Exhibit 99.1
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GSAA HOME EQUITY TRUST 2006-16
ASSET-BACKED CERTIFICATES
SERIES 2006-16
MASTER SERVICING
and
TRUST AGREEMENT
among
GS MORTGAGE SECURITIES CORP.,
Depositor,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
U.S. BANK NATIONAL ASSOCIATION,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION
Custodians
and
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator
Dated September 1, 2006
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TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.................................................................................................9
ARTICLE I DEFINITIONS 14
Section 1.01 Definitions..........................................................................................14
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES 47
Section 2.01 Conveyance of Mortgage Loans.........................................................................47
Section 2.02 Acceptance by the Custodians of the Mortgage Loans...................................................49
Section 2.03 Execution and Delivery of Certificates...............................................................51
Section 2.04 REMIC Matters........................................................................................51
Section 2.05 Representations and Warranties of the Depositor......................................................51
Section 2.06 Representations and Warranties of JPMorgan...........................................................53
Section 2.07 Representations and Warranties of Deutsche Bank......................................................53
Section 2.08 Representations and Warranties of U.S. Bank..........................................................54
Section 2.09 Representations and Warranties of Xxxxx Fargo........................................................55
ARTICLE III TRUST ACCOUNTS 55
Section 3.01 Excess Reserve Fund Account; Distribution Account....................................................55
Section 3.02 Investment of Funds in the Distribution Account......................................................57
ARTICLE IV DISTRIBUTIONS 59
Section 4.01 Priorities of Distribution...........................................................................59
Section 4.02 Monthly Statements to Certificateholders.............................................................64
Section 4.03 Allocation of Applied Realized Loss Amounts..........................................................66
Section 4.04 Certain Matters Relating to the Determination of LIBOR...............................................66
Section 4.05 Supplemental Interest Trust..........................................................................67
Section 4.06 Trust's Obligations under the Interest Rate Swap Agreement;
Replacement and Termination of the Interest Rate Swap
Agreement............................................................................................68
ARTICLE V THE CERTIFICATES 69
Section 5.01 The Certificates.....................................................................................69
Section 5.02 Certificate Register; Registration of Transfer and Exchange of
Certificates.........................................................................................70
i
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates....................................................75
Section 5.04 Persons Deemed Owners................................................................................76
Section 5.05 Access to List of Certificateholders' Names and Addresses............................................76
Section 5.06 Maintenance of Office or Agency......................................................................76
ARTICLE VI THE DEPOSITOR 76
Section 6.01 Liabilities of the Depositor.........................................................................76
Section 6.02 Merger or Consolidation of the Depositor.............................................................77
Section 6.03 Limitation on Liability of the Depositor and Others..................................................77
Section 6.04 Servicing Compliance Review..........................................................................77
Section 6.05 Option to Purchase Defaulted Mortgage Loans..........................................................78
ARTICLE VII SERVICER DEFAULT 78
Section 7.01 Events of Default....................................................................................78
Section 7.02 Master Servicer to Act; Appointment of Successor.....................................................78
Section 7.03 Master Servicer to Act as Servicer...................................................................80
Section 7.04 Notification to Certificateholders...................................................................80
ARTICLE VIII CONCERNING THE TRUSTEE AND THE CUSTODIANS 80
Section 8.01 Duties of the Trustee and the Custodians.............................................................80
Section 8.02 [Reserved]...........................................................................................81
Section 8.03 Certain Matters Affecting the Trustee and the Custodians.............................................81
Section 8.04 Trustee and Custodians...............................................................................83
Section 8.05 Trustee May Own Certificates.........................................................................83
Section 8.06 Trustee's Fees and Expenses..........................................................................84
Section 8.07 Eligibility Requirements for the Trustee.............................................................84
Section 8.08 Resignation and Removal of the Trustee...............................................................85
Section 8.09 Successor Trustee....................................................................................85
Section 8.10 Merger or Consolidation of the Trustee or the Custodians.............................................86
Section 8.11 Appointment of Co-Trustee or Separate Trustee........................................................86
Section 8.12 Tax Matters..........................................................................................87
Section 8.13 [Reserved]...........................................................................................91
Section 8.14 Tax Classification of the Excess Reserve Fund Account and the
Interest Rate Swap Agreement.........................................................................91
Section 8.15 Custodial Responsibilities...........................................................................92
ARTICLE IX ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER 93
Section 9.01 Duties of the Master Servicer; Enforcement of Servicer's Obligations.................................93
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions Insurance......................................94
Section 9.03 Representations and Warranties of the Master Servicer................................................94
Section 9.04 Master Servicer Events of Default....................................................................96
Section 9.05 Waiver of Default....................................................................................98
ii
Section 9.06 Successor to the Master Servicer.....................................................................98
Section 9.07 Compensation of the Master Servicer.................................................................100
Section 9.08 Merger or Consolidation.............................................................................100
Section 9.09 Resignation of the Master Servicer..................................................................100
Section 9.10 Assignment or Delegation of Duties by the Master Servicer...........................................100
Section 9.11 Limitation on Liability of the Master Servicer......................................................101
Section 9.12 Indemnification; Third Party Claims.................................................................101
ARTICLE X CONCERNING THE SECURITIES ADMINISTRATOR 102
Section 10.01 Duties of the Securities Administrator..............................................................102
Section 10.02 Certain Matters Affecting the Securities Administrator..............................................104
Section 10.03 Securities Administrator Not Liable for Certificates or Mortgage Loans..............................106
Section 10.04 Securities Administrator May Own Certificates.......................................................106
Section 10.05 Securities Administrator's Fees and Expenses........................................................106
Section 10.06 Eligibility Requirements for the Securities Administrator...........................................107
Section 10.07 Resignation and Removal of the Securities Administrator.............................................108
Section 10.08 Successor Securities Administrator..................................................................109
Section 10.09 Merger or Consolidation of the Securities Administrator.............................................110
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator.......................................................................................110
ARTICLE XI TERMINATION 110
Section 11.01 Termination upon Liquidation or Purchase of the Mortgage Loans......................................110
Section 11.02 Final Distribution on the Certificates..............................................................111
Section 11.03 Additional Termination Requirements.................................................................113
ARTICLE XII MISCELLANEOUS PROVISIONS 113
Section 12.01 Amendment...........................................................................................113
Section 12.02 Recordation of Agreement; Counterparts..............................................................116
Section 12.03 Governing Law.......................................................................................116
Section 12.04 Intention of Parties................................................................................116
Section 12.05 Notices.............................................................................................117
Section 12.06 Severability of Provisions..........................................................................118
Section 12.07 Limitation on Rights of Certificateholders..........................................................118
Section 12.08 Certificates Nonassessable and Fully Paid...........................................................119
Section 12.09 Waiver of Jury Trial................................................................................119
Section 12.10 Rights of the Swap Provider.........................................................................119
ARTICLE XIII EXCHANGE ACT REPORTING 119
Section 13.01 Filing Obligations..................................................................................119
Section 13.02 Form 8-K Filings....................................................................................121
Section 13.03 Form 10-D Filings...................................................................................122
Section 13.04 Form 10-K Filings...................................................................................123
iii
Section 13.05 Form 15 Filing......................................................................................125
Section 13.06 Xxxxxxxx-Xxxxx Certification........................................................................125
Section 13.07 Report on Assessment of Compliance and Attestation..................................................126
Section 13.08 Use of Subservicers and Subcontractors..............................................................127
iv
SCHEDULES
Schedule I Mortgage Loan Schedule
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificates
Exhibit B Form of Class P Certificates
Exhibit C Form of Class R, Class RC and Class RX Certificates
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Custodian
Exhibit F Form of Document Certification and Exception Report of Custodian
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J-1 Form of Back-up Certification (Master Servicer)
Exhibit J-2 Form of Back-up Certification (Securities Administrator)
Exhibit K Form of Servicing Criteria to be Addressed in Assessment of
Compliance Statement
Exhibit L Form of Request for Release of Documents (U.S. Bank National
Trust Company)
Exhibit L-1 Form of Request for Release of Documents (Deutsche Bank National
Trust Company)
Exhibit L-2 Form of Request for Release of Documents (JPMorgan Chase Bank,
National Trust Company)
Exhibit L-3 Form of Request for Release of Documents (Xxxxx Fargo Bank,
National Association)
Exhibit M Form 8-K Disclosure Information
Exhibit N Additional Form 10-D Disclosure
Exhibit O Additional Form 10-K Disclosure
v
Exhibit P Form of Master Loan Purchase Agreement, between various sellers
and Xxxxxxx Sachs Mortgage Company
Exhibit Q Flow Servicing Agreement, dated as of January 1, 2006, between
Avelo Mortgage, L.L.C. and Xxxxxxx Xxxxx Mortgage Company
Exhibit R Servicing Agreement, dated as of July 1, 2004, between
Countrywide Home Loans Servicing LP and Xxxxxxx Sachs Mortgage
Company
Exhibit S Master Mortgage Loan Purchase Agreement, dated as of July 1,
2004, between Countrywide Home Loans, Inc. and Xxxxxxx Xxxxx
Mortgage Company
Exhibit T Amendment Reg AB, dated as of January 1, 2006, between Xxxxxxx
Sachs Mortgage Company and Countrywide Home Loans, Inc.
Exhibit U Amended and Restated Master Mortgage Loan Purchase Agreement,
dated as of November 1, 2005, between GreenPoint Mortgage
Funding, Inc. and Xxxxxxx Xxxxx Mortgage Company
Exhibit V Servicing Agreement, dated as of November 1, 2005, between
GreenPoint Mortgage Funding, Inc. and Xxxxxxx Sachs Mortgage
Company
Exhibit W Second Amended and Restated Flow Seller's Warranties and
Servicing Agreement, dated as of January 1, 2006, between
National City Mortgage Co. and Xxxxxxx Xxxxx Mortgage Company
Exhibit X Second Amended and Restated Master Seller's Warranties and
Servicing Agreement, dated as of November 1, 2005, between
Xxxxx Fargo Bank, National Association and Xxxxxxx Xxxxx
Mortgage Company
Exhibit Y Mortgage Loan Sale and Servicing Agreement, dated as of July 1,
2006, between First Horizon Loan Corporation and Xxxxxxx Sachs
Mortgage Company
Exhibit Z Seller's Purchase, Warranties and Servicing Agreement, dated
as of April 1, 2005, between Xxxxxxx Xxxxx Mortgage Company and
Wachovia Mortgage Corporation
Exhibit AA Amended and Restated Mortgage Loan Flow Purchase, Sale &
Servicing Agreement, dated as of December 1, 2005, between
Xxxxxxx Sachs Mortgage Company and PHH Mortgage Corporation
(formerly known as Cendant Mortgage Corporation) and Xxxxxx'x
Gate Residential Mortgage Trust (formerly known as Cendant
Residential Mortgage Trust)
vi
THIS MASTER SERVICING AND TRUST AGREEMENT, dated as of September
1, 2006 (this "Agreement"), is hereby executed by and among GS MORTGAGE
SECURITIES CORP., a Delaware corporation (the "Depositor"), DEUTSCHE BANK
NATIONAL TRUST COMPANY ("Deutsche Bank"), as trustee (in such capacity, the
"Trustee"), U.S. BANK NATIONAL ASSOCIATION ("U.S. Bank"), as a custodian,
DEUTSCHE BANK NATIONAL TRUST COMPANY ("Deutsche Bank"), as a custodian,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION ("JPMorgan"), as a custodian, XXXXX
FARGO BANK, NATIONAL ASSOCIATION ("Xxxxx Fargo"), as a custodian (Deutsche
Bank, JPMorgan, U.S. Bank and Xxxxx Fargo, each as a "Custodian" and together
the "Custodians") and Xxxxx Fargo, as master servicer (in such capacity, the
"Master Servicer") and as securities administrator (in such capacity, the
"Securities Administrator").
W I T N E S S E T H:
- - - - - - - - - -
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Securities Administrator on behalf of the Trust shall elect
that four segregated asset pools within the Trust Fund be treated for federal
income tax purposes as comprising four REMICs (each, a "Trust REMIC" or, in
the alternative, the "Lower-Tier REMIC", the "Middle-Tier REMIC", the
"Upper-Tier REMIC" and the "Class X REMIC", respectively). The Class UT-Swap
IO Interest, the Class X Interest and each Class of LIBOR Certificates (other
than the right of each Class of LIBOR Certificates to receive Basis Risk Carry
Forward Amounts), represents ownership of a regular interest in the Upper-Tier
REMIC for purposes of the REMIC Provisions. The Class R Certificates represent
ownership of the sole class of residual interest in the Upper-Tier REMIC, the
Class RC Certificates represent ownership of the sole class of residual
interest in the Lower-Tier REMIC and the Middle-Tier REMIC, and the Class RX
Certificates represent ownership of the sole class of residual interest in the
Class X REMIC for purposes of the REMIC Provisions. The Startup Day for each
REMIC described herein is the Closing Date. The latest possible maturity date
for each Certificate is the latest date referenced in Section 2.04. The Class
X REMIC shall hold as assets the Class X Interest and the Class UT-Swap-IO
Interest as set out below. The Upper-Tier REMIC shall hold as assets the
several classes of uncertificated Middle-Tier Regular Interests, set out
below. The Middle-Tier REMIC shall hold as assets the several classes of
uncertificated Lower-Tier Regular Interests, set out below. The Lower-Tier
REMIC shall hold as assets the assets described in the definition of "Trust
Fund" herein (other than the Prepayment Premiums and the Excess Reserve Fund
Account). Each Lower-Tier Regular Interest is hereby designated as a regular
interest in the Lower-Tier REMIC. Each Middle-Tier Regular Interest is hereby
designated as a regular interest in the Middle-Tier REMIC. The Class MT-A-1,
Class MT-A-2, Class MT-A-3-A, Class MT-A-3-B, Class MT-M-1, Class MT-M-2,
Class MT-M-3, Class MT-M-4 and Class MT-B-1 Interests are hereby designated
the MT-Accretion Directed Classes (the "MT Accretion Directed Classes"). The
Class P Certificates represent beneficial ownership of the Prepayment
Premiums, each Class of Certificates (excluding the Class P, Class X and each
class of Residual Certificates) represents beneficial ownership of a regular
interest in the Upper-Tier REMIC and
the right to receive Basis Risk Carry Forward Amounts and the Class X
Certificates represent beneficial ownership of a regular interest in the Class
X REMIC and the Excess Reserve Fund Account, which portions of the Trust Fund
shall be treated as a grantor trust.
The Lower-Tier REMIC
The Lower-Tier REMIC Interests will have the Initial Principal Balances
and Pass-Through Rates as set forth in the following table:
Initial Principal Pass-Through
Lower-Tier REMIC Interests Balance(1) Rate
-------------------------- ------- ----
Class LT-1A $ 21,836,500.00 (2)
Class LT-1B $ 21,836,500.00 (2)
Class LT-2A $ 34,005,500.00 (2)
Class LT-2B $ 34,005,500.00 (2)
Class LT-3A $ 32,350,000.00 (2)
Class LT-3B $ 32,350,000.00 (2)
Class LT-4A $ 30,838,000.00 (2)
Class LT-4B $ 30,838,000.00 (2)
Class LT-5A $ 29,452,500.00 (2)
Class LT-5B $ 29,452,500.00 (2)
Class LT-6A $ 28,018,500.00 (2)
Class LT-6B $ 28,018,500.00 (2)
Class LT-7A $ 26,654,000.00 (2)
Class LT-7B $ 26,654,000.00 (2)
Class LT-8A $ 25,355,500.00 (2)
Class LT-8B $ 25,355,500.00 (2)
Class LT-9A $ 24,121,500.00 (2)
Class LT-9B $ 24,121,500.00 (2)
2
Initial Principal Pass-Through
Lower-Tier REMIC Interests Balance(1) Rate
-------------------------- ------- ----
Class LT-10A $ 22,946,500.00 (2)
Class LT-10B $ 22,946,500.00 (2)
Class LT-11A $ 21,829,000.00 (2)
Class LT-11B $ 21,829,000.00 (2)
Class LT-12A $ 20,766,000.00 (2)
Class LT-12B $ 20,766,000.00 (2)
Class LT-13A $ 19,754,500.00 (2)
Class LT-13B $ 19,754,500.00 (2)
Class LT-14A $ 18,792,500.00 (2)
Class LT-14B $ 18,792,500.00 (2)
Class LT-15A $ 17,877,500.00 (2)
Class LT-15B $ 17,877,500.00 (2)
Class LT-16A $ 17,007,000.00 (2)
Class LT-16B $ 17,007,000.00 (2)
Class LT-17A $ 16,178,000.00 (2)
Class LT-17B $ 16,178,000.00 (2)
Class LT-18A $ 15,390,500.00 (2)
Class LT-18B $ 15,390,500.00 (2)
Class LT-19A $ 14,641,000.00 (2)
Class LT-19B $ 14,641,000.00 (2)
Class LT-20A $ 13,928,000.00 (2)
Class LT-20B $ 13,928,000.00 (2)
Class LT-21A $ 13,249,500.00 (2)
3
Initial Principal Pass-Through
Lower-Tier REMIC Interests Balance(1) Rate
-------------------------- ------- ----
Class LT-21B $ 13,249,500.00 (2)
Class LT-22A $ 12,603,500.00 (2)
Class LT-22B $ 12,603,500.00 (2)
Class LT-23A $ 11,990,000.00 (2)
Class LT-23B $ 11,990,000.00 (2)
Class LT-24A $ 11,406,000.00 (2)
Class LT-24B $ 11,406,000.00 (2)
Class LT-25A $ 10,850,500.00 (2)
Class LT-25B $ 10,850,500.00 (2)
Class LT-26A $ 10,322,000.00 (2)
Class LT-26B $ 10,322,000.00 (2)
Class LT-27A $ 9,819,500.00 (2)
Class LT-27B $ 9,819,500.00 (2)
Class LT-28A $ 9,341,000.00 (2)
Class LT-28B $ 9,341,000.00 (2)
Class LT-29A $ 8,885,500.00 (2)
Class LT-29B $ 8,885,500.00 (2)
Class LT-30A $ 8,453,500.00 (2)
Class LT-30B $ 8,453,500.00 (2)
Class LT-31A $ 8,041,000.00 (2)
Class LT-31B $ 8,041,000.00 (2)
Class LT-32A $ 7,649,500.00 (2)
Class LT-32B $ 7,649,500.00 (2)
4
Initial Principal Pass-Through
Lower-Tier REMIC Interests Balance(1) Rate
-------------------------- ------- ----
Class LT-33A $ 7,277,500.00 (2)
Class LT-33B $ 7,277,500.00 (2)
Class LT-34A $ 6,923,500.00 (2)
Class LT-34B $ 6,923,500.00 (2)
Class LT-35A $ 6,587,500.00 (2)
Class LT-35B $ 6,587,500.00 (2)
Class LT-36A $ 6,266,000.00 (2)
Class LT-36B $ 6,266,000.00 (2)
Class LT-37A $ 5,961,000.00 (2)
Class LT-37B $ 5,961,000.00 (2)
Class LT-38A $ 5,670,500.00 (2)
Class LT-38B $ 5,670,500.00 (2)
Class LT-39A $ 5,394,000.00 (2)
Class LT-39B $ 5,394,000.00 (2)
Class LT-40A $ 5,131,000.00 (2)
Class LT-40B $ 5,131,000.00 (2)
Class LT-41A $ 4,881,500.00 (2)
Class LT-41B $ 4,881,500.00 (2)
Class LT-42A $ 4,643,000.00 (2)
Class LT-42B $ 4,643,000.00 (2)
Class LT-43A $ 4,417,000.00 (2)
Class LT-43B $ 4,417,000.00 (2)
Class LT-44A $ 4,202,000.00 (2)
5
Initial Principal Pass-Through
Lower-Tier REMIC Interests Balance(1) Rate
-------------------------- ------- ----
Class LT-44B $ 4,202,000.00 (2)
Class LT-45A $ 3,997,000.00 (2)
Class LT-45B $ 3,997,000.00 (2)
Class LT-46A $ 3,802,000.00 (2)
Class LT-46B $ 3,802,000.00 (2)
Class LT-47A $ 3,617,000.00 (2)
Class LT-47B $ 3,617,000.00 (2)
Class LT-48A $ 3,440,500.00 (2)
Class LT-48B $ 3,440,500.00 (2)
Class LT-49A $ 3,273,000.00 (2)
Class LT-49B $ 3,273,000.00 (2)
Class LT-50A $ 3,113,500.00 (2)
Class LT-50B $ 3,113,500.00 (2)
Class LT-51A $ 2,962,000.00 (2)
Class LT-51B $ 2,962,000.00 (2)
Class LT-52A $ 2,817,000.00 (2)
Class LT-52B $ 2,817,000.00 (2)
Class LT-53A $ 2,680,000.00 (2)
Class LT-53B $ 2,680,000.00 (2)
Class LT-54A $ 2,549,500.00 (2)
Class LT-54B $ 2,549,500.00 (2)
Class LT-55A $ 2,425,000.00 (2)
Class LT-55B $ 2,425,000.00 (2)
6
Initial Principal Pass-Through
Lower-Tier REMIC Interests Balance(1) Rate
-------------------------- ------- ----
Class LT-56A $ 2,307,000.00 (2)
Class LT-56B $ 2,307,000.00 (2)
Class LT-57A $ 2,195,000.00 (2)
Class LT-57B $ 2,195,000.00 (2)
Class LT-58A $ 2,089,000.00 (2)
Class LT-58B $ 2,089,000.00 (2)
Class LT-59A $ 1,989,000.00 (2)
Class LT-59B $ 1,989,000.00 (2)
Class LT-60A $ 35,035,000.00 (2)
Class LT-60B $ 35,035,000.00 (2)
Class LT-Support (3) (2)
-------------------------------
(1) Scheduled principal, prepayments and Realized Losses will be allocated
first, to the Class LT-Support Interest and second, among the other
Classes designated "LT-", first, sequentially to the Class having the
lowest cardinal number following such designation, in each case until
reduced to zero, and second, among each class having the same cardinal
number pro rata between each such class.
(2) On each Distribution Date, the interest rate will be the Weighted
Average of the Adjusted Net Mortgages Rates then in effect on the
beginning of the related Due Period on the Mortgage Loans ("Pool WAC").
(3) On each Distribution Date, following the allocation of Principal Amounts
and Realized Losses, the principal balance in respect of the Class
LT-Support Interest will equal the excess of the principal balance of
the Mortgage Loans over the principal balance in respect of the
remaining Lower-Tier REMIC Interests designated as "LT-".
In addition to issuing the Lower-Tier Regular Interests, the
Lower-Tier REMIC shall issue the Class R-1 Interest which shall be the sole
class of residual interests in the Lower-Tier REMIC. The Class RC Certificates
will represent ownership of the Class R-1 Interest and will be issued as a
single certificate in definitive form in a principal amount of $100 and shall
have no interest rate. Amounts received by the Class R-1 Interest shall be
deemed paid from the Lower-Tier REMIC.
7
The Middle-Tier REMIC
Corresponding
Middle-Tier Interest Middle-Tier Initial Middle-Tier Principal Upper-Tier
Designation Interest Rate Amount REMIC Class
-------------------- ------------- ------------------------------------------------ -------------
Class MT-A1 (1) 1/2 initial Class Certificate Balance of A-1
Corresponding Upper-Tier REMIC Regular Interest
Class MT-A-2A (1) 1/2 initial Class Certificate Balance of A-2A
Corresponding Upper-Tier REMIC Regular Interest
Class MT-A3-A (1) 1/2 initial Class Certificate Balance of A3-A
Corresponding Upper-Tier REMIC Regular Interest
Class MT-A3-B (1) 1/2 initial Class Certificate Balance of A3-B
Corresponding Upper-Tier REMIC Regular Interest
Class MT-M-1 (1) 1/2 initial Class Certificate Balance of M-1
Corresponding Upper-Tier REMIC Regular Interest
Class MT-M-2 (1) 1/2 initial Class Certificate Balance of M-2
Corresponding Upper-Tier REMIC Regular Interest
Class MT-M-3 (1) 1/2 initial Class Certificate Balance of M-3
Corresponding Upper-Tier REMIC Regular Interest
Class MT-M-4 (1) 1/2 initial Class Certificate Balance of M-4
Corresponding Upper-Tier REMIC Regular Interest
Class MT-M-5 (1) 1/2 initial Class Certificate Balance of M-5
Corresponding Upper-Tier REMIC Regular Interest
Class MT-B-1 (1) 1/2 initial Class Certificate Balance of B-1
Corresponding Upper-Tier REMIC Regular Interest
Class MT-B-2 (1) 1/2 initial Class Certificate Balance of B-2
Corresponding Upper-Tier REMIC Regular Interest
Class MT-B-3 (1) 1/2 initial Class Certificate Balance of B-3
Corresponding Upper-Tier REMIC Regular Interest
Class MT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2 N/A
Overcollateralized Amount
Class MT-Swap IO (2) (2) N/A
------------------------------------
8
(1) The interest rate with respect to any Distribution Date for these
interests will equal the weighted average of the pass through rates of
the Lower-Tier REMIC Interests treating: (i) each "A" class (e.g. XX-0X,
XX-0X, XX-0X ...) as subject to a cap and a floor equal to the product
of 2 and Pool WAC minus 10.612%, and (ii) each "B" class (e.g. LT-1B,
LT-2B, LT-3B ...) as subject to a cap and a floor rate equal to the
product of 2 and One Month LIBOR, in each case whose cardinal number
preceding such designation (x.x. -0, -0, -0,...) is not exceeded by the
ordinal number of the Distribution Date following the Closing Date (e.g.
first, second, third,...) for such Distribution Date (the "Tax WAC
Cap").
(2) For each Distribution Date, the interest rate will equal the excess of
5.306% over one month LIBOR on a notional balance equal to the sum of
the principal balances of each Lower-Tier REMIC Regular Interests whose
cardinal number following such designation (x.x. -0, -0, -0,...) is not
exceeded by the ordinal number of the Distribution Date following the
Closing Date (e.g. first, second, third,...) for such Distribution Date.
The Middle-Tier REMIC shall hold as assets all of the Middle-Tier
REMIC Regular Interests.
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount will be payable as a reduction of the Middle-Tier
Principal Amount of the MT-Accretion Directed Classes (each such Class will be
reduced by an amount equal to 50% of any increase in the Overcollateralized
Amount that is attributable to a reduction in the Class Certificate Balance of
its Corresponding Class) and will be accrued and added to the Middle-Tier
Principal Amount of the Class MT-Accrual Interest. On each Distribution Date,
the increase in the Middle-Tier Principal Amount of the Class MT-Accrual
Interest may not exceed interest accruals for such Distribution Date for the
Class MT-Accrual Interest. In the event that: (i) 50% of the increase in the
Overcollateralized Amount exceeds (ii) interest accruals on the Class
MT-Accrual Interest for such Distribution Date, the excess for such
Distribution Date (accumulated with all such excesses for all prior
Distribution Dates) will be added to any increase in the Overcollateralized
Amount for purposes of determining the amount of interest accrual on the Class
MT-Accrual Interest payable as principal on the MT-Accretion Directed Classes
on the next Distribution Date pursuant to the first sentence of this
paragraph. All payments of scheduled principal and prepayments of principal
generated by the Mortgage Loans shall be allocated (i) 50% to the Class
MT-Accrual Interest and (ii) 50% to the MT-Accretion Directed Classes
(principal payments shall be allocated among such MT-Accretion Directed
Classes in an amount equal to 50% of the principal amounts allocated to their
respective Corresponding Classes), until paid in full. Notwithstanding the
above, principal payments allocated to the Class X Interest that result in the
reduction in the Overcollateralized Amount shall be allocated to the Class
MT-Accrual Interest (until paid in full). Realized Losses shall be applied so
that after all distributions have been made on each Distribution Date (i) the
Middle-Tier Principal Amount of each of the MT-Accretion Directed Classes is
equal to 50% of the Class Certificate Balance of its Corresponding Class, and
(ii) the Class MT-Accrual Interest are equal to 50% of the aggregate Stated
Principal Balance of the Mortgage Loans plus 50% of the Overcollateralized
Amount.
In addition to issuing the Middle-Tier Regular Interests, the
Middle-Tier REMIC shall issue the Class R-2 Interest which shall be the sole
class of residual interests in the Middle-Tier REMIC. The Class RC
Certificates will represent ownership of the Class R-2 Interest and will be
issued as a single certificate in definitive form in a principal amount of
$100 and shall
9
have no interest rate. Amounts received by the Class R-2 Interest shall be
deemed paid from the Middle-Tier REMIC.
The Upper-Tier REMIC
The Upper-Tier REMIC shall issue the following classes of
Upper-Tier Regular Interests, and each such interest, other than the Class
UT-R Interest, is hereby designated as a regular interest in the Upper-Tier
REMIC.
Upper-Tier Interest
Rate and Initial Upper-Tier
Corresponding Principal Amount and
Upper-Tier Class Pass-Through Corresponding Class Corresponding Class
Class Designation Rate Certificate Balance of Certificates
--------------------- ---------------------- ---------------------- ----------------------
Class A-1 (1) $ 797,539,000 Class A-1(13)
Class A-2 (2) $ 216,239,000 Class A-2(13)
Class A-3-A (3) $ 302,442,000 Class A-3-A(13)
Class A-3-B (4) $ 33,605,000 Class A-3-B(13)
Class M-1 (5) $ 18,878,000 Class M-1(13)
Class M-2 (6) $ 18,153,000 Class M-2(13)
Class M-3 (7) $ 10,165,000 Class M-3(13)
Class M-4 (8) $ 9,440,000 Class M-4(13)
Class M-5 (9) $ 14,522,000 Class M-5(13)
Class B-1 (10) $ 8,711,000 Class B-1(13)
Class B-2 (11) $ 7,262,000 Class B-2(13)
Class X (12) (12) Class X(12)
Class UT-Swap IO (14) (14) Class X(12)
(1) The Class A-1 Interest will bear interest during each Interest Accrual
period at a per annum rate equal to the least of (i) one-month LIBOR
plus 0.060% (0.120% after the first distribution date on which the
optional clean-up call is exercisable), (ii) the Tax Loan Cap and (iii)
the Tax WAC Cap.
(2) The Class A-2 Interest will bear interest during each Interest Accrual
period at a per annum rate equal to the least of (i) one-month LIBOR
plus 0.170% (0.340% after the first distribution date on which the
optional clean-up call is exercisable), (ii) the Tax Loan Cap and (iii)
the Tax WAC Cap.
(3) The Class A-3-A Interest will bear interest during each Interest Accrual
period at a per annum rate equal to the least of (i) one-month LIBOR
plus 0.240% (0.480% after the first distribution date on which the
optional clean-up call is exercisable), (ii) the Tax Loan Cap and (iii)
the Tax WAC Cap.
(4) The Class A-3-B Interest will bear interest during each Interest Accrual
period at a per annum rate equal to the least of (i) one-month LIBOR
plus 0.270% (0.540% after the first distribution date on which the
optional clean-up call is exercisable), (ii) the Tax Loan Cap and (iii)
the Tax WAC Cap.
10
(5) The Class M-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to lesser of (i) one-month LIBOR plus
0.300% (0.450% after the first distribution date on which the optional
clean-up call is exercisable) and (ii) the Tax WAC Cap.
(6) The Class M-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to lesser of (i) one-month LIBOR plus
0.310% (0.465% after the first distribution date on which the optional
clean-up call is exercisable) and (ii) the Tax WAC Cap.
(7) The Class M-3 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to lesser of (i) one-month LIBOR plus
0.320% (0.480% after the first distribution date on which the optional
clean-up call is exercisable) and (ii) the Tax WAC Cap.
(8) The Class M-4 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to lesser of (i) one-month LIBOR plus
0.370% (0.555% after the first distribution date on which the optional
clean-up call is exercisable) and (ii) the Tax WAC Cap.
(9) The Class M-4 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to lesser of (i) one-month LIBOR plus
0.470% (0.705% after the first distribution date on which the optional
clean-up call is exercisable) and (ii) the Tax WAC Cap.
(10) The Class B-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to lesser of (i) one-month LIBOR plus
1.000% (1.500% after the first distribution date on which the optional
clean-up call is exercisable) and (ii) the Tax WAC Cap.
(11) The Class B-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to lesser of (i) one-month LIBOR plus
1.850% (2.775% after the first distribution date on which the optional
clean-up call is exercisable) and (ii) the Tax WAC Cap.
(12) The Class X Interest will have a principal balance to the extent of any
Overcollateralized Amount. The Class X Interest will not accrue interest
on such balance but will accrue interest on a notional principal
balance. As of any Distribution Date, the Class X Interest shall have a
notional principal balance equal to the aggregate of the principal
balances of the Middle-Tier Regular Interests as of the first day of the
related Interest Accrual Period. With respect to any Interest Accrual
Period, the Class X Interest shall bear interest at a rate equal to the
excess, if any, of the Tax WAC Cap over the product of (i) 2 and (ii)
the weighted average Middle-Tier Interest Rate of the Middle-Tier
Regular Interests, where the Middle-Tier Interest Rates on the Class
MT-Accrual Interest is subject to a cap equal to zero and each
MT-Accretion Directed Class is subject to a cap equal to the
Pass-Through Rate on its Corresponding Class. With respect to any
Distribution Date, interest that so accrues on the notional principal
balance of the Class X Interest shall be deferred in an amount equal to
any increase in the Overcollateralized Amount on such Distribution Date.
Such deferred interest shall not itself bear interest. The Class X
Certificates will represent beneficial ownership of a regular interest
issued by the Class X REMIC, the
11
Interest Rate Swap Agreement, the Supplemental Interest Trust and
amounts in the Excess Reserve Fund Account and the Supplemental Interest
Trust, subject to the obligation to make payments from the Excess
Reserve Fund Account in respect of Basis Risk Carry Forward Amounts. For
federal income tax purposes, the Securities Administrator will treat the
Class X Certificateholders' obligation to make payments from the Excess
Reserve Fund Account and the Supplemental Interest Trust as payments
made pursuant to an interest rate cap contract written by the Class X
Certificateholders in favor of each Class of LIBOR Certificates. Such
rights of the Class X Certificateholders and Principal
Certificateholders shall be treated as held in a portion of the Trust
Fund that is treated as a grantor trust under subpart E, Part I of
subchapter J of the Code.
(13) Each of the Certificates will bear interest at a pass through rate equal
to the pass through rate in respect of its Corresponding Upper-Tier
REMIC Class substituting the term "WAC Cap" for each reference to "Tax
WAC Cap". Each of these Certificates will represent not only the
ownership of the Corresponding Class of Upper-Tier Regular Interest but
also the right to receive payments from the Excess Reserve Fund Account
and the Supplemental Interest Trust in respect of any Basis Risk Carry
Forward Amounts. For federal income tax purposes, the Securities
Administrator will treat a Certificateholder's right to receive payments
from the Excess Reserve Fund Account and the Supplemental Interest Trust
as payments made pursuant to an interest rate cap contract written by
the Class X Certificateholders.
(14) For each Distribution Date, 100% of the cash flow in respect of the
Class MT-Swap IO Interest. The Class X Certificates will be entitled to
100% of the Cash flow in respect of the Class UT-Swap IO Interest.
Each of these Certificates will also be subject to the obligation to pay
Class IO Shortfalls as described in Section 8.14. For federal income tax
purposes, any amount distributed on the Upper Tier REMIC Interests on any such
Distribution Date in excess of their Pass Through Rate, (the "REMIC Cap")
shall be treated as having been paid from the Excess Reserve Fund Account or
the Supplemental Interest Trust, as applicable, and any excess of the REMIC
Cap over the amount distributable on such Class of Upper Tier REMIC Interests
on such Distribution Date shall be treated as having been paid to the
Supplemental Interest Trust, all pursuant to, and as further provided in,
Section 8.14. The Securities Administrator will treat a LIBOR
Certificateholder's right to receive payments from the Excess Reserve Fund
Account and the Supplemental Interest Trust as payments made pursuant to an
interest rate cap contract written by the Class X Certificateholders.
In addition to issuing the Upper-Tier Regular Interests, the Upper-Tier
REMIC shall issue the Class R Certificates, which shall be the sole class of
residual interests in the Upper-Tier REMIC. The Class R Certificates will be
issued as a single certificate in definitive form in a principal amount of
$100 and shall have no interest rate. Amounts received by the Class R
Certificates shall be deemed paid from the Upper-Tier REMIC.
12
Class X REMIC
The Class X REMIC shall issue the following classes of interests. The
Class X Certificates shall represent a regular interest in the Class X REMIC
and the Class RX Certificates shall represent the sole class of residual
interest in the Class X REMIC.
Class X REMIC
Class X REMIC Designation Interest Rate Principal Amount
-------------------------- ------------- ----------------
Class X Certificates (1) (1)
-----------------
(1) The Class X Certificates are entitled to 100% of the interest and
principal on the Class X Interest and the Class UT-Swap-IO Interest on
each Distribution Date.
In addition to issuing the Class X Certificates, the Class X REMIC shall
issue the Class R-X Certificates which shall be the sole class of residual
interests in the Class X REMIC. The Class RX Certificates will be issued as a
single certificate in definitive form in a principal amount of $100 and shall
have no interest rate. Amounts received by the Class RX Certificates shall be
deemed paid from the Class X REMIC.
The foregoing REMIC structure is intended to cause all of the cash from
the Mortgage Loans to flow through to the Upper-Tier REMIC as cash flow on a
REMIC regular interest, without creating any actual or potential shortfall
(other than for credit losses) to any Trust REMIC regular interest. It is not
intended that the Class R, Class RC or Class RX Certificates be entitled to
any cash flow pursuant to this Agreement except as provided in Section
4.01(a)(ii)(A)(a) hereunder.
For any purpose for which the Pass-Through Rates are calculated, the
interest rate on the Mortgage Loans shall be appropriately adjusted to account
for the difference between the monthly day count convention of the Mortgage
Loans and the monthly day count convention of the regular interests issued by
each of the REMICs. For purposes of calculating the Pass-Through Rates for
each of the interests issued by the Lower-Tier REMIC and the Middle-Tier REMIC
such rates shall be adjusted to equal a monthly day count convention based on
a 30 day month for each Due Period and a 360-day year so that the Mortgage
Loans and all regular interests will be using the same monthly day count
convention.
The minimum denomination for each Class of the Offered Certificates will
be $50,000 initial Certificate Balance, with integral multiples of $1 in
excess thereof except that one Certificate in each Class may be issued in a
different amount. The minimum denomination for (a) the Class R and Class RC
Certificates will each be $100 and each will be a 100% Percentage Interest in
such Class, (b) the Class RX Certificates will be a 100% Percentage Interest
in such Class and (c) the Class P and Class X Certificates will be a 1%
Percentage Interest in each such Class.
Set forth below are designations of Classes of Certificates to the
categories used herein:
13
Book-Entry Certificates.............................. All Classes of Certificates other than the Physical
Certificates.
Class A Certificates................................. The Class A-1, Class A-2, Class A-3-A and Class A-3-B
Certificates, collectively.
Class B Certificates................................. The Class B-1, Class B-2 and Class B-3 Certificates,
collectively.
Class M Certificates................................. The Class M-1, Class M-2, Class M-3, Class M-4 and
Class M-5 Certificates, collectively.
Residual Certificates................................ The Class R, Class RC and Class RX Certificates.
ERISA Restricted The Private Certificates and any Certificate with a
rating below the lowest
Certificates......................................... applicable permitted rating under the Underwriters'
Exemption.
LIBOR Certificates................................... The Offered Certificates other than the Residual
Certificates.
Offered Certificates................................. All Classes of Certificates other than the Private
Certificates.
Private Certificates................................. The Class B-3, Class P and Class X Certificates.
