seller actually expended pursuant to
this Agreement (provided that the Seller shall provide the
successor servicer with written evidence of such amounts) which the
successor is entitled to retain hereunder and which would otherwise
have been recovered by the Seller pursuant to this Agreement but
for the appointment of the successor servicer. v
Upon a successor's acceptance of appointment as
such, the Seller shall notify by mail the Purchaser of such
appointment.
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 a Consolidated
Statement of Operations of the Seller's parent company,