Physical Certificates................................ The Class R, Class RC, Class RX, Class P and Class X
Certificates.
Principal Certificates............................... The Offered Certificates.
Rating Agencies...................................... Xxxxx'x and S&P.
Regular Certificates................................. All Classes of Certificates other than the Residual
Certificates.
Subordinated Certificates............................ The Class M and Class B Certificates.
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Capitalized terms used herein but not
defined herein shall have the meanings given them in the applicable Servicing
Agreement or Sale Agreement. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
10-K Filing Deadline: As defined in Section 13.04.
14
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect
to which any portion of a Monthly Payment is, as of the last day of the prior
Due Period, two (2) months or more past due (without giving effect to any
grace period), each Mortgage Loan in foreclosure, all REO Property and each
Mortgage Loan for which the Mortgagor has filed for bankruptcy.
Account: Any of the Distribution Account or the Excess Reserve
Fund Account. Each such Account shall be a separate Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of LIBOR Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior
to such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for the related Due
Period allocated to such Class pursuant to Section 4.01.
Additional Form 10-D Disclosure: As defined in Section 13.03.
Additional Form 10-K Disclosure: As defined in Section 13.04.
Additional Servicer: Each affiliate of each Servicer that services
any of the Mortgage Loans and each Person who is not an affiliate of the any
Servicer, who services 10% or more of the Mortgage Loans. For clarification
purposes, the Master Servicer and the Securities Administrator are Additional
Servicers.
Adjusted Net Mortgage Interest Rate: As to each Mortgage Loan and
at any time, the per annum rate equal to the Mortgage Interest Rate less the
Expense Fee Rate.
Administrative Fee Rate: With respect to any Mortgage Loan, the
Master Servicing Fee Rate.
Administrative Fees: As to each Mortgage Loan, the fees calculated
by reference to the Administrative Fee Rate.
Advance: Any Monthly Advance or Servicing Advance.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For
the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement: This Master Servicing and Trust Agreement and all
amendments or supplements hereto.
Applied Realized Loss Amount: With respect to any Distribution
Date, the amount, if any, by which the aggregate Class Certificate Balance of
the LIBOR Certificates after distributions of principal on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
15
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the
assignee's name and recording information not yet returned from the recording
office), reflecting the sale of the Mortgage to the Trustee.
Assignment Agreement: A Step 1 Assignment Agreement or a Step 2
Assignment Agreement.
Auction Call: As defined in Section 9.03(b).
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Master Servicer (x) the sum of
(without duplication) (i) all scheduled installments of interest (net of the
related Expense Fees) and principal due on the Due Date on such Mortgage Loans
in the related Due Period and received on or prior to the related
Determination Date, together with any Monthly Advances in respect thereof;
(ii) all Condemnation Proceeds, Insurance Proceeds and Liquidation Proceeds
received during the related Principal Prepayment Period (in each case, net of
unreimbursed expenses incurred in connection with a liquidation or foreclosure
and unreimbursed Advances, if any); (iii) all partial or full prepayments
(excluding Prepayment Premiums) on the Mortgage Loans received during the
related Principal Prepayment Period together with all Compensating Interest
paid in connection therewith; (iv) all amounts received with respect to such
Distribution Date in connection with a purchase or repurchase of a Deleted
Mortgage Loan; (v) all amounts received with respect to such Distribution Date
in connection with the operation of the Primary Mortgage Insurance Policy;
(vi) all amounts received with respect to such Distribution Date as a
Substitution Adjustment Amount received in connection with the substitution of
a Mortgage Loan; (vii) all Net Swap Receipt Amounts, if any, less Net Swap
Payment Amounts, if any, for such Distribution Date; and (viii) all proceeds
received with respect to the termination of the Trust Fund pursuant to clause
(a) of Section 11.01; reduced by (y) all amounts in reimbursement for Monthly
Advances and Servicing Advances previously made with respect to the Mortgage
Loans, and other amounts as to which the Servicers, the Depositor, the Master
Servicer, the Securities Administrator, the Trustee (or co-trustee) or the
Custodians are entitled to be paid or reimbursed pursuant to this Agreement.
Avelo: Avelo Mortgage, L.L.C., a Delaware limited liability
company, and its successors in interest.
Avelo Call: As defined in Section 11.01.
Avelo Servicing Agreement: The Flow Servicing Agreement, dated as
of January 1, 2006, between Avelo and GSMC, as modified by the related
Assignment Agreements.
Back-Up Certification: As defined in Section 13.06.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Principal Remittance Amount
for such Distribution Date over (ii) the Excess Overcollateralized Amount, if
any, for such Distribution Date.
00
Xxxxx Xxxx Xxxxx Xxxxxxx Xxxxxx: With respect to each Class of
LIBOR Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon the WAC Cap, the excess, if any, of (i) the amount of interest such
Class of Certificates would otherwise be entitled to receive on such
Distribution Date had such Pass-Through Rate not been subject to the WAC Cap,
over (ii) the amount of interest that Class of Certificates received on such
Distribution Date taking into account the WAC Cap and (B) the Basis Risk Carry
Forward Amount for such Class of Certificates for all previous Distribution
Dates not previously paid, together with interest thereon at a rate equal to
the applicable Pass-Through Rate for such Class of Certificates for such
Distribution Date, without giving effect to the WAC Cap).
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk Carry Forward Amounts for
such Distribution Date, (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments) or (iii) the amount payable from the
Supplemental Interest Trust.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions in (a) the States of
New York, California, Texas, Maryland and Minnesota, (b) with respect to a
Servicer, the State in which such Servicer's servicing operations are located,
or (c) the State in which the Trustee's operations are located, are authorized
or obligated by law or executive order to be closed.
Certificate: Any one of the Certificates executed by the
Securities Administrator in substantially the forms attached hereto as
exhibits.
Certificate Balance: With respect to any Class of LIBOR
Certificates, at any date, the maximum dollar amount of principal to which the
Holder thereof is then entitled hereunder, such amount being equal to the
Denomination thereof minus all distributions of principal previously made with
respect thereto and in the case of any Subordinated Certificates, reduced by
any Applied Realized Loss Amounts applicable to such Class of Subordinated
Certificates; provided, however, that immediately following the Distribution
Date on which a Subsequent Recovery is distributed, the Class Certificate
Balances of any Class or Classes of Certificates that have been previously
reduced by Applied Realized Loss Amounts will be increased, in order of
seniority, by the amount of the Subsequent Recovery distributed on such
Distribution Date (up to the amount of Applied Realized Loss Amounts allocated
to such Class or Classes). The Class X and Class P Certificates have no
Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor or any affiliate of the Depositor
shall be deemed not to be Outstanding and the Percentage Interest evidenced
thereby
17
shall not be taken into account in determining whether the requisite amount of
Percentage Interests necessary to effect such consent has been obtained;
provided, however, that if any such Person (including the Depositor) owns 100%
of the Percentage Interests evidenced by a Class of Certificates, such
Certificates shall be deemed to be Outstanding for purposes of any provision
hereof that requires the consent of the Holders of Certificates of a
particular Class as a condition to the taking of any action hereunder. The
Securities Administrator is entitled to rely conclusively on a certification
of the Depositor or any affiliate of the Depositor in determining which
Certificates are registered in the name of an affiliate of the Depositor.
Certification Parties: As defined in Section 13.06.
Certifying Person: As defined in Section 13.06.
Class: All Certificates bearing the same class designation as set
forth in this Agreement.
Class A Certificates: As specified in the Preliminary Statement.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1."
Class A-2 Certificates: All Certificates bearing the class
designation of "Class A-2."
Class A-3-A Certificates: All Certificates bearing the class
designation of "Class A-3-A."
Class A-3-B Certificates: All Certificates bearing the class
designation of "Class A-3-B."
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balance
of the Class A Certificates immediately prior to such Distribution Date over
(ii) the lesser of (A) 86.10% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class B Certificates: As specified in the Preliminary Statement.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2
18
Certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account
the distribution of the Class M-3 Principal Distribution Amount on such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account
the distribution of the Class M-5 Principal Distribution Amount on such
Distribution Date) and (G) the Class Certificate Balance of the Class B-1
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) the product of (x) 96.90% and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, and (B) the excess,
if any, of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over the Overcollateralization Floor.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2."
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class Certificate Balance of the Class M-3 Certificates (after taking into
account the distribution of the Class M-3 Principal Distribution Amount on
such Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account
the distribution of the Class M-5 Principal Distribution Amount on such
Distribution Date), (G) the Class Certificate Balance of the Class B-1
Certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount on such Distribution Date) and (H) the Class
Certificate Balance of the Class B-2 Certificates immediately prior to that
Distribution Date over (ii) the lesser of (A) the product of (x) 97.90% and
(y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3."
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution
19
Amount on such Distribution Date), (D) the Class Certificate Balance of the
Class M-3 Certificates (after taking into account the distribution of the
Class M-3 Principal Distribution Amount on such Distribution Date), (E) the
Class Certificate Balance of the Class M-4 Certificates (after taking into
account the distribution of the Class M-4 Principal Distribution Amount on
such Distribution Date), (F) the Class Certificate Balance of the Class M-5
Certificates (after taking into account the distribution of the Class M-5
Principal Distribution Amount on such Distribution Date), (G) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account
the distribution of the Class B-1 Principal Distribution Amount on such
Distribution Date), (H) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount on such Distribution Date) and (I) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to that
Distribution Date over (ii) the lesser of (A) the product of (x) 98.90% and
(y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class IO Shortfall: As defined in Section 8.15. For the avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall equal the
amount payable to the Class X Certificates in respect of amounts due to the
Swap Provider on such Distribution Date (other than Defaulted Swap Termination
Payments) in excess of the amount payable on the Class X Interest on such
Distribution Date, all as further provided in Section 8.15.
Class M Certificates: As specified in the Preliminary Statement.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1."
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) the
product of (x) 88.70% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2."
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1
20
Principal Distribution Amount on such Distribution Date) and (C) the Class
Certificate Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) the product of (x) 91.20% and
(y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3."
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date) and (D) the
Class Certificate Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (ii) the lesser of (A) the product of (x) 92.60%
and (y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4."
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class Certificate Balance of the Class M-3 Certificates (after taking into
account the distribution of the Class M-3 Principal Distribution Amount on
such Distribution Date) and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) the product of (x) 93.90% and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date and (B) the excess,
if any, of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over the Overcollateralization Floor.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5."
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution
21
Amount on such Distribution Date), (B) the Class Certificate Balance of the
Class M-1 Certificates (after taking into account the distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class Certificate Balance of the Class M-2 Certificates (after taking into
account the distribution of the Class M-2 Principal Distribution Amount on
such Distribution Date), (D) the Class Certificate Balance of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Class
Certificate Balance of the Class M-4 Certificates (after taking into account
the distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), and (F) the Class Certificate Balance of the Class M-5
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) the product of (x) 95.80% and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date and (B) the excess,
if any, of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over the Overcollateralization Floor.
Class P Certificates: All Certificates bearing the class
designation of "Class P."
Class R Certificates: All Certificates bearing the class
designation of "Class R."
Class RC Certificates: All Certificates bearing the class
designation of "Class RC."
Class RX Certificates: All Certificates bearing the class
designation of "Class RX."
Class X Certificates: All Certificates bearing the class
designation of "Class X."
Class X Distributable Amount: On any Distribution Date, (i) as a
distribution in respect of interest, the amount of interest that has accrued
on the Class X Interest and not applied as an Extra Principal Distribution
Amount on such Distribution Date, plus any such accrued interest remaining
undistributed from prior Distribution Dates, plus, without duplication, (ii)
as a distribution in respect of principal, any portion of the principal
balance of the Class X Interest which is distributable as an
Overcollateralization Reduction Amount, minus (iii) any amounts paid as a
Basis Risk Payment.
Class X Interest: The Upper-Tier Regular Interest as specified and
described in the Preliminary Statement and the related footnote thereto.
Class X REMIC: As defined in the Preliminary Statement.
Closing Date: September 28, 2006.
Code: The Internal Revenue Code of 1986, including any successor
or amendatory provisions.
Collection Account: The "Custodial Account" as defined in the
applicable Servicing Agreement.
Commission: The U.S. Securities and Exchange Commission.
22
Compensating Interest: For any Distribution Date, each Servicer,
other than Xxxxx Fargo and PHH, shall provide compensating interest equal to
the lesser of (A) the difference between the interest paid by the applicable
mortgagors for that Prepayment Period in connection with the prepayments and
thirty (30) days' interest on the related mortgage loans and (B) (i) one-half
the applicable monthly servicing fee received for the related Distribution
Date, in the case of Avelo, NatCity, GreenPoint and Countrywide Servicing or
(ii) the applicable monthly servicing fee received for the related
Distribution Date, in the case of Wachovia and First Horizon. Xxxxx Fargo and
PHH will each provide Compensating Interest equal to the aggregate of the
prepayment interest shortfalls on the mortgage loans for the related
distribution date resulting from voluntary principal prepayments (in full in
the case of Xxxxx Fargo, and in full and in part, in the case of PHH) of the
mortgage loans during the related prepayment period.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Corporate Trust Office: With respect to the Securities
Administrator, the principal office of the Securities Administrator is located
at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 and its office for
certificate transfer services is located at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust Services, GSAA Home
Equity Trust 2006-16, or at such other address as the Securities Administrator
may designate from time to time by notice to the Certificateholders. With
respect to the Trustee, the principal office of the Trustee at 0000 Xxxx Xx.
Xxxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention: Trust Administration - GS0616,
or at such other address as the Trustee may designate from time to time by
notice to the Certificateholders.
Corresponding Class: The Class of interests in one Trust REMIC
created under this Agreement that corresponds to the Class of interests in the
other Trust REMIC or to a Class of Certificates in the manner set out below:
Lower-Tier Upper-Tier Corresponding
Regular Interest Regular Interest Class of Certificates
---------------- ---------------- ---------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2 Class A-2 Class A-2
Class LT-A-3-A Class A-3-A Class A-3-A
Class LT-A-3-B Class A-3-B Class A-3-B
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
23
Countrywide: Countrywide Home Loans, Inc., a New York corporation,
and its successors in interest.
Countrywide Mortgage Loans: The Mortgage Loans acquired by the
Purchaser pursuant to the Countrywide Sale Agreement.
Countrywide Sale Agreement: The Master Mortgage Loan Purchase
Agreement, dated as of July 1, 2004, between Countrywide, Countrywide
Servicing and GSMC, as amended by that certain Amendment Reg AB dated as of
January 1, 2006.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a
Texas limited partnership, and its successors in interest.
Countrywide Servicing Agreement: The Servicing Agreement, dated as
of July 1, 2004, as amended by that certain Amendment Reg AB dated as of
January 1, 2006, between Countrywide, Countrywide Servicing and GSMC, as
modified by the related Assignment Agreements.
Custodial File: With respect to each Mortgage Loan, any Mortgage
Loan Document which is delivered to the applicable Custodian or which at any
time comes into the possession of that Custodian.
Custodians: Deutsche Bank, U.S. Bank, JPMorgan and Xxxxx Fargo.
Cut-off Date: September 1, 2006.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal Balance of all Mortgage Loans as of the Cut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off
Date (after giving effect to payments of principal due on that date, whether
or not received).
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Supplemental Interest Trust to the Swap Provider
pursuant to the Interest Rate Swap Agreement as a result of an Event of
Default (as defined in the Interest Rate Swap Agreement) with respect to which
the Swap Provider is the defaulting party or a Termination Event (as defined
in the Interest Rate Swap Agreement) (other than Illegality or a Tax Event
that is not a Tax Event Upon Merger (each as defined in the Interest Rate Swap
Agreement)) with respect to which the Swap Provider is the sole Affected Party
(as defined in the Interest Rate Swap Agreement) or with respect to a
termination resulting from a Substitution Event (as defined in the Interest
Rate Swap Agreement).
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: A Mortgage Loan which is purchased or
repurchased by any Responsible Party, the Purchaser or the Depositor in
accordance with the terms of any Sale
24
Agreement, any Assignment Agreement or this Agreement, as applicable, or which
is, in the case of a substitution by any Servicer (if permitted under the
applicable Servicing Agreement) or by the Purchaser pursuant to the Assignment
Agreements or this Agreement, replaced or to be replaced with a substitute
mortgage loan.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the Percentage Interest appearing on the face thereof.
Depositor: GS Mortgage Securities Corp., a Delaware corporation,
and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code
of the State of New York.
Depository Institution: Any depository institution or trust
company, including the Trustee and the Securities Administrator, that (a) is
incorporated under the laws of the United States of America or any State
thereof, (b) is subject to supervision and examination by federal or state
banking authorities and (c) has outstanding unsecured commercial paper or
other short-term unsecured debt obligations that are rated "P-1" by Moody's
and "A-1" by Standard & Poor's.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the
close of business of the last day of the month preceding the month in which
such Remittance Date occurs, or, with respect to the Goldman Conduit Mortgage
Loans, the 15th calendar day (or if such 15th day is not a Business Day, the
Business Day immediately following such 15th day) of the month of the related
Remittance Date.
Deutsche Bank: Deutsche Bank National Trust Company, a national
banking association, and its successors in interest.
Distribution Account: The separate Eligible Account created by the
Securities Administrator pursuant to Section 3.01(b) in the name of the
Securities Administrator as paying agent for the benefit of the Trustee and
the Certificateholders and designated "Xxxxx Fargo Bank, National Association,
as paying agent, in trust for registered holders of GSAA Home Equity Trust
2006-16, Asset-Backed Certificates, Series 2006-16." Funds in the Distribution
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Distribution Date: The 25th day of each month or, if such day is
not a Business Day, the immediately succeeding Business Day, commencing in
September 2006.
25
Document Certification and Exception Report: The report attached
to Exhibit F hereto.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
[Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in
which that Distribution Date occurs and ending on the first day of the
calendar month in which that Distribution Date occurs, except, in the case of
the Goldman Conduit Mortgage Loans, the period commencing on the first day of
the month and ending on the last day of the month preceding the month of the
Remittance Date.]
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Eligible Account: Either (i) an account 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 a subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated
"A-1+" by Standard & Poor's, "F1" by Fitch and "P-1" by Moody's (or a
comparable rating if another Rating Agency is specified by the Depositor by
written notice to the Servicer) at the time any amounts are held on deposit
therein, (ii) a trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity or (iii) any other account acceptable to each Rating Agency. Eligible
Accounts may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Securities Administrator or the
Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Event of Default: As defined in the applicable Servicing
Agreement.
Excess Overcollateralized Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralized Amount on such
Distribution Date over (b) the Specified Overcollateralized Amount for such
Distribution Date.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Securities Administrator pursuant to Sections 3.01(a) in
the name of the Securities Administrator as paying agent for the benefit of
the Regular Certificateholders and designated "Xxxxx Fargo Bank, National
Association, as paying agent, in trust for registered holders of GSAA Home
Equity Trust 2006-16, Asset-Backed Certificates, Series 2006-16." Funds in the
Excess Reserve Fund Account shall be held in trust for the Regular
26
Certificateholders for the uses and purposes set forth in this Agreement.
Amounts on deposit in the Excess Reserve Fund Account shall not be invested.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
Exchange Act Filing Obligation: The obligations of the Master
Servicer under Section 9.04 and Article XIII (except Section 13.07) with
respect to notice and information to be provided to the Depositor.
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form
10-K required to be filed by the Depositor with respect to the Trust Fund
under the Exchange Act.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal
to the sum of the Servicing Fee Rate, the Administrative Fee Rate and, if set
forth on the Mortgage Loan Schedule, the applicable Primary Mortgage Insurance
Policy premium rate.
Expense Fees: As to each Mortgage Loan, the fees calculated by
reference to the Expense Fee Rate.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for that
Distribution Date and (y) the related Overcollateralization Deficiency for
such Distribution Date.
Fair Market Value Excess: As defined in Section 11.01.
Xxxxxx Mae: The Federal National Mortgage Association, and its
successors in interest.
Final Scheduled Distribution Date: The Final Scheduled
Distribution Date for each Class of Certificates is the Distribution Date
occurring in October 2036.
First Horizon: First Horizon Loan Corporation, a Kansas
corporation, and its successors in interest.
First Horizon Mortgage Loans: The Mortgage Loans acquired by the
Purchaser pursuant to the First Horizon Sale and Servicing Agreement.
First Horizon Sale and Servicing Agreement: Mortgage Loan Sale and
Servicing Agreement, dated as of July 1, 2006, between First Horizon Loan
Corporation and GSMC.
Fitch: Fitch, Inc.
Form 8-K Disclosure Information: As defined in Section 13.02.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under
Title III of the Emergency Home Finance Act of 1970, as amended, and its
successors in interest.
27
Goldman Conduit: Xxxxxxx Xxxxx Residential Mortgage Conduit
Program.
Goldman Conduit Mortgage Loans: The Mortgage Loans acquired by the
Purchaser pursuant to the applicable Goldman Conduit Sale Agreements.
Goldman Conduit Sale Agreements: The Master Loan Purchase
Agreements, between various mortgage loan sellers and GSMC, dated as of their
respective dates, as modified by the related Assignment Agreements.
GreenPoint: GreenPoint Mortgage Funding, Inc., a New York
corporation, and its successors in interest.
GreenPoint Mortgage Loans: The Mortgage Loans acquired by the
Purchaser pursuant to the GreenPoint Sale Agreement.
GreenPoint Sale Agreement: Amended and Restated Master Mortgage
Loan Purchase Agreement, dated as of November 1, 2005, between GreenPoint,
Inc. and GSMC.
GreenPoint Servicing Agreement: Servicing Agreement, dated as of
November 1, 2005, between GreenPoint and GSMC, as modified by the related
Assignment Agreements.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Accrual Period: With respect to any Distribution Date,
with respect to the LIBOR Certificates, the period commencing on the
immediately preceding Distribution Date (or commencing on the Closing Date in
the case of the first Distribution Date) and ending on the day immediately
preceding the current Distribution Date the calendar month immediately
preceding the month in which such Distribution Date occurs. For purposes of
computing interest accruals on each Class of LIBOR Certificates, each Interest
Accrual Period has the actual number of days in such period and each year is
assumed to have 360 days.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of September 18, 2006, between the GSAA Home Equity Trust 2006-16 and
the Swap Provider and assigned to the Supplemental Interest Trust or any other
swap agreement (including any related schedules) assigned to the Supplemental
Interest Trust.
Interest Remittance Amount: With respect to any Distribution Date,
that portion of Available Funds attributable to interest relating to the
Mortgage Loans and any Net Swap Receipt Amount attributable for such
Distribution Date, net of any Net Swap Payment Amount made with respect to
such Distribution Date, and that portion of Available Funds attributable to
monies received under the operation of the Primary Mortgage Insurance Policy
for such Distribution Date.
Investment Account: As defined in Section 3.02(a).
Item 1119 Party: The Depositor, the Master Servicer, the Trustee,
any Servicer, any subservicer, any originator identified in the Prospectus
Supplement and any Swap Provider.
28
JPMorgan: JPMorgan Chase Bank, National Association, a national
banking association, and its successors in interest.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Securities Administrator on the
related LIBOR Determination Date on the basis of the offered rate for one
month U.S. dollar deposits as such rate appears on Telerate Page 3750 as of
11:00 a.m. (London time) on such date; provided, that if such rate does not
appear on Telerate Page 3750, the rate for such date will be determined on the
basis of the rates at which one-month U.S. dollar deposits are offered by the
Reference Banks at approximately 11:00 a.m. (London time) on such date to
prime banks in the London interbank market. In such event, the Securities
Administrator shall request the principal London office of each of the
Reference Banks to provide a quotation of its rate. If at least two (2) such
quotations are provided, the rate for that date will be the arithmetic mean of
the quotations (rounded upwards if necessary to the nearest whole multiple of
1/16%). If fewer than two (2) quotations are provided as requested, the rate
for that date will be the arithmetic mean of the rates quoted by major banks
in New York City, selected by the Securities Administrator (after consultation
with the Depositor), at approximately 11:00 a.m. (New York City time) on such
date for one-month U.S. dollar deposits of leading European banks. The
establishment of LIBOR by the Securities Administrator and the Securities
Administrator's subsequent calculations based thereon, in the absence of
manifest error, shall be final and binding. Except as otherwise set forth
herein, absent manifest error, the Securities Administrator may conclusively
rely on quotations of LIBOR as such quotations appear on Telerate Screen Page
3750.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding
the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in
the Principal Prepayment Period preceding the month of such Distribution Date
and as to which the applicable Servicer has certified that it has received all
amounts it expects to receive in connection with the liquidation of such
Mortgage Loan including the final disposition of an REO Property.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan, including any
Subsequent Recoveries.
London Business Day: Any day on which dealings in deposits of
United States dollars are transacted in the London interbank market.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: As described in the Preliminary
Statement.
29
Lower-Tier REMIC: As described in the Preliminary Statement.
Majority Class X Certificateholder: The Holder or Holders of a
majority of the Percentage Interests in the Class X Certificates.
Master Servicer: Xxxxx Fargo, and if a successor master servicer
is appointed hereunder, such successor.
Master Servicer Event of Default: As defined in Section 9.04.
Master Servicer Float Period: As to any Distribution Date and each
Mortgage Loan, the period commencing on the sixth calendar day immediately
preceding such Distribution Date and ending on such Distribution 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 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: As defined in the applicable Servicing Agreement.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section 4.02.
Moody's: Xxxxx'x Investors Service, Inc. If Xxxxx'x is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
12.05(b) the address for notices to Moody's shall be Xxxxx'x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Pass-Through Group, or such other address as Moody's may
hereafter furnish to the Depositor and the Servicer.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Loan: An individual Mortgage Loan which is the subject of
a Sale Agreement and a Servicing Agreement, each Mortgage Loan originally sold
and subject to any Sale Agreement being identified on the Mortgage Loan
Schedule, which Mortgage Loan
30
includes without limitation the Mortgage File, the Servicing File, the Monthly
Payments, Principal Prepayments, Prepayment Premiums, 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 mortgage loan documents pertaining to
each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed
hereto as Schedule I (which shall be delivered to the Custodians in an
electronic format acceptable to the Custodians), such schedule setting forth
the following information with respect to each Mortgage Loan: (1) Responsible
Party's Mortgage Loan number; (2) the address, city, state and zip code of the
Mortgaged Property; (3) a code indicating whether the Mortgagor is
self-employed; (4) a code indicating whether the Mortgaged Property is
owner-occupied, investment property or a second home; (5) a code indicating
whether the Mortgaged Property is a single family residence, two family
residence, three-family residence, four family residence, condominium,
manufactured housing or planned unit development; (6) the purpose of the
Mortgage Loan; (7) the type of Mortgage Loan; (8) the Mortgage Interest Rate
at origination; (9) the current Mortgage Interest Rate; (10) the name of the
applicable Servicer; (11) the applicable Servicing Fee Rate; (12) the current
Monthly Payment; (13) the original term to maturity; (14) the remaining term
to maturity; (15) the principal balance of the Mortgage Loan as of the Cut-off
Date after deduction of payments of principal due on or before the Cut-off
Date whether or not collected; (16) the LTV at origination and if the Mortgage
Loan has a second lien, combined LTV at origination; (17) the actual principal
balance of the Mortgage Loan as of the Cut-off Date; (18) social security
number of the Mortgagor; (19) a code indicating whether the Mortgage Loan had
a second lien at origination; (20) if the Mortgage Loan has a second lien,
combined loan balance as of the Cut-off Date; (21) a code indicating whether
the Mortgaged Property is a leasehold estate; (22) the due date of the
Mortgage Loan; (23) whether the Mortgage Loan is insured by a Mortgage
Insurance Policy and the name of the insurer; (24) the certificate number of
the Mortgage Insurance Policy; (25) the amount of coverage of the Primary
Mortgage Insurance Policy, if it is a lender-paid Primary Mortgage Insurance
Policy or a Primary Mortgage Insurance Policy paid for on behalf of the Trust,
the premium rate; (26) the premium tax information for each mortgage loan
covered by the Primary Mortgage Insurance Policy; (27) the type of appraisal;
(28) a code indicating whether the Mortgage Loan is a MERS Loan; (29)
documentation type (including asset and income type); (30) first payment date;
(31) the schedule of the payment delinquencies in the prior 12 months; (32)
FICO score; (33) the Mortgagor's name; (34) the stated maturity date; (35) the
original principal amount of the Mortgage Loan; and (36) the name of the
applicable Custodian.
Mortgaged Property: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
NatCity: National City Mortgage Co., an Ohio corporation, and its
successors in interest.
31
NatCity Mortgage Loans: The Mortgage Loans acquired by the
Purchaser pursuant to the NatCity Sale and Servicing Agreement.
NatCity Sale and Servicing Agreement: The Second Amended and
Restated Flow Seller's Warranties and Servicing Agreement, dated as of January
1, 2006, between NatCity and GSMC, as modified by the applicable Assignment
Agreements.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.01(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum
of the Compensating Interest payments made on such Distribution Date.
Net Swap Payment Amount: With respect to any Distribution Date,
the Fixed Amount (as defined in the Interest Rate Swap Agreement) payable by
the Supplemental Interest Trust to the Swap Provider, pursuant to the
applicable clauses of the Priorities of Distribution, on the related Fixed
Rate Payer Payment Date (as defined in the Interest Rate Swap Agreement).
Net Swap Receipt Amount: With respect to any Distribution Date,
the Floating Amount (as defined in the Interest Rate Swap Agreement) payable
by the Swap Provider to the Supplemental Interest Trust on the related
Floating Rate Payer Payment Date (as defined in the Interest Rate Swap
Agreement).
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class P and Class X Certificates.
NIM Trustee: The trustee for the NIM Securities.
Non Permitted Transferee: As defined in Section 8.12(e).
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 Servicer (in accordance with
the related Servicing Standard set forth in the related Servicing Agreement),
the Master Servicer or any successor Master Servicer including the Trustee, as
applicable, will not or, in the case of a proposed Monthly Advance, would not
be ultimately recoverable from related late payments, Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds on such Mortgage Loan or REO
Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in the good faith business judgment of the Servicer (in accordance with
the related Servicing Standard set forth in the related Servicing Agreement),
the Master Servicer or any successor Master Servicer including the Trustee, as
applicable, will not or, in the case of a proposed Servicing Advance,
32
would not, be ultimately recoverable from related Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds or otherwise.
Notice of Final Distribution: The notice to be provided pursuant
to Section 11.02 to the effect that final distribution on any of the
Certificates shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or the President or a Vice President
or an Assistant Vice President and by the Treasurer or the Secretary or one of
the Assistant Treasurers or Assistant Secretaries of any Servicer or any
Responsible Party, and delivered to the Trustee and the Securities
Administrator, as required by any Servicing Agreement or Sale Agreement or, in
the case of any other Person, signed by an authorized officer of such Person.
Opinion of Counsel: A written opinion of counsel, who may be in
house counsel for the applicable Servicer, reasonably acceptable to the
Trustee and/or the Securities Administrator, as applicable (and/or such other
Persons as may be set forth herein); provided, that any Opinion of Counsel
relating to (a) qualification of any Trust REMIC or (b) compliance with the
REMIC Provisions, must be (unless otherwise stated in such Opinion of Counsel)
an opinion of counsel who (i) is in fact independent of the applicable
Servicer or the Master Servicer of the Mortgage Loans, (ii) does not have any
material direct or indirect financial interest in the applicable Servicer or
the Master Servicer of the Mortgage Loans or in an affiliate of either and
(iii) is not connected with the applicable Servicer or the Master Servicer of
the Mortgage Loans as an officer, employee, director or person performing
similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day
of the related Due Period, is equal to 10.00% or less of the Cut-off Date Pool
Principal Balance.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Securities Administrator or
delivered to the Securities Administrator for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Securities
Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with a Stated Principal Balance greater than zero which was not the subject of
a Principal Prepayment in Full prior to such Due Date and which did not become
a Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over (b) the aggregate of the Class
Certificate Balances of the LIBOR Certificates as of such Distribution
33
Date (after giving effect to the payment of the Principal Remittance Amount on
such Certificates on such Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Overcollateralized Amount
applicable to such Distribution Date over (b) the Overcollateralized Amount
applicable to such Distribution Date.
Overcollateralization Floor: With respect to any Distribution
Date, 0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as
of the Cut-off Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Net Monthly Excess Cash Flow.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial.
Par Value: an amount equal to the greater of (a) the sum of (1)
100% of the unpaid principal balance of the Mortgage Loans (other than
Mortgage Loans related to REO Properties), (2) interest accrued and unpaid on
the Mortgage Loans, (3) any xxxxxxxxxxxx X&X Advances, fees and expenses of
the Master Servicer, the Securities Administrator and the Trustee, (4) any
expenses incurred during the exercise of the Auction Call and (5) with respect
to any REO Property, the lesser of (x) the appraised value of each REO
Property, as determined by the higher of two appraisals completed by two
independent appraisers selected by the Master Servicer or its designee, and
(y) the unpaid principal balance of each Mortgage Loan related to any REO
Property, and (b) the sum of (1) the aggregate unpaid Class Certificate
Balance of each class of certificates then outstanding, (2) interest accrued
and unpaid on the certificates, (3) any xxxxxxxxxxxx X&X Advances, fees and
expenses of the Master Servicer, the Securities Administrator and the Trustee,
(4) any Swap Termination Payment other than a Defaulted Swap Termination
Payment owed to the Swap Provider and (5) with respect to any REO Property,
the lesser of (x) the appraised value of each REO Property, as determined by
the higher of two appraisals completed by two independent appraisers selected
by the Master Servicer or its designee, and (y) the unpaid principal balance
of each Mortgage Loan related to any REO Property, and (b) the sum of (1) the
aggregate unpaid Class Certificate Balance of each class of certificates then
outstanding, (2) interest accrued and unpaid on the certificates, (3) any
xxxxxxxxxxxx X&X Advances, fees and expenses of the Master Servicer, the
Securities Administrator and the Trustee and (4) any Swap Termination Payment
other than a Defaulted Swap Termination Payment owed to the Swap Provider.
Pass-Through Rate: For each Class of Certificates and each
Lower-Tier Regular Interest, the per annum rate set forth or calculated in the
manner described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made on the related
Class, such percentage interest being
34
set forth on the face thereof or equal to the percentage obtained by dividing
the Denomination of such Certificate by the aggregate of the Denominations of
all Certificates of the same Class.
Permitted Investments: Any one or more of the following
obligations or securities acquired at a purchase price of not greater than
par, regardless of whether issued by the Servicer, the Trustee, the Securities
Administrator or any of their respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to timely
payment of principal and interest by, the United States or any agency or
instrumentality thereof, provided such obligations are backed by the
full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than ninety (90) days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or a
remaining maturity of more than thirty (30) days) denominated in United
States dollars and issued by any Depository Institution and rated F1+ by
Fitch, P-1 by Moody's and A-1+ by S&P;
(iii) repurchase obligations with respect to any security described in
clause (i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are issued
by any corporation incorporated under the laws of the United States of
America or any state thereof and that are rated by each Rating Agency
that rates such securities in its highest long-term unsecured rating
categories at the time of such investment or contractual commitment
providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than thirty (30) days after the date of
acquisition thereof) that is rated by each Rating Agency that rates such
securities in its highest short-term unsecured debt rating available at
the time of such investment;
(vi) units of money market funds, including money market funds advised
by the Depositor, the Securities Administrator or the Trustee or an
Affiliate thereof, that have been rated "Aaa" by Moody's, "AAAm" or
"AAAm-G" by Standard & Poor's and, if rated by Fitch, at least "AA" by
Fitch; and
(vii) if previously confirmed in writing to the Securities
Administrator, any other demand, money market or time deposit, or any
other obligation, security or investment, as may be acceptable to the
Rating Agencies as a permitted investment of funds backing "Aaa" or
"AAA" rated securities;
provided, however, that no instrument described hereunder shall evidence
either the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying
obligations.
35
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality
of any of the foregoing, (ii) a foreign government, international organization
or any agency or instrumentality of either of the foregoing, (iii) an
organization (except certain farmers' cooperatives described in Section 521 of
the Code) which is exempt from tax imposed by Chapter 1 of the Code (including
the tax imposed by Section 511 of the Code on unrelated business taxable
income) on any excess inclusions (as defined in Section 860E(c)(1) of the
Code) with respect to any Residual Certificate, (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) a
Person that is not a U.S. Person or a U.S. Person with respect to whom income
from a Residual Certificate is attributable to a foreign permanent
establishment or fixed base (within the meaning of an applicable income tax
treaty) of such Person or any other U.S. Person, (vi) an "electing large
partnership" within the meaning of Section 775 of the Code and (vii) any other
Person so designated by the Depositor based upon an Opinion of Counsel that
the Transfer of an Ownership Interest in a Residual Certificate to such Person
may cause any Trust REMIC to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and,
with the exception of the Xxxxxxx Mac, a majority of its board of directors is
not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
PHH: PHH Mortgage Corporation, a New Jersey corporation, and its
successors in interest.
PHH Mortgage Loans: The Mortgage Loans acquired by the Purchaser
pursuant to the PHH Sale and Servicing Agreement.
PHH Sale and Servicing Agreement: The Amended and Restated
Mortgage Loan Flow Purchase, Sale and Servicing Agreement, dated as of
December 1, 2005, between PHH and GSMC, as modified by the applicable
Assignment Agreements.
Physical Certificates: As specified in the Preliminary Statement.
P&I Advances: Advances made by the servicers or the Master
Servicer (including the Trustee as successor master servicer and any other
successor master servicer) with respect to delinquent payments of interest and
principal on the mortgage loans, less the servicing fee or the master
servicing fee, as applicable.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Prepayment Interest Shortfall: With respect to any Remittance
Date, the sum of, for each Mortgage Loan that was during the related Principal
Prepayment Period the subject of a
36
Principal Prepayment that was applied by the Servicer to reduce the
outstanding principal balance of such Mortgage Loan on a date preceding the
Due Date in the succeeding Principal Prepayment Period, an amount equal to the
product of (a) the Mortgage Interest Rate net of the applicable Servicing Fee
Rate for such Mortgage Loan, (b) the amount of the Principal Prepayment for
such Mortgage Loan, (c) 1/360 and (d) the number of days commencing on the
date on which such Principal Prepayment was applied and ending on the last day
of the related Principal Prepayment Period.
Prepayment Premium: Any prepayment premium, penalty or charge, if
any, required under the terms of the related Mortgage Note to be paid in
connection with a Principal Prepayment, to the extent permitted by law.
Primary Mortgage Insurance Policy: The GSAA Home Equity Trust
2006-16 Bulk Primary First Lien Mortgage Insurance Policy No. 00000-0000-0,
PMI Bulk Deal No.: 2006-0842, dated August 25, 2006.
Principal Certificates: As specified in the Preliminary Statement.
Principal Distribution Amount: For any Distribution Date, the sum
of (i) the Basic Principal Distribution Amount for such Distribution Date and
(ii) the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan) which is received in advance of its scheduled Due Date,
including any Prepayment Premium, and which is not accompanied by an amount of
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Prepayment Period: With respect to any Distribution
Date, the calendar month preceding the month in which that Distribution Date
occurs.
Principal Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans, the amount equal to the sum of the following amounts
(without duplication): (i) all scheduled payments of principal due on the Due
Date on such Mortgage Loans in the related Due Period and received on or prior
to the related Determination Date, together with any Monthly Advances in
respect thereof; (ii) all Condemnation Proceeds, Insurance Proceeds and
Liquidation Proceeds allocable to principal and received during the related
Principal Prepayment Period; (iii) all Principal Prepayments allocable to
principal and received during the related Principal Prepayment Period; (iv)
all amounts received with respect to such Distribution Date representing the
portion of the purchase price allocable to principal in connection with a
purchase or repurchase of a Deleted Mortgage Loan; (v) principal portion of
all amounts received with respect to such Distribution Date as a Substitution
Adjustment Amount and received in connection with the substitution of a
Mortgage Loan and (vi) the allocable portion of the proceeds received with
respect to the termination of the Trust Fund pursuant to clause (a) of Section
11.01 (to the extent such proceeds relate to principal).
37
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated September
27, 2006, relating to the Offered Certificates.
PTCE: Prohibited Transaction Class Exemption, issued by the U.S.
Department of Labor.
PUD: A planned unit development.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, a New York limited
partnership, and its successors in interest.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee and the
Securities Administrator. References herein to a given rating or rating
category of a Rating Agency shall mean such rating category without giving
effect to any modifiers. For purposes of Section 12.05(b), the addresses for
notices to each Rating Agency shall be the address specified therefor in the
definition corresponding to the name of such Rating Agency, or such other
address as either such Rating Agency may hereafter furnish to the Depositor
and the Servicer.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid
principal balance of such Liquidated Mortgage Loan together with accrued and
unpaid interest thereon exceeds (b) the Liquidation Proceeds with respect
thereto net of the expenses incurred by the Servicer in connection with the
liquidation of such Liquidated Mortgage Loan and net of any amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the related Interest Accrual Period;
provided, however, that for any Definitive Certificate issued pursuant to
Section 5.02(e), the Record Date shall be the close of business on the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
38
Relief Act Interest Shortfall: With respect to any Distribution
Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended Due Period as a
result of the application of the Servicemembers' Civil Relief Act of 1940 or
any similar state statutes.
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 real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the 18th
day (or if such 18th day is not a Business Day, the first Business Day
immediately preceding such 18th day) of the month in which such Distribution
Date occurs.
REO Disposition: The final sale by the Servicer of any REO
Property.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Reportable Event: As defined in Section 13.02.
Reporting Party: The Depositor, any Originator, the Master
Servicer, any Servicer, any originator defined in the Prospectus Supplement,
any swap or corridor contract counterparty, any credit enhancement provider
described herein and any other material transaction party (excluding the
Trustee and the Custodians) as may be mutually agreed between the Depositor
and the Master Servicer from time to time for the purpose of complying with
the requirements of the Commission.
Reporting Servicer: As defined in Section 13.04.
Reporting Subcontractor: With respect to the Master Servicer or
the Securities Administrator, any Subcontractor determined by such Person
pursuant to Section 11.08(b) to be "participating in the servicing function"
within the meaning of Item 1122 of Regulation AB. References to a Reporting
Subcontractor shall refer only to the Subcontractor of such Person and shall
not refer to Subcontractors generally.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Securities
Administrator or the Master Servicer, any vice president, any assistant vice
president, any assistant secretary, any assistant treasurer, any associate or
any other officer of the Securities Administrator or the Master Servicer,
customarily performing functions similar to those performed by any of the
above designated officers who at such time shall be officers to whom, with
respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity with the
39
particular subject and who shall have direct responsibility for the
administration of this Agreement. When used with respect to the Trustee, any
officer of the Trustee having direct responsibility for the administration of
this transaction, or to whom corporate trust matters are referred because of
that officer's knowledge of and familiarity with the particular subject.
Responsible Party: Countrywide, GreenPoint, NatCity, Wachovia,
Xxxxx Fargo, First Horizon and PHH, each in its capacity as seller under the
applicable Sale Agreement. With respect to the Goldman Conduit Mortgage Loans,
the Purchaser.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
Sale Agreement: Each of the Countrywide Sale Agreement, the
NatCity Sale and Servicing Agreement, the GreenPoint Sale Agreement, the Xxxxx
Fargo Sale and Servicing Agreement, the First Horizon Sale and Servicing
Agreement, the Wachovia Sale and Servicing Agreement, the PHH Sale and
Servicing Agreement and the Goldman Conduit Sale Agreement.
Xxxxxxxx-Xxxxx Certification: As defined in Section 13.06.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo, and if a successor
securities administrator is appointed hereunder, such successor.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate
Class Certificate Balance of the Subordinated Certificates and (ii) the
Overcollateralized Amount (in each case after taking into account the
distributions of the Principal Distribution Amount for such Distribution Date)
by (y) the aggregate Stated Principal Balance of the Mortgage Loans as of the
first day of the month in which such Distribution Date occurs.
Senior Specified Enhancement Percentage: As of any date of
determination, 13.90%.
Sequential Trigger Event: An event which occurs, if (x) on any
Distribution Date before the 37th Distribution Date the aggregate amount of
Realized Losses incurred since the cut-off date through the last day of the
related Prepayment Period divided by the aggregate scheduled principal balance
of the Mortgage Loans as of the cut-off date exceeds 0.550%, or (y) on or
after the 37th Distribution Date, a Trigger Event is in effect.
Servicer: Each of Avelo, Countrywide Servicing, GreenPoint,
NatCity, Xxxxx Fargo, PHH, First Horizon and Wachovia, in its capacity as
servicer under the related Servicing Agreement, or any successor servicer
appointed pursuant to such Servicing Agreement.
Servicing Advances: As defined in the related Servicing Agreement.
40
Servicing Agreement: Each of the Avelo Servicing Agreement, the
Countrywide Servicing Agreement, the GreenPoint Servicing Agreement, the
NatCity Sale and Servicing Agreement, the Xxxxx Fargo Sale and Servicing
Agreement, the PHH Sale and Servicing Agreement, the First Horizon Sale and
Servicing Agreement and the Wachovia Sale and Servicing Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as the same may be amended from time to time.
Servicing Fee: As defined in the related Servicing Agreement.
Servicing Fee Rate: With respect to each Mortgage Loan, the per
annum rate for such Mortgage Loan specified on the Mortgage Loan Schedule.
Servicing File: As defined in the applicable Servicing Agreement.
Servicing Function Participant: Any Subservicer, Subcontractor or
any other Person, other than each Servicer, the Master Servicer, the Trustee,
the Securities Administrator and any Custodian, that is performing activities
addressed by the Servicing Criteria.
Similar Law: As defined in Section 5.02(b).
Specified Overcollateralized Amount: Prior to the Stepdown Date,
an amount equal to 0.55% of the Cut-off Date Pool Principal Balance. On and
after the Stepdown Date, an amount equal to 1.10% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date, subject,
until the Class Certificate Balance of each Class of LIBOR Certificates has
been reduced to zero, to a minimum amount equal to the Overcollateralization
Floor; provided, however, that if, on any Distribution Date, a Trigger Event
has occurred, the Specified Overcollateralized Amount shall not be reduced to
the applicable percentage of the then current aggregate Stated Principal
Balance of the Mortgage Loans but instead will remain the same as the prior
period's Specified Overcollateralized Amount until the Distribution Date on
which a Trigger Event is no longer occurring. When the Class Certificate
Balance of each Class of LIBOR Certificates has been reduced to zero, the
Specified Overcollateralized Amount will thereafter be zero.
Standard & Poor's or S&P: Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. If Standard & Poor's is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
12.05(b) the address for notices to Standard & Poor's shall be Standard &
Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential
Mortgage Surveillance Group - GSAA Home Equity Trust 2006-16, or such other
address as Standard & Poor's may hereafter furnish to the Depositor and the
Servicer.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
Determination Date, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before
such date (whether or not received), minus (ii) all amounts previously
remitted to the Securities Administrator with respect to the related Mortgage
41
Loan representing payments or recoveries of principal including advances in
respect of scheduled payments of principal. For purposes of any Distribution
Date, the Stated Principal Balance of any Mortgage Loan will give effect to
any scheduled payments of principal received or advanced prior to the related
Remittance Date and any unscheduled principal payments and other unscheduled
principal collections received during the related Principal Prepayment Period,
and the Stated Principal Balance of any Mortgage Loan that has prepaid in full
or has become a Liquidated Mortgage Loan during the related Principal
Prepayment Period shall be zero.
Step 1 Assignment Agreement: Each of the (i) Assignment,
Assumption and Recognition Agreement, dated as of September 28, 2006, between
the Purchaser, Countrywide and the Depositor, (ii) Assignment, Assumption and
Recognition Agreement, dated as of September 28, 2006, between the Purchaser,
GreenPoint and the Depositor; (iii) Assignment, Assumption and Recognition
Agreement, dated as of September 28, 2006, between the Purchaser, Avelo and
the Depositor; (iv) Assignment, Assumption and Recognition Agreement, dated as
of September 28, 2006, between the Purchaser, NatCity and the Depositor; (v)
Assignment, Assumption and Recognition Agreement, dated as of September 28,
2006, between the Purchaser, PHH and the Depositor; (vi) Assignment,
Assumption and Recognition Agreement, dated as of September 28, 2006, between
the Purchaser, Xxxxx Fargo and the Depositor; (vii) Assignment, Assumption and
Recognition Agreement, dated as of September 28, 2006, between the Purchaser,
First Horizon and the Depositor; and (viii) Assignment, Assumption and
Recognition Agreement, dated as of September 28, 2006, between the Purchaser,
Wachovia and the Depositor.
Step 2 Assignment Agreement: Each of the (i) Assignment,
Assumption and Recognition Agreement, dated as of September 28, 2006, between
the Depositor, the Master Servicer, the Trustee, Countrywide and Countrywide
Servicing; (ii) Assignment, Assumption and Recognition Agreement, dated as of
September 28, 2006, between the Depositor, the Master Servicer, the Trustee
and GreenPoint; (iii) Assignment, Assumption and Recognition Agreement, dated
as of September 28, 2006, between the Depositor, the Master Servicer, the
Trustee and Avelo; (iv) Assignment, Assumption and Recognition Agreement,
dated as of September 28, 2006, between the Depositor, the Master Servicer,
the Trustee and NatCity; (v) Assignment, Assumption and Recognition Agreement,
dated September 28, 2006, between the Depositor, the Master Servicer, the
Trustee and PHH; (vi) Assignment, Assumption and Recognition Agreement, dated
September 28, 2006, between the Depositor, the Master Servicer, the Trustee
and Xxxxx Fargo; (vii) Assignment, Assumption and Recognition Agreement, dated
September 28, 2006, between the Depositor, the Master Servicer, the Trustee
and First Horizon; and (viii) Assignment, Assumption and Recognition
Agreement, dated as of September 28, 2006, between the Depositor, the Master
Servicer, the Trustee and Wachovia.
Stepdown Date: The earlier to occur of (a) the date on which the
aggregate Class Certificate Balance of the Class A Certificates has been
reduced to zero and (b) the later to occur of (i) the Distribution Date in
October 2009 and (ii) the first Distribution Date on which the Senior
Enhancement Percentage is greater than or equal to the Senior Specified
Enhancement Percentage.
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-
42
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 Master Servicer, any Servicer,
any subservicer or the Securities Administrator, as the case may be.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subsequent Recoveries: Amounts received with respect to any
Liquidated Mortgage Loan after it has become a Liquidated Mortgage Loan.
Substitution Adjustment Amount: With respect to any Servicing
Agreement or Sale Agreement, as applicable, in which substitution is
permitted, or with respect to a Mortgage Loan substituted by the Purchaser, an
amount of cash received from the applicable Servicer or the Purchaser, as
applicable, in connection with a substitution for a Deleted Mortgage Loan.
Supplemental Interest Trust: The corpus of a trust created
pursuant to Section 4.05 of this Agreement, consisting of the Interest Rate
Swap Agreement, subject to the obligation to pay amounts specified in Section
4.05.
Swap Provider: Xxxxxxx Xxxxx Mitsui Marine Derivatives Products,
L.P. a Delaware limited partnership, and its successors in interest, and any
successor swap provider under any replacement Interest Rate Swap Agreement.
Swap Termination Payment: Any payment payable by the Supplemental
Interest Trust or the Swap Provider upon termination of the Interest Rate Swap
Agreement as a result of an Event of Default (as defined in the Interest Rate
Swap Agreement) or a Termination Event (as defined in the Interest Rate Swap
Agreement).
Tax Matters Person: The Holder of the Class R, Class RC and Class
RX Certificates is designated as "tax matters person" of the Lower-Tier REMIC,
Middle-Tier REMIC and the Upper-Tier REMIC, respectively, in the manner
provided under Treasury Regulations Section 1.806F-4(d) and Treasury
Regulations Section 301.6234(a)(7)-1.
Telerate Page 3750: The display page currently so designated on
the Bridge Telerate Service (or such other page as may replace that page on
that service for displaying comparable rates or prices).
Termination Price: As defined in Section 11.01.
Total Monthly Excess Spread: As to any Distribution Date, an
amount equal to the excess if any, of (i) the interest collected (prior to the
related Remittance Date) or advanced on the Mortgage Loans for Due Dates
during the related Due Period (net of Expense Fees) plus the Net Swap Receipt
Amount and minus any Net Swap Payment Amount over (ii) the sum of the interest
payable to the LIBOR Certificates on such Distribution Date pursuant to
Section 4.01(a)(i).
43
Transaction Documents: This Agreement, the Interest Rate Swap
Agreement, the Assignment Agreements and any other document or agreement
entered into in connection with the Trust Fund, the Certificates or the
Mortgage Loans.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c)(ii).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a Trigger
Event exists if (i) on such Distribution Date the quotient (expressed as a
percentage) of (x) the rolling three month average of the aggregate unpaid
principal balance of 60+ Day Delinquent Mortgage Loans, and (y) the aggregate
unpaid principal balance of the Mortgage Loans as of the last day of the
related Due Period equals or exceeds 40.00% of the Senior Enhancement
Percentage as of the last day of the prior Due Period or (ii) the quotient
(expressed as a percentage) of (x) the aggregate amount of Realized Losses
incurred since the Cut-off Date through the last day of the related Principal
Prepayment Period divided by (y) the Cut-off Date Pool Principal Balance
exceeds the applicable percentages set forth below with respect to such
Distribution Date:
Distribution Date Occurring In Loss Percentage
------------------------------ ---------------
October 2008 - September 2009 0.250% for the first month, plus an additional
1/12th of 0.300% for each month thereafter
(e.g., approximately 0.275% in November
2008)
October 2009 - September 2010 0.550% for the first month, plus an additional
1/12th of 0.400% for each month thereafter
(e.g., approximately 0.583% in November
2009)
October 2010 - September 2011 0.950% for the first month, plus an additional
1/12th of 0.450% for each month thereafter
(e.g., approximately 0.988% in November
2010)
October 2011 - September 2012 1.400% for the first month, plus an additional
1/12th of 0.250% for each month thereafter
(e.g., approximately 1.421% in November
2011)
October 2012 and thereafter 1.650%
Trust: The express trust created hereunder in Section 2.01(c).
44
Trust Fund: The corpus of the trust created hereunder consisting
of (i) the Mortgage Loans and all interest and principal received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) the
Interest Rate Swap Agreement and all amounts received thereunder; (iii) the
Primary Mortgage Insurance Policy, and all amounts received thereunder; (iv)
the Excess Reserve Fund Account, the Distribution Account, and all amounts
deposited therein pursuant to the applicable provisions of this Agreement; (v)
property that secured a Mortgage Loan and has been acquired by foreclosure,
deed-in-lieu of foreclosure or otherwise; (vi) the rights of the Trust under
the Step 2 Assignment Agreements; (vii) the Supplemental Interest Trust; and
(viii) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing. The Trust Fund created hereunder is referred to as the GSAA Home
Equity Trust 2006-16.
Trust REMIC: As specified in the Preliminary Statement.
Trustee: Deutsche Bank, and its successors in interest, and, if a
successor trustee is appointed hereunder, such successor.
Underwriters' Exemption: Any exemption listed in footnote 1 of,
and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or amended by Prohibited Transaction Exemption 2002-19, 67 Fed. Reg.
14979, or any successor exemption.
Unpaid Interest Amount: As of any Distribution Date and any Class
of Certificates, the sum of (a) the portion of the Accrued Certificate
Interest Distribution Amount from Distribution Dates remaining unpaid prior to
the current Distribution Date and (b) interest on the amount in clause (a) at
the applicable Pass-Through Rate (to the extent permitted by applicable law).
U.S. Bank: U.S. Bank National Association, a national banking
association, and its successors in interest.
U.S. Person: (i) A citizen or resident of the United States; (ii)
a corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of
any State thereof, including, for this purpose, the District of Columbia;
(iii) a partnership (or entity treated as a partnership for tax purposes)
organized in the United States or under the laws of the United States or of
any State thereof, including, for this purpose, the District of Columbia
(unless provided otherwise by future Treasury regulations); (iv) an estate
whose income is includible in gross income for United States income tax
purposes regardless of its source; or (v) a trust, if a court within the
United States is able to exercise primary supervision over the administration
of the trust and one or more U.S. Persons have authority to control all
substantial decisions of the trust. Notwithstanding the last clause of the
preceding sentence, to the extent provided in Treasury regulations, certain
trusts in existence on August 20, 1996, and treated as U.S. Persons prior to
such date, may elect to continue to be U.S. Persons.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
45
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), and (c) the remaining Voting Rights shall be allocated among
Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, a per annum rate equal to the product of (i) the sum of (A) the weighted
average of the Adjusted Net Mortgage Interest Rates then in effect on the
beginning of the related Due Period on the Mortgage Loans, and (B) the Net
Swap Receipt Amount, if any, less the Net Swap Payment Amount, if any, divided
by the Stated Principal Balance of the Mortgage Loans at the beginning of the
related Due Period multiplied by 12 and (ii) 30 divided by the actual number
of days in the related Interest Accrual Period, in the case of the LIBOR
Certificates.
Wachovia: Wachovia Mortgage Corporation, a North Carolina
corporation, and its successors in interest.
Wachovia Mortgage Loans: The Mortgage Loans acquired by the
Purchaser from Wachovia pursuant to the Wachovia Sale and Servicing Agreement.
Wachovia Sale and Servicing Agreement: The Seller's Purchase,
Warranties and Servicing Agreement, dated as of April 1, 2006, between
Wachovia and GSMC.
Xxxxx Fargo: Xxxxx Fargo Bank, National Association, a national
banking association, and its successors in interest.
Xxxxx Fargo Mortgage Loans: The Mortgage Loans acquired by the
Purchaser from Xxxxx Fargo pursuant to the Xxxxx Fargo Sale and Servicing
Agreement.
Xxxxx Fargo Sale and Servicing Agreement: The Second Amended and
Restated Master Seller's Warranties and Servicing Agreement, dated as of
November 1, 2005, between Xxxxx Fargo Bank, National Association and Xxxxxxx
Sachs Mortgage Company, as modified by the related Assignment Agreements.
46
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund.
(b) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered or caused to be delivered to the
applicable Custodian on behalf of the Trustee for the benefit of the
Certificateholders the following documents or instruments with respect to each
applicable Mortgage Loan so assigned:
(i) the original Mortgage Note, endorsed without recourse in blank
by the last endorsee, including all intervening endorsements showing a
complete chain of endorsement from the originator to the last endorsee;
(ii) The original Assignment of Mortgage in blank (or, in the case
of the Goldman Conduit Mortgage Loans, in form and substance acceptable
for recording or if the Mortgage is to be recorded, assigned to the
Purchaser), unless the Mortgage Loan is a MERS Loan;
(iii) personal endorsement, surety and/or guaranty agreements
executed in connection with all non individual Mortgage Loans
(corporations, partnerships, trusts, estates, etc. (if any);
(iv) the related original Mortgage and evidence of its recording
or a certified copy of the Mortgage with evidence of recording;
(v) originals of any intervening Mortgage assignment or certified
copies in either case necessary to show a complete chain of title from
the original mortgagee to the seller and evidencing recording; provided,
that, except in the case of the Xxxxxxx Conduit Mortgage Loans, the
assignment may be in the form of a blanket assignment or assignments, a
copy of which with evidence of recording shall be acceptable;
(vi) originals of all assumption, modification, consolidation or
extension agreements or certified copies thereof, in either case with
evidence of recording if required to maintain the lien of the mortgage
or if otherwise required, or, if recordation is not required, an
original or copy of the agreement; provided, that, in the case of the
Xxxxxxx Conduit Mortgage Loans, an original with evidence of recording
thereon is always required;
(vii) if applicable to the files held by the applicable Custodian,
an original or copy of a title insurance policy or evidence of title;
(viii) to the extent applicable, an original power of attorney;
47
(ix) for each Mortgage Loan (if applicable to the files held by
the applicable Custodian) with respect to which the Mortgagor's name as
it appears on the note does not match the borrower's name on the
Mortgage Loan Schedule, one of the following: the original of the
assumption agreement, or a certified copy thereof, in either case with
evidence of recording thereon if required to maintain the lien of the
mortgage or if otherwise required, or, if recordation is not so
required, an original or copy of such assumption agreement;
(x) if applicable to the files held by the applicable Custodian, a
security agreement, chattel mortgage or equivalent document executed in
connection with the Mortgage, if any; and
(xi) with respect to each Mortgage Loan, the complete Custodial
File including all items as set forth in the applicable Servicing
Agreement to the extent in the possession of the Depositor or the
Depositor's Agents.
The Depositor shall deliver or cause each Responsible Party to
deliver to each Custodian the applicable recorded document promptly upon
receipt from the respective recording office but in no event later than 120
days from the Closing Date.
From time to time, pursuant to the applicable Sale Agreement, the
Responsible Party may forward to the applicable Custodian additional original
documents, additional documents evidencing an assumption, modification,
consolidation or extension of a Mortgage Loan, in accordance with the terms of
the applicable Sale Agreement. All such mortgage documents held by the
Custodians as to each Mortgage Loan shall constitute the "Custodial File."
On or prior to the Closing Date, the Depositor shall deliver to
the Custodians Assignments of Mortgages (except in the case of MERS Loans), in
blank, for each applicable Mortgage Loan. On the Closing Date, the Depositor
shall provide a written request to each Responsible Party to submit the
Assignments of Mortgage for recordation, at the Responsible Party's expense,
pursuant to the applicable Sale Agreement. Each Custodian shall deliver the
Assignment of Mortgages to be submitted for recordation to the applicable
Responsible Party upon receipt of a written request for release in standard
and customary form as set forth in Exhibit L, Exhibit X-0, Xxxxxxx X-0 or
Exhibit L-3, as applicable.
On or prior to the Closing Date, the Depositor shall deliver to
the Custodians and the Master Servicer a copy of the Mortgage Loan Schedule in
electronic, machine readable medium in a form mutually acceptable to the
Depositor, the applicable Custodian, the Master Servicer and the Trustee.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Custodian within the time period and in the manner specified in the
applicable Sale Agreement, the Trustee shall take or cause to be taken such
remedial actions under the Sale Agreement against the applicable Responsible
Party as may be permitted to be taken thereunder, including without
limitation, if applicable, the repurchase by the applicable Responsible Party
of such Mortgage Loan. The foregoing repurchase remedy shall not apply in the
event that the Responsible Party cannot
48
deliver such original or copy of any document submitted for recordation to the
appropriate public recording office within the specified period due to a delay
caused by the recording office in the applicable jurisdiction; provided, that
the applicable Responsible Party shall instead deliver a recording receipt of
such recording office or, if such recording receipt is not available, an
officer's certificate of an officer of the applicable Responsible Party,
confirming that such document has been accepted for recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses
the original Mortgage or assignment after it has been recorded, the
obligations of the Responsible Party shall be deemed to have been satisfied
upon delivery by the Responsible Party to the applicable Custodian prior to
the Closing Date of a copy of such Mortgage or assignment, as the case may be,
certified (such certification to be an original thereof) by the public
recording office to be a true and complete copy of the recorded original
thereof.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "GSAA Home Equity Trust
2006-16" and Deutsche Bank is hereby appointed as Trustee in accordance with
the provisions of this Agreement.
(d) It is the policy and intention of the Trust that none of the
Mortgage Loans included in the Trust is (a) covered by the Home Ownership and
Equity Protection Act of 1994, or (b) considered a "high cost home,"
"threshold," "predatory" or "covered" loan (excluding "covered home loans" as
defined under clause (1) of the definition of "covered home loans" in the New
Jersey Home Ownership Security Act of 2002) under applicable state, federal or
local laws.
Section 2.02 Acceptance by the Custodians of the Mortgage Loans.
Each Custodian acknowledges receipt of the documents identified in the Initial
Certification, subject to any exceptions listed on the exception report
attached thereto, in the form annexed hereto as Exhibit E, and declares that
it holds and will hold such documents and the other documents delivered to it
pursuant to Section 2.01, and that it holds or will hold such other assets as
are included in the Trust Fund, in trust for the exclusive use and benefit of
all present and future Certificateholders. Deutsche Bank, as Custodian,
acknowledges that it will maintain possession of the related Mortgage Notes in
the State of California, unless otherwise permitted by the Rating Agencies,
JPMorgan, as Custodian, acknowledges that it will maintain possession of the
related Mortgage Notes in the State of Texas, unless otherwise permitted by
the Rating Agencies, U.S. Bank, as Custodian, acknowledges that it will
maintain possession of the related Mortgage Notes in the State of Minnesota,
unless otherwise permitted by the Rating Agencies and Xxxxx Fargo, as
Custodian, acknowledges that it will maintain possession of the related
Mortgage Notes in the State of Minnesota, unless otherwise permitted by the
Rating Agencies.
Prior to and as a condition to the Closing, each Custodian shall
deliver via facsimile (with original to follow the next Business Day) to the
Depositor an Initial Certification prior to the Closing Date, or as the
Depositor agrees to, on the Closing Date, certifying receipt of a Mortgage
Note and Assignment of Mortgage, subject to any exceptions listed on the
exception
49
report attached thereto, for each Mortgage Loan. None of the Custodians shall
be responsible for verifying the validity, sufficiency or genuineness of any
document in any Custodial File.
On the Closing Date, each Custodian shall ascertain that all
documents required to be delivered to it on or prior to the Closing Date are
in its possession, subject to any exceptions listed on the exception report
attached thereto, and shall deliver to the Depositor and the Trustee an
Initial Certification, in the form annexed hereto as Exhibit E, and shall
deliver to the Depositor and the Trustee a Document Certification and
Exception Report, in the form annexed hereto as Exhibit F, within ninety (90)
days after the Closing Date to the effect that, as to each applicable Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid
in full or any Mortgage Loan specifically identified in such certification as
an exception and not covered by such certification): (i) all documents
required to be delivered to it are in its possession; (ii) such documents have
been reviewed by it and appear regular on their face and relate to such
Mortgage Loan; (iii) based on its examination and only as to the foregoing
documents, as to Deutsche Bank, the information set forth in items 2, 8, 33,
and 34 of the Mortgage Loan Schedule respecting such Mortgage Loan is correct;
(iv) based on its examination and only as to the foregoing documents, as to
JPMorgan, the information set forth in items 2, 8, 34, and 35 of the Mortgage
Loan Schedule respecting such Mortgage Loan is correct; (v) based on its
examination and only as to the foregoing documents, as to U.S. Bank, the
information set forth in items 2, 8, 34, and 35 of the Mortgage Loan Schedule
respecting such Mortgage Loan is correct; (vi) based on its examination and
only as to the foregoing documents, as to Xxxxx Fargo, the information set
forth in items 2, 8, 34, and 35 of the Mortgage Loan Schedule respecting such
Mortgage Loan is correct; and (vii) each Mortgage Note has been endorsed as
provided in Section 2.01 of this Agreement. None of the Custodians shall be
responsible for verifying the validity, sufficiency or genuineness of any
document in any Custodial File.
Each Custodian shall retain possession and custody of each
applicable Custodial File in accordance with and subject to the terms and
conditions set forth herein. The Servicer shall promptly deliver to the
applicable Custodian, upon the execution or receipt thereof, the originals of
such other documents or instruments constituting the Custodial File as come
into the possession of the Servicer from time to time.
Each Custodian shall notify the Trustee and the Depositor of any
Mortgage Loans that do not conform to the requirements of Sections 2.01 and
2.02 hereof by delivery of the Document Certification and Exception Report. In
its capacity as "Assignee" under the Step 2 Assignment Agreements, the Trustee
shall enforce the obligation of the Responsible Parties to cure or repurchase
Mortgage Loans that do not conform to such requirements as determined in the
applicable Custodian's review as required herein, or based upon notification
from the Master Servicer (who shall be entitled to rely on information
regarding any such defaults by a Responsible Party that has been provided by
the applicable Servicer for purposes of providing such notification to the
Trustee), by notifying the applicable Responsible Party to correct or cure
such default. In its capacity as "Assignee" under the Step 2 Assignment
Agreements, the Trustee shall also enforce the obligation of the Responsible
Parties under the Sale Agreements, and to the extent applicable, of any
Servicer under the Servicing Agreements, and of the Purchaser under the Step 1
Assignment Agreements to cure or repurchase Mortgage Loans for which there is
a defect or a breach of a representation or warranty thereunder of which a
Responsible Officer of
50
the Trustee has actual knowledge, by notifying the applicable party to correct
or cure such default. If the Trustee obtains actual knowledge that any
Servicer, any Responsible Party or the Purchaser, as the case may be, fails or
is unable to correct or cure the defect or breach within the period set forth
in the applicable agreement, the Trustee shall notify the Depositor of such
failure to correct or cure. Unless otherwise directed by the Depositor within
five (5) Business Days after notifying the Depositor of such failure by the
applicable party to correct or cure, the Trustee shall notify such party to
repurchase the Mortgage Loan. If, within ten (10) Business Days of receipt of
such notice by such party, such party fails to repurchase such Mortgage Loan,
the Trustee shall notify the Depositor of such failure. The Trustee shall
pursue all legal remedies available to the Trustee against the Servicers, the
Responsible Parties and the Purchaser, as applicable, under this Agreement, if
the Trustee has received written notice from the Depositor directing the
Trustee to pursue such remedies and the Trustee shall be entitled to
reimbursement from the Trust Fund for any reasonable expenses incurred in
pursuing such remedies.
Section 2.03 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, the Securities Administrator
has executed and delivered to or upon the order of the Depositor, the
Certificates in authorized denominations evidencing directly or indirectly the
entire ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund
and exercise the rights referred to above for the benefit of all present and
future Holders of the Certificates.
Section 2.04 REMIC Matters. The Preliminary Statement sets forth
the designations for federal income tax purposes of all interests created
hereby. The "Startup Day" for purposes of the REMIC Provisions shall be the
Closing Date. The "latest possible maturity date" is October 25, 2036, which
is the Distribution Date following the latest Mortgage Loan maturity date.
Amounts paid to the Class X Certificates (prior to any reduction for any Basis
Risk Payment or Swap Termination Payment) shall be deemed paid from the
Upper-Tier REMIC to the Class X REMIC in respect of the Class X Interest and
from the Class X REMIC to the holders of the Class X Certificates prior to
distribution of Basis Risk Payments to the LIBOR Certificates.
Amounts distributable to the Class X Certificates (prior to any
reduction for any Net Swap Receipt Amounts, Net Swap Payment Amounts or Swap
Termination Payment), shall be deemed paid from the Class X REMIC to the
Holders of the Class X Certificates prior to distribution of any Basis Risk
Payments to the LIBOR Certificates.
For federal income tax purposes, any amount distributed on the
LIBOR Certificates on any such Distribution Date in excess of their Pass
Through Rate, calculated by substituting the REMIC Cap for the applicable cap
in respect of the related Certificates shall be treated as having been paid
from the Excess Reserve Fund Account or the Supplemental Interest Trust, as
applicable, and any excess of the REMIC Cap over the amount distributable on
such Class of LIBOR Certificates on such Distribution Date shall be treated as
having been paid to the Supplemental Interest Trust, all pursuant to, and as
further provided in, Section 8.14.
Section 2.05 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee that as of
the date of this Agreement or as of such date specifically provided herein:
51
(a) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by
the other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by
the Depositor with this Agreement or the consummation by the Depositor of any
of the transactions contemplated hereby, except as have been made on or prior
to the Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of,
or constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) any
term, condition or provision of any material indenture, deed of trust,
contract or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound;
(ii) results or will result in a violation of any law, rule, regulation,
order, judgment or decree applicable to the Depositor of any court or
governmental authority having jurisdiction over the Depositor or its
subsidiaries; or (iii) results in the creation or imposition of any lien,
charge or encumbrance which would have a material adverse effect upon the
Mortgage Loans or any documents or instruments evidencing or securing the
Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's
reasonable judgment, might materially and adversely affect the performance by
the Depositor of its obligations under this Agreement, or the validity or
enforceability of this Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
52
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any
other Person, and the Depositor has transferred all right, title and interest
in each Mortgage Loan to the Trustee. The transfer of each Mortgage Note and
each Mortgage as and in the manner contemplated by this Agreement is
sufficient either (i) fully to transfer to the Trustee, for the benefit of the
Certificateholders, all right, title, and interest of the Depositor thereto as
note holder and mortgagee or (ii) to grant to the Trustee, for the benefit of
the Certificateholders, the security interest referred to in Section 12.04
hereof.
It is understood and agreed that the representations, warranties
and covenants set forth in this Section 2.05 shall survive delivery of the
respective Custodial Files to the Custodians, and shall inure to the benefit
and to Certificateholders.
Section 2.06 Representations and Warranties of JPMorgan. JPMorgan,
as Custodian, hereby represents and warrants to the Depositor, the Master
Servicer and the Trustee, as of the Closing Date:
(a) Such Custodian is duly organized and is validly existing and
in good standing under the laws of its jurisdiction of incorporation and is
duly authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by such Custodian or is otherwise not required
under applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in accordance
with the terms thereof.
(b) Such Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of such Custodian, enforceable against such Custodian in
accordance with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by such
Custodian, the consummation of any other of the transactions contemplated by
this Agreement, and the fulfillment of or compliance with the terms thereof
are in the ordinary course of business of such Custodian and will not result
in a material breach of any term or provision of the articles of association
or by laws of such Custodian.
Section 2.07 Representations and Warranties of Deutsche Bank.
Deutsche Bank, in its capacity as a Custodian, hereby represents and warrants
to the Depositor, the Master Servicer and the Trustee, as of the Closing Date:
53
(a) Such Custodian is duly organized and is validly existing and
in good standing under the laws of its jurisdiction of incorporation and is
duly authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by such Custodian or is otherwise not required
under applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in accordance
with the terms thereof.
(b) Such Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of such Custodian, enforceable against such Custodian in
accordance with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by such
Custodian, the consummation of any other of the transactions contemplated by
this Agreement, and the fulfillment of or compliance with the terms thereof
are in the ordinary course of business of such Custodian and will not result
in a material breach of any term or provision of the articles of association
or by laws of such Custodian.
Section 2.08 Representations and Warranties of U.S. Bank. U.S.
Bank hereby represents and warrants to the Depositor, the Master Servicer and
the Trustee, as of the Closing Date:
(a) Such Custodian is duly organized and is validly existing and
in good standing under the laws of its jurisdiction of incorporation and is
duly authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by such Custodian or is otherwise not required
under applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in accordance
with the terms thereof.
(b) Such Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of such Custodian, enforceable against such Custodian in
accordance with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
54
(c) The execution and delivery of this Agreement by such
Custodian, the consummation of any other of the transactions contemplated by
this Agreement, and the fulfillment of or compliance with the terms thereof
are in the ordinary course of business of such Custodian and will not result
in a material breach of any term or provision of the articles of incorporation
or by laws of such Custodian.
Section 2.09 Representations and Warranties of Xxxxx Fargo. Xxxxx
Fargo, in its capacity as a Custodian, hereby represents and warrants to the
Depositor, the Master Servicer and the Trustee, as of the Closing Date:
(a) Such Custodian is duly organized and is validly existing and
in good standing under the laws of its jurisdiction of incorporation and is
duly authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by such Custodian or is otherwise not required
under applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in accordance
with the terms thereof.
(b) Such Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of such Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of such Custodian, enforceable against such Custodian in
accordance with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by such
Custodian, the consummation of any other of the transactions contemplated by
this Agreement, and the fulfillment of or compliance with the terms thereof
are in the ordinary course of business of such Custodian and will not result
in a material breach of any term or provision of the articles of incorporation
or by laws of such Custodian.
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Excess Reserve Fund Account; Distribution Account.
(a) The Securities Administrator shall establish and maintain the Excess
Reserve Fund Account to receive any Basis Risk Payment and to secure their
limited recourse obligation to pay to the LIBOR Certificateholders any Basis
Risk Carry Forward Amounts (prior to using any Net Swap Receipt Amounts). On
each Distribution Date, the Securities Administrator shall deposit the amount
of any Basis Risk Payment received by it for such date into the Excess Reserve
Fund Account. For the avoidance of doubt, any Basis Risk Carry Forward Amounts
shall be paid to
55
the LIBOR Certificates first from the Excess Reserve Fund Account and then
from the Supplemental Interest Trust.
On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class or Classes of LIBOR Certificates, the Securities
Administrator shall (1) withdraw from the Distribution Account, to the extent
of funds available therefor in the Distribution Account, and deposit in the
Excess Reserve Fund Account, as set forth in Section 4.01(a)(iii)(e), the
lesser of (x) the Class X Distributable Amount (without regard to the
reduction in clause (iii) of the definition thereof with respect to Basis Risk
Payments) (to the extent remaining after the distributions specified in
Sections 4.01(a)(iii)(a)-(d)) and (y) the aggregate Basis Risk Carry Forward
Amount of the LIBOR Certificates for such Distribution Date and (2) withdraw
from the Excess Reserve Fund Account and the Supplemental Interest Account
amounts necessary (including Net Swap Payment Amounts or Swap Termination
Payments (other than amounts received pursuant to an ISDA Credit Support Annex
negotiated between the Trust and the Swap Provider)) to pay to such Class or
Classes of Certificates the related Basis Risk Carry Forward Amount. Such
payments shall be allocated to those Classes based upon the amount of Basis
Risk Carry Forward Amount owed to each such Class and shall be paid in the
priority set forth in Section 4.01(a)(iii)(e).
The Securities Administrator shall account for the Excess Reserve
Fund Account as an asset of a grantor trust under subpart E, Part I of
subchapter J of the Code and not as an asset of any Trust REMIC created
pursuant to this Agreement. The beneficial owners of the Excess Reserve Fund
Account are the Class X Certificateholders. For all federal income tax
purposes, amounts transferred to the Excess Reserve Fund Account shall be
treated as distributions by the Securities Administrator from the Upper-Tier
REMIC to the Class X Interest and from the Class X REMIC to the Class X
Certificates and then contributed by the Class X Certificateholders to the
Excess Reserve Fund Account.
Any Basis Risk Carry Forward Amounts distributed by the Securities
Administrator to the Principal Certificateholders shall be accounted for by
the Securities Administrator, for federal income tax purposes, as amounts paid
first to the Holders of the Class X Certificates and then to the respective
Class or Classes of LIBOR Certificates in accordance with the priority of
payments in this Section 3.01. In addition, the Securities Administrator shall
account for the Principal Certificateholders' rights to receive payments of
Basis Risk Carry Forward Amounts as rights in a limited recourse interest rate
cap contract written by the Class X Certificateholders in favor of the Holders
of each such Class.
Notwithstanding any provision contained in this Agreement, the
Securities Administrator shall not be required to make any distributions from
the Excess Reserve Fund Account except as expressly set forth in this Section
3.01(a).
(b) The Securities Administrator shall establish and maintain the
Distribution Account on behalf of the Certificateholders. The amount remitted
by the Servicer to the Master Servicer on each Remittance Date shall be
credited to the Distribution Account within two (2) Business Days once the
amounts are identified as a remittance in connection with the Trust and
reconciled to the reports provided by the Servicer. The Securities
Administrator shall establish and maintain the Distribution Account on behalf
of the Certificateholders. The Master Servicer
56
shall, promptly upon receipt on the Business Day received, deposit in the
Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicers to the Master
Servicer pursuant to the Servicing Agreements;
(ii) any amounts remitted as a result of the operation of the
Primary Mortgage Insurance Policy;
(iii) any Net Swap Receipt Amounts or Swap Termination Payments
(other than amounts received pursuant to an ISDA Credit Support Annex
negotiated between the Trust and the Swap Provider) remitted by the Swap
Provider; and
(iv) any other amounts deposited hereunder which are required to
be deposited in the Distribution Account.
In the event that any Servicer shall remit any amount not required
to be remitted pursuant to the applicable Servicing Agreement, and such
Servicer directs the Master Servicer in writing to withdraw such amount from
the Distribution Account, the Master Servicer shall return such funds to the
applicable Servicer. All funds deposited in the Distribution Account shall be
held by the Securities Administrator in trust for the Certificateholders until
disbursed in accordance with this Agreement or withdrawn in accordance with
Section 4.01.
(c) From time to time, the Securities Administrator may also
establish any other accounts for the purposes of carrying out its duties
hereunder (including, without limitation, any account necessary under the
Interest Rate Swap Agreement).
Section 3.02 Investment of Funds in the Distribution Account. (a)
Other than during the Master Servicer Float Period, the Depositor shall direct
the investment of funds held in the Distribution Account in one or more
Permitted Investments. Absent such direction, the Securities Administrator
shall invest such funds during such period in the Xxxxx Fargo Advantage Prime
Investment Money Market Fund so long as such fund is a Permitted Investment.
The Securities Administrator may (but shall not be obligated to) invest funds
in the Distribution Account during the Master Servicer Float Period (for
purposes of this Section 3.02, such Account is referred to as an "Investment
Account"), in one or more Permitted Investments bearing interest or sold at a
discount, and maturing, unless payable on demand, or maturing on such
Distribution Date, in the case of an investment that is an obligation of Xxxxx
Fargo, no later than the Business Day immediately preceding the date on which
such funds are required to be withdrawn from such account pursuant to this
Agreement. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account shall be
made in the name of the Securities Administrator. The Securities Administrator
shall be entitled to sole possession over each such investment, and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the Securities Administrator or its agent, together with
any document of transfer necessary to transfer title to such investment to the
Securities Administrator. In the event amounts on deposit in an Investment
Account are at any time invested in a Permitted Investment payable on demand,
the Securities Administrator may:
57
(x) consistent with any notice required to be given thereunder, demand
that payment thereon be made on the last day such Permitted
Investment may otherwise mature hereunder in an amount equal to
the lesser of (1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder that such Permitted
Investment would not constitute a Permitted Investment in respect
of funds thereafter on deposit in the Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Securities Administrator
during the Master Servicer Float Period shall be subject to the Securities
Administrator's withdrawal in the manner set forth in Section 10.05.
(c) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Securities Administrator shall take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings. Notwithstanding the
foregoing, the Depositor shall be liable to the Trust for any loss on any
investment of funds in the Distribution Account other than during the Master
Servicer Float Period and the Securities Administrator shall be liable to the
Trust for any such loss on any funds it has invested under this Section 3.02
only during the Master Servicer Float Period, and the Depositor or the
Securities Administrator, as the case may be, shall deposit funds in the
amount of such loss in the Distribution Account promptly after such loss is
incurred.
(d) The Securities Administrator or its Affiliates are permitted
to receive additional compensation that could be deemed to be in the
Securities Administrator's economic self-interest for (i) serving as
investment adviser, administrator, shareholder, servicing agent, custodian or
sub-custodian with respect to certain of the Permitted Investments, (ii) using
Affiliates to effect transactions in certain Permitted Investments and (iii)
effecting transactions in certain Permitted Investments. Such compensation is
not payable or reimbursable under Section 8.06 of this Agreement.
(e) In order to comply with its duties under the USA PATRIOT Act
of 0000, X.X. Xxxx, XXXxxxxx and Xxxxx Fargo, each as a Custodian, may obtain
and verify certain information and documentation from the other parties to
this Agreement including, but not limited to, each such party's name, address
and other identifying information.
(f) In order to comply with laws, rules and regulations applicable
to banking institutions, including those relating to the funding of terrorist
activities and money laundering, Deutsche Bank as Trustee and a Custodian is
required to obtain, verify and record certain information relating to
individuals and entities which maintain a business relationship with Deutsche
Bank. Accordingly, each of the parties agrees to provide to Deutsche Bank upon
its request from time to time such party's complete name, address, tax
identification number and such other identifying information together with
copies of such party's constituting
58
documentation, securities disclosure documentation and such other identifying
documentation as may be available for such party.
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution. (a) On each Distribution
Date, the Securities Administrator shall make the disbursements and transfers
from amounts then on deposit in the Distribution Account in the following
order of priority and to the extent of the Available Funds remaining:
(i) to the holders of each Class of LIBOR Certificates and to the
Supplemental Interest Trust in the following order of priority:
(A) to the Supplemental Interest Trust, the sum of (x) all
Net Swap Payment Amounts and (y) any Swap Termination Payment owed
to the Swap Provider other than a Defaulted Swap Termination
Payment owed to the Swap Provider, if any;
(B) from the Interest Remittance Amounts, pro rata (based on
the Accrued Certificate Interest Distribution Amounts and Unpaid
Interest Amounts, distributable to each Class of Class A
Certificates), to each of the Class A Certificates, the related
Accrued Certificate Interest Distribution Amounts and Unpaid
Interest Amounts for each Class of the Class A Certificates from
prior Distribution Dates;
(C) from any remaining Interest Remittance Amounts to the
Class M Certificates, sequentially, in ascending numerical order,
their Accrued Certificate Interest; and
(D) from any remaining Interest Remittance Amounts to the
Class B Certificates, sequentially, in ascending numerical order,
their Accrued Certificate Interest.
(ii) (A) on each Distribution Date (x) prior to the Stepdown Date
or (y) with respect to which a Trigger Event is in effect, to the
holders of the Class or Classes of LIBOR Certificates and Residual
Certificates then entitled to distributions of principal, from Available
Funds remaining after making distributions pursuant to clause (a)(i)
above, an amount equal to the Principal Distribution Amount in the
following order of priority:
(1) concurrently, to the Class R, Class RC and Class RX
Certificates, pro rata, until their respective Class Certificate
Balances have been reduced to zero;
(2) concurrently, to the Class A Certificates, in the
following order of priority:
59
(x) sequentially, to the Class A-1 and Class A-2
Certificates, in that order, until their respective Class
Certificate Balances have been reduced to zero;
(y) concurrently, to the Class A-3-A and Class A-3-B
Certificates, pro rata, until their respective Class
Certificate Balances have been reduced to zero, with the
exception that if a Sequential Trigger Event is in effect,
principal distributions to the Class A-3-A and Class A-3-B
Certificates will be allocated first to the Class A-3-A
Certificates, until its Class Certificate Balance has been
reduced to zero, and then to the Class A-3-B Certificates,
until its Class Certificate Balance has been reduced to
zero;
(3) sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class B-1, Class B-2 and Class B-3
Certificates, in that order, until their respective Class
Certificate Balances have been reduced to zero;
(B) on each Distribution Date (x) on and after the Stepdown Date
and (y) as long as a Trigger Event is not in effect, to the holders of
the Class or Classes of LIBOR Certificates then entitled to distribution
of principal from Available Funds remaining after making distributions
pursuant to clause (i) above, an amount equal to the Principal
Distribution Amount in the following order of priority:
(1) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount allocated among those classes in the following
order of priority:
(x) sequentially, to the Class A-1 and Class A-2
Certificates, in that order, until their respective Class
Certificate Balances have been reduced to zero; and
(y) concurrently, to the Class A-3-A and Class A-3-B
Certificates, pro rata, until their respective Class
Certificate Balances have been reduced to zero;
(2) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above and (y) the Class M-1 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(3) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above and to the Class M-1 Certificates in clause
(ii)(B)(2) above and (y) the Class M-2 Principal
60
Distribution Amount, until their Class Certificate Balance has
been reduced to zero;
(4) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in clause
(ii)(B)(2) above and to the Class M-2 Certificates in clause
(ii)(B)(3) above and (y) the Class M-3 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(5) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in clause
(ii)(B)(2) above, to the Class M-2 Certificates in clause
(ii)(B)(3) above and to the Class M-3 Certificates in clause
(ii)(B)(4) above and (y) the Class M-4 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(6) to the Class M-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in clause
(ii)(B)(2) above, to the Class M-2 Certificates in clause
(ii)(B)(3) above, to the Class M-3 Certificates in clause
(ii)(B)(4) above and to the Class M-4 Certificates in clause
(ii)(B)(5) above and (y) the Class M-5 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(7) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in clause
(ii)(B)(2) above, to the Class M-2 Certificates in clause
(ii)(B)(3) above, to the Class M-3 Certificates in clause
(ii)(B)(4) above, to the Class M-4 Certificates in clause
(ii)(B)(5) above, to the Class M-5 Certificates in clause
(ii)(B)(6) above and (y) the Class B-1 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(8) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in clause
(ii)(B)(2) above, to the Class M-2 Certificates in clause
(ii)(B)(3) above, to the Class M-3 Certificates in clause
(ii)(B)(4) above, to the Class M-4 Certificates in clause
(ii)(B)(5) above, to the Class M-5 Certificates in clause
(ii)(B)(6) above to the Class B-1 Certificates in clause
(ii)(B)(7) above and (y) the Class B-2 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero; and
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(9) to the Class B-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amount distributed to the Class A Certificates in clause
(ii)(B)(1) above, to the Class M-1 Certificates in clause
(ii)(B)(2) above, to the Class M-2 Certificates in clause
(ii)(B)(3) above, to the Class M-3 Certificates in clause
(ii)(B)(4) above, to the Class M-4 Certificates in clause
(ii)(B)(5) above, to the Class M-5 Certificates in clause
(ii)(B)(6) above, to the Class B-1 Certificates in clause
(ii)(B)(7) above, to the Class B-2 Certificates in clause
(ii)(B)(8) above and (y) the Class B-3 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero.
(iii) from the Available Funds remaining after the distributions
in clauses (a)(i) and (a)(ii) above, the following amounts shall be
distributed in the following order of priority:
(A) if and to the extent that the Interest Remittance
Amounts distributed pursuant to clauses (a)(i) and (a)(ii) above
were insufficient to make full distributions in respect of
interest set forth in such clauses, (x) to the holders of each
Class of Class A Certificates, any unpaid Accrued Certificate
Interest and any Unpaid Interest Amounts, pro rata among such
Classes based on their respective entitlement to those amounts,
and then (y) to the holders of each Class of the Class M and Class
B Certificates, any unpaid Accrued Certificate Interest, in the
order of priority for such classes set forth in clause (i) above;
(B) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amount for such Class;
(C) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amount for such Class;
(D) to the holders of the Class M-3 Certificates, any Unpaid
Interest Amount for such Class;
(E) to the holders of the Class M-4 Certificates, any Unpaid
Interest Amount for such Class;
(F) to the holders of the Class M-5 Certificates, and Unpaid
Interest Amount for such Class;
(G) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amount for such Class;
(H) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amount for such Class;
(I) to the holders of the Class B-3 Certificates, any Unpaid
Interest Amount for such Class;
62
(J) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment (without regard to Net Swap Receipt Amounts)
for such Distribution Date;
(K) from funds on deposit in the Excess Reserve Fund Account
with respect to that Distribution Date, an amount equal to any
Basis Risk Carry Forward Amount with respect to the LIBOR
Certificates for that Distribution Date in the same order and
priority in which Accrued Certificate Interest is allocated among
those Classes of Certificates, with the allocation to the Class A
Certificates being pro rata based on their respective Class
Certificate Balances; provided, however, for any Distribution
Date, after the remaining Basis Risk Carry Forward Amount for any
of the Class A Certificates has been reduced to zero, any
remaining Basis Risk Carry Forward Amount that would have been
allocated to such Class A Certificates for that Distribution Date
will be allocated, pro rata, to the remaining Class A Certificates
based on their respective remaining unpaid Basis Risk Carry
Forward Amounts;
(L) to the Supplemental Interest Trust, the amount of any
Defaulted Swap Termination Payment owed to the Swap Provider;
(M) to the holders of the Class X Certificates, the
remainder of the Class X Distributable Amount not distributed
pursuant to Section 4.01(a)(iii)(A)-(L); and
(N) to the holders of the Class R, Class RC and Class RX
Certificates, pro rata, any remaining amount.
(b) On each Distribution Date, all amounts representing Prepayment
Premiums from the Mortgage Loans received during the related Principal
Prepayment Period shall be distributed by the Securities Administrator to the
holders of the Class P Certificates.
(c) Notwithstanding the foregoing description of allocation of
principal distributions to the Class A Certificates, from and after the
Distribution Date on which the aggregate Class Certificate Balance of the
Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class B-1, Class B-2
and Class B-3 Certificates and the Overcollateralized Amount have been reduced
to zero, any principal distributions allocated to the Class A Certificates are
required to be allocated pro rata to the Class A Certificates, based on their
respective Class Certificate Balances, until their respective Class Principal
Balances have been returned to zero, with the exception that if a Sequential
Trigger Event is in effect, principal distributions to the Class A-3-A and
Class A-3-B Certificates will be allocated (x) first to the Class A-3-A
Certificates, until its Class Certificate Balance has been reduced to zero and
(y) then to the Class A-3-B Certificates, until its Class Certificate Balance
has been reduced to zero.
(d) On any Distribution Date, any shortfalls resulting from the
application of the Servicemembers Civil Relief Act or other similar state
statute and any prepayment interest shortfalls not covered by Compensating
Interest will be allocated first to excess interest on the mortgage loans for
the related Distribution Date and thereafter as a reduction to the Accrued
63
Certificate Interest for the Principal Certificates on a pro rata basis based
on the respective amounts of interest accrued on those certificates for that
Distribution Date. The holders of the Principal Certificates will not be
entitled to reimbursement for the allocation of any of those shortfalls
described in the preceding sentence.
Upon any exercise of the purchase option set forth in Section
11.01(a), the Securities Administrator shall distribute to the holders of the
Class RC Certificates any amounts required to be distributed on the Class RC
Certificates pursuant to Section 11.02.
Section 4.02 Monthly Statements to Certificateholders. (a) Not
later than each Distribution Date, the Securities Administrator shall make
available to each Certificateholder, the Depositor, the Trustee and each
Rating Agency a statement based, in part, upon the information provided by the
Servicers setting forth with respect to the related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amount included in such distribution and any remaining Unpaid Interest
Amount after giving effect to such distribution, any Basis Risk Carry
Forward Amount for such Distribution Date and the amount of all Basis
Risk Carry Forward Amount covered by withdrawals from the Excess Reserve
Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the
amount of the shortfall and the allocation thereof as between principal
and interest, including any Basis Risk Carry Forward Amount not covered
by amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
and the notional amount of the Class P Certificates after giving effect
to the distribution of principal on such Distribution Date;
(v) the aggregate Stated Principal Balance of the Mortgage Loans
for the following Distribution Date;
(vi) the amount of the expenses and fees paid to or retained by
the Servicer and paid to or retained by the Trustee with respect to such
Distribution Date;
(vii) the amount of any Administrative Fees paid to the Master
Servicer or Securities Administrator with respect to such Distribution
Date;
(viii) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
(ix) the amount of P&I Advances included in the distribution on
such Distribution Date and the aggregate amount of P&I Advances reported
by the Servicers
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(and the Master Servicer, the Trustee as successor master servicer and
any other successor master servicer, if applicable) as outstanding as of
the close of business on the Determination Date immediately preceding
such Distribution Date;
(x) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Monthly Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days (each to be calculated using
the OTS Method), (2) that have become REO Property, (3) that are in
foreclosure and (4) that are in bankruptcy, in each case as of the close
of business on the last Business Day of the immediately preceding month;
(xi) the total number and principal balance of any REO Properties
(and market value, if available) as of the close of business on the
Determination Date preceding such Distribution Date;
(xii) whether a Trigger Event has occurred and is continuing
(including the calculation demonstrating the existence of the Trigger
Event and the aggregate outstanding balance of all 60+ Day Delinquent
Mortgage Loans);
(xiii) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xiv) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xv) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Unpaid Interest Amounts;
(xvi) the Overcollateralized Amount and Specified
Overcollateralized Amount;
(xvii) the Prepayment Premiums collected by or paid by the
Servicers;
(xviii) the percentage equal to the aggregate realized losses
divided by the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date;
(xix) the amount distributed on the Class X and Class P
Certificates;
(xx) the amount of any Subsequent Recoveries for such Distribution
Date; and
(xxi) updated Mortgage Loan information, such as weighted average
interest rate, and weighted average remaining term.
(b) The Securities Administrator's responsibility for providing
the above statement to the Certificateholders, each Rating Agency, the Trustee
and the Depositor is limited to the availability, timeliness and accuracy of
the information derived from the Master Servicer, the Servicers and the
Responsible Parties. The Securities Administrator shall provide the above
statement via the Securities Administrator's internet website. Assistance in
using the website
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can be obtained by calling the Securities Administrator's investor relations
desk at (000) 000-0000. The Securities Administrator will also make a paper
copy of the above statement available upon request.
(c) Upon request, within a reasonable period of time after the end
of each calendar year, the Securities Administrator shall cause to be
furnished to each Person who at any time during the calendar year was a
Certificateholder, a statement containing the information set forth in clauses
(a)(i), (a)(ii), (a)(iii) and (a)(vii) of this Section 4.02 aggregated for
such calendar year or applicable portion thereof during which such Person was
a Certificateholder. Such obligation of the Securities Administrator shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Securities Administrator pursuant to any
requirements of the Code as from time to time in effect.
The Securities Administrator shall be entitled to rely on
information provided by third parties for purposes of preparing the foregoing
report, but shall not be responsible for the accuracy of such information.
Section 4.03 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts will be allocated to the most junior Class of
Subordinated Certificates then outstanding in reduction of the Class
Certificate Balance thereof. In the event, Applied Realized Loss Amounts are
allocated to any Class of Certificates, their Class Certificate Balance shall
be reduced by the amount so allocated and no funds shall be distributed with
respect to the written down amounts or with respect to interest or Basis Risk
Carry Forward Amounts on the written down amounts on that Distribution Date or
any future Distribution Dates, even if funds are otherwise available therefor.
Notwithstanding the foregoing, the Class Certificate Balance of
each Class of Subordinated Certificates that has been previously reduced by
Applied Realized Loss Amounts will be increased, in the order of seniority, by
the amount of the Subsequent Recoveries (but not in excess of the Applied
Realized Loss Amount allocated to the applicable Class of Subordinated
Certificates).
Section 4.04 Certain Matters Relating to the Determination of
LIBOR. LIBOR shall be calculated by the Securities Administrator in accordance
with the definition of "LIBOR." Until all of the LIBOR Certificates are paid
in full, the Securities Administrator will at all times retain at least four
Reference Banks for the purpose of determining LIBOR with respect to each
LIBOR Determination Date. The Securities Administrator initially shall
designate the Reference Banks (after consultation with the Depositor). Each
"Reference Bank" shall be a leading bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market, shall not control, be
controlled by, or be under common control with, the Securities Administrator
and shall have an established place of business in London. If any such
Reference Bank should be unwilling or unable to act as such or if the
Securities Administrator should terminate its appointment as Reference Bank,
the Securities Administrator shall promptly appoint or cause to be appointed
another Reference Bank (after consultation with the Depositor). The Securities
Administrator shall have no liability or responsibility to any Person for (i)
the selection of any Reference Bank for purposes of determining LIBOR or (ii)
any inability to
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retain at least four Reference Banks which is caused by circumstances beyond
its reasonable control.
The Pass-Through Rate for each Class of LIBOR Certificates for
each Interest Accrual Period shall be determined by the Securities
Administrator on each LIBOR Determination Date so long as the LIBOR
Certificates are outstanding on the basis of LIBOR and the respective formulae
appearing in footnotes corresponding to the LIBOR Certificates in the table
relating to the Certificates in the Preliminary Statement. The Securities
Administrator shall not have any liability or responsibility to any Person for
its inability, following a good faith reasonable effort, to obtain quotations
from the Reference Banks or to determine the arithmetic mean referred to in
the definition of LIBOR, all as provided for in this Section 4.04 and the
definition of LIBOR. The establishment of LIBOR and each Pass-Through Rate for
the LIBOR Certificates by the Securities Administrator shall (in the absence
of manifest error) be final, conclusive and binding upon each Holder of a
Certificate and the Trustee.
Section 4.05 Supplemental Interest Trust. On the Closing Date, the
Securities Administrator on behalf of the Trustee shall establish and maintain
a separate non-interest bearing trust (the "Supplemental Interest Trust") to
which the Securities Administrator will transfer and assign the Interest Rate
Swap Agreement. The Supplemental Interest Trust shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including, without limitation, other
moneys of the Securities Administrator held pursuant to this Agreement.
On any Distribution Date, Swap Termination Payments, Net Swap
Payment Amounts owed to the Swap Provider and Net Swap Receipt Amounts for
that Distribution Date will be deposited into the Supplemental Interest Trust.
Funds in the Supplemental Interest Trust will be distributed in the following
order of priority:
(i) to the Swap Provider, the sum of (x) all Net Swap Payment
Amounts and (y) any Swap Termination Payment, other than a Defaulted
Swap Termination Payment, to the Swap Provider, if any, owed for that
Distribution Date;
(ii) to the Certificateholders, to pay Accrued Certificate
Interest and, if applicable, any Unpaid Interest Amounts as described in
clause (i) of "--Priorities of Distributions" above, to the extent
unpaid from other Available Funds;
(iii) to the Certificateholders, to pay principal as described in
clause (ii)(A) and clause (ii)(B) of "--Priorities of Distributions"
above, but only to the extent necessary to maintain the
Overcollateralized Amount at the Specified Overcollateralized Amount,
after giving effect to payments and distributions from other Available
Funds;
(iv) to the Certificateholders, to pay Unpaid Interest Amounts and
Basis Risk Carry Forward Amounts as described in clause (iii) of
"--Priorities of Distributions" above, to the extent unpaid from other
Available Funds (including funds on deposit in the Excess Reserve Fund
Account);
(v) to the Swap Provider, any Defaulted Swap Termination Payment
owed to the Swap Provider for that Distribution Date; and
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(vi) to the holders of the Class X Certificates, any remaining
amounts.
Upon termination of the Trust, any amounts remaining in the
Supplemental Interest Trust shall be distributed pursuant to the priorities
set forth in this Section 4.05.
The Securities Administrator shall account for the Supplemental
Interest Trust as an asset of a grantor trust under subpart E, Part I of
subchapter J of the Code and not as an asset of any Trust REMIC created
pursuant to this Agreement. The beneficial owners of the Supplemental Interest
Trust are the Class X Certificateholders. For federal income tax purposes, Net
Swap Payment Amounts and Swap Termination Payments payable to the Swap
Provider shall be deemed to be paid to the Supplemental Interest Trust first,
by the Holder of the Class X Certificates and second, other than any Defaulted
Swap Termination Payment, from the Upper-Tier REMIC by the Holders of the
applicable Class or Classes of LIBOR Certificates as and to the extent
provided in Section 8.14.
Any Basis Risk Carry Forward Amounts (defined solely for this
purpose as any excess of monies received for such Distribution Date over the
REMIC Cap) distributed by the Securities Administrator to the LIBOR
Certificateholders shall be accounted for by the Securities Administrator, for
federal income tax purposes, as amounts paid first to the Holders of the Class
X Certificates and (to the extent remaining after payments to the Swap
Provider) then to the respective Class or Classes of LIBOR Certificates. In
addition, the Securities Administrator shall account for the rights of Holders
of each Class of LIBOR Certificates to receive payments of Basis Risk Carry
Forward Amounts (defined solely for this purpose as any excess of monies
received for such Distribution Date over the REMIC Cap) from the Supplemental
Interest Trust (along with Basis Risk Carry Forward Amounts (defined solely
for this purpose as any excess of monies received for such Distribution Date
over the REMIC Cap) payable from the Excess Reserve Fund Account) as rights in
a separate limited recourse interest rate cap contract written by the Class X
Certificateholders in favor of Holders of each such Class.
The Supplemental Interest Trust shall be an "outside reserve fund"
for federal income tax purposes and will not be an asset of any Trust REMIC.
Furthermore, the Holders of the Class X Certificates shall be the beneficial
owners of the Supplemental Interest Trust for all federal income tax purposes,
and shall be taxable on all income earned thereon.
Section 4.06 Trust's Obligations under the Interest Rate Swap
Agreement; Replacement and Termination of the Interest Rate Swap Agreement.
(a) Upon the Securities Administrator obtaining actual knowledge
of the rating of the Swap Provider falling below the Required Hedge
Counterparty Rating (as defined in the Interest Rate Swap Agreement), the
Securities Administrator, acting at the written direction of the Depositor,
shall attempt to negotiate an ISDA Credit Support Annex (as defined in the
Interest Rate Swap Agreement with the Swap Provider that meets the terms of
the Interest Rate Swap Agreement. If an ISDA Credit Support Annex is
negotiated, the Securities Administrator, acting at the written direction of
the Depositor, shall set up an account in accordance with Section 3.01(c) to
hold cash or other eligible investments pledged under such ISDA Credit Support
Annex. Any cash or other eligible investments pledged under an ISDA Credit
Support Annex shall not be part of the Distribution Account, the Excess
Reserve Fund Account
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or the Supplemental Interest Trust unless they are applied in accordance with
such ISDA Credit Support Annex to make a payment due to the Trust pursuant to
the Interest Rate Swap Agreement.
(b) Upon the Securities Administrator obtaining actual knowledge
of an Event of Default (as defined in the Interest Rate Swap Agreement) or
Termination Event (as defined in the Interest Rate Swap Agreement) for which
the Trust has the right to designate an Early Termination Date (as defined in
the Interest Rate Swap Agreement), the Securities Administrator will act at
the written direction of the Depositor as to whether it will designate an
Early Termination Date; provided, however, that the Securities Administrator,
on behalf of the Trust, shall provide written notice to each Rating Agency
following the Event of Default or Termination Event. Upon the termination of
the Interest Rate Swap Agreement under the circumstances contemplated by this
Section 4.06(b), the Securities Administrator, on behalf of the Trust, shall
use its reasonable best efforts to enforce the rights of the Trust and the
Trustee thereunder as may be permitted by the terms of the Interest Rate Swap
Agreement and consistent with the terms hereof, and shall apply the proceeds
of any such efforts to enter into a replacement interest rate swap agreement
with another swap provider. To the extent such replacement interest rate swap
agreement can be entered into, any termination payments received by the Trust
in respect of the terminated interest rate swap agreement shall be used, to
the extent necessary, by the Trust for the purpose of entering into such
replacement interest rate swap agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral
multiples in excess thereof (except that one Certificate in each Class may be
issued in a different amount) and aggregate denominations per Class set forth
in the Preliminary Statement.
The Depositor hereby directs the Securities Administrator to
register the Class X and Class P Certificates in the name of the Depositor or
its designee. On a date as to which the Depositor notifies the Securities
Administrator, the Depositor hereby directs the Securities Administrator to
transfer the Class X and Class P Certificates in the name of the NIM Trustee
or such other name or names as the Depositor shall request, and to deliver the
Class X and Class P Certificates to the NIM Trustee, or to such other person
or persons as the Depositor shall request.
Subject to Section 11.02 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator shall
make distributions to each Certificateholder of record on the preceding Record
Date either (x) by wire transfer in immediately available funds to the account
of such holder at a bank or other entity having appropriate facilities
therefor as directed by that Certificateholder by written wire instructions
provided to the Securities Administrator or (y), in the event that no wire
instructions are provided to the Securities Administrator, by check mailed by
first class mail to such Certificateholder at the address of such holder
appearing in the Certificate Register.
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The Certificates shall be executed by manual or facsimile
signature on behalf of the Securities Administrator by an authorized officer.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time such signatures were affixed, authorized to sign on behalf
of the Securities Administrator shall bind the Securities Administrator,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of any such Certificates
or did not hold such office at the date of such Certificate. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless authenticated by the Securities Administrator by manual
signature, and such authentication upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly executed
and delivered hereunder. All Certificates shall be dated the date of their
authentication. On the Closing Date, the Securities Administrator shall
authenticate the Certificates to be issued at the direction of the Depositor,
or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Securities Administrator shall maintain, in
accordance with the provisions of Section 5.06, a Certificate Register for the
Trust Fund in which, subject to the provisions of subsections (b) and (c)
below and to such reasonable regulations as it may prescribe, the Securities
Administrator shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. Upon surrender for
registration of transfer of any Certificate, the Securities Administrator
shall execute and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class and aggregate
Percentage Interest.
At the option of a Certificateholder, Certificates may be
exchanged for other Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Securities Administrator duly executed by the
holder thereof or his attorney duly authorized in writing. In the event, the
Depositor or an Affiliate transfers the Class X Certificates, or a portion
thereof, to another Affiliate, it shall notify the Securities Administrator in
writing of the affiliated status of the transferee. The Securities
Administrator shall have no liability regarding the lack of notice with
respect thereto.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Securities
Administrator in accordance with the Securities Administrator's customary
procedures.
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(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws.
Except with respect to (i) the initial transfer of the Class X or Class P
Certificates on the Closing Date, (ii) the transfer of the Class X or Class P
Certificates to the NIM Issuer or the NIM Trustee, or (iii) a transfer of the
Class X or Class P Certificates to the Depositor or any Affiliate of the
Depositor, in the event that a transfer of a Private Certificate which is a
Physical Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer shall certify to the Securities Administrator in writing the facts
surrounding the transfer in substantially the form set forth in Exhibit H (the
"Transferor Certificate") and either (i) there shall be delivered to the
Securities Administrator a letter in substantially the form of Exhibit I (the
"Rule 144A Letter") or (ii) there shall be delivered to the Securities
Administrator at the expense of the transferor an Opinion of Counsel that such
transfer may be made without registration under the Securities Act. In the
event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities
Act and such laws, in order to assure compliance with the Securities Act and
such laws, the Certificateholder desiring to effect such transfer will be
deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such
Certificate, in each case as if such Certificate were evidenced by a Physical
Certificate. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other information as shall be necessary to satisfy the condition to
eligibility set forth in Rule 144A(d)(4) for transfer of any such Certificate
without registration thereof under the Securities Act pursuant to the
registration exemption provided by Rule 144A. The Trustee and the Securities
Administrator shall cooperate with the Depositor in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Depositor such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
request to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee and the Depositor and each Servicer against
any liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
Except with respect to (i) the initial transfer of the Class X or
Class P Certificates on the Closing Date, (ii) the transfer of the Class X or
Class P Certificates to the NIM Issuer or the NIM Trustee or (iii) a transfer
of the Class X or Class P Certificates to the Depositor or any Affiliate of
the Depositor, no transfer of an ERISA-Restricted Certificate shall be made
unless the Securities Administrator shall have received either (i) a
representation from the transferee of such Certificate acceptable to and in
form and substance satisfactory to the Securities Administrator (in the event
such Certificate is a Private Certificate or a Residual Certificate, such
requirement is satisfied only by the Securities Administrator's receipt of a
representation letter from the transferee substantially in the form of Exhibit
G), to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code or a plan subject to any Federal, state or local law ("Similar Law")
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materially similar to the foregoing provisions of ERISA or the Code, nor a
person acting on behalf of any such plan or arrangement nor using the assets
of any such plan or arrangement to effect such transfer (each such investor a
"Plan"), (ii) in the case of an ERISA-Restricted Certificate (other than a
Residual Certificate) that has been the subject of an ERISA-Qualifying
Underwriting, a representation that the purchaser is an insurance company that
is purchasing such Certificates with funds contained in an "insurance company
general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption ("PTCE") 95-60) and that the purchase and holding
of such Certificates satisfy the requirements for exemptive relief under
Sections I and III of PTCE 95-60 or (iii) in the case of any ERISA-Restricted
Certificate presented for registration in the name of an employee benefit plan
subject to Title I of ERISA, a plan or arrangement subject to Section 4975 of
the Code (or comparable provisions of any subsequent enactments), or a plan
subject to Similar Law, or a trustee of any such plan or any other person
acting on behalf of any such plan or arrangement or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Securities
Administrator and the Depositor, which Opinion of Counsel shall not be an
expense of the Trustee, the Depositor, the Securities Administrator or the
Trust Fund, addressed to the Securities Administrator and the Depositor, to
the effect that the purchase and holding of such ERISA-Restricted Certificate
will not constitute or result in a non-exempt prohibited transaction within
the meaning of ERISA, Section 4975 of the Code or any Similar Law and will not
subject the Trustee, the Depositor, the Master Servicer, any other servicer or
the Securities Administrator to any obligation in addition to those expressly
undertaken in this Agreement or to any liability. For purposes of the
preceding sentence, with respect to an ERISA-Restricted Certificate that is
not a Private Certificate or a Residual Certificate, in the event the
representation letter referred to in the preceding sentence is not furnished,
such representation shall be deemed to have been made to the Securities
Administrator by the transferee's (including an initial acquirer's) acceptance
of the ERISA-Restricted Certificates. In the event that such representation is
violated, or any attempt is made to transfer to a plan or arrangement subject
to Section 406 of ERISA, a plan subject to Section 4975 of the Code or a plan
subject to Similar Law, or a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement, without such
Opinion of Counsel, such attempted transfer or acquisition shall be void and
of no effect.
During the period the Supplemental Interest Trust is in effect, no
transfer of a Certificate shall be made unless the Securities Administrator
shall have received either a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the
Securities Administrator to the effect that such transferee is not a Plan, or
(ii) a representation that the purchase and holding of the Certificate satisfy
the requirements for exemptive relief under XXXX 00-00, XXXX 00-0, XXXX 00-00,
XXXX 00-00, XXXX 96-23 or a similar exemption, or in the case of a Plan
subject to Similar Law, will not constitute a non-exempt violation of such
Similar Law. In the event such a representation letter is not delivered, one
of the foregoing representations, as appropriate, shall be deemed to have been
made by the transferee's (including an initial acquirer's) acceptance of the
Certificate. In the event that such representation is violated, such transfer
or acquisition shall be void and of no effect. The Residual Certificates may
not be sold to any employee benefit plan subject to Title I of ERISA, any plan
subject to Section 4975 of the Code, or any plan subject to any Similar Law or
any person investing on behalf of or with plan assets of such plan.
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The Securities Administrator shall have no duty to monitor
transfers of beneficial interests in any Book-Entry Certificate and shall not
be under liability to any Person for any registration of transfer of any ERISA
Restricted Certificate that is in fact not permitted by this Section 5.02(b)
or for making any payments due on such Certificate to the Holder thereof or
taking any other action with respect to such Holder under the provisions of
this Agreement so long as the transfer was registered by the Securities
Administrator in accordance with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following
provisions, and the rights of each Person acquiring any Ownership Interest in
a Residual Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in
its status as a Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Securities Administrator shall not register the Transfer of any Residual
Certificate unless, in addition to the certificates required to be
delivered to the Securities Administrator under subparagraph (b) above,
the Securities Administrator shall have been furnished with an affidavit
(a "Transfer Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as Exhibit I;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in
the purported Transferee. If any purported transferee shall become a
Holder of a Residual Certificate in violation of the provisions of this
Section 5.02(c), then the last preceding Permitted Transferee shall be
restored to all rights as Holder thereof retroactive to the date of
registration of Transfer of such Residual Certificate. Neither the
Securities Administrator nor the Trustee shall have any liability to any
Person for any registration of Transfer of a Residual Certificate that
is in fact not permitted by Section 5.02(b) and this Section 5.02(c) or
for making any payments due on such Certificate to the Holder thereof or
taking any other action with respect to such Holder under the provisions
of this Agreement. The Securities Administrator shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact not a Permitted Transferee at the time it became a Holder
or,
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at such subsequent time as it became other than a Permitted Transferee,
all payments made on such Residual Certificate at and after either such
time. Any such payments so recovered by the Securities Administrator
shall be paid and delivered by the Securities Administrator to the last
preceding Permitted Transferee of such Certificate; and
(v) The Depositor shall use its best efforts to make available,
upon receipt of written request from the Securities Administrator, all
information necessary to compute any tax imposed under Section 860E(e)
of the Code as a result of a Transfer of an Ownership Interest in a
Residual Certificate to any Holder who is not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth
in this Section 5.02(c) shall cease to apply (and the applicable portions of
the legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund,
the Trustee, or the Securities Administrator, to the effect that the
elimination of such restrictions will not cause any Trust REMIC to fail to
qualify as a REMIC at any time that the Certificates are outstanding or result
in the imposition of any tax on the Trust Fund, a Certificateholder or another
Person. Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Securities Administrator, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial
interest in, a Residual Certificate is not transferred, directly or
indirectly, to a Person that is not a Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Residual Certificate which is held by
a Person that is not a Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and
at all times: (i) registration of the Certificates may not be transferred by
the Securities Administrator except to another Depository; (ii) the Depository
shall maintain book entry records with respect to the Certificate Owners and
with respect to ownership and transfers of such Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry Certificates on the
books of the Depository shall be governed by applicable rules established by
the Depository; (iv) the Depository may collect its usual and customary fees,
charges and expenses from its Depository Participants; (v) the Trustee and the
Securities Administrator shall deal with the Depository, Depository
Participants and indirect participating firms as representatives of the
Certificate Owners of the Book-Entry Certificates for purposes of exercising
the rights of holders under this Agreement, and requests and directions for
and votes of such representatives shall not be deemed to be inconsistent if
they are made with respect to different Certificate Owners; and (vi) the
Securities Administrator and the Trustee may rely and shall be fully protected
in relying upon information furnished by the Depository with respect to its
Depository Participants and furnished by the Depository Participants with
respect to indirect participating firms and persons shown on the books of such
indirect participating firms as direct or indirect Certificate Owners.
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All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or
(y) the Depositor notifies the Depository of its intent to terminate the book
entry system through the Depository, the Depository Participants holding
beneficial interests in the Book-Entry Certificates agree to initiate such
termination, the Securities Administrator shall notify all Certificate Owners,
through the Depository, of the occurrence of any such event and of the
availability of definitive, fully registered Certificates (the "Definitive
Certificates") to Certificate Owners requesting the same. Upon surrender to
the Securities Administrator of the related Class of Certificates by the
Depository, accompanied by the instructions from the Depository for
registration, the Securities Administrator shall issue the Definitive
Certificates. Neither the Depositor nor the Securities Administrator shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The
Depositor shall provide the Securities Administrator with an adequate
inventory of Certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Securities
Administrator, to the extent applicable with respect to such Definitive
Certificates and the Securities Administrator shall recognize the Holders of
the Definitive Certificates as Certificateholders hereunder; provided, that
the Securities Administrator shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Securities
Administrator, duly executed by the Certificateholder or his attorney duly
authorized in writing. Each Certificate presented or surrendered for
registration of transfer or exchange shall be canceled and subsequently
disposed of by the Securities Administrator in accordance with its customary
practice. No service charge shall be made for any registration of transfer or
exchange of Private Certificates, but the Securities Administrator may require
payment of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer or exchange of Private
Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Securities Administrator,
or the Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to
the Depositor, the Trustee and the Securities Administrator such security or
indemnity as may be required by them to hold each of them harmless, then, in
the absence of notice to the Securities Administrator that such Certificate
has been acquired by a protected purchaser, the Securities Administrator shall
execute, authenticate
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and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like Class, tenor and Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 5.03, the Securities Administrator may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Securities Administrator) connected therewith. Any replacement Certificate
issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Trustee, the Depositor,
the Securities Administrator and any agent of the Depositor, the Securities
Administrator or the Trustee may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions as provided in this Agreement and for all other
purposes whatsoever, and none of the Trustee, the Securities Administrator,
the Depositor or any agent of the Depositor, the Securities Administrator or
the Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and
(c) provide a copy of the communication which such Certificateholders propose
to transmit, or if the Depositor or a Servicer shall request such information
in writing from the Securities Administrator, then the Securities
Administrator shall, within ten (10) Business Days after the receipt of such
request, provide the Depositor, such Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of
such Trust Fund held by the Securities Administrator, if any. The Depositor
and every Certificateholder, by receiving and holding a Certificate, agree
that the Securities Administrator shall not be held accountable by reason of
the disclosure of any such information as to the list of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator will maintain or cause to be maintained at its expense an office
or agency or agencies where Certificates may be surrendered for registration
of transfer or exchange. The Securities Administrator initially designates its
Corporate Trust Office for such purposes. The Securities Administrator will
give prompt written notice to the Certificateholders of any change in such
location of any such office or agency.
ARTICLE VI
THE DEPOSITOR
Section 6.01 Liabilities of the Depositor. The Depositor shall be
liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by it herein.
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Section 6.02 Merger or Consolidation of the Depositor. The
Depositor will keep in full effect its existence, rights and franchises as a
corporation or federally chartered savings bank, as the case may be, under the
laws of the United States or under the laws of one of the states thereof and
will each obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, or any
of the Mortgage Loans and to perform its respective duties under this
Agreement.
Any Person into which the Depositor may be merged or consolidated,
or any Person resulting from any merger or consolidation to which the
Depositor shall be a party, or any person succeeding to the business of the
Depositor, shall be the successor of the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 6.03 Limitation on Liability of the Depositor and Others.
Neither the Depositor nor any of its directors, officers, employees or agents
shall be under any liability to the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor or
any such Person from any liability which would otherwise be imposed by reasons
of willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and duties hereunder.
The Depositor and any director, officer, employee or agent of the Depositor
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 Depositor and any director, officer, employee or agent of the Depositor
shall be indemnified by the Trust Fund and held harmless against any loss,
liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder. The Depositor shall
not be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its respective duties hereunder and which in its
opinion may involve it in any expense or liability; provided, however, that
the Depositor may in its discretion undertake any such action (or direct the
Trustee to undertake such actions for the benefit of the Certificateholders)
that it may deem necessary or desirable in respect of this Agreement and the
rights and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund and the Depositor (or the Trustee to the extent
it has been directed by the Depositor to undertake such actions) shall be
entitled to be reimbursed therefor out of the Distribution Account.
Section 6.04 Servicing Compliance Review. Promptly upon receipt
from each Servicer of its annual statement of compliance and accountant's
report described in the applicable Step 2 Assignment Agreement the Master
Servicer shall furnish a copy thereof to the Depositor. Promptly after the
Depositor's receipt thereof, the Depositor shall review the same
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and, if applicable, consult with such Servicer as to the nature of any
defaults by such Servicer in the fulfillment of any of its Servicer's
obligations under the applicable Servicing Agreement.
Section 6.05 Option to Purchase Defaulted Mortgage Loans. The
Depositor shall have the option, but is not obligated, to purchase from the
Trust any Mortgage Loan that is ninety (90) days or more delinquent. The
purchase price therefor shall be 100% of the unpaid principal balance of such
Mortgage Loan, plus all related accrued and unpaid interest, and the amount of
any unreimbursed Servicing Advances made by the Servicers or the Master
Servicer related to the Mortgage Loan.
ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default. If an Event of Default described
in any Servicing Agreement shall occur with respect to the related Servicer
then, and in each and every such case, so long as such Event of Default shall
not have been remedied, the Master Servicer may, or at the direction of
Certificateholders entitled to a majority of the Voting Rights the Master
Servicer shall, by notice in writing to the applicable Servicer (with a copy
to each Rating Agency), terminate all of the rights and obligations of such
Servicer under the applicable Servicing Agreement and in and to the Mortgage
Loans and the proceeds thereof. The Holders of Certificates evidencing at
least 66% of the Voting Rights of Certificates affected by a Event of Default
may waive such Event of Default; provided, however, that (a) an Event of
Default with respect to any Servicer's obligation to make Monthly Advances may
be waived only by all of the holders of the Certificates affected by such
Event of Default and (b) no such waiver is permitted that would materially
adversely affect any non consenting Certificateholder. On and after the
receipt by such Servicer of such written notice of termination, all authority
and power of such Servicer hereunder or under the applicable Servicing
Agreement, whether with respect to the Mortgage Loans or otherwise, shall pass
to and be vested in the Master Servicer. The Master Servicer is hereby
authorized and empowered to execute and deliver, on behalf of such Servicer,
as attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement or assignment of the Mortgage Loans and related
documents, or otherwise.
Section 7.02 Master Servicer to Act; Appointment of Successor.
Within 120 days after the Master Servicer gives, and the applicable Servicer
receives a notice of termination pursuant to Section 7.01, the Master Servicer
shall, subject to and to the extent provided in Section 7.03, and subject to
the rights of the Master Servicer to appoint a successor Servicer pursuant to
this Section 7.02, be the successor to the Servicer in its capacity as
servicer under the applicable Servicing Agreement and the transactions set
forth or provided for herein and in such Servicing Agreement and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions of such Servicing Agreement
and applicable law including the obligation to make Monthly Advances or
Servicing Advances pursuant to such Servicing Agreement (it being understood
and agreed that if any Servicer fails to make an Advance, the Master Servicer
shall do so unless a determination has been made that such Advance would
constitute a Nonrecoverable Monthly Advance or a Nonrecoverable
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Servicing Advance). As compensation therefor, the Master Servicer shall be
entitled to all funds relating to the Mortgage Loans that the Servicer would
have been entitled to charge to the Collection Account if the Servicer had
continued to act under the Servicing Agreement including, if the Servicer was
receiving the Servicing Fee at the Servicing Fee Rate set forth in the
Servicing Agreement (or, as set forth in the Mortgage Loan Schedule with
respect to the related Mortgage Loans, as applicable) such Servicing Fee and
the income on investments or gain related to the Collection Account.
Notwithstanding the foregoing, the Master Servicer may, if it
shall be unwilling to so act, or shall, if it is prohibited by applicable law
from making Monthly Advances and Servicing Advances pursuant to the applicable
Servicing Agreement, or if it is otherwise unable to so act, or, at the
written request of Certificateholders entitled to a majority of the Voting
Rights, appoint, or petition a court of competent jurisdiction to appoint, any
established mortgage loan servicing institution the appointment of which does
not adversely affect the then current rating of the Certificates by each
Rating Agency, as the successor to such Servicer under the applicable
Servicing Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of such Servicer. No such appointment
of a successor to a Servicer hereunder shall be effective until the Depositor
shall have consented thereto. Any successor to such Servicer shall be an
institution which is a Xxxxxx Xxx and Xxxxxxx Mac approved seller/servicer in
good standing, which has a net worth of at least $25,000,000, which is willing
to service the Mortgage Loans and which executes and delivers to the Depositor
and the Master Servicer an agreement accepting such delegation and assignment,
containing an assumption by such Person of the rights, powers, duties,
responsibilities, obligations and liabilities of such terminated Servicer,
(other than liabilities of such terminated Servicer incurred prior to
termination of such Servicer under Section 7.01), with like effect as if
originally named as a party to this Agreement; provided, that each Rating
Agency acknowledges that its rating of the Certificates in effect immediately
prior to such assignment and delegation will not be qualified or reduced, as a
result of such assignment and delegation. Pending appointment of a successor
to a Servicer hereunder, the Master Servicer, unless the Master Servicer is
prohibited by law from so acting, shall, subject to this Section 7.02, act in
such capacity as hereinabove provided. In connection with such appointment and
assumption, the Master Servicer may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it, the
Depositor and such successor shall agree; provided, however, that no such
compensation shall be in excess of the Servicing Fee Rate and amounts paid to
the Servicer from investments. The Master Servicer and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Master Servicer nor any other
successor to a Servicer shall be deemed to be in default hereunder by reason
of any failure to make, or any delay in making, any distribution hereunder or
any portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure of
the predecessor Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
Any successor Servicer shall give notice to the Mortgagors of such
change of Servicer, in accordance with applicable federal and state law, and
shall, during the term of its service as servicer, maintain in force the
policy or policies that each Servicer is required to maintain pursuant to the
applicable Servicing Agreement.
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Notwithstanding the foregoing, the Master Servicer may not
terminate a Servicer without cause.
Section 7.03 Master Servicer to Act as Servicer. In the event that
a Servicer shall for any other reason no longer be the Servicer, the Master
Servicer or another successor Servicer, shall thereupon assume all of the
rights and obligations of the predecessor Servicer hereunder arising
thereafter pursuant to Section 7.02.
Section 7.04 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to a Servicer, the Securities
Administrator shall give prompt written notice thereof to Certificateholders
and to each Rating Agency.
(b) Promptly after the occurrence of any Event of Default, the
Securities Administrator shall transmit by mail to all Certificateholders and
each Rating Agency notice of each such Event of Default hereunder known to the
Securities Administrator, unless such Event of Default shall have been cured
or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIANS
Section 8.01 Duties of the Trustee and the Custodians. The
Trustee, before the occurrence of a Master Servicer Event of Default and after
the curing of all Master Servicer Events of Default that may have occurred,
shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement. In case a Master Servicer Event of
Default has occurred and remains uncured, the Trustee shall exercise such of
the rights and powers vested in it by this Agreement, and use the same degree
of care and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
The Trustee and the Custodians, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee or the Custodians, as applicable, that
are specifically required to be furnished pursuant to any provision of this
Agreement shall examine them to determine whether on their face they are in
the form required by this Agreement, or with respect to the documents in the
respective Custodial Files whether they satisfy the review criteria set forth
in Section 2.02. Neither the Trustee nor the Custodians shall be responsible
for the accuracy or content of any resolution, certificate, statement,
opinion, report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee or the Custodians from liability for its own negligent action, its own
negligent failure to act or its own bad faith or willful misfeasance;
provided, however, that:
(a) unless a Master Servicer Event of Default of which a
Responsible Officer of the Trustee obtains actual knowledge has occurred and
is continuing, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically
set forth in this Agreement, no implied covenants or obligations shall be
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read into this Agreement against the Trustee, and the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the Trustee
and conforming to the requirements of this Agreement which it believed in good
faith to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of
the Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 [Reserved].
Section 8.03 Certain Matters Affecting the Trustee and the
Custodians. Except as otherwise provided in Section 8.01:
(a) the Trustee and the Custodians may request and rely upon and
shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, Opinion of Counsel, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or parties
and the Trustee and the Custodians shall have no responsibility to ascertain
or confirm the genuineness of any signature of any such party or parties;
(b) before taking any action under this Agreement, the Trustee and
the Custodians may consult with counsel, financial advisers or accountants and
the advice of any such counsel, financial advisers or accountants and any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(c) the Trustee and the Custodians shall not be liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond
or other paper or document, unless requested in writing so to do by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to
each Class of Certificates; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of
the Trustee, not assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require indemnity satisfactory to the
Trustee against such cost, expense or liability as a condition to taking any
such action. The
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reasonable expense of every such examination shall be paid by the applicable
Servicer or, if paid by the Trustee, shall be repaid by the Servicer upon
demand from the applicable Servicer's own funds;
(e) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) neither the Trustee nor the Custodians shall be required to
risk or expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security);
(h) unless a Responsible Officer of the Trustee has actual
knowledge of the occurrence of a Master Servicer Event of Default or an Event
of Default, the Trustee shall not be deemed to have knowledge of a Master
Servicer Event of Default or an Event of Default, until a Responsible Officer
of the Trustee shall have received written notice thereof;
(i) the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against the
costs, expenses and liabilities which may be incurred therein or thereby;
(j) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act;
(k) the Trustee shall not be required to give any bond or surety
in respect of the execution of the Trust Fund created hereby or the powers
granted hereunder;
(l) notwithstanding anything to the contrary in any Servicing
Agreement, the Trustee shall not consent to a Servicer's request of assigning
the Servicing Agreement or the servicing rights thereunder to any other party;
(m) the Trustee and the Custodians shall not be accountable and
shall have no liability for any acts or omissions by the Securities
Administrator, the Master Servicer or other party hereto;
(n) in no event shall JPMorgan as a Custodian, Deutsche Bank in
its capacity as Trustee and a Custodian hereunder, or U.S. Bank or Xxxxx
Fargo, as Custodians hereunder, be liable for special, indirect or
consequential damages;
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(o) the Securities Administrator is authorized and directed to
execute the Interest Rate Swap Agreement and;
(p) the Trustee is authorized and directed to execute the Primary
Mortgage Insurance Policy on behalf of the Trust [; and
(q) the Trustee is authorized and directed to execute any other
documents required under this Agreement to be executed on behalf of the
Trust].
Section 8.04 Trustee and Custodians Not Liable for Certificates or
Mortgage Loans. The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor and neither the Trustee nor the
Custodians assumes any responsibility for their correctness. The Trustee and
the Custodians make no representations as to the validity or sufficiency of
this Agreement or of the Certificates or of any Mortgage Loan or related
document. Neither the Trustee nor the Custodians shall be accountable for the
use or application by the Depositor, the Master Servicer, any Servicer or the
Securities Administrator of any funds paid to the Depositor, the Master
Servicer, any Servicer or the Securities Administrator in respect of the
Mortgage Loans or deposited in or withdrawn from the Collection Account or the
Distribution Account by the Depositor, the Master Servicer, any Servicer, or
the Securities Administrator.
The Trustee shall have no responsibility (i) for filing or
recording any financing or continuation statement in any public office at any
time or to otherwise perfect or maintain the perfection of any security
interest or lien granted to it hereunder (unless the Trustee shall have become
and remains the successor Master Servicer), (ii) to see to any insurance
(unless the Trustee shall have become the successor Master Servicer) or (iii)
to confirm or verify the contents of any reports or certificates of the
Servicers, Securities Administrator or Master Servicer delivered to the
Trustee pursuant to this Agreement believed by the Trustee to be genuine and
to have been signed or presented by the proper party or parties.
The Securities Administrator executes the Certificates not in its
individual capacity but solely as Securities Administrator of the Trust Fund
created by this Agreement, in the exercise of the powers and authority
conferred and vested in it by this Agreement. Each of the undertakings and
agreements made on the part of the Securities Administrator on behalf of the
Trust Fund in the Certificates is made and intended not as a personal
undertaking or agreement by the Securities Administrator but is made and
intended for the purpose of binding only the Trust Fund.
Section 8.05 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Certificates with the same rights as it would have if it were not the Trustee.
Section 8.06 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee shall be paid an on-going monthly
or annual fee, as applicable, by the Securities Administrator pursuant to a
separate agreement. The Trustee shall have no lien on the Trust Fund for the
payment of such fees. The Trustee shall be entitled to be reimbursed, from
funds on deposit in the Distribution Account, amounts sufficient to indemnify
and hold harmless the Trustee and any director, officer, employee, or agent of
the Trustee against any loss, liability, or expense (including reasonable
attorneys' fees) incurred:
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(i) in connection with any claim or legal action relating to:
(a) this Agreement;
(b) the Mortgage Loans or the Certificates; and
(ii) the performance of any of the Trustee's duties under this
Agreement; or
(iii) incurred by reason of any action of the Trustee taken at the
direction of the Certificateholders;
other than, in each case, any loss, liability, or expense (i) resulting from
any breach of any Servicer's obligations in connection with its Servicing
Agreement for which that Servicer has performed its obligation to indemnify
the Trustee pursuant to Servicing Agreement, (ii) resulting from any breach of
the Responsible Party's obligations in connection with any Sale Agreement for
which it has performed its obligation to indemnify the Trustee pursuant to the
Sale Agreement, (iii) resulting from any breach of the Master Servicer's
obligations hereunder for which the Master Servicer has performed its
obligation to indemnify the Trustee pursuant to this Agreement or (iv)
incurred because of willful misfeasance, bad faith, or negligence in the
performance of any of the Trustee's duties under this Agreement. This
indemnity shall survive the termination of this Agreement or the resignation
or removal of the Trustee under this Agreement. Without limiting the
foregoing, except for any expense, disbursement, or advance arising from the
Trustee's negligence, bad faith, or willful misfeasance, the Trust Fund shall
pay or reimburse the Trustee, for all reasonable expenses, disbursements, and
advances incurred or made by the Trustee in accordance with this Agreement
with respect to:
(A) the reasonable compensation, expenses, and disbursements
of its counsel not associated with the closing of the issuance of
the Certificates; and
(B) the reasonable compensation, expenses, and disbursements
of any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must
engage them to perform services under this Agreement.
Except as otherwise provided in this Agreement, the Trustee shall
not be entitled to payment or reimbursement for any routine ongoing expenses
incurred by the Trustee in the ordinary course of its duties as Trustee under
this Agreement or for any other expenses.
Section 8.07 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation, banking association or other
association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and the
appointment of which would not cause any of the Rating Agencies to reduce or
withdraw their respective then current ratings of the Certificates (or having
provided such security from time to time as is sufficient to avoid such
reduction) as evidenced in writing by each Rating Agency. If such corporation
or association publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this
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Section 8.07 the combined capital and surplus of such corporation or
association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with this Section 8.07,
the Trustee shall resign immediately in the manner and with the effect
specified in Section 8.08. The entity serving as Trustee may have normal
banking and trust relationships with the Depositor and its affiliates or with
the Servicer and its affiliates; provided, however, that such entity cannot be
an affiliate of the Depositor or of any Servicer other than the Trustee in its
role as successor to the Master Servicer.
Section 8.08 Resignation and Removal of the Trustee. The Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice of resignation to the Depositor, the Master Servicer,
the Securities Administrator and each Rating Agency not less than sixty (60)
days before the date specified in such notice, when, subject to Section 8.09,
such resignation is to take effect, and acceptance by a successor trustee in
accordance with Section 8.09 meeting the qualifications set forth in Section
8.07. If no successor trustee meeting such qualifications shall have been so
appointed and have accepted appointment within thirty (30) days after the
giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in
accordance with Section 8.07 and shall fail to resign after written request
thereto by the Depositor, (ii) the Trustee shall become incapable of acting,
or shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or
of its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, (iii)(A) a tax is imposed with
respect to the Trust Fund by any state in which the Trustee or the Trust Fund
is located and (B) the imposition of such tax would be avoided by the
appointment of a different trustee, or (iv) the Trustee fails to comply with
its obligations under the last sentence of Section 9.04 in the preceding
paragraph, Section 8.10 or Article XIII and such failure is not remedied
within the lesser of ten (10) calendar days or such period in which the
applicable Exchange Act Report can be timely filed (without taking into
account any extensions), then, in the case of clauses (i) through (iv), the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which shall be delivered to the Trustee
and one copy to the successor trustee.
The Holders of Certificates entitled to a majority of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in duplicate, signed by such Holders or
their attorneys in fact duly authorized, one complete set of which shall be
delivered to the Trustee so removed and one complete set to the successor so
appointed. The successor trustee shall notify each Rating Agency of any
removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.08 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section
8.09.
Section 8.09 Successor Trustee. Any successor trustee appointed as
provided in Section 8.08 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee an instrument accepting such
appointment hereunder and thereupon the resignation or
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removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee herein. The
Depositor and the predecessor trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor trustee all such
rights, powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.09 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.07 and its appointment does not adversely affect the
then current rating of the Certificates and has provided to the Depositor in
writing and in form and substance reasonably satisfactory to the Depositor,
all information reasonably requested by the Depositor in order to comply with
its reporting obligation under Item 6.02 of Form 8-K with respect to a
replacement Trustee.
Upon acceptance of appointment by a successor trustee as provided
in this Section 8.09, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates and the Custodians. If
the Depositor fails to mail such notice within ten (10) days after acceptance
of appointment by the successor trustee, the successor trustee shall cause
such notice to be mailed at the expense of the Depositor.
Section 8.10 Merger or Consolidation of the Trustee or the
Custodians. Any corporation or association into which the Trustee or the
Custodians, as applicable, may be merged or converted or with which it may be
consolidated or any corporation or association resulting from any merger,
conversion or consolidation to which the Trustee or the Custodians, as
applicable, shall be a party, or any corporation or association succeeding to
the business of the Trustee or the Custodians, as applicable, or any
corporation or association to which all or substantially all of the corporate
trust business of the Trustee or the Custodians, as applicable, may be sold or
otherwise transferred, shall be the successor of the Trustee or the
Custodians, as applicable, hereunder; provided, that such corporation or
association shall be eligible under Section 8.07 without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 8.11 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time
be located, the Trustee shall have the power and shall execute and deliver all
instruments to appoint one or more Persons to act as co-trustee or co-trustees
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.11, such powers, duties, obligations,
rights and trusts as the Trustee may consider appropriate. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 8.09 and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required
under Section 8.09.
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Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(a) to the extent necessary to effectuate the purposes of this
Section 8.11, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee (as successor
Master Servicer) under this Agreement to advance funds on behalf of the Master
Servicer, shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly (it being understood
that such separate trustee or co-trustee is not authorized to act separately
without the Trustee joining in such act), except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the Master Servicer
hereunder), the Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the
Trustee;
(b) no trustee hereunder shall be held personally liable because
of any act or omission of any other trustee hereunder and such appointment
shall not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(d) the Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees,
when and as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article VIII. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee and a copy thereof given to the Master Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute
the Trustee its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 8.12 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be
made, as set forth in the Preliminary
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Statement, shall constitute, and that the conduct of matters relating to such
assets shall be such as to qualify such assets as, a "real estate mortgage
investment conduit" as defined in, and in accordance with, the REMIC
Provisions. In furtherance of such intention, the Securities Administrator
covenants and agrees that it shall act as agent (and the Securities
Administrator is hereby appointed to act as agent) on behalf of each REMIC
described in the Preliminary Statement and that in such capacity it shall:
(a) prepare and file, in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file
with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with
respect to each Trust REMIC containing such information and at the times and
in the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby;
(b) within thirty (30) days of the Closing Date, apply for an
employer identification number from the Internal Revenue Service via Form SS-4
or any other acceptable method for all tax entities and shall also furnish to
the Internal Revenue Service, on Form 8811 or as otherwise may be required by
the Code, the name, title, address, and telephone number of the person that
the holders of the Certificates may contact for tax information relating
thereto, together with such additional information as may be required by such
Form, and update such information at the time or times in the manner required
by the Code;
(c) make an election that each Trust REMIC be treated as a REMIC
on the federal tax return for its first taxable year (and, if necessary, under
applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any
original issue discount using the prepayment assumption (as described in the
Prospectus Supplement);
(e) provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is not a
Permitted Transferee (a "Non Permitted Transferee"), or an agent (including a
broker, nominee or other middleman) of a Non Permitted Transferee, or a pass
through entity in which a Non Permitted Transferee is the record holder of an
interest (the reasonable cost of computing and furnishing such information may
be charged to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so
as to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
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(h) pay, from the sources specified in the last paragraph of this
Section 8.12, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any Trust REMIC before its
termination when and as the same shall be due and payable (but such obligation
shall not prevent the Securities Administrator or any other appropriate Person
from contesting any such tax in appropriate proceedings and shall not prevent
the Securities Administrator from withholding payment of such tax, if
permitted by law, pending the outcome of such proceedings);
(i) cause federal, state or local income tax or information
returns to be signed by the Securities Administrator or, if required by
applicable tax law, the Trustee or such other person as may be required to
sign such returns by the Code or state or local laws, regulations or rules;
(j) maintain records relating to each of the Trust REMICs,
including the income, expenses, assets, and liabilities thereof on a calendar
year basis and on the accrual method of accounting and the fair market value
and adjusted basis of the assets determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and
(k) as and when necessary and appropriate, represent each Trust
REMIC in any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of each Trust REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any Trust REMIC, and otherwise act on
behalf of each Trust REMIC in relation to any tax matter or controversy
involving it.
The Holder of the largest Percentage Interest of the Class R,
Class RC and Class RX Certificates shall act as Tax Matters Person for the
Lower-Tier REMIC and the Middle-Tier REMIC, the Upper-Tier REMIC and the Class
X REMIC, respectively, within the meaning of Treasury Regulations Section
1.860F-4(d), and the Securities Administrator is hereby designated as agent of
such Certificateholder for such purpose (or if the Securities Administrator is
not so permitted, such Holder shall be the Tax Matters Person in accordance
with the REMIC Provisions). In such capacity, the Securities Administrator
shall, as and when necessary and appropriate, represent each Trust REMIC in
any administrative or judicial proceedings relating to an examination or audit
by any governmental taxing authority, request an administrative adjustment as
to any taxable year of each Trust REMIC, enter into settlement agreements with
any governmental taxing agency, extend any statute of limitations relating to
any tax item of any Trust REMIC, and otherwise act on behalf of each Trust
REMIC in relation to any tax matter or controversy involving it.
The Securities Administrator shall treat the rights of the Class P
Certificateholders to receive Prepayment Premiums, the rights of the Class X
Certificateholders to receive amounts in the Excess Reserve Fund Account and
Supplemental Interest Trust (subject to the obligation to pay Basis Risk Carry
Forward Amounts) and the rights of the LIBOR Certificateholders to receive
Basis Risk Carry Forward Amounts (as calculated in the Preliminary Statement)
as the beneficial ownership interests in a grantor trust and not as an
obligations of any REMIC created hereunder, for federal income tax purposes.
The Securities Administrator shall file or cause to
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be filed with the Internal Revenue Service Form 1041 or such other form as may
be applicable and shall furnish or cause to be furnished, to the Class X
Certificateholders, the Class P Certificateholders and the LIBOR
Certificateholders, the respective amounts described above that are received,
in the time or times and in the manner required by the Code.
To enable the Securities Administrator to perform its duties under
this Agreement, the Depositor shall provide to the Securities Administrator
within ten (10) days after the Closing Date all information or data that the
Securities Administrator requests in writing and determines to be relevant for
tax purposes to the valuations and offering prices of the Certificates,
including the price, yield, prepayment assumption, and projected cash flows of
the Certificates and the Mortgage Loans. Moreover, the Depositor shall provide
information to the Securities Administrator concerning the value, if any, to
each Class of Certificates of the right to receive Basis Risk Carry Forward
Amounts from the Excess Reserve Fund Account and the Supplemental Interest
Trust. Thereafter, the Depositor shall provide to the Securities Administrator
promptly upon written request therefor any additional information or data that
the Securities Administrator may, from time to time, reasonably request to
enable the Securities Administrator to perform its duties under this
Agreement. The Depositor hereby indemnifies the Securities Administrator for
any losses, liabilities, damages, claims, or expenses of the Securities
Administrator arising from any errors or miscalculations of the Securities
Administrator that result from any failure of the Depositor to provide, or to
cause to be provided, accurate information or data to the Securities
Administrator on a timely basis.
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Lower-Tier REMIC as defined in Section 860G(c) of
the Code, on any contribution to any Trust REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed,
including any minimum tax imposed on any Trust REMIC pursuant to Sections
23153 and 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, the tax shall be paid by (i) the Master
Servicer, the Trustee or the Securities Administrator, as applicable if such
tax arises out of or results from negligence of the Master Servicer, the
Trustee or the Securities Administrator, as applicable in the performance of
any of its obligations under this Agreement, (ii) a Servicer, in the case of
any such minimum tax, and otherwise if such tax arises out of or results from
a breach by the Servicer of any of its obligations under the applicable
Servicing Agreement, (iii) a Responsible Party if such tax arises out of or
results from the Responsible Party's obligation to repurchase a Mortgage Loan
pursuant to the applicable Sale Agreement or (iv) in all other cases, or if
the Trustee, the Master Servicer, the Securities Administrator, the Servicer
or the Responsible Party fails to honor its obligations under the preceding
clause (i), (ii), or (iii), any such tax will be paid with amounts otherwise
to be distributed to the Certificateholders, as provided in Section 4.01(a).
For as long as each Trust REMIC shall exist, the Securities
Administrator shall act as specifically required herein, and the Securities
Administrator shall comply with any directions of the Depositor or a Servicer
stating that such directions are being given to assure such continuing
treatment. In particular, the Securities Administrator shall not (a) sell or
authorize the sale of all or any portion of the Mortgage Loans or of any
investment of deposits in an Account unless such sale is as a result of a
purchase or repurchase of the Mortgage Loans pursuant to this Agreement or (b)
accept any contribution to any Trust REMIC after the Startup
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Day without receipt of an Opinion of Counsel that such action described in
clause (a) or (b) will not result in the imposition of a tax on any Trust
REMIC or cause any Trust REMIC to fail to qualify as a REMIC at any time that
any Certificates are outstanding.
Section 8.13 [Reserved].
Section 8.14 Tax Classification of the Excess Reserve Fund Account
and the Interest Rate Swap Agreement. For federal income tax purposes, the
Securities Administrator shall treat the Excess Reserve Fund Account and the
Interest Rate Swap Agreement as beneficially owned by the holder of the Class
X Certificates and shall treat such portion of the Trust Fund as a grantor
trust under subpart E, Part I of subchapter J of the Code. The Securities
Administrator shall treat the rights that each Class of LIBOR Certificates has
to receive payments of Basis Risk Carry Forward Amounts (excluding any such
Amounts attributable to any excess of the REMIC Cap over the WAC Cap) from the
Excess Reserve Fund Account and the Supplemental Interest Trust as rights to
receive payments under an interest rate cap contract written by the Class X
Certificateholders in favor of each Class. Accordingly, each Class of LIBOR
Certificates will comprise two components--a regular interest in the
Upper-Tier REMIC and an interest in an interest rate cap contract, and the
Class X Certificates will be comprised of four components--a regular interest
in the Class X REMIC, an interest in the Interest Rate Swap Agreement, the
Supplemental Interest Trust and the Excess Reserve Fund Account subject to the
obligation to pay Basis Risk Xxxx Forward Amounts, Net Swap Payment Amounts
and Swap Termination Payments. The Securities Administrator shall allocate the
issue price for a Class of Certificates among these components for purposes of
determining the issue price of the Upper-Tier Regular Interest component based
on information received from the Depositor. Unless otherwise advised by the
Depositor in writing, for federal income tax purposes, the Securities
Administrator is hereby directed to assign a value of zero to the right of
each Holder of a LIBOR Certificate to receive the related Basis Risk Carry
Forward Amount (excluding any such Amounts attributable to any excess of the
REMIC Cap over the WAC Cap) for purposes of allocating the purchase price of
an initial LIBOR Certificateholder between such right and the related
Upper-Tier Regular Interest.
Holders of LIBOR Certificates shall also be treated as having
agreed to pay, on each Distribution Date, to the Holders of the Class X
Certificates an aggregate amount equal to the excess, if any, of (i) Net Swap
Payment Amounts and Swap Termination Payments (other that Defaulted Swap
Termination Payments) over (ii) the sum of amounts payable on the Class X
Interest as provided in the Preliminary Statement hereof (such excess, a
"Class IO Shortfall"), first from interest and then from principal
distributable on the LIBOR Certificates. A Class IO Shortfall payable from
interest collections shall be allocated pro rata among such LIBOR Certificates
based on the amount of interest otherwise payable to such Class of LIBOR
Certificates, and a Class IO Shortfall payable from principal collections
shall be allocated in reverse sequential order beginning with the most
subordinate Class of LIBOR Certificates then outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of LIBOR
Certificates in respect of the corresponding Upper-Tier Regular Interest and
as having been paid by such Holders to the Holders of the Class X Certificates
through the Supplemental Interest Trust.
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Section 8.15 Custodial Responsibilities. Each of the Custodians
shall provide access to the Mortgage Loan documents in possession of such
Custodian regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Trustee, the Certificateholders, the FDIC, and the
supervisory agents and examiners of the FDIC, such access being afforded only
upon two (2) Business Days prior written request and during normal business
hours at the office of such Custodian; provided, however, that, unless
otherwise required by law or any regulatory or administrative agency
(including the FDIC), such Custodian shall not be required to provide access
to such records and documentation if the provision thereof would violate the
legal right to privacy of any Mortgagor. Each of the Custodians shall allow
representatives of the above entities to photocopy any of the records and
documentation and shall provide equipment for that purpose at the expense of
the Trust that covers such Custodians actual costs.
Upon receipt of a request for release by a Servicer substantially
in the form of Exhibit L, Exhibit X-0, Xxxxxxx X-0 or Exhibit L-3 hereto, the
applicable Custodian shall release within five (5) Business Days the related
Mortgage File to such Servicer and the Trustee shall execute and deliver to
such Servicer, without recourse, a request for reconveyance, deed of
reconveyance or release or satisfaction of mortgage or such instrument
releasing the lien of the Mortgage (furnished by such Servicer), together with
the Mortgage Note.
Each of the Custodians may resign at any time or may be terminated
by the Trustee with cause, in each case, upon sixty (60) days written notice
to the applicable Servicer, the Depositor and the Securities Administrator, in
which event the Depositor will be obligated to appoint a successor. If no
successor has been appointed and has accepted appointment within sixty (60)
days after the resignation or termination of such Custodian, such Custodian
may petition any court of competent jurisdiction for appointment of a
successor.
The Securities Administrator, pursuant to a separate agreement,
shall compensate from its own funds the Custodians for their respective
activities under this Agreement. The Custodians shall have no lien on the
Trust Fund for the payment of such fees. The Custodians shall be entitled to
be reimbursed, from funds on deposit in the Distribution Account, amounts
sufficient to indemnify and hold harmless each of the Custodians and any
director, officer, employee, or agent of a Custodian against any loss,
liability, or expense (including reasonable attorneys' fees) incurred in
connection with any claim or legal action relating to:
(a) this Agreement;
(b) the Certificates; or
(c) the performance of any of such Custodian's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of a
Servicer's obligations in connection with a Servicing Agreement for which the
Servicer has performed its obligation to indemnify such Custodian pursuant to
such Servicing Agreement, (ii) resulting from any breach of the Responsible
Party's obligations in connection with a Sale Agreement for which the
Responsible Party has performed its obligation to indemnify such Custodian
pursuant to such Sale Agreement or (iii) incurred because of willful
misfeasance, bad faith, or negligence in the performance of any of such
Custodian's duties under this Agreement. This indemnity shall survive the
termination of this Agreement or the earlier resignation or removal of the
Custodians.
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ARTICLE IX
ADMINISTRATION OF THE MORTGAGE LOANS
BY THE MASTER SERVICER
Section 9.01 Duties of the Master Servicer; Enforcement of
Servicer's Obligations. (a) The Master Servicer, on behalf of the Trustee, the
Securities Administrator, the Depositor and the Certificateholders, shall
monitor the performance of the Servicers under the related Servicing
Agreements, and (except as set forth below) shall use its reasonable good
faith efforts to cause the Servicers to duly and punctually perform their
duties and obligations thereunder as applicable. Upon the occurrence of an
Event of Default of which a Responsible Officer of the Master Servicer has
actual knowledge, the Master Servicer shall promptly notify the Securities
Administrator and the Trustee and shall specify in such notice the action, if
any, the Master Servicer plans to take in respect of such default. So long as
an Event of Default shall occur and be continuing, the Master Servicer shall
take the actions specified in Article VII.
If (i) a Servicer reports a delinquency on a monthly report and
(ii) such Servicer, by 11 a.m. (New York Time) on the Business Day preceding
the related Remittance Date, neither makes a Monthly Advance nor provides the
Securities Administrator and the Master Servicer with a report certifying that
such a Monthly Advance would be a Nonrecoverable Monthly Advance, then the
Master Servicer shall deposit in the Distribution Account not later than the
Business Day immediately preceding the related Distribution Date a Monthly
Advance in an amount equal to the difference between (x) with respect to each
Monthly Payment due on a Mortgage Loan that is delinquent (other than Relief
Act Interest Shortfalls) and for which the related Servicer was required to
make a Monthly Advance pursuant to the related Servicing Agreement and (y)
amounts deposited in the Collection Account to be used for Monthly Advances
with respect to such Mortgage Loan, except to the extent the Master Servicer
determines any such Monthly Advance to be a Nonrecoverable Monthly Advance or
Nonrecoverable Servicing Advance. Subject to the foregoing, the Master
Servicer shall continue to make such Monthly Advances for so long as the
related Servicer is required to do so under the related Servicing Agreement.
If applicable, on the Business Day immediately preceding the Distribution
Date, the Master Servicer shall deliver an Officer's Certificate to the
Trustee stating that the Master Servicer elects not to make a Monthly Advance
in a stated amount and detailing the reason(s) it deems the Monthly Advance to
be a Nonrecoverable Monthly Advance. Any amounts deposited by the Master
Servicer pursuant to this Section 9.01 shall be net of the Servicing Fee for
the related Mortgage Loans. If the Master Servicer fails to make a required
Monthly Advance, the Securities Administrator shall provide prompt written
notice to the Trustee of such failure.
(a) The Master Servicer shall pay the costs of monitoring the
Servicers as required hereunder (including costs associated with (i)
termination of any Servicer, (ii) the appointment of a successor servicer or
(iii) the transfer to and assumption of, the servicing by the Master Servicer)
and shall, to the extent permitted by the related Servicing Agreement, seek
reimbursement therefor initially from the terminated Servicer. In the event
the full costs associated with the transition of servicing responsibilities to
the Master Servicer or to a successor servicer are not paid for by the
predecessor or successor Servicer (provided such successor Servicer is not the
Master Servicer), the Master Servicer may be reimbursed therefor by the Trust
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for out-of-pocket costs incurred by the Master Servicer associated with any
such transfer of servicing duties from a Servicer to the Master Servicer or
any other successor servicer.
(b) If the Master Servicer assumes the servicing with respect to
any of the Mortgage Loans, it will not assume liability for the
representations and warranties of any Servicer it replaces or for any errors
or omissions of such Servicer.
If the Depositor or an affiliate of the Depositor, is the owner of
the servicing rights for any Servicer and the Depositor chooses to terminate
such Servicer with or without cause and sell those servicing rights to a
successor servicer, then the Depositor must provide thirty (30) days' notice
to the Master Servicer, such successor servicer must be reasonably acceptable
to the Master Servicer, the terminated servicer must be reimbursed for any
unreimbursed Monthly Advances, servicing fees and any related expenses, the
successor servicer must be qualified to service mortgage loans for Xxxxxx Xxx
or Xxxxxxx Mac and the Depositor must obtain prior written consent from the
Rating Agencies that the transfer of the servicing of the mortgage loans will
not result in a downgrade, qualification or withdrawal of the then current
ratings of the Certificates. The costs of such transfer (including any costs
of the Master Servicer) are to be borne by the Depositor.
Neither the Depositor nor the Securities Administrator shall
consent to the assignment by any Servicer of such Servicer's rights and
obligations under the Agreement without the prior written consent of the
Master Servicer, which consent shall not be unreasonably withheld.
Section 9.02 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. The Master Servicer, at its expense, shall maintain in effect a
blanket fidelity bond and an errors and omissions insurance policy, affording
coverage with respect to all directors, officers, directors, employees and
other Persons acting on such Master Servicer's behalf, and covering errors and
omissions in the performance of the Master Servicer's obligations hereunder.
The errors and omissions insurance policy and the fidelity bond shall be in
such form and amount generally acceptable for entities serving as master
servicers or trustees.
Section 9.03 Representations and Warranties of the Master
Servicer. (a) The Master Servicer hereby represents and warrants to the
Depositor, the Securities Administrator and the Trustee, for the benefit of
the Certificateholders, as of the Closing Date that:
(i) it is a national banking association validly existing and in
good standing under the laws of the United States of America, and as
Master Servicer has full power and authority to transact any and all
business contemplated by this Agreement and to execute, deliver and
comply with its obligations under the terms of this Agreement, the
execution, delivery and performance of which have been duly authorized
by all necessary corporate action on the part of the Master Servicer;
(ii) the execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not (A) violate the Master Servicer's charter or bylaws,
(B) violate any law or regulation or any administrative decree or order
to which it is subject or (C) constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default)
under,
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or result in the breach of, any material contract, agreement or other
instrument to which the Master Servicer is a party or by which it is
bound or to which any of its assets are subject, which violation,
default or breach would materially and adversely affect the Master
Servicer's ability to perform its obligations under this Agreement;
(iii) this Agreement constitutes, assuming due authorization,
execution and delivery hereof by the other respective parties hereto, a
legal, valid and binding obligation of the Master Servicer, enforceable
against it in accordance with the terms hereof, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors' rights
in general, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law);
(iv) the Master Servicer is not in default with respect to any
order or decree of any court or any order or regulation of any federal,
state, municipal or governmental agency to the extent that any such
default would materially and adversely affect its performance hereunder;
(v) the Master Servicer is not a party to or bound by any
agreement or instrument or subject to any charter provision, bylaw or
any other corporate restriction or any judgment, order, writ,
injunction, decree, law or regulation that may materially and adversely
affect its ability as Master Servicer to perform its obligations under
this Agreement or that requires the consent of any third person to the
execution of this Agreement or the performance by the Master Servicer of
its obligations under this Agreement;
(vi) no litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vii) [Reserved];
(viii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery
and performance by the Master Servicer of or compliance by the Master
Servicer with this Agreement or the consummation of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations and orders (if any) as have been obtained; and
(ix) the consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Master Servicer.
(b) Section 11.01(a) of this Agreement and Section 6 of the
applicable Step 2 Assignment Agreements provide that Avelo, at its option, may
purchase (or, if Avelo is no longer acting as a Servicer of any of the
Mortgage Loans, the Depositor, at its option, may request the Master Servicer
to solicit bids in a commercially reasonable manner, on or after the Optional
Termination Date (such event, the "Auction Call"), for the purchase) of all of
the Mortgage Loans (and REO Properties) at the Termination Price. The Master
Servicer shall accommodate such request to conduct an Auction Call at its sole
discretion. Avelo, in
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consideration of the benefits to it of the transactions occurring under this
Agreement, the Assignment Agreements and the related Servicing Agreement,
hereby represents, covenants and agrees with the Depositor and any applicable
NIM Issuer that it will not exercise its right to purchase, on or after the
Optional Termination Date, all Mortgage Loans (and REO Properties) unless it
has received (x) written notification from the NIM Trustee that all of the
outstanding notes issued under the applicable indenture have been paid in full
or (y) an Officer's Certificate of the NIM Issuer pursuant to the applicable
section of the relevant indenture to the effect that all conditions precedent
to the satisfaction and discharge of the indenture have been complied with.
The Depositor hereby represents, covenants and agrees with any applicable NIM
Issuer that it will not exercise its right to request the Master Servicer to
solicit bids in a commercially reasonable manner, on or after the Optional
Termination Date, for the purchase of all of the Mortgage Loans (and REO
Properties) unless it has received (x) written notification from the NIM
Trustee that all of the outstanding notes issued under the applicable
indenture have been paid in full or (y) an Officer's Certificate of the NIM
Issuer pursuant to the applicable section of the relevant indenture to the
effect that all conditions precedent to the satisfaction and discharge of the
indenture have been complied with.
The Master Servicer shall give Avelo written notice of the
occurrence of the Optional Termination Date upon the occurrence of the same.
(c) It is understood and agreed that the representations and
warranties set forth in this Section shall survive the execution and delivery
of this Agreement. The Master Servicer shall indemnify the Depositor,
Securities Administrator, and the Trustee and hold them harmless against any
loss, damages, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments, and other reasonable costs and expenses resulting
from any claim, demand, defense or assertion based on or grounded upon, or
resulting from, a material breach of the Master Servicer's representations and
warranties contained in Section 9.03(a) above. It is understood and agreed
that the enforcement of the obligation of the Master Servicer set forth in
this Section 9.03 to indemnify the Depositor, Securities Administrator, and
the Trustee constitutes the sole remedy of the Depositor and the Trustee,
respecting a breach of the foregoing representations and warranties. Such
indemnification shall survive any termination of the Master Servicer as Master
Servicer hereunder and any termination of this Agreement.
Any cause of action against the Master Servicer relating to or
arising out of the breach of any representations and warranties made in this
Section shall accrue upon discovery of such breach by either the Depositor,
the Master Servicer, Securities Administrator or the Trustee or notice thereof
by any one of such parties to the other parties.
Section 9.04 Master Servicer Events of Default. Each of the
following shall constitute a "Master Servicer Event of Default":
(a) any failure by the Master Servicer to deposit in the
Distribution Account any payment received by it from any Servicer or required
to be made by the Master Servicer 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 Master Servicer by any other party hereto;
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(b) failure by the Master Servicer to duly observe or perform, in
any material respect, any other covenants, obligations or agreements of the
Master Servicer as set forth in this Agreement (including any obligation to
cause any subservicer or Reporting Subcontractor (except as specified below)
to take any action specified in Article XIII) 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 Master Servicer by the Trustee or to the Master Servicer and the
Trustee by the holders of Certificates evidencing at least 25% of the Voting
Rights; provided that the thirty (30) day cure period shall not apply so long
as the Depositor is required to file Exchange Act Reports with respect to the
Trust Fund, the failure to comply with the requirements set forth in Article
XIII, for which the grace period shall not exceed the lesser of ten (10)
calendar days or such period in which the applicable Exchange Act Report can
be timely filed (without taking into account any extensions);
(c) a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshaling
of assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master
Servicer and such decree or order shall have remained in force, undischarged
or unstayed for a period of sixty (60) days;
(d) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, bankruptcy,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings of or relating to the Master Servicer or relating to all or
substantially all of its property;
(e) the Master Servicer shall admit in writing its inability to
pay its debts 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
for three (3) Business Days;
(f) except as otherwise set forth herein, the Master Servicer
attempts to assign this Agreement or its responsibilities hereunder or to
delegate its duties hereunder (or any portion thereof) without the consent of
the Securities Administrator and the Depositor; or
(g) the indictment of the Master Servicer for the taking of any
action by the Master Servicer, any employee thereof, any Affiliate or any
director or employee thereof that constitutes fraud or criminal activity in
the performance of its obligations under this Agreement, in each case, where
such indictment materially and adversely affects the ability of the Master
Servicer to perform its obligations under this Agreement (subject to the
condition that such indictment is not dismissed within ninety (90) days).
In each and every such case, so long as a Master Servicer Event of
Default shall not have been remedied, in addition to whatever rights the
Trustee may have at law or equity to damages, including injunctive relief and
specific performance, the Trustee, by notice in writing to the Master
Servicer, may, and (a) upon the request of the Holders of Certificates
representing at least 51% of the Voting Rights (except with respect to any
Master Servicer Event of Default related to a failure to comply with an
Exchange Act Filing Obligation) or (b) the Depositor, in
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the case of a failure related to an Exchange Act Filing Obligation, shall,
terminate with cause all the rights and obligations of the Master Servicer
under this Agreement.
The Depositor shall not be entitled to terminate the rights and
obligations of the Master Servicer, pursuant to the above paragraph, if a
failure of the Master Servicer 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.
Upon receipt by the Master Servicer of such written notice, all
authority and power of the Master Servicer under this Agreement, shall pass to
and be vested in any successor master servicer appointed hereunder which
accepts such appointments. Upon written request from the Trustee or the
Depositor, the Master Servicer shall prepare, execute and deliver to the
successor entity designated by the Trustee any and all documents and other
instruments related to the performance of its duties hereunder as the Master
Servicer and, place in such successor's possession all such documents with
respect to the master servicing of the Mortgage Loans and do or cause to be
done all other acts or things necessary or appropriate to effect the purposes
of such notice of termination, at the Master Servicer's sole expense. The
Master Servicer shall cooperate with the Trustee and such successor master
servicer in effecting the termination of the Master Servicer's
responsibilities and rights hereunder, including without limitation, the
transfer to such successor master servicer for administration by it of all
cash amounts which shall at the time be credited to the Distribution Account
or are thereafter received with respect to the Mortgage Loans.
Upon the occurrence of a Master Servicer Event of Default, the
Securities Administrator shall (i) provide prompt written notice to the
Trustee and the Depositor of such occurrence and (ii) provide the Depositor in
writing and in form and substance reasonably satisfactory to the Depositor,
all information reasonably requested by the Depositor in order to comply with
its reporting obligation under Item 6.02 of Form 8-K with respect to a
successor master servicer in the event the Trustee should succeed to the
duties of the Master Servicer as set forth herein. In the event that the
Master Servicer becomes a terminated Master Servicer due to a Master Servicer
Event of Default, the terminated Master Servicer shall bear all costs of the
transfer of master servicing hereunder (including those incurred by the
Trustee). If such costs are not paid by the terminated Master Servicer, such
costs shall be reimbursed from the Trust Fund.
Section 9.05 Waiver of Default. By a written notice, the Trustee
may with the consent of a Holders of Certificates evidencing at least 51% of
the Voting Rights waive any default by the Master Servicer in the performance
of its obligations hereunder and its consequences. Upon any waiver of a past
default, such default shall cease to exist, and any Master Servicer 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 9.06 Successor to the Master Servicer. Upon termination of
the Master Servicer's responsibilities and duties under this Agreement, the
Trustee shall appoint or may petition any court of competent jurisdiction for
the appointment of a successor, which shall
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succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Master Servicer under this Agreement prior to the
termination of the Master Servicer. Any successor shall be a Xxxxxx Xxx and
Xxxxxxx Mac approved servicer in good standing and acceptable to the Depositor
and the Rating Agencies. In connection with such appointment and assumption,
the Trustee may make such arrangements for the compensation of such successor
out of payments on Mortgage Loans as it and such successor shall agree;
provided, however, that in no event shall the master servicer fee paid to such
successor master servicer exceed that paid to the Master Servicer hereunder.
In the event that the Master Servicer's duties, responsibilities and
liabilities under this Agreement are terminated, the Master Servicer shall
continue to discharge its duties and responsibilities hereunder until the
effective date of such termination 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 of its
successor. The termination of the Master Servicer shall not become effective
until a successor shall be appointed pursuant hereto and shall in no event (i)
relieve the Master Servicer of responsibility for the representations and
warranties made pursuant to Section 9.03(a) hereof and the remedies available
to the Trustee under Section 9.03(b) hereof, it being understood and agreed
that the provisions of Section 9.03 hereof shall be applicable to the Master
Servicer notwithstanding any such sale, assignment, resignation or termination
of the Master Servicer or the termination of this Agreement; or (ii) affect
the right of the Master Servicer to receive payment and/or reimbursement of
any amounts accruing to it hereunder prior to the date of termination (or
during any transition period in which the Master Servicer continues to perform
its duties hereunder prior to the date the successor master servicer fully
assumes its duties).
If no successor Master Servicer has accepted its appointment
within ninety (90) days of the time the Trustee receives the resignation of
the Master Servicer, the Trustee shall be the successor Master Servicer in all
respects under this Agreement and shall have all the rights and powers and be
subject to all the responsibilities, duties and liabilities relating thereto,
including the obligation to make Monthly Advances; provided, however, that any
failure to perform any duties or responsibilities caused by the Master
Servicer's failure to provide information required by this Agreement shall not
be considered a default by the Trustee hereunder. In the Trustee's capacity as
such successor, the Trustee shall have the same limitations on liability
herein granted to the Master Servicer. As compensation therefor, the Trustee
shall be entitled to receive the compensation, reimbursement and indemnities
otherwise payable to the Master Servicer, including the fees and other amounts
payable pursuant to Section 9.07 hereof.
At least fifteen (15) calendar days prior to the effective date of
such appointment, the Trustee shall provide written notice to the Depositor of
such successor pursuant to this Section 9.06.
Any successor master servicer appointed as provided herein, shall
execute, acknowledge and deliver to the Master Servicer and to the Trustee an
instrument accepting such appointment, wherein the successor shall make the
representations and warranties set forth in Section 9.03 hereof, and whereupon
such successor shall become fully vested with all of the rights, powers,
duties, responsibilities, obligations and liabilities of the Master Servicer,
with like effect as if originally named as a party to this Agreement. Any
termination or resignation of the Master Servicer or termination of this
Agreement shall not affect any claims that the Trustee may
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have against the Master Servicer arising out of the Master Servicer's actions
or failure to act prior to any such termination or resignation or in
connection with the Trustee's assumption as successor master servicer of such
obligations, duties and responsibilities.
Upon a successor's acceptance of appointment as such, the Master
Servicer shall notify by mail the Trustee of such appointment.
Section 9.07 Compensation of the Master Servicer. As compensation
for its activities under this Agreement, the Master Servicer shall be paid the
Master Servicing Fee and be entitled to the investment income earned on
amounts in the Distribution Account during the Master Servicer Float Period.
Section 9.08 Merger or Consolidation. Any Person into which the
Master Servicer may be merged or consolidated, or any Person resulting from
any merger, conversion, other change in form or consolidation to which the
Master Servicer shall be a party, or any Person succeeding to the business of
the Master Servicer, shall be the successor to the Master Servicer hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or resulting Person to the Master
Servicer shall (i) be a Person (or have an Affiliate) that is qualified and
approved to service mortgage loans for Xxxxxx Xxx and FHLMC (provided, further
that a successor Master Servicer that satisfies subclause (i) through an
Affiliate agrees to service the Mortgage Loans in accordance with all
applicable Xxxxxx Mae and FHLMC guidelines) and (ii) have a net worth of not
less than $25,000,000.
Section 9.09 Resignation of the Master Servicer. Except as
otherwise provided in Sections 9.08 and 9.10 hereof, the Master Servicer shall
not resign from the obligations and duties hereby imposed on it unless the
Master Servicer's duties hereunder are no longer permissible under applicable
law or are in material conflict by reason of applicable law with any other
activities carried on by it and cannot be cured. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel that shall be independent to such effect delivered to the
Trustee. No such resignation shall become effective until the Trustee shall
have assumed, or a successor master servicer satisfactory to the Trustee and
the Depositor shall have assumed, the Master Servicer's responsibilities and
obligations under this Agreement. Notice of such resignation shall be given
promptly by the Master Servicer and the Depositor to the Trustee.
At least fifteen (15) calendar days prior to the effective date of
such resignation, the Master Servicer shall provide written notice to the
Depositor of any successor pursuant to this Section.
If at any time, Xxxxx Fargo, as Master Servicer, resigns under
this Section 9.09, or is removed as Master Servicer pursuant to Section 9.04,
then at such time Xxxxx Fargo shall also resign (and shall be entitled to
resign) as Securities Administrator under this Agreement.
Section 9.10 Assignment or Delegation of Duties by the Master
Servicer. Except as expressly provided herein, the Master Servicer shall not
assign or transfer any of its rights, benefits or privileges hereunder to any
other Person, or delegate to or subcontract with, or authorize or appoint any
other Person to perform any of the duties, covenants or obligations to be
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performed by the Master Servicer; provided, however, that the Master Servicer
shall have the right with the prior written consent of the Depositor (which
shall not be unreasonably withheld or delayed), and upon delivery to the
Trustee and the Depositor of a letter from each Rating Agency to the effect
that such action shall not result in a downgrade of the ratings assigned to
any of the Certificates, to delegate or assign to or subcontract with or
authorize or appoint any qualified Person to perform and carry out any duties,
covenants or obligations to be performed and carried out by the Master
Servicer hereunder. Notice of such permitted assignment shall be given
promptly by the Master Servicer to the Depositor and the Trustee. If, pursuant
to any provision hereof, the duties of the Master Servicer are transferred to
a successor master servicer, the entire compensation payable to the Master
Servicer pursuant hereto shall thereafter be payable to such successor master
servicer but in no event shall the fee payable to the successor master
servicer exceed that payable to the predecessor master servicer.
Section 9.11 Limitation on Liability of the Master Servicer.
Neither the Master Servicer nor any of the directors, officers, employees or
agents of the Master Servicer shall be under any liability to the Trustee, the
Securities Administrator, the Servicers or the Certificateholders for any
action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement, or for errors in judgment; provided, however, that
this provision shall not protect the Master Servicer or any such person
against any liability that would otherwise be imposed by reason of willful
malfeasance, bad faith or negligence in the performance of its duties or by
reason of reckless disregard for its obligations and duties under this
Agreement. The Master Servicer and any director, officer, employee or agent of
the Master Servicer may rely in good faith on any document prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Master Servicer shall be under no obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties as
Master Servicer with respect to the Mortgage Loans under this Agreement and
that in its opinion may involve it in any expenses or liability; provided,
however, that the Master Servicer may in its sole discretion undertake any
such action that it may deem necessary or desirable in respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs
of such action and any liability resulting therefrom, shall be liabilities of
the Trust, and the Master Servicer shall be entitled to be reimbursed therefor
out of the Master Servicer Account in accordance with the provisions of
Section 9.07 and Section 9.12.
The Master Servicer shall not be liable for any acts or omissions
of any Servicer except to the extent that damages or expenses are incurred as
a result of such act or omissions and such damages and expenses would not have
been incurred but for the negligence, willful malfeasance, bad faith or
recklessness of the Master Servicer in supervising, monitoring and overseeing
the obligations of the Servicers as required under this Agreement.
Section 9.12 Indemnification; Third Party Claims. The Master
Servicer agrees to indemnify the Depositor, the Securities Administrator, the
Servicers and the Trustee, and hold them harmless against any and all claims,
losses, penalties, fines, forfeitures, legal fees and related costs,
judgments, and any other costs, liability, fees and expenses that the
Depositor, the Securities Administrator, the Servicers or the Trustee may
sustain as a result of the Master Servicer's willful malfeasance, bad faith or
negligence in the performance of its duties hereunder or by reason of its
reckless disregard for its obligations and duties under this Agreement. The
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Depositor, the Securities Administrator, the Servicers, and the Trustee shall
immediately notify the Master Servicer if a claim is made by a third party
with respect to this Agreement or the Mortgage Loans which would entitle the
Depositor, the Servicers or the Trustee to indemnification under this Section
9.12, whereupon the Master Servicer shall assume the defense of any such claim
and pay all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be
entered against it or them in respect of such claim.
The Master Servicer agrees to indemnify and hold harmless the
Trustee from and against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs,
liability, fees and expenses (including reasonable attorneys' fees) that the
Trustee may sustain as a result of such liability or obligations of the Master
Servicer and in connection with the Trustee's assumption (not including the
Trustee's performance, except to the extent that costs or liability of the
Trustee are created or increased as a result of negligent or wrongful acts or
omissions of the Master Servicer prior to its replacement as Master Servicer)
of the Master Servicer's obligations, duties or responsibilities under such
agreement.
The Trust will indemnify the Master Servicer and hold it harmless
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments, and any other costs, liabilities, fees and
expenses that the Master Servicer may incur or sustain in connection with,
arising out of or related to this Agreement, the Servicing Agreements, the
Sale Agreements, the Step 2 Assignment Agreements or the Certificates, except
to the extent that any such loss, liability or expense is related to (i) a
material breach of the Master Servicer's representations and warranties in
this Agreement or (ii) the Master Servicer's willful malfeasance, bad faith or
negligence or by reason of its reckless disregard of its duties and
obligations under any such agreement; provided, that any such loss, liability
or expense constitutes an "unanticipated expense incurred by the REMIC" within
the meaning of Treasury Regulations Section 1.860G-1(b)(3)(ii). The Master
Servicer shall be entitled to reimbursement for any such indemnified amount
from funds on deposit in the Distribution Account.
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01 Duties of the Securities Administrator. The
Securities Administrator shall undertake to perform such duties and only such
duties as are specifically set forth in this Agreement.
(a) The Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securities Administrator that are specifically
required to be furnished pursuant to any provision of this Agreement shall
examine them to determine whether they are in the form required by this
Agreement; provided, however, that the Securities Administrator shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Securities Administrator shall notify the
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Certificateholders of such non conforming instrument in the event the
Securities Administrator, after so requesting, does not receive a
satisfactorily corrected instrument.
(b) The Securities Administrator, only as directed by an
authorized officer of Xxxxx Fargo or Avelo, as applicable, shall remit from
trust amounts the mortgage insurance premiums in accordance with the
requirements of the Primary Mortgage Insurance Policy. The Securities
Administrator shall also remit any amounts due for premium taxes on insurance
on applicable covered Mortgage Loans secured by properties located in West
Virginia or Kentucky on a monthly basis as directed in writing by an
authorized officer of Xxxxx Fargo or Avelo, as applicable. All other
responsibilities under the Primary Mortgage Insurance Policy, including making
claims and receiving payments, complying with unpaid principal reporting and
monthly default and delinquency reporting requirements, and in all other ways
maintaining such Primary Mortgage Insurance Policy shall not be the
responsibility of the Securities Administrator, but will instead by the
responsibility of the party or parties set forth in such Primary Mortgage
Insurance Policy.
Premiums shall be calculated by the Securities Administrator on
individual covered loans as the product of the Loan-Level Premium-Rate (as
defined in the Primary Mortgage Insurance Policy and delivered by GSMC)
assigned to the applicable Mortgage Loan in the Certificate Schedule (as
defined in the Primary Mortgage Insurance Policy) and set forth on the
Mortgage Loan Schedule, multiplied by the current UPB of the applicable
Mortgage Loan outstanding at the beginning of the month for which coverage is
provided, divided by twelve. The Securities Administrator shall remit from
trust amounts all such initial premiums and associated premium taxes required
to be paid under the Primary Mortgage Insurance Policy by the last Business
Day of the first full month following the Closing Date in accordance with the
requirements of the Primary Mortgage Insurance Policy. Any revised Loan-Level
Premium-Rates will be delivered to the Securities Administrator in writing by
Xxxxx Fargo or Avelo, as applicable, at which time the Securities
Administrator shall revise premium amounts accordingly.
In no event will the Securities Administrator bear any
responsibility to investigate or resolve issues or claims in connection with
the Primary Mortgage Insurance Policy, or to advise or notify any party of
notices received by it with regard to such policy. The Securities
Administrator shall remit premiums on a covered Mortgage Loan until notified
in writing by Xxxxx Fargo or Avelo, as applicable, that such Mortgage Loan has
been liquidated and the UPB brought to zero. The Securities Administrator and
its respective officers and directors shall be entitled to conclusively rely
on upon all such reports by Xxxxx Fargo or Avelo, as applicable. In the event
additional premiums are required under the Primary Mortgage Insurance Policy
due to the reinstatement of a covered Mortgage Loan or other shortfall due to
error, the Securities Administrator will be notified in writing by Xxxxx Fargo
or Avelo, as applicable, (which writing will confirm the reinstatement or
error, as applicable, and direct the remittance of premium amounts) and, if
such notice is received on or before the fifteenth (15th) day of the current
month, shall remit all such premium amounts from trust funds on the next
Distribution Date. If such notice is received after the fifteenth (15th) day
of the month, the Securities Administrator shall remit such premium amounts
from trust funds on the Distribution Date occurring in the immediately
succeeding month.
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(c) No provision of this Agreement shall be construed to relieve
the Securities Administrator from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct; provided, however,
that:
(i) the duties and obligations of the Securities Administrator
shall be determined solely by the express provisions of this Agreement,
the Securities Administrator shall not be liable except for the
performance of such duties and obligations as are specifically set forth
in this Agreement, no implied covenants or obligations shall be read
into this Agreement against the Securities Administrator and the
Securities Administrator may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Securities Administrator
and conforming to the requirements of this Agreement which it believed
in good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(ii) the Securities Administrator shall not be liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities Administrator, unless it shall be
conclusively determined by a court of competent jurisdiction, such
determination no longer subject to appeal, that the Securities
Administrator was negligent in ascertaining the pertinent facts;
(iii) the Securities Administrator shall not be liable with
respect to any action or inaction taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of Holders of
Certificates evidencing not less than 25% of the Voting Rights of
Certificates relating to the time, method and place of conducting any
proceeding for any remedy available to the Securities Administrator, or
exercising or omitting to exercise any trust or power conferred upon the
Securities Administrator under this Agreement; and
(iv) the Securities Administrator shall not be accountable, shall
have no liability and makes no representation as to any acts or
omissions hereunder of the Master Servicer or the Trustee.
Section 10.02 Certain Matters Affecting the Securities
Administrator. Except as otherwise provided in Section 10.01:
(a) the Securities Administrator may request and conclusively rely
upon and shall be fully protected in acting or refraining from acting
upon any resolution, Officer's Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Securities Administrator shall have no
responsibility to ascertain or confirm the genuineness of any signature
of any such party or parties;
(b) the Securities Administrator may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants and any advice or Opinion of Counsel
shall be full and complete authorization and protection
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in respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
(c) the Securities Administrator shall not be liable for any
action or inaction taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(d) the Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable
time to the Securities Administrator of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Securities Administrator, not
reasonably assured to the Securities Administrator by the security
afforded to it by the terms of this Agreement, the Securities
Administrator may require reasonable indemnity against such expense or
liability as a condition to so proceeding. Nothing in this clause (iv)
shall derogate from the obligation of the Master Servicer to observe any
applicable law prohibiting disclosure of information regarding the
Mortgagors, provided that the Master Servicer shall have no liability
for disclosure required by this Agreement;
(e) the Securities Administrator may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys or a custodian and the Securities
Administrator shall not be responsible for any misconduct or negligence
on the part of any such agent, attorney or custodian appointed by the
Securities Administrator with due care;
(f) the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers hereunder if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator
to perform, or be responsible for the manner of performance of, any of
the obligations of the Master Servicer under this Agreement;
(g) the Securities Administrator shall be under no obligation to
exercise any of the trusts, rights or powers vested in it by this
Agreement or to institute, conduct or defend any litigation hereunder or
in relation hereto at the request, order or direction of any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Securities
Administrator reasonable security or indemnity satisfactory to the
Securities Administrator against the costs, expenses and liabilities
which may be incurred therein or thereby;
(h) the Securities Administrator shall have no obligation to
appear in, prosecute or defend any legal action that is not incidental
to its duties hereunder and
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which in its opinion may involve it in any expense or liability;
provided, however, that the Securities Administrator may in its
discretion undertake any such action that it may deem necessary or
desirable in respect of this Agreement and the rights and duties of the
parties hereto and the interests of the Trustee, the Securities
Administrator and the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund,
and the Securities Administrator shall be entitled to be reimbursed
therefor out of the Collection Account; and
(i) in no event shall the Securities Administrator be liable for
special, indirect or consequential damages.
The Securities Administrator shall have no duty (A) to cause any
recording, filing, or depositing of this Agreement or any agreement referred
to herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or
filing or depositing or to any rerecording, refiling or redepositing thereof,
(B) to cause the provision of any insurance or (C) to cause the payment or
discharge of any tax, assessment, or other governmental charge or any lien or
encumbrance of any kind owing with respect to, assessed or levied against, any
part of the Trust Fund other than from funds available in the Distribution
Account.
Section 10.03 Securities Administrator Not Liable for Certificates
or Mortgage Loans. The recitals contained herein and in the Certificates shall
be taken as the statements of the Depositor or the Transferor, as the case may
be, and the Securities Administrator assumes no responsibility for their
correctness. The Securities Administrator makes no representations as to the
validity or sufficiency of this Agreement or of the Certificates or of any
Mortgage Loan or related document other than with respect to the Securities
Administrator's execution and authentication of the Certificates. The
Securities Administrator shall not be accountable for the use or application
by the Depositor or the Master Servicer of any funds paid to the Depositor or
the Master Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Master Servicer.
Section 10.04 Securities Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become
the owner or pledgee of Certificates and may transact business with the
parties hereto and their Affiliates with the same rights as it would have if
it were not the Securities Administrator.
Section 10.05 Securities Administrator's Fees and Expenses. The
Securities Administrator shall be entitled to the investment income earned on
amounts in the Distribution Account during the Master Servicer Float Period.
The Securities Administrator and any director, officer, employee, agent or
"control person" within the meaning of the Securities Act of 1933, as amended,
and the Securities Exchange of 1934, as amended ("Control Person"), of the
Securities Administrator shall be indemnified by the Trust and held harmless
against any loss, liability or expense (including reasonable attorney's fees)
(i) incurred in connection with any claim or legal action relating to (a) this
Agreement, (b) the Mortgage Loans or (c) the Certificates, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad
faith or negligence in the performance of any of the Securities
Administrator's duties hereunder, (ii) incurred in connection with the
performance of any of the Securities Administrator's duties hereunder, other
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than any loss, liability or expense incurred by reason of willful misfeasance,
bad faith or negligence in the performance of any of the Securities
Administrator's duties hereunder or (iii) incurred by reason of any action of
the Securities Administrator taken at the direction of the Certificateholders,
provided that any such loss, liability or expense constitutes an
"unanticipated expense incurred by the REMIC" within the meaning of Treasury
Regulations Section 1.860G-1(b)(3)(ii). Such indemnity shall survive the
termination of this Agreement or the resignation or removal of the Securities
Administrator hereunder. Without limiting the foregoing, and except for any
such expense, disbursement or advance as may arise from the Securities
Administrator's negligence, bad faith or willful misconduct, or which would
not be an "unanticipated expense" within the meaning of the second preceding
sentence, the Securities Administrator shall be reimbursed by the Trust for
all reasonable expenses, disbursements and advances incurred or made by the
Securities Administrator in accordance with any of the provisions of this
Agreement with respect to: (A) the reasonable compensation and the expenses
and disbursements of its counsel not associated with the closing of the
issuance of the Certificates, (B) the reasonable compensation, expenses and
disbursements of any accountant, engineer, appraiser or other agent that is
not regularly employed by the Securities Administrator, to the extent that the
Securities Administrator must engage such Persons to perform acts or services
hereunder and (C) printing and engraving expenses in connection with preparing
any Definitive Certificates. The Trust shall fulfill its obligations under
this paragraph from amounts on deposit from time to time in the Distribution
Account.
The Securities Administrator may retain or withdraw from the
Distribution Account, (i) the Master Servicing Fee and the investment income
earned on amounts in the Distribution Account during the Master Servicer Float
Period, (ii) amounts necessary to reimburse it or the Master Servicer for any
previously unreimbursed Advances and any Advances the Master Servicer deems to
be non-recoverable from the related Mortgage Loan proceeds, (iii) an aggregate
annual amount to indemnify the Master Servicer and itself for amounts due in
accordance with this Agreement, (iv) amounts necessary for the Master Servicer
to pay primary mortgage insurance premiums under the GSAA Home Equity Trust
2006-16 Bulk Primary First Lien Mortgage Insurance Policy No. 00000-0000-0,
PMI Bulk Deal No.: 2006-0740, dated August 25, 2006 and (v) any other amounts
which it or the Master Servicer is entitled to receive hereunder for
reimbursement, indemnification or otherwise, including the amount to which the
Securities Administrator is entitled pursuant to Section 3.02 hereof. The
Securities Administrator shall be required to pay all expenses incurred by it
in connection with its activities hereunder and shall not be entitled to
reimbursement therefor except as provided in this Agreement.
Section 10.06 Eligibility Requirements for the Securities
Administrator. The Securities Administrator hereunder shall at all times be a
corporation or association organized and doing business under the laws the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by federal or state
authority and with a credit rating of at least investment grade. If such
corporation or association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 10.06 the combined
capital and surplus of such corporation or association shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Securities
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Administrator shall cease to be eligible in accordance with the provisions of
this Section 10.06, the Securities Administrator shall resign immediately in
the manner and with the effect specified in Section 10.07 hereof. The entity
serving as Securities Administrator may have normal banking and trust
relationships with the Depositor and its affiliates or the Trustee and its
affiliates.
Any successor Securities Administrator (i) may not be an
originator, the Master Servicer, the Servicer, the Depositor or an affiliate
of the Depositor unless the Securities Administrator functions are operated
through an institutional trust department of the Securities Administrator,
(ii) must be authorized to exercise corporate trust powers under the laws of
its jurisdiction of organization, and (iii) must be rated at least "A/F1" by
Fitch, if Fitch is a Rating Agency and if rated by Fitch, or the equivalent
rating by S&P or Xxxxx'x. If no successor Securities Administrator shall have
been appointed and shall have accepted appointment within sixty (60) days
after the Securities Administrator ceases to be the Securities Administrator
pursuant to Section 10.07, then the Trustee may (but shall not be obligated
to) become the successor Securities Administrator. The Depositor shall appoint
a successor to the Securities Administrator in accordance with Section 10.07.
The Trustee shall notify the Rating Agencies of any change of Securities
Administrator.
Section 10.07 Resignation and Removal of the Securities
Administrator. The Securities Administrator may at any time resign by giving
written notice of resignation to the Depositor and the Trustee and each Rating
Agency not less than sixty (60) days before the date specified in such notice
when, subject to Section 10.08, such resignation is to take effect, and
acceptance by a successor Securities Administrator in accordance with Section
10.08 meeting the qualifications set forth in Section 10.06. If no successor
Securities Administrator meeting such qualifications shall have been so
appointed by the Depositor and have accepted appointment within thirty (30)
days after the giving of such notice of resignation, the resigning Securities
Administrator may petition any court of competent jurisdiction for the
appointment of a successor Securities Administrator.
At least fifteen (15) calendar days prior to the effective date of
such resignation, the Securities Administrator shall provide written notice to
the Depositor or any successor pursuant to this Section 10.07.
If at any time (i) the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 10.06 hereof and shall
fail to resign after written request thereto by the Depositor, (ii) the
Securities Administrator shall become incapable of acting, or shall be
adjudged as bankrupt or insolvent, or a receiver of the Securities
Administrator or of its property shall be appointed, or any public officer
shall take charge or control of the Securities Administrator or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, (iii)(A) a tax is imposed with respect to the Trust Fund by any
state in which the Securities Administrator or the Trust Fund is located and
(B) the imposition of such tax would be avoided by the appointment of a
different Securities Administrator, or (iv) the Securities Administrator fails
to comply with its obligations under Article XIII and such failure is not
remedied within the lesser of ten (10) calendar days or such period in which
the applicable Exchange Act Report can be timely filed (without taking into
account any extensions), then, in the case of clauses (i) through (iv), the
Depositor may remove
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the Securities Administrator and appoint a successor Securities Administrator
by written instrument, in triplicate, one copy of which instrument shall be
delivered to the Securities Administrator so removed, one copy of which shall
be delivered to the Master Servicer and one copy to the successor Securities
Administrator.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Securities Administrator and appoint a
successor Securities Administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys in fact duly authorized,
one complete set of which instruments shall be delivered by the successor
Securities Administrator to the Trustee, one complete set to the Securities
Administrator so removed and one complete set to the successor so appointed.
Notice of any removal of the Securities Administrator shall be given to each
Rating Agency by the successor Securities Administrator.
Any resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 10.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 10.08
hereof.
Section 10.08 Successor Securities Administrator. Any successor
Securities Administrator (which may be the Trustee) appointed as provided in
Section 10.07 hereof shall execute, acknowledge and deliver to the Depositor
and to its predecessor Securities Administrator and the Trustee an instrument
accepting such appointment hereunder and thereupon the resignation or removal
of the predecessor Securities Administrator shall become effective and such
successor Securities Administrator, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if
originally named as Securities Administrator herein. The Depositor, the
Trustee, the Master Servicer and the predecessor Securities Administrator
shall execute and deliver such instruments and do such other things as may
reasonably be required for more fully and certainly vesting and confirming in
the successor Securities Administrator all such rights, powers, duties, and
obligations.
No successor Securities Administrator shall accept appointment as
provided in this Section 10.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 10.06 hereof and its appointment shall not adversely affect the then
current rating of the Certificates, as confirmed in writing by each Rating
Agency and has provided to the Depositor in writing and in form and substance
reasonably satisfactory to the Depositor, all information reasonably requested
by the Depositor in order to comply with its reporting obligation under Item
6.02 of Form 8-K with respect to a replacement Securities Administrator.
Upon acceptance by a successor Securities Administrator of
appointment as provided in this Section 10.08, the Depositor shall mail notice
of the succession of such Securities Administrator hereunder to all Holders of
Certificates. If the Depositor fails to mail such notice within ten (10) days
after acceptance by the successor Securities Administrator of appointment, the
successor Securities Administrator shall cause such notice to be mailed at the
expense of the Depositor.
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Section 10.09 Merger or Consolidation of the Securities
Administrator. Any corporation or other entity into which the Securities
Administrator may be merged or converted or with which it may be consolidated
or any corporation or other entity resulting from any merger, conversion or
consolidation to which the Securities Administrator shall be a party, or any
corporation or other entity succeeding to the business of the Securities
Administrator, shall be the successor of the Securities Administrator
hereunder, provided that such corporation or other entity shall be eligible
under the provisions of Section 10.06 hereof, without the execution or filing
of any paper or further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 10.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities
Administrator shall not assign or transfer any of its rights, benefits or
privileges hereunder to any other Person, or delegate to or subcontract with,
or authorize or appoint any other Person to perform any of the duties,
covenants or obligations to be performed by the Securities Administrator;
provided, however, that the Securities Administrator shall have the right with
the prior written consent of the Depositor (which shall not be unreasonably
withheld or delayed), and upon delivery to the Trustee and the Depositor of a
letter from each Rating Agency to the effect that such action shall not result
in a downgrade of the ratings assigned to any of the Certificates, to delegate
or assign to or subcontract with or authorize or appoint any qualified Person
to perform and carry out any duties, covenants or obligations to be performed
and carried out by the Securities Administrator hereunder. Notice of such
permitted assignment shall be given promptly by the Securities Administrator
to the Depositor and the Trustee. If, pursuant to any provision hereof, the
duties of the Securities Administrator are transferred to a successor
securities administrator, the entire compensation payable to the Securities
Administrator pursuant hereto shall thereafter be payable to such successor
securities administrator but in no event shall the fee payable to the
successor securities administrator exceed that payable to the predecessor
securities administrator.
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 11.03, the obligations and responsibilities
of the Depositor, the Master Servicer, the Servicers, the Securities
Administrator and the Trustee created hereby with respect to the Trust Fund
shall terminate upon the earlier of: (a) Avelo, at its option, purchasing (the
"Avelo Call") (or, if Avelo is no longer acting as a Servicer of any of the
Mortgage Loans, the Depositor may request the Master Servicer to exercise its
option to conduct an Auction Call for the purchase of) the Mortgage Loans and
all other property of the Trust on a non-recourse basis with no
representations or warranties of any nature whatsoever and the sale of all of
the Property of the Trust Fund, on or after the Optional Termination Date. The
Master Servicer shall accommodate such request to conduct an Auction Call at
its sole discretion. The Property of the Trust Fund shall be sold by the
Trustee as directed by the Depositor or the Master Servicer to the entity with
the highest bid received by the Master Servicer from closed bids solicited by
the Master Servicer or its designee; provided, that to effectuate such sale,
the Master Servicer or its designee shall have made reasonable efforts to sell
all of the property of the Trust Fund for its fair market value in a
commercially reasonable manner and on commercially reasonable terms,
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which includes the good faith solicitation of competitive bids to prospective
purchasers that are recognized broker/dealers for assets of this type and
provided further that, (i) such sale price shall not be less than the Par
Value as certified by the Depositor, (ii) the Master Servicer receives bids
from no fewer than three prospective purchasers (which may include the
Majority Class X Certificateholder) and (iii) such sale price shall be
deposited with the Master Servicer prior to the Distribution Date following
the month in which such value is determined; and (b) the later of (i) the
maturity or other liquidation (or any Advance with respect thereto) of the
last Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to Certificateholders of all amounts
required to be distributed to them pursuant to this Agreement. In no event
shall the trusts created hereby continue beyond the expiration of 21 years
from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx, the
late Ambassador of the United States to the Court of St. James's, living on
the date hereof. For purposes of this Section, the "Termination Price" shall
be equal to the greater of: (1) the sum of (i) 100% of the unpaid principal
balance of each Mortgage Loan (other than in respect of REO Property) plus
accrued and unpaid interest thereon at the applicable Mortgage Interest Rate,
(ii) the lesser of (x) the appraised value of any REO Property as determined
by the higher of two appraisals completed by two independent appraisers
selected by the Master Servicer at its expense, plus accrued and unpaid
interest on the related mortgage loans at the applicable mortgage rate and (y)
the unpaid principal balance of each Mortgage Loan related to any REO
Property, in each case plus accrued and unpaid interest thereon at the
applicable Mortgage Interest Rate; and (iii) any Swap Termination Payment
other than a Defaulted Swap Termination Payment owed to the Swap Provider; and
(2) the aggregate fair market value of each Mortgage Loan and any REO
Property, as determined by the highest bid received by the Master Servicer
from closed bids solicited by the Depositor or its designee from at least
three recognized broker/dealers (one of which may be an affiliate of the
Depositor) that deal in similar assets as of the close of business on the
third Business Day preceding the date upon which a Notice of Final
Distribution is furnished to Certificateholders pursuant to Section 11.02,
plus accrued and unpaid interest on the Mortgage Loans at the applicable
Mortgage Interest Rate.
The proceeds of the purchase or sale of such assets of the Trust
pursuant to the Avelo Call or the Auction Call described in Section 11.01
above (other than, with respect to any mortgage loan and the related property,
an amount equal to the excess, if any, of the amount in Section 11.01(a)(2)
over the sum of the amount in Section 11.01(a)(1) (such excess, the "Fair
Market Value Excess")) will be distributed to the holders of the Certificates
in accordance with Section 4.01. Any Fair Market Value Excess received in
connection with the purchase of the Mortgage Loans and REO Properties will be
distributed to the holders of the Class RC Certificates.
Except to the extent provided above with regard to allocating any
Fair Market Value Excess to the holders of the Class RC Certificates, the
proceeds of such a purchase or sale will be treated as a prepayment of the
Mortgage Loans for purposes of distributions to Certificateholders.
Accordingly, the sale of the Mortgage Loans and the REO Properties as a result
of the exercise of the Avelo Call or the Auction Call will result in the final
distribution on the Certificates on that Distribution Date.
Section 11.02 Final Distribution on the Certificates. If, on any
Remittance Date, the Servicers notify the Securities Administrator that there
are no Outstanding Mortgage Loans
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and no other funds or assets in the Trust Fund other than the funds in the
Collection Account, the Securities Administrator shall promptly send a Notice
of Final Distribution to the applicable Certificateholders. If Avelo exercises
its option to terminate the Trust Fund pursuant to clause (a) of Section
11.01, or if an Auction Call is requested pursuant to clause (b) of such
Section, the Master Servicer, pursuant to the applicable Step 2 Assignment
Agreements and by no later than the tenth (10th) day of the month of final
distribution, shall notify the Trustee, each Servicer and the Securities
Administrator of the final Distribution Date and of the applicable sale price
of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date
on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the
Securities Administrator by letter to Certificateholders mailed not later than
the fifteenth (15th) day of the month of such final distribution. Any such
Notice of Final Distribution shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation
and surrender of Certificates at the office therein designated, (b) the amount
of such final distribution, (c) the location of the office or agency at which
such presentation and surrender must be made, and (d) that the Record Date
otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Securities Administrator
will give such Notice of Final Distribution to each Rating Agency at the time
such Notice of Final Distribution is given to Certificateholders.
In the event the Mortgage Loans (and REO Properties) and all
rights and obligations under the Servicing Agreements are purchased or sold
pursuant to Section 11.01 and pursuant to the applicable Step 2 Assignment
Agreement, the Master Servicer on behalf of the Trustee is required thereunder
to remit to the Securities Administrator the applicable Termination Price on
the applicable Remittance Date immediately preceding the applicable final
Distribution Date. Upon such final deposit with respect to the Trust Fund and
the receipt by the Securities Administrator and the Custodians of a request
for release therefor in the form of Exhibit L, Exhibit X-0, Xxxxxxx X-0 or
Exhibit L-3, as applicable, the Master Servicer shall direct the Custodians to
release and the relevant Custodians shall promptly release to the Master
Servicer or its designee the Custodial Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the
Securities Administrator shall cause to be distributed to the
Certificateholders of each Class (after reimbursement of all amounts due the
Depositor, the Master Servicer, the Securities Administrator, the Trustee and
the Custodians hereunder), in each case on the final Distribution Date and in
the order set forth in Section 4.01, in proportion to their respective
Percentage Interests, with respect to Certificateholders of the same Class, an
amount up to an amount equal to (i) as to each Class of Regular Certificates
(except the Class X Certificates), the Certificate Balance thereof plus for
each such Class and the Class X Certificates accrued interest thereon in the
case of an interest-bearing Certificate and all other amounts to which such
Classes are entitled pursuant to Section 4.01, and (ii) as to the Residual
Certificates, the amount, if any, which remains on deposit in the Distribution
Account after application pursuant to clause (i) above (other than the amounts
retained to meet claims). The foregoing provisions are intended to distribute
to each Class of Regular Certificates any accrued and unpaid interest and
principal to which they are entitled
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based on the Pass-Through Rates and actual Class Certificate Balances or
notional principal balances set forth in the Preliminary Statement upon
liquidation of the Trust Fund.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six (6) months after the date
specified in the above mentioned written notice, the Securities Administrator
shall give a second written notice to the remaining Certificateholders to
surrender their Certificates for cancellation and receive the final
distribution with respect thereto. If within six months after the second
notice all the applicable Certificates shall not have been surrendered for
cancellation, the Securities Administrator may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain a part of
the Trust Fund. If within one (1) year after the second notice all
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
of the Trust Fund which remain subject hereto.
Section 11.03 Additional Termination Requirements. In the event
the Avelo Call or the Auction Call is exercised as provided in Section 11.01,
the Trust Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee and the Securities Administrator have been
supplied with an Opinion of Counsel, at the expense of the entity exercising
the call right, to the effect that the failure to comply with the requirements
of this Section 11.03 will not (i) result in the imposition of taxes on
"prohibited transactions" on any Trust REMIC as defined in Section 860F of the
Code, or (ii) cause any Trust REMIC to fail to qualify as a REMIC at any time
that any Certificates are outstanding:
(a) The Securities Administrator on behalf of the Trustee shall
sell all of the assets of the Trust Fund to the entity with the highest bid
received pursuant to the Auction Call and, by the next Distribution Date after
such sale, shall distribute to the Certificateholders the proceeds of such
sale in complete liquidation of each of the Trust REMICs; and
(b) The Securities Administrator shall attach a statement to the
final federal income tax return for each of the Trust REMICs stating that
pursuant to Treasury Regulations Section 1.860F-1, the first day of the ninety
(90) day liquidation period for each such Trust REMIC was the date on which
the Securities Administrator on behalf of the Trustee sold the assets of the
Trust Fund to the entity with the highest bid received pursuant to the Auction
Call.
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01 Amendment. This Agreement may be amended from time
to time by the Depositor, the Master Servicer, the Securities Administrator,
the Custodians and the Trustee (and the Master Servicer may request an
amendment or consent to any amendment of a Servicing Agreement as directed by
the Depositor) without the consent of any of the Certificateholders (i) to
cure any ambiguity or mistake, (ii) to correct any defective provision herein
or in the applicable Servicing Agreement, or to supplement any provision in
this Agreement which may be inconsistent with any other provision herein or in
the applicable
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Servicing Agreement, (iii) to add to the duties of the Depositor, or the
Trustee (or with respect to the applicable Servicing Agreement, of the
applicable Servicer) the Master Servicer, the Securities Administrator or the
Custodians, (iv) to add any other provisions with respect to matters or
questions arising hereunder or under the applicable Servicing Agreement, (v)
to cause the provisions herein to conform to or be consistent with or in
furtherance of the statements made with respect to the Certificates, the Trust
Fund or this Agreement in the Prospectus Supplement, or to correct or
supplement any provision herein which may be inconsistent with any other
provisions herein or with the provisions of any underlying purchase or
servicing agreement or (vi) to modify, alter, amend, add to or rescind any of
the terms or provisions contained in this Agreement or in the applicable
Servicing Agreement; provided, that any action pursuant to clause (iv) or (v)
above shall not, as evidenced by an Opinion of Counsel (which Opinion of
Counsel shall be an expense of the requesting party, but in any case shall not
be an expense of the Trustee, the Master Servicer, the Securities
Administrator, the Custodians or the Trust Fund, and shall be addressed to the
foregoing entities), adversely affect in any material respect the interests of
any Certificateholder; provided, further, that the amendment shall not be
deemed to adversely affect in any material respect the interests of the
Certificateholders if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor, the Custodians, the
Securities Administrator and the Master Servicer also may at any time and from
time to time amend this Agreement (and the Master Servicer shall request the
Servicers amend the applicable Servicing Agreements), without the consent of
the Certificateholders, to modify, eliminate or add to any of its provisions
to such extent as shall be necessary or helpful to (i) maintain the
qualification of each Trust REMIC under the REMIC Provisions, (ii) avoid or
minimize the risk of the imposition of any tax on any Trust REMIC pursuant to
the Code that would be a claim at any time prior to the final redemption of
the Certificates or (iii) comply with any other requirements of the Code;
provided, that the Trustee and the Master Servicer have been provided an
Opinion of Counsel, which opinion shall be an expense of the party requesting
such opinion but in any case shall not be an expense of the Trustee or the
Trust Fund, to the effect that such action is necessary or helpful to, as
applicable, (i) maintain such qualification, (ii) avoid or minimize the risk
of the imposition of such a tax or (iii) comply with any such requirements of
the Code.
This Agreement may also be amended from time to time by the
Depositor, the Master Servicer, the Custodians, the Securities Administrator
and the Trustee (and the Master Servicer shall consent to any amendment to the
applicable Servicing Agreement as directed by the Depositor) with the consent
of the Holders of Certificates evidencing Percentage Interests aggregating not
less than 66?% of each Class of Certificates affected thereby for the purpose
of adding any provisions to or changing in any manner or eliminating any of
the provisions of this Agreement or of modifying in any manner the rights of
the Holders of Certificates; provided, however, that no such amendment shall
(i) reduce in any manner the amount of, or delay the timing of, payments
required to be distributed on any Certificate without the consent of the
Holder of such Certificate, (ii) adversely affect in any material respect the
interests of the Holders of any Class of Certificates in a manner other than
as described in clause (i), without the consent of the Holders of Certificates
of such Class evidencing, as to such Class, Percentage
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Interests aggregating not less than 66 2/3%, or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to
any such amendment, without the consent of the Holders of all such
Certificates then outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee and the Master Servicer shall not consent to any amendment to this
Agreement or any Servicing Agreement unless (i) each shall have first received
an Opinion of Counsel, which opinion shall not be an expense of the Trustee,
the Master Servicer or the Trust Fund, to the effect that such amendment will
not cause the imposition of any tax on any Trust REMIC or the
Certificateholders or cause any Trust REMIC to fail to qualify as a REMIC at
any time that any Certificates are outstanding and (ii) the party seeking such
amendment shall have provided written notice to the Rating Agencies (with a
copy of such notice to the Trustee and the Master Servicer) of such amendment,
stating the provisions of the Agreement to be amended.
Notwithstanding the foregoing provisions of this Section 12.01,
with respect to any amendment that significantly modifies the permitted
activities of the Trustee or a Servicer under the applicable Servicing
Agreement, any Certificate beneficially owned by the Depositor or any of its
Affiliates or by the Responsible Party or any of its Affiliates shall be
deemed not to be outstanding (and shall not be considered when determining the
percentage of Certificateholders consenting or when calculating the total
number of Certificates entitled to consent) for purposes of determining if the
requisite consents of Certificateholders under this Section 12.01 have been
obtained.
Promptly after the execution of any amendment to this Agreement or
any Servicing Agreement requiring the consent of Certificateholders, the
Master Servicer shall furnish written notification of the substance or a copy
of such amendment to each Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 12.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee, the
Custodians, the Master Servicer or the Securities Administrator to enter into
an amendment which modifies its obligations or liabilities without its consent
and in all cases without receiving an Opinion of Counsel (which Opinion shall
not be an expense of the Trustee, the Custodians, the Master Servicer, the
Securities Administrator or the Trust Fund), satisfactory to the Trustee, the
Master Servicer or the Securities Administrator, as applicable, that (i) such
amendment is permitted and is not prohibited by this Agreement or the
applicable Servicing Agreement and that all requirements for amending this
Agreement or such Servicing Agreement have been complied with; and (ii) either
(A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to
this Section 12.01.
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Notwithstanding the Trustee's consent to, or the Master Servicer's
request for, any amendment of any Servicing Agreement pursuant to the terms of
this Section 12.01, such Servicing Agreement cannot be amended without the
consent of the applicable Servicer. Neither the Master Servicer nor the
Trustee shall be responsible for any failure by such Servicer to consent to
any amendment to the applicable Servicing Agreement.
Notwithstanding the foregoing, any amendment to this Agreement
shall require the prior written consent of the Swap Provider, if such
amendment materially and adversely affects the rights or interests of the Swap
Provider.
Section 12.02 Recordation of Agreement; Counterparts. This
Agreement is subject to recordation in all appropriate public offices for real
property records in all the counties or other comparable jurisdictions in
which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such
recordation shall be caused to be effected by the Depositor at the expense of
the Trust, but only if an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders is delivered to the Depositor.
For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one
and the same instrument.
Section 12.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.04 Intention of Parties. It is the express intent of
the parties hereto that the conveyance (i) of the Mortgage Loans by the
Depositor and (ii) of the Trust Fund by the Depositor to the Trustee each be,
and be construed as, an absolute sale thereof. It is, further, not the
intention of the parties that such conveyances be deemed a pledge thereof.
However, in the event that, notwithstanding the intent of the parties, such
assets are held to be the property of the Depositor, or if for any other
reason this Agreement is held or deemed to create a security interest in
either of such assets, then (i) this Agreement shall be deemed to be a
security agreement within the meaning of the Uniform Commercial Code of the
State of New York and (ii) the conveyances provided for in this Agreement
shall be deemed to be an assignment and a grant by the Depositor to the
Trustee, for the benefit of the Certificateholders, of a security interest in
all of the assets transferred, whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for
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filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of
the Certificateholders.
Section 12.05 Notices. (a) The Securities Administrator shall use
its best efforts to promptly provide notice to each Rating Agency with respect
to each of the following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not
been cured;
(iii) The resignation or termination of a Servicer, Master
Servicer, Securities Administrator or the Trustee and the
appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans
pursuant to this Agreement or the Sale Agreements; and
(v) The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly make
available on its internet website to each Rating Agency copies of the
following:
(i) Each report to Certificateholders described in Section
4.02.
(ii) The Servicer's annual statement of compliance and the
accountant's report described in the Servicing Agreements; and
(iii) Any notice of a purchase of a Mortgage Loan pursuant
to this Agreement and any Sale Agreement.
(c) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to: (a) in
the case of the Depositor, the Purchaser or the Goldman Conduit, to Xxxxxxx,
Sachs & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Principal
Finance Group/Xxxxxxxxxxx X. Xxxxxxx and Asset Management Group/Senior Asset
Manager, or such other address as may be hereafter furnished to the Securities
Administrator by the Depositor in writing; (b) in the case of Avelo, to Avelo
Mortgage, L.L.C., 000 X. Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx
00000, Attention: President and General Counsel, or such other address as may
be hereafter furnished to the Depositor and the Securities Administrator by
Avelo in writing; (c) in the case of Countrywide and Countrywide Servicing, to
Countrywide Home Loans Servicing LP, 0000 Xxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx
00000, Attention: Investor Accounting, or such other address as may be
hereafter furnished to the Depositor and the Securities Administrator by
Countrywide Servicing in writing; (d) in the case of JPMorgan as Custodian, to
JPMorgan Chase Bank, National Association, 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxx, Xxxxx 00000, or such other address as may be hereafter furnished
to the Depositor and the Securities Administrator by JPMorgan in writing; (e)
in the case of GreenPoint, to GreenPoint Mortgage Funding, Inc., 000 Xxxx
Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxx, or such other
address as may be hereafter furnished to the Depositor and the Securities
Administrator by GreenPoint in writing;
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(f) in the case of NatCity, National City Mortgage Co., 0000 Xxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxx 00000, Attention: Xxx Xxxxxx, Trader, or such other address
as may be hereafter furnished to the Depositor and the Securities
Administrator by National City in writing; (g) in the case of PHH, PHH
Mortgage Corporation, 0000 Xxxxxxxxxx Xxxx, Xx. Xxxxxx, Xxx Xxxxxx 00000, or
such other address as may be hereafter furnished to the Depositor, the
Securities Administrator and the Swap Provider by PHH in writing; (h) in the
case of Wachovia, to Wachovia Mortgage Corporation, 0000 Xxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxx Xxxxxx, or such other
address as may hereinafter be furnished to the Depositor and the Securities
Administrator by Wachovia in writing; (i) in the case of First Horizon, to
First Horizon Loan Corporation, 0000 Xxxxxxx Xxx, Xxxxxx, Xxxxx 00000,
Attention: Xxxxx Xxxxxxxx, or such other address as may hereinafter be
furnished to the Depositor and the Securities Administrator by Wachovia in
writing; (j) in the case of the Trustee or the Securities Administrator to its
Corporate Trust Office, or such other address as the Trustee or the Securities
Administrator may hereafter furnish to the Depositor; (k) in the case of the
Master Servicer, the Securities Administrator and the Custodian, Xxxxx Fargo
Bank, National Association, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000, Attention:
GSAA 2006-16, or such other address as may be hereafter furnished to the
Depositor and the Securities Administrator by the Master Servicer in writing;
(l) in the case of Deutsche Bank as a Custodian, Deutsche Bank National Trust
Company, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention:
Mortgage Custody - GS0616; (m) in the case of U.S. Bank, U.S. Bank National
Association, 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xx. Xxxx, Xxxxxxxxx 00000,
Attention: GSAA Home Equity Trust 2006-16; (n) in the case of the Swap
Provider, to the related Swap Provider addressed to it at the address
specified in the Interest Rate Swap Agreement or at any other address
previously furnished in writing to the Trust by the related Swap Provider; and
(o) in the case of each of the Rating Agencies, the address specified therefor
in the definition corresponding to the name of such Rating Agency. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
Section 12.06 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement or of
the Certificates or the rights of the Holders thereof.
Section 12.07 Limitation on Rights of Certificateholders. The
death or incapacity of any Certificateholder shall not operate to terminate
this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth or contained in the terms of the Certificates
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be
under any liability to
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any third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
herein provided, and unless the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates shall also have
made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for sixty (60) days after its receipt of such notice, request and offer of
indemnity shall have neglected or refused to institute any such action, suit
or proceeding; it being understood and intended, and being expressly
covenanted by each Certificateholder with every other Certificateholder and
the Trustee, that no one or more Holders of Certificates shall have any right
in any manner whatever by virtue or by availing itself or themselves of any
provisions of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of the Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder or to enforce any right
under this Agreement, except in the manner herein provided and for the common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 12.07, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 12.08 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 12.09 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 12.10 Rights of the Swap Provider. The Swap Provider shall
be deemed a third party beneficiary of this Agreement to the same extent as if
it were a party hereto, and shall have the right to enforce its rights under
this Agreement,
ARTICLE XIII
EXCHANGE ACT REPORTING
Section 13.01 Filing Obligations.
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The Master Servicer, the Trustee, the Securities Administrator and
each Custodian shall reasonably cooperate with the Depositor and Securities
Administrator in connection with the satisfaction of the Depositor's reporting
requirements under the Exchange Act with respect to the Trust Fund. In
addition to the information specified below, if so requested by the Depositor
in writing for the purpose of satisfying its reporting obligation under the
Exchange Act, the Master Servicer, the Trustee, the Securities Administrator
and each Custodian shall (and the Master Servicer shall cause each Servicer
and subservicer to) provide the Depositor with (a) such information which is
available to such Person without unreasonable effort or expense and within
such timeframe as may be reasonably requested by the Depositor to comply with
the Depositor's reporting obligations under the Exchange Act and (b) to the
extent such Person is a party (and the Depositor is not a party) to any
agreement or amendment required to be filed, copies of such agreement or
amendment in XXXXX-compatible form.
In the event that the Securities Administrator becomes aware that
it will be unable to timely file with the Commission all or any required
portion of any Form 8-K, 10-D or 10-K required to be filed by this Agreement
because required disclosure information was either not delivered to it or
delivered to it after the delivery deadlines set forth in this Agreement or
for any other reason, the Securities Administrator will promptly notify the
Depositor. In the case of Form 10-D and 10-K, the parties to this Agreement
will cooperate and cause such other Servicers or Servicing Function
Participants, as applicable, to cooperate, to prepare and file a Form 12b-25
and a 10-DA and 10-KA as applicable, pursuant to Rule 12b-25 of the Exchange
Act. In the case of Form 8-K, the Securities Administrator will, upon receipt
of all required Form 8-K Disclosure Information and upon the approval and
direction of the Depositor, include such disclosure information on the next
Form 10-D unless directed by the Depositor to file a Form 8-K with such Form
8-K Disclosure Information. In the event that any previously filed Form 8-K,
Form 10-D or Form 10-K needs to be amended, the Securities Administrator shall
notify the Depositor and prepare any necessary Form 8-KA, Form 10-DA or Form
10-KA. Any Form 15, Form 12b-25 or any amendment to Form 8-K or Form 10-D
shall be signed by a duly authorized representative of the Master Servicer.
Any amendment to Form 10-K shall be signed by the Depositor. The parties to
this Agreement acknowledge that the performance by the Securities
Administrator of its duties under this Section 13.01 related to the timely
preparation and filing of Form 15, a Form 12b-25 or any amendment to Form 8-K,
Form 10-D or Form 10-K is contingent upon each such party performing its
duties under this Section. The Securities Administrator shall have no
liability for any loss, expense, damage or claim arising out of or with
respect to any failure to properly prepare and/or timely file any such Form
15, Form 12b-25 or any amendments to Form 8-K, Form 10-D or Form 10-K, where
such failure results from the Securities Administrator's inability or failure
to receive on a timely basis, any information from or on behalf of any other
party hereto needed to prepare, arrange for execution or file such Form 15,
Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, not resulting from
its own negligence, bad faith or willful misconduct.
The Securities Administrator shall promptly file, and exercise its
reasonable best efforts to obtain a favorable response to, no-action requests,
or other appropriate exemptive relief with the Commission seeking the usual
and customary exemption from such reporting requirements granted to issuers of
securities similar to the Certificates if and to the extent the Depositor
shall deem any such relief to be necessary or appropriate. Unless otherwise
advised by the Depositor, the Securities Administrator shall assume that the
Depositor is in compliance
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with the preceding sentence. In no event shall the Securities Administrator
have any liability for the execution or content of any document required to be
filed by the 1934 Act. The Depositor agrees to promptly furnish to the
Securities Administrator, from time to time upon request, such further
information, reports, and financial statements within its control related to
the Trust Agreement and the Mortgage Loans as the Depositor reasonably deems
appropriate to prepare and file all necessary reports with the Commission.
Section 13.02 Form 8-K Filings.
The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K. Thereafter within four (4) Business Days after the
occurrence of an event requiring disclosure in a current report on Form 8-K
(each such event, a "Reportable Event"), and if requested by the Depositor,
the Master Servicer shall sign on behalf of the Depositor and the Securities
Administrator shall prepare and file with the Commission any Form 8-K, as
required by the Exchange Act. Any disclosure or information related to a
Reportable Event or that is otherwise required to be included on Form 8-K
("Form 8-K Disclosure Information") shall be determined and prepared by and at
the direction of the Depositor pursuant to this Section 13.02 and the
Securities Administrator shall have no duty or liability for any failure
hereunder to determine or prepare any Form 8-K Disclosure Information or any
Form 8-K, except as set forth in this Section 13.02.
As set forth on Exhibit M hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than the end of
business on the second Business Day after the occurrence of a Reportable Event
each of the Securities Administrator, the Custodians, the Master Servicer and
the Depositor shall be required to provide to the Securities Administrator and
Depositor, to the extent known, in XXXXX-compatible form, or in such other
form as otherwise agreed upon by the Securities Administrator and such party,
the form and substance of any Form 8-K Disclosure Information, if applicable
and (ii) the Depositor shall approve, as to form and substance, or disapprove,
as the case may be, the inclusion of the Form 8-K Disclosure Information. The
Depositor shall be responsible for any reasonable fees and expenses assessed
or incurred by the Securities Administrator in connection with including any
Form 8-K Disclosure Information on Form 8-K pursuant to this paragraph.
After preparing the Form 8-K, the Securities Administrator shall
forward electronically a draft copy of the Form 8-K to the Depositor for
review. No later than 12:00 noon New York City time on the fourth (4th)
Business Day after the Reportable Event, a duly authorized representative of
the Master Servicer shall sign the Form 8-K and return such signed Form 8-K to
the Securities Administrator, and no later than 5:30 p.m. New York City time
on such Business Day the Securities Administrator shall file such Form 8-K
with the Commission. If a Form 8-K cannot be filed on time or if a previously
filed Form 8-K needs to be amended, the Securities Administrator will follow
the procedures set forth in Section 13.01. Promptly (but no later than one (1)
Business Day) after filing with the Commission, the Securities Administrator
will, make available on its internet website (located at xxx.xxxxxxx.xxx) a
final executed copy of each Form 8-K prepared by the Securities Administrator.
The signing party at the Master Servicer can be contacted at 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000-0000, Attention: Corporate Trust,
GSAA 2006-16, by e-mail at xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx or by
facsimile (000) 000-0000. The parties to this Agreement acknowledge that the
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performance by the Securities Administrator of its duties under this Section
13.02 related to the timely preparation and filing of Form 8-K is contingent
upon such parties strictly observing all applicable deadlines in the
performance of their duties under this Section 13.02. The Securities
Administrator shall have no liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare and/or
timely file such Form 8-K, where such failure results from the Securities
Administrator's inability or failure to receive on a timely basis, any
information from any other party hereto (other than an Affiliate) needed to
prepare, arrange for execution or file such Form 8-K, not resulting from its
own negligence, bad faith or willful misconduct.
Section 13.03 Form 10-D Filings.
Within fifteen days after each Distribution Date (subject to
permitted extensions under the Exchange Act and until a Form 15 is filed
pursuant to Section 13.05), the Securities Administrator shall prepare and
file, and the Master Servicer shall sign on behalf of the Depositor and file
with the Commission any distribution report on Form 10-D required by the
Exchange Act, in form and substance as required by the Exchange Act. The
Securities Administrator shall file each Form 10-D with a copy of the related
Monthly Statement attached thereto. Any disclosure in addition to the monthly
statement that is required to be included on Form 10-D ("Additional Form 10-D
Disclosure") shall be determined and prepared by and at the direction of the
Depositor pursuant to the following paragraph and the Securities Administrator
will have no duty or liability for any failure hereunder to determine or
prepare any Additional Form 10-D Disclosure, except as set forth in this
Section 13.03.
As set forth on Exhibit N hereto, within five (5) calendar days
after the related Distribution Date, (i) certain parties to the GSAA Home
Equity Trust 2006-16 Asset-Backed Certificates transaction shall be required
to provide to the Securities Administrator and the Depositor, to the extent
known, in XXXXX-compatible form, or in such other form as otherwise agreed
upon by the Securities Administrator and such party, the form and substance of
any Additional Form 10-D Disclosure, if applicable and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-D Disclosure on Form 10-D. The Depositor
shall be responsible for any reasonable fees and expenses assessed or incurred
by the Securities Administrator in connection with any Additional Form 10-D
Disclosure on Form 10-D pursuant to this Section 13.03.
After preparing the Form 10-D, the Securities Administrator shall
forward electronically a draft copy of the Form 10-D to the Depositor for
review. No later than fifteen days after the related Distribution Date, a duly
authorized representative of the Master Servicer shall sign the Form 10-D and
return such signed Form 10-D to the Securities Administrator and Depositor,
and no later than 5:30 p.m. New York City time on such day the Securities
Administrator shall file such Form 10-D with the Commission. If a Form 10-D
cannot be filed on time or if a previously filed Form 10-D needs to be
amended, the Securities Administrator will follow the procedures set forth in
Section 13.01. Promptly (but no later than one (1) Business Day) after filing
with the Commission, the Securities Administrator will make available on its
internet website (located at xxx.xxxxxxx.xxx) a final executed copy of each
Form 10-D prepared by the Securities Administrator. The signing party at the
Master Servicer can be contacted at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000-0000, Attention: Corporate
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Trust, GSAA 2006-16, by e-mail at xxx.xxx.xxxxxxxxxxxxx@xxxxxxxxxx.xxx or by
facsimile (000) 000-0000. Each party to this Agreement acknowledges that the
performance by the Securities Administrator of its duties under this Section
13.03 related to the timely preparation and filing of Form 10-D is contingent
upon such parties strictly observing all applicable deadlines in the
performance of their duties under this Section 13.03. The Securities
Administrator shall have no liability for any loss, expense, damage or claim
arising out of or with respect to any failure to properly prepare and/or
timely file such Form 10-D, where such failure results from the Securities
Administrator's inability or failure to receive on a timely basis, any
information from any other party hereto needed to prepare, arrange for
execution or file such Form 10-D, not resulting from its own negligence, bad
faith or willful misconduct.
Form 10-D requires the registrant to indicate (by checking "yes"
or "no") that it "(1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days." The
Depositor shall notify the Securities Administrator in writing, no later than
the fifth calendar day after the related Distribution Date with respect to the
filing of a report on Form 10-D if the answer to the questions should be "no".
The Securities Administrator shall be entitled to rely on such representations
in preparing, executing and/or filing any such report.
Section 13.04 Form 10-K Filings.
Within 90 days after the end of each fiscal year of the Trust or
such earlier date as may be required by the Exchange Act (the "10-K Filing
Deadline") (it being understood that the fiscal year for the Trust ends on
December 31 of each year), commencing in March 2007 and continuing until the
Trust has been deregistered with the Commission, the Securities Administrator
shall prepare and file on behalf of the Depositor an annual report on Form
10-K, in form and substance as required by the Exchange Act. Each such Form
10-K shall include the following items, in each case to the extent they have
been delivered to the Securities Administrator within the applicable time
frames set forth in this Agreement and the related Servicing Agreement: (i) an
annual compliance statement for each Servicer, each Additional Servicer and
the Master Servicer (each such party, a "Reporting Servicer") as described
below, (ii)(A) the annual reports on assessment of compliance with servicing
criteria for each Reporting Servicer, as described under this Section 13.04
and Section 13.07, and (B) if each Reporting Servicer's report on assessment
of compliance with servicing criteria described under Section 13.04 and
Section 13.07 identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or if each Reporting Servicer's
report on assessment of compliance with servicing criteria described under
Section 13.04 and Section 13.07 is not included as an exhibit to such Form
10-K, disclosure that such report is not included and an explanation why such
report is not included, (iii)(A) the registered public accounting firm
attestation report for each Reporting Servicer, as described under Section
13.07, and (B) if any registered public accounting firm attestation report
described under Section 13.07 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if
any such registered public accounting firm attestation report is not included
as an exhibit to such Form 10-K, disclosure that such report is not included
and an explanation why such report is not included, and (iv) a Xxxxxxxx-Xxxxx
Certification as described in Section 13.06. Any disclosure or information in
addition to the disclosure or information specified in items (i) through (iv)
123
above that is required to be included on Form 10-K ("Additional Form 10-K
Disclosure") shall be determined and prepared by and at the direction of the
Depositor pursuant to the following paragraph and the Securities Administrator
shall have no duty or liability for any failure hereunder to determine or
prepare any Additional Form 10-K Disclosure, except as set forth in this
Section 13.04.
The Master Servicer and the Securities Administrator shall deliver
(and the Master Servicer and Securities Administrator shall cause any
Additional Servicer engaged by it to deliver) to the Depositor and the
Securities Administrator on or before March 15 of each year, commencing in
March 2007, an Officer's Certificate stating, as to the signer thereof, that
(i) a review of such party's activities during the preceding calendar year or
portion thereof and of such party's performance under this Agreement, or such
other applicable agreement in the case of an Additional Servicer, has been
made under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, such party has fulfilled all its obligations
under this Agreement, or such other applicable agreement in the case of an
Additional Servicer, in all material respects throughout such year or portion
thereof, or, if there has been a failure to fulfill any such obligation in any
material respect, specifying each such failure known to such officer and the
nature and status thereof. Promptly after receipt of each such officer's
certificate, the Depositor shall review such officer's certificate and consult
with each such party, as applicable, as to the nature of any failures by such
party, in the fulfillment of any of such party's obligations hereunder or, in
the case of an Additional Servicer, under such other applicable agreement.
The Master Servicer shall enforce any obligation of the Servicers,
to the extent set forth in the related Servicing Agreement, to deliver to the
Master Servicer an annual statement of compliance within the time frame set
forth in, and in such form and substance as may be required pursuant to, the
related Servicing Agreement The Master Servicer shall include such annual
statements of compliance with its own annual statement of compliance to be
submitted to the Securities Administrator pursuant to this Section.
As set forth on Exhibit O hereto, no later than March 15 of each
year that the Trust is subject to the Exchange Act reporting requirements,
commencing in 2007 and continuing until the Trust has been deregistered with
the Commission, (i) certain parties to the GSAA Home Equity Trust 2006-16
Asset-Backed Certificates transaction shall be required to provide to the
Securities Administrator and the Depositor, to the extent known, in
XXXXX-compatible form, or in such other form as otherwise agreed upon by the
Securities Administrator and such party, the form and substance of any
Additional Form 10-K Disclosure, if applicable, and (ii) the Depositor shall
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-K Disclosure on Form 10-K. The Depositor
shall be responsible for any reasonable fees and expenses assessed or incurred
by the Securities Administrator in connection with including any Additional
Form 10-K Disclosure on Form 10-K pursuant to this Section 13.04.
After preparing the Form 10-K, the Securities Administrator shall
forward electronically a draft copy of the Form 10-K to the Depositor for
review. No later than 12:00 noon New York City time on the fourth Business Day
prior to the 10-K Filing Deadline, a senior officer of the Depositor shall
sign the Form 10-K and return such signed Form 10-K to the Securities
Administrator. If a Form 10-K cannot be filed on time or if a previously filed
Form
124
10-K needs to be amended, the Securities Administrator will follow the
procedures set forth in 13.01. Promptly (but no later than one (1) Business
Day) after filing with the Commission, the Securities Administrator will make
available on its internet website located at (located at xxx.xxxxxxx.xxx) a
final executed copy of each Form 10-K prepared by the Securities
Administrator. The parties to this Agreement acknowledge that the performance
by the Securities Administrator of its duties under this Section 13.04 related
to the timely preparation and filing of Form 10-K is contingent upon such
parties (and any Additional Servicer or Servicing Function Participant)
strictly observing all applicable deadlines in the performance of their duties
under this Section 13.04, Section 13.06, Section 13.01 and Section 13.07. The
Securities Administrator shall have no liability for any loss, expense,
damage, claim arising out of or with respect to any failure to properly
prepare and/or timely file such Form 10-K, where such failure results from the
Securities Administrator's inability or failure to receive on a timely basis,
any information from any other party hereto needed to prepare, arrange for
execution or file such Form 10-K, not resulting from its own negligence, bad
faith or willful misconduct.
Form 10-K requires the registrant to indicate (by checking "yes"
or "no") that it "(1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days." The
Depositor shall notify the Securities Administrator in writing, no later than
March 15th if the answer to the questions should be "no". The Securities
Administrator shall be entitled to rely on such representations in preparing,
executing and/or filing any such report.
Section 13.05 Form 15 Filing.
Prior to January 30 of the first year in which the Securities
Administrator is able to do so under applicable law, the Securities
Administrator shall prepare, sign and file a Form 15 relating to the automatic
suspension of reporting in respect of the Trust Fund under the Exchange Act.
Section 13.06 Xxxxxxxx-Xxxxx Certification.
Each Form 10-K shall include a certification, (the "Xxxxxxxx-Xxxxx
Certification") required by Rules 13a-14(d) and 15(d)-14(d) under the Exchange
Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002 and the rules
and regulations of the Commission promulgated thereunder). Each Servicer, the
Securities Administrator and the Master Servicer shall cause any Servicing
Function Participant engaged by it to provide to the Person who signs the
Xxxxxxxx-Xxxxx Certification (the "Certifying Person"), by March 15 of each
year in which the Trust is subject to the reporting requirements of the
Exchange Act and otherwise within a reasonable period of time upon request, a
certification (each, a "Back-Up Certification"), in the form attached hereto
as Exhibit J-1 (in the case of the Master Servicer) and Exhibit J-2 (in the
case of the Securities Administrator), upon which the Certifying Person, the
entity for which the Certifying Person acts as an officer, and such entity's
officers, directors and Affiliates (collectively with the Certifying Person,
"Certification Parties") can reasonably rely. The Depositor shall serve as the
Certifying Person on behalf of the Trust. In the event that prior to the
filing date of the Form 10-K in March of each year, the Securities
Administrator or the Master Servicer has actual knowledge of information
material to the Xxxxxxxx-Xxxxx
125
Certification, the Securities Administrator or the Master Servicer, as the
case may be, shall promptly notify the Depositor. The respective parties
hereto agree to cooperate with all reasonable requests made by any Certifying
Person or Certification Party in connection with such Person's attempt to
conduct any due diligence that such Person reasonably believes to be
appropriate in order to allow it to deliver any Xxxxxxxx-Xxxxx Certification
or portion thereof with respect to the Trust Fund. In the event the Master
Servicer, the Securities Administrator or any Servicing Function Participant
engaged by parties is terminated or resigns pursuant to the terms of this
Agreement, or any applicable sub-servicing agreement, as the case may be, such
party shall provide a Back-Up Certification to the Certifying Person pursuant
to this Section 13.06 with respect to the period of time it was subject to
this Agreement or any applicable sub-servicing agreement, as the case may be.
The Master Servicer shall enforce any obligation of the Servicers,
to the extent set forth in the related Servicing Agreement, to deliver to the
Master Servicer a certification similar to the Back-Up Certification within
the time frame set forth in, and in such form and substance as may be required
pursuant to, the related Servicing Agreement.
Section 13.07 Report on Assessment of Compliance and Attestation.
(a) On or before March 15th of each calendar year, commencing in
2007:
(1) Each of the Master Servicer, the Securities
Administrator and the Custodians shall deliver to the Depositor and the
Securities Administrator a report regarding the Master Servicer's, the
Securities Administrator's or Custodians', as applicable, assessment of
compliance with the Servicing Criteria applicable to it 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; provided, however, the Securities
Administrator and Custodians shall deliver such report until a Form 15 is
filed pursuant to Section 13.06. Such report shall be signed by an authorized
officer of such Person and shall address each of the Servicing Criteria
applicable to it identified in Exhibit K hereto delivered to the Depositor
concurrently with the execution of this Agreement. To the extent any of the
Servicing Criteria so specified are not applicable to such Person, with
respect to asset-backed securities transactions taken as a whole involving
such Person and that are backed by the same asset type backing the
Certificates, such report shall include such a statement to that effect. The
Depositor and its respective officers and directors shall be entitled to rely
on upon each such servicing criteria assessment.
(2) Each of the Master Servicer, the Securities
Administrator and the Custodians shall deliver to the Depositor, the
Securities Administrator and the Master Servicer a report of a registered
public accounting firm that attests to, and reports on, the assessment of
compliance made by Master Servicer, the Securities Administrator or the
Custodians, as applicable, and delivered pursuant to the preceding paragraphs.
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, including,
without limitation that in the event that an overall opinion cannot be
expressed, such registered public accounting firm shall state in such report
why it was unable to express such an opinion. Such report must be available
for general use and not contain restricted use language. To the extent any of
the Servicing Criteria are not applicable to such Person, with respect to
asset-backed securities transactions taken as a whole involving such Person
and that
126
are backed by the same asset type backing the Certificates, such report shall
include such a statement to that effect.
(3) The Master Servicer shall cause each Servicer and
Reporting Subcontractor to deliver to the Depositor an assessment of
compliance and accountant's attestation as and when provided in paragraphs (a)
and (b) of this Section 13.07.
(4) The Securities Administrator shall cause each Reporting
Subcontractor under its employ, if any, to deliver to the Depositor and the
Master Servicer an assessment of compliance and accountant's attestation as
and when provided in paragraphs (a) and (b) of this Section.
(b) Each assessment of compliance provided by the Securities
Administrator, the Master Servicer or the Custodians pursuant to Section
13.07(a)(2) shall address each of the Servicing Criteria applicable to it
specified on a Exhibit K hereto delivered to the Depositor concurrently with
the execution of this Agreement or, in the case of a securities administrator,
master servicer or custodian subsequently appointed as such, on or prior to
the date of such appointment. An assessment of compliance provided by a
Subcontractor pursuant to Section 13.07(a)(3) or (4) need not address any
elements of the Servicing Criteria other than those specified pursuant to
Section 13.07(a)(1).
Section 13.08 Use of Subservicers and Subcontractors.
(a) The Master Servicer shall cause any subservicer used by the
Master Servicer and shall cause each Servicer to cause any subservicer used by
such servicer for the benefit of the Depositor to comply with the provisions
of this Article XIII to the same extent as if such Servicer or subservicer
were the Master Servicer (except with respect to the Master Servicer's duties
with respect to preparing and filing any Exchange Act Reports or as the
Certifying Person). The Master Servicer shall be responsible for obtaining
from each Servicer and subservicer and delivering to the Depositor any
servicer compliance statement required to be delivered by such Servicer or
subservicer pursuant to the second paragraph of Section 13.04, any assessment
of compliance and attestation required to be delivered by such Servicer or
subservicer under Section 13.07 and any certification required to be delivered
to the Certifying Person under Section 13.05 as and when required to be
delivered.
(b) It shall not be necessary for the Master Servicer, any
Servicer, any subservicer or the Securities Administrator to seek the consent
of the Depositor or any other party hereto to the utilization of any
Subcontractor. The Master Servicer or the Securities Administrator, as
applicable, shall promptly upon request provide to the Depositor (or any
designee of the Depositor, such as the Master Servicer or administrator) a
written description (in form and substance satisfactory to the Depositor) of
the role and function of each Subcontractor utilized by such Person (or in the
case of the Master Servicer, any Servicer or any subservicer), specifying (i)
the identity of each such Subcontractor, (ii) which (if any) of such
Subcontractors are "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the
Servicing Criteria will be addressed in assessments of compliance provided by
each Subcontractor identified pursuant to clause (ii) of this paragraph.
127
As a condition to the utilization of any Subcontractor determined
to be a Reporting Subcontractor, the Master Servicer or the Securities
Administrator, as applicable, shall cause any such Subcontractor used by such
Person (or in the case of the Master Servicer, any Servicer or any
subservicer) for the benefit of the Depositor to comply with the provisions of
Section 13.07 of this Agreement to the same extent as if such Subcontractor
were the Master Servicer (except with respect to the Master Servicer's duties
with respect to preparing and filing any Exchange Act Reports or as the
Certifying Person) or the Securities Administrator, as applicable. The Master
Servicer or the Securities Administrator, as applicable, shall be responsible
for obtaining from each Subcontractor and delivering to the Depositor and the
Master Servicer, any assessment of compliance and attestation required to be
delivered by such Subcontractor under Section 13.07, in each case as and when
required to be delivered.
* * * * * * *
128
IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
GS MORTGAGE SECURITIES CORP.
By: /s/ Xxxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxxx Xxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely in its capacity as Trustee and
Custodian and not in its individual
capacity
By: /s/ Xxxxxxx Xxxxx
--------------------------------------
Name: Xxxxxxx Xxxxx
Title: Assistant Vice President
By:
--------------------------------------
Name:
Title:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Master Servicer and Securities
Administrator
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
[SIGNATURES CONTINUE]
2
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as a Custodian
By: /s/ Xxxx Xxxxx
--------------------------------------
Name: Xxxx Xxxxx
Title: Vice President
U.S BANK NATIONAL ASSOCIATION, as a
Custodian
By: /s/ Xxxx X. Xxxx
-------------------------------------
Name: Xxxx X. Xxxx
Title: Assistant Vice President
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as a Custodian
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
[SIGNATURES CONTINUE]
Solely for purposes of Sections 9.03(b) and 11.01
accepted and agreed to by:
AVELO MORTGAGE, L.L.C.
By: /s/ J.Xxxxxx Xxxxxxx
-----------------------------------------------------------
Name: J. Xxxxxx Xxxxxxx
Title: President
2
SCHEDULE I
Mortgage Loan Schedule
[On File with the Securities Administrator as provided by the Depositor]
S-I-1
EXHIBIT A
FORM OF CLASS X-0, XXXXX X-0, CLASS A-3-A, CLASS A-3-B,
CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5,
CLASS B-1, CLASS B-2 AND CLASS B-3 CERTIFICATES
[To be added to the Class B-3 Certificates while they remain non-investment
grade Certificates: IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER
THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE (THE "TRANSFEROR CERTIFICATE") IN THE FORM OF EXHIBIT I TO THE
AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE SECURITIES ADMINISTRATOR
RECEIVES A RULE 144A LETTER (THE "RULE 144A LETTER") IN THE FORM OF EXHIBIT H
TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR
RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR,
THAT SUCH TRANSFER MAY BE MADE WITHOUT-REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED.]
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL
BE DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
[To be added to the Class B-3 Certificates while they remain Private
Certificates: NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE
TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR
EITHER A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975
OF THE CODE, OR A PLAN SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW
("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE
CODE OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN,
OR, IF THE TRANSFEREE IS AN INSURANCE COMPANY, A REPRESENTATION LETTER THAT IT
IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING
OF THIS CERTIFICATE SATISFY THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER
SECTIONS I AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE, THE SECURITIES ADMINISTRATOR
AND THE DEPOSITOR, TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY
SIMILAR LAW AND WILL NOT SUBJECT THE DEPOSITOR, THE TRUSTEE, THE MASTER
SERVICER, THE SERVICERS OR THE SECURITIES ADMINISTRATOR TO ANY OBLIGATION IN
A-1
ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR TO ANY LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER
OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO
TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE
REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES
ADMINISTRATOR, TRUSTEE AND DEPOSITOR AS DESCRIBED ABOVE SHALL BE VOID AND OF
NO EFFECT.]
IN THE EVENT THAT A TRANSFER OF A PRIVATE CERTIFICATE WHICH IS A BOOK-ENTRY
CERTIFICATE IS TO BE MADE IN RELIANCE UPON AN EXEMPTION FROM THE SECURITIES
ACT AND SUCH LAWS, IN ORDER TO ASSURE COMPLIANCE WITH THE SECURITIES ACT AND
SUCH LAWS, THE CERTIFICATEHOLDER DESIRING TO EFFECT SUCH TRANSFER WILL BE
DEEMED TO HAVE MADE AS OF THE TRANSFER DATE EACH OF THE CERTIFICATIONS SET
FORTH IN THE TRANSFEROR CERTIFICATE IN RESPECT OF SUCH CERTIFICATE AND THE
TRANSFEREE WILL BE DEEMED TO HAVE MADE AS OF THE TRANSFER DATE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER IN RESPECT OF SUCH
CERTIFICATE, IN EACH CASE AS IF SUCH CERTIFICATE WERE EVIDENCED BY A PHYSICAL
CERTIFICATE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN
OTHER ASSETS.
[To be added to the Class B-3 Certificates while they remain Private
Certificates: THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS
CERTIFICATE WITHOUT REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A
TRANSACTION EXEMPTED FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN
ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.]
A-2
Certificate No. :
Cut-off Date : September 1, 2006
First Distribution Date : October 25, 2006
Initial Certificate Balance of
this Certificate
("Denomination") :
Initial Certificate Balances of
all Certificates of this Class :
CUSIP
ISIN
A-3
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-16
Asset-Backed Certificates, Series 2006-16
[Class A-1][Class A-2][Class A-3-A][Class A-3-B]
[Class M-1][Class M-2][Class M-3][Class M-4][Class M-5]
[Class B-1][Class B-2][Class B-3]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly
as set forth herein. Accordingly, the Certificate Balance at any time may be
less than the Certificate Balance as set forth herein. This Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Master Servicer, the Securities Administrator or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain
monthly distributions pursuant to a Master Servicing and Trust Agreement dated
as of the Cut-off Date specified above (the "Agreement") among GS Mortgage
Securities Corp., as depositor (the "Depositor"), Deutsche Bank National Trust
Company, as trustee (the "Trustee") and as a custodian, Xxxxx Fargo Bank,
National Association, as Master Servicer (in such capacity, the "Master
Servicer"), Securities Administrator (in such capacity, the "Securities
Administrator") and as a custodian, JPMorgan Chase Bank, National Association,
as a custodian, Deutsche Bank National Trust Company, as a custodian and U.S.
Bank National Association, as a custodian. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
A-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
------------------------------------
Authenticated:
By:
----------------------------------------
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
A-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-16
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-16 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
for each Distribution Date is the last Business Day of the applicable Interest
Accrual Period for the related Distribution Date; provided, however, that for
any Definitive Certificates, the Record Date shall be the last Business Day of
the month immediately preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank
or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Securities Administrator in
writing at least five (5) Business Days prior to the related Record Date and
such Certificateholder shall satisfy the conditions to receive such form of
payment set forth in the Agreement, or, if not, by check mailed by first class
mail to the address of such Certificateholder appearing in the Certificate
Register. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office designated by the Securities Administrator for such purposes, or such
other location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Trustee and the rights of the Certificateholders under the Agreement at
any time by the Depositor, the Trustee and the other parties to the Agreement
with the consent of the Holders of Certificates affected by such
A-6
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange therefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Securities Administrator may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee, the Depositor and the Securities Administrator and
any agent of the Trustee, the Depositor or the Securities Administrator may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Trustee, the
Securities Administrator, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 11.01 of the Agreement
will have the option to effectuate the purchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined and in the manner as provided in
the Agreement. The obligations and responsibilities created by this Agreement
will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
A-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_____________________________________________________________________________.
Dated:
_________________________________________
Signature by or on behalf of assignor
B-8
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______, or, if mailed by check, to ___________________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
A-9
EXHIBIT B
FORM OF CLASS P CERTIFICATE
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE (THE "TRANSFEROR CERTIFICATE") IN THE FORM OF EXHIBIT H TO THE
AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE SECURITIES ADMINISTRATOR
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR RECEIVES AN OPINION OF COUNSEL,
DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN
SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR IF THE TRANSFEREE IS AN
INSURANCE COMPANY AND THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION LETTER THAT IT IS USING THE
ASSETS OF ITS GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE SATISFY THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR,
TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING
OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT SUBJECT THE
TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR OR THE SECURITIES ADMINISTRATOR TO
ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR
TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE
SECURITIES ADMINISTRATOR AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
B-1
Certificate No. : 1
Cut-off Date : September 1, 2006
First Distribution Date : October 25, 2006
Percentage Interest of this Certificate
("Denomination") : [_____]%
CUSIP :
ISIN :
B-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-16
Asset-Backed Certificates, Series 2006-16
Class P
evidencing a percentage interest in the distributions allocable to the
Certificates of the above referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Master
Servicer, the Securities Administrator or the Trustee referred to below or any
of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_______________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate of the
denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Master Servicing and
Trust Agreement dated as of the Cut-off Date specified above (the "Agreement")
among GS Mortgage Securities Corp., as depositor (the "Depositor"), Deutsche
Bank National Trust Company, as trustee (the "Trustee") and as a custodian,
Xxxxx Fargo Bank, National Association, as Master Servicer (in such capacity,
the "Master Servicer"), Securities Administrator (in such capacity, the
"Securities Administrator") and as a custodian, JPMorgan Chase Bank, National
Association, as a custodian and U.S. Bank National Association, as a
custodian. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the
Trust will be made only upon presentment and surrender of this Certificate at
the office designated by the Securities Administrator for such purposes or the
office or agency maintained by the Securities Administrator.
No transfer of a Certificate of this Class shall be made unless
such disposition is exempt from the registration requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and any applicable state
securities laws or is made in accordance with the 1933 Act and such laws. In
the event of any such transfer, the Securities Administrator shall require the
transferor to execute a transferor certificate (in substantially the form
attached to the Agreement) and deliver either (i) a Rule 144A Letter, (in
substantially the form attached to the Agreement), or (ii) a written Opinion
of Counsel to the Securities Administrator that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the 1933 Act or is being made pursuant to the 1933 Act, which
Opinion of Counsel shall be an expense of the transferor. No transfer of a
Certificate of this Class shall be made unless
B-3
the Securities Administrator shall have received either (i) a representation
letter from the transferee of such Certificate, acceptable to and in form and
substance satisfactory to the Securities Administrator, to the effect that
such transferee is not an employee benefit plan subject to Section 406 of
ERISA or Section 4975 of the Code or any materially similar provisions of
applicable federal, state or local law ("Similar Law") or a person acting on
behalf of or investing plan assets of any such plan, which representation
letter shall not be an expense of the Securities Administrator, or (ii) if the
transferee is an insurance company and the certificate has been the subject of
an ERISA-Qualifying Underwriting, a representation letter that it is
purchasing such Certificates with the assets of its general account and that
the purchase and holding of such Certificates satisfy the requirements for
exemptive relief under Sections I and III of PTCE 95-60, or (iii) in the case
of a Certificate presented for registration in the name of an employee benefit
plan subject to ERISA, or a plan or arrangement subject to Section 4975 of the
Code (or comparable provisions of any subsequent enactments) or a plan subject
to Similar Law, or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Securities Administrator,
which Opinion of Counsel shall not be an expense of the Securities
Administrator, the Depositor, the Trustee or the Trust Fund, addressed to the
Securities Administrator, the Trustee and the Depositor to the effect that the
purchase and holding of such Certificate will not constitute or result in a
non-exempt prohibited transaction within the meaning of ERISA, Section 4975 of
the Code or any Similar Law and will not subject the Trustee to any obligation
in addition to those expressly undertaken in this Agreement or to any
liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
* * *
B-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
------------------------------------
Authenticated:
By:
----------------------------------------
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
B-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-16
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-16 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing
on the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
for each Distribution Date is the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank
or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Securities Administrator in
writing at least five (5) Business Days prior to the related Record Date and
such Certificateholder shall satisfy the conditions to receive such form of
payment set forth in the Agreement, or, if not, by check mailed by first class
mail to the address of such Certificateholder appearing in the Certificate
Register. The final distribution on each Certificate will be made in like
manner, but only upon presentment and surrender of such Certificate at the
office designated by the Securities Administrator for such purposes or such
other location specified in the notice to Certificateholders of such final
distribution.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Trustee and the rights of the Certificateholders under the Agreement at
any time by the Trustee and the other parties to the Agreement with the
consent of the Holders of Certificates affected by such amendment evidencing
the requisite Percentage Interest, as provided in the Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future
B-6
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of
such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in
the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage
Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange, but the Securities Administrator may require payment of
a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Trustee, the Depositor and the Securities Administrator and
any agent of the Trustee, the Depositor or the Securities Administrator may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Trustee, the Depositor, the
Securities Administrator, nor any such agent shall be affected by any notice
to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 11.01 of the Agreement
will have the option to effectuate the purchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined and in the manner as provided in
the Agreement. The obligations and responsibilities created by this Agreement
will terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have
the meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
B-7
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_____________________________________________________________________________.
Dated:
_________________________________________
Signature by or on behalf of assignor
A-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______, or, if mailed by check, to ___________________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _______,
the assignee named above, or ,
as its agent.
B-9
EXHIBIT C
FORM OF CLASS R, CLASS RC AND CLASS RX CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER
AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO
HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A
PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW")
OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR AN
OPINION OF COUNSEL AS DESCRIBED IN THE AGREEMENT. IN THE EVENT THAT SUCH
REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT
WITHOUT AN OPINION OF COUNSEL AS DESCRIBED IN THE AGREEMENT, SUCH ATTEMPTED
TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : [R][RC][RX]
Cut-off Date : September 1, 2006
First Distribution Date : October 25, 2006
Initial Certificate Balance of this
Certificate ("Denomination") : $100
Initial Certificate Balance of all
Certificates of this Class: : $100
CUSIP :
ISIN :
C-1
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-16
Asset-Backed Certificates, Series 2006-16
Class [R][RC][RX]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as set
forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Master Servicer, the Securities Administrator or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [____________] is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class [R][RC][RX] Certificates pursuant to a Master Servicing and Trust
Agreement dated as of the Cut-off Date specified above (the "Agreement") among
GS Mortgage Securities Corp., as depositor (the "Depositor"), Deutsche Bank
National Trust Company, as trustee (the "Trustee") and as a custodian, Xxxxx
Fargo Bank, National Association, as Master Servicer (in such capacity, the
"Master Servicer"), Securities Administrator (in such capacity, the
"Securities Administrator") and as a custodian, JPMorgan Chase Bank, National
Association, as a custodian and U.S. Bank National Association, as a
custodian. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class
[R][RC][RX] Certificate at the office designated by the Securities
Administrator for such purposes.
No transfer of a Class [R][RC][RX] Certificate shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section
406 of ERISA, a plan or arrangement subject to Section 4975 of the Code or a
plan subject to Similar Law, or a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement to effect such
transfer, which representation letter shall not be an expense of the
Securities Administrator or the Trust Fund, or, alternatively, an opinion of
counsel as described in the Agreement. In the event that such representation
is violated, or any attempt is made to transfer to a plan or arrangement
subject to Section 406 of ERISA or a plan subject to Section 4975 of the Code
or a plan subject to Similar Law, or a person acting on behalf of any such
plan or arrangement or using the assets of any such plan or arrangement,
without an opinion
C-2
of counsel as described in the Agreement, such attempted transfer or
acquisition shall be void and of no effect.
Each Holder of this Class [R][RC][RX] Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class [R][RC][RX]
Certificate to have agreed to be bound by the following provisions, and the
rights of each Person acquiring any Ownership Interest in this Class
[R][RC][RX] Certificate are expressly subject to the following provisions: (i)
each Person holding or acquiring any Ownership Interest in this Class
[R][RC][RX] Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in its
status as a Permitted Transferee, (ii) no Ownership Interest in this Class
[R][RC][RX] Certificate may be registered on the Closing Date or thereafter
transferred, and the Securities Administrator shall not register the Transfer
of this Certificate unless, in addition to the certificates required to be
delivered to the Securities Administrator under Section 5.02(b) of the
Agreement, the Securities Administrator shall have been furnished with a
Transfer Affidavit of the initial owner or the proposed transferee in the form
attached as Exhibit G to the Agreement, (iii) each Person holding or acquiring
any Ownership Interest in this Class [R][RC][RX] Certificate shall agree (A)
to obtain a Transfer Affidavit from any other Person to whom such Person
attempts to Transfer its Ownership Interest this Class [R][RC][RX]
Certificate, (B) to obtain a Transfer Affidavit from any Person for whom such
Person is acting as nominee, trustee or agent in connection with any Transfer
of this Class [R][RC][RX] Certificate, (C) not to cause income with respect to
the Class [R][RC][RX] Certificate to be attributable to a foreign permanent
establishment or fixed base, within the meaning of an applicable income tax
treaty, of such Person or any other U.S. Person and (D) not to Transfer the
Ownership Interest in this Class [R][RC][RX] Certificate or to cause the
Transfer of the Ownership Interest in this Class [R][RC][RX] Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class [R][RC][RX] Certificate in violation of the
provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
C-3
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
------------------------------------
Authenticated:
By:
----------------------------------------
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
C-4
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-16
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as GSAA Home Equity Trust 2006-16 Asset-Backed Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account
for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name
this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date for each
Distribution Date is the last Business Day of the month immediately preceding
the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
Securities Administrator for such purposes, or such other location specified
in the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any
time by the Depositor, the Trustee and the other parties to the Agreement with
the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder
C-5
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Securities Administrator upon surrender of this Certificate
for registration of transfer at the office designated by the Securities
Administrator for such purposes, accompanied by a written instrument of
transfer in form satisfactory to the Securities Administrator duly executed by
the holder hereof or such holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest in the
Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates
are exchangeable for new Certificates of the same Class in authorized
denominations and evidencing the same aggregate Percentage Interest, as
requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Trustee, the Depositor, the Securities Administrator and any agent
of the Trustee, the Depositor or the Securities Administrator may treat the
Person in whose name this Certificate is registered as the owner hereof for
all purposes, and none of the Depositor, the Trustee or Securities
Administrator, nor any such agent shall be affected by any notice to the
contrary.
On any Distribution Date on which the aggregate Stated Principal Balance
of the Mortgage Loans is less than or equal to 10% of the Cut-off Date Pool
Principal Balance, the Person specified in Section 11.01 of the Agreement will
have the option to effectuate the purchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined and in the manner as provided in the
Agreement. The obligations and responsibilities created by this Agreement will
terminate as provided in Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
C-6
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address:
_____________________________________________________________________________.
Dated:
_________________________________________
Signature by or on behalf of assignor
C-7
DISTRIBUTION INSTRUCTIONS
-------------------------
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ______, or, if mailed by check, to ___________________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
C-8
EXHIBIT D
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER ASSETS
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR
CERTIFICATE (THE "TRANSFEROR CERTIFICATE") IN THE FORM OF EXHIBIT H TO THE
AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE SECURITIES ADMINISTRATOR
RECEIVES A RULE 144A LETTER (THE "RULE 144A LETTER") IN THE FORM OF EXHIBIT I
TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR
RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR,
THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN
SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR IF THE TRANSFEREE IS AN
INSURANCE COMPANY AND THE CERTIFICATE HAS BEEN THE SUBJECT OF AN
ERISA-QUALIFYING UNDERWRITING, A REPRESENTATION LETTER THAT IT IS USING THE
ASSETS OF ITS GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS
CERTIFICATE SATISFY THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND
III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, THE SECURITIES ADMINISTRATOR AND THE DEPOSITOR,
TO THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION WITHIN THE MEANING
OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT SUBJECT THE
TRUSTEE, THE MASTER SERVICER, THE DEPOSITOR OR THE SECURITIES ADMINISTRATOR TO
ANY OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR
TO ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION
D-1
LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR AS
DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : X-1
Cut-off Date : September 1, 2006
First Distribution Date : October 25, 2006
Percentage Interest of this
Certificate ("Denomination") : 100%
CUSIP :
ISIN :
D-2
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-16
Asset-Backed Certificates, Series 2006-16
Class X
evidencing a percentage interest in the distributions
allocable to the Certificates of the above-referenced
Class.
Distributions in respect of this Certificate are
distributable monthly as set forth herein. This Certificate does not evidence
an obligation of, or an interest in, and is not guaranteed by the Depositor
the Master Servicer, to Securities Administrator or the Trustee referred to
below or any of their respective affiliates. Neither this Certificate nor the
Mortgage Loans are guaranteed or insured by any governmental agency or
instrumentality.
This certifies that [_______________________] is the
registered owner of the Percentage Interest evidenced by this Certificate
(obtained by dividing the denomination of this Certificate by the aggregate of
the denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Master Servicing and
Trust Agreement dated as of the Cut-off Date specified above (the "Agreement")
among GS Mortgage Securities Corp., as depositor (the "Depositor"), Deutsche
Bank National Trust Company, as trustee (the "Trustee") and as a custodian,
Xxxxx Fargo Bank, National Association, as Master Servicer (in such capacity,
the "Master Servicer"), Securities Administrator (in such capacity, the
"Securities Administrator") and as a Custodian, JPMorgan Chase Bank, National
Association, as a custodian and U.S. Bank National Association, as a
custodian. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and
will be entitled to distributions only to the extent set
forth in the Agreement. In addition, any distribution of the proceeds of any
remaining assets of the Trust will be made only upon presentment and surrender
of this Certificate at the office designated by the Securities Administrator
for such purposes or the office or agency maintained by the Securities
Administrator.
No transfer of a Certificate of this Class shall be made
unless such disposition is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "1933 Act"), and
any applicable state securities laws or is made in accordance with the 1933
Act and such laws. In the event of any such transfer, the Securities
Administrator shall require the transferor to execute a transferor certificate
(in substantially the form attached to the Agreement) and deliver either (i) a
Rule 144A Letter (in substantially the form attached to the Agreement), or
(ii) a written Opinion of Counsel to the Securities Administrator that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant
to the 1933 Act, which Opinion of Counsel shall be an expense of the
transferor. No transfer of a Certificate of this Class shall be made unless
the
D-3
Securities Administrator shall have received either (i) a representation
letter from the transferee of such Certificate, acceptable to and in form and
substance satisfactory to the Securities Administrator, to the effect that
such transferee is not an employee benefit plan subject to Section 406 of
ERISA or Section 4975 of the Code or any materially similar provisions of
applicable federal, state or local law ("Similar Law") or a person acting on
behalf of or investing plan assets of any such plan, which representation
letter shall not be an expense of the Securities Administrator, or (ii) if the
transferee is an insurance company and the certificate has been the subject of
an ERISA-Qualifying Underwriting, a representation letter that it is
purchasing such Certificates with the assets of its general account and that
the purchase and holding of such Certificates satisfy the requirements for
exemptive relief under Sections I and III of PTCE 95-60, or (iii) in the case
of a Certificate presented for registration in the name of an employee benefit
plan subject to ERISA, or a plan or arrangement subject to Section 4975 of the
Code (or comparable provisions of any subsequent enactments) or a plan subject
to Similar Law, or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Securities Administrator,
which Opinion of Counsel shall not be an expense of the Securities
Administrator, the Depositor, the Trustee or the Trust Fund, addressed to the
Securities Administrator, the Trustee and the Depositor to the effect that the
purchase and holding of such Certificate will not constitute or result in a
non-exempt prohibited transaction within the meaning of ERISA, Section 4975 of
the Code or any Similar Law and will not subject the Trustee to any obligation
in addition to those expressly undertaken in this Agreement or to any
liability.
Reference is hereby made to the further provisions of
this Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit
under the Agreement or be valid for any purpose unless manually authenticated
by an authorized signatory of the Securities Administrator.
* * *
D-4
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
By:
------------------------------------
Authenticated:
By:
----------------------------------------
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
D-5
GS MORTGAGE SECURITIES CORP.
GSAA Home Equity Trust 2006-16
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of
Certificates designated as GSAA Home Equity Trust 2006-16
Asset-Backed Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this
Certificate, agrees that it will look solely to the funds on
deposit in the Distribution Account for payment hereunder and that the Trustee
is not liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the
Agreement, subject to any liability under the Agreement.
This Certificate does not purport to summarize the
Agreement and reference is made to the Agreement for the
interests, rights and limitations of rights, benefits, obligations and duties
evidenced thereby, and the rights, duties and immunities of the Trustee and
the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution
will be made on the 25th day of each month or, if such
25th day is not a Business Day, the Business Day immediately following (the
"Distribution Date"), commencing on the first Distribution Date specified on
the face hereof, to the Person in whose name this Certificate is registered at
the close of business on the applicable Record Date in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to Holders of Certificates of the Class to
which this Certificate belongs on such Distribution Date pursuant to the
Agreement. The Record Date for each Distribution Date is the last Business Day
of the month immediately preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire
transfer of immediately available funds to the account
of the Holder hereof at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have so notified the Securities
Administrator in writing at least five (5) Business Days prior to the related
Record Date and such Certificateholder shall satisfy the conditions to receive
such form of payment set forth in the Agreement, or, if not, by check mailed
by first class mail to the address of such Certificateholder appearing in the
Certificate Register. The final distribution on each Certificate will be made
in like manner, but only upon presentment and surrender of such Certificate at
the office designated by the Securities Administrator for such purposes or
such other location specified in the notice to Certificateholders of such
final distribution.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of
the rights and obligations of the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Trustee and the
other parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future
D-6
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of
such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register of the Securities Administrator upon surrender of
this Certificate for registration of transfer at the office designated by the
Securities Administrator for such purposes, accompanied by a written
instrument of transfer in form satisfactory to the Securities Administrator
duly executed by the holder hereof or such holder's attorney duly authorized
in writing, and thereupon one or more new Certificates of the same Class in
authorized denominations and evidencing the same aggregate Percentage Interest
in the Trust Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered
Certificates without coupons in denominations specified in the
Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class in authorized denominations and evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration
of transfer or exchange, but the Securities
Administrator may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
The Trustee, the Depositor and the Securities
Administrator and any agent of the Trustee, the Depositor or the
Securities Administrator may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Trustee,
the Depositor, the Securities Administrator, nor any such agent shall be
affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans is less than or
equal to 10% of the Cut-off Date Pool Principal Balance, the Person or Persons
specified in Section 11.01 of the Agreement will have the option to effectuate
the purchase, in whole, from the Trust Fund all remaining Mortgage Loans and
all property acquired in respect of the Mortgage Loans at a purchase price
determined and in the manner as provided in the Agreement. The obligations and
responsibilities created by this Agreement will terminate as provided in
Section 11.01 of the Agreement.
Any term used herein that is defined in the Agreement
shall have the meaning assigned in the Agreement, and nothing herein shall be
deemed inconsistent with that meaning.
D-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto_________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to
issue a new Certificate of a like denomination and Class, to the above named
assignee and deliver such Certificate to the following address:
-----------------------------------------------------------------------------.
Dated:
_______________________________________________
Signature by or on behalf of assignor
D-8
DISTRIBUTION INSTRUCTIONS
Distributions shall be made, by wire transfer or
otherwise, in immediately available funds to _________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ______, or, if mailed by check, to ____________________________.
Applicable statements should be mailed to ____________________________________,
This information is provided by _________________________,
the assignee named above, or _________________________________________________,
as its agent.
D-9
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
[Depositor]
[Trustee]
---------------------
---------------------
Re: Master Servicing and Trust Agreement, dated as
of September 1, 2006 (the "Agreement"), among
GS Mortgage Securities Corp., as depositor (the
"Depositor"), Deutsche Bank National Trust
Company, as trustee (in such capacity, the
"Trustee"), JPMorgan Chase Bank, National
Association, Deutsche Bank National Trust
Company and U.S. Bank National Association,
each as a custodian, and Xxxxx Fargo Bank,
National Association, as master servicer (in
such capacity, the "Master Servicer")
securities administrator (in such capacity, the
"Securities Administrator") and as a custodian
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned
Master Servicing and Trust Agreement (the "Trust Agreement"), the undersigned,
as Custodian, for each Mortgage Loan listed in the Mortgage Loan Schedule for
which the undersigned is specified as the Custodian (other than any Mortgage
Loan listed in the attached exception report), it has received:
(i) the original Mortgage Note, endorsed as provided
in the following form: "Pay to the order of ________,
without recourse"; and
(ii) except with respect to a MERS Loan, an executed
Assignment of Mortgage (which may be included in a blanket
assignment or assignments).
Based on its review and examination and only as to the
foregoing documents, such documents appear regular on
their face and related to such Mortgage Loan.
The Custodian has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Trust Agreement. The Custodian makes no representations as to:
(i) the validity, legality, sufficiency, enforceability, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such
Mortgage Loan or the perfection or priority of any Mortgage. Notwithstanding
anything herein to the contrary, the Custodian has made no determination and
makes no representations as to whether (i) any endorsement is sufficient to
E-1
transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Trust
Agreement.
[DEUTSCHE BANK NATIONAL TRUST
COMPANY][JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION][U.S. BANK
NATIONAL ASSOCIATION][XXXXX FARGO
BANK, NATIONAL ASSOCIATION], not in its
individual capacity, but solely as Custodian
By:_________________________________
Name:_______________________________
Title:________________________________
E-2
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF CUSTODIAN
[date]
[Depositor]
[Trustee]
---------------------
---------------------
Re: Master Servicing and Trust Agreement, dated as
of September 1, 2006 (the "Agreement"), among
GS Mortgage Securities Corp., as depositor (the
"Depositor"), Deutsche Bank National Trust
Company, as trustee (in such capacity, the
"Trustee"), JPMorgan Chase Bank, National
Association, Deutsche Bank National Trust
Company and U.S. Bank National Association,
each as a custodian, and Xxxxx Fargo Bank,
National Association, as master servicer (in
such capacity, the "Master Servicer")
securities administrator (in such capacity, the
"Securities Administrator") and as a custodian
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned
Master Servicing and Trust Agreement (the "Trust
Agreement"), the undersigned, as Custodian, hereby certifies, subject to any
exceptions listed on the exception report attached hereto, that as to each
Mortgage Loan listed in the Mortgage Loan Schedule for which the undersigned
is specified as the Custodian (other than any Mortgage Loan paid in full or
listed on the attached exception report) it has received:
1. the original Mortgage Note, endorsed without recourse
in blank by the last endorsee, including all intervening endorsements showing
a complete chain of endorsement from the originator to the last endorsee;
2. the original Assignment of Mortgage in blank (or, in
the case of the Goldman Conduit Mortgage Loans, in form and substance
acceptable for recording or if the Mortgage is to be recorded, assigned to the
Trustee or in blank), unless the Mortgage Loan is a MERS Loan, and in the case
of the SunTrust Mortgage Loans, blanket assignments for Mortgage Loans;
F-1
3. personal endorsement and/or guaranty agreements
executed in connection with all non individual Mortgage Loans (corporations,
partnerships, trusts, estates, etc. (if provided);
4. the related original Mortgage and evidence of its
recording or a certified copy of the Mortgage with evidence of recording
thereof;
5. originals of any intervening Mortgage assignment or
certified copies in either case necessary to show a complete chain of title
from the original mortgagee to the seller and evidencing recording; provided,
that, except in the case of the Goldman Conduit Mortgage Loans, the assignment
may be in the form of a blanket assignment or assignments, a copy of which
with evidence of recording shall be acceptable;
6. if provided, originals of all assumption,
modification, consolidation or extension agreements or certified copies
thereof, in either case with evidence of recording if required to maintain the
lien of the mortgage or if otherwise required, or, if recordation is not
required, an original or copy of the agreement; provided, that, in the case of
the Goldman Conduit Mortgage Loans, an original with evidence of recording
thereon is always required;
7. except with respect to the Countrywide Mortgage Loans,
(if applicable to the files held by the Custodian) an original or copy of a
title insurance policy or evidence of title;
8. to the extent applicable, an original power of
attorney; except in the case of the Goldman Conduit Mortgage Loans, (if
applicable to the files held by the Custodian) an original power of attorney
or, in limited circumstances as set forth in the applicable Servicing
Agreement, a copy of the power of attorney; and
9. except with respect to the Countrywide Mortgage Loans,
(if applicable to the files held by the Custodian) a security agreement,
chattel mortgage or equivalent document executed in connection with the
Mortgage, if any.
Based on its review and examination and only as to the
foregoing documents, (a) such documents appear regular on
their face and related to such Mortgage Loan, and (b) the information set
forth in items 2, 8, 34 and 35 of the Mortgage Loan Schedule accurately
reflects information set forth in the Custodial File.
The Custodian has made no independent examination of any
documents contained in each Mortgage File beyond the review of the Custodial
File specifically required in the Trust Agreement. The Custodian makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such
Mortgage Loan or the perfection or priority of any Mortgage. Notwithstanding
anything herein to the contrary, the Custodian has made no determination and
makes no representations as to whether (i) any endorsement is sufficient to
transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
F-2
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Trust Agreement.
[DEUTSCHE BANK NATIONAL TRUST
COMPANY][JPMORGAN CHASE BANK,
NATIONAL ASSOCIATION][U.S. BANK
NATIONAL ASSOCIATION][XXXXX FARGO
BANK, NATIONAL ASSOCIATION], not in its
individual capacity, but solely as Custodian
By:_________________________________
Name:_______________________________
Title:________________________________
F-3
EXHIBIT G
FORM OF RESIDUAL TRANSFER AFFIDAVIT
GSAA Home Equity Trust 2006-16,
Asset-Backed Certificates, Series 2006-16
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says
as follows:
1. The undersigned is an officer of ___________________,
the proposed Transferee of an Ownership Interest in a Class [R][RC][RX]
Certificate (the "Certificate") issued pursuant to the Master Servicing and
Trust Agreement (the "Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Deutsche Bank National Trust Company, as trustee
(the "Trustee"), Xxxxx Fargo Bank, National Association, as Master Servicer
(in such capacity, the "Master Servicer"), Securities Administrator (in such
capacity, the "Securities Administrator") and as a custodian, U.S. Bank
National Association, as a custodian, Deutsche Bank National Trust Company, as
a custodian and JPMorgan Chase Bank, National Association, as a custodian.
Capitalized terms used, but not defined herein, shall have the meanings
ascribed to such terms in the Agreement. The Transferee has authorized the
undersigned to make this affidavit on behalf of the Transferee for the benefit
of the Depositor, the Securities Administrator and the Trustee.
2. The Transferee is, as of the date hereof, and will be,
as of the date of the Transfer, a Permitted Transferee. The Transferee is
acquiring its Ownership Interest in the Certificate for its own account. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands
that (i) a tax will be imposed on Transfers of the Certificate to Persons that
are not Permitted Transferees; (ii) such tax will be imposed on the
transferor, or, if such Transfer is through an agent (which includes a broker,
nominee or middleman) for a Person that is not a Permitted Transferee, on the
agent; and (iii) the Person otherwise liable for the tax shall be relieved of
liability for the tax if the subsequent Transferee furnished to such Person an
affidavit that such subsequent Transferee is a Permitted Transferee and, at
the time of Transfer, such Person does not have actual knowledge that the
affidavit is false.
4. The Transferee has been advised of, and understands
that a tax will be imposed on a "pass-through entity" holding the Certificate
if at any time during the taxable year of the pass through entity a Person
that is not a Permitted Transferee is the record holder of an interest in such
entity. The Transferee understands that such tax will not be imposed for any
period with respect to which the record holder furnishes to the pass through
entity an affidavit that such record holder is a Permitted Transferee and the
pass through entity does not have actual knowledge that such affidavit is
false. (For this purpose, a "pass through entity" includes a regulated
investment company, a real estate investment trust or common trust fund, a
G-1
partnership, trust or estate, and certain cooperatives and, except as may be
provided in Treasury Regulations, persons holding interests in pass through
entities as a nominee for another Person.)
5. The Transferee has reviewed the provisions of Section
5.02(c) of the Agreement and understands the legal consequences of the
acquisition of an Ownership Interest in the Certificate including, without
limitation, the restrictions on subsequent Transfers and the provisions
regarding voiding the Transfer and mandatory sales. The Transferee expressly
agrees to be bound by and to abide by the provisions of Section 5.02(c) of the
Agreement and the restrictions noted on the face of the Certificate. The
Transferee understands and agrees that any breach of any of the
representations included herein shall render the Transfer to the Transferee
contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit
from any Person to whom the Transferee attempts to Transfer its Ownership
Interest in the Certificate, and in connection with any Transfer by a Person
for whom the Transferee is acting as nominee, trustee or agent, and the
Transferee will not Transfer its Ownership Interest or cause any Ownership
Interest to be Transferred to any Person that the Transferee knows is not a
Permitted Transferee. In connection with any such Transfer by the Transferee,
the Transferee agrees to deliver to the Securities Administrator a certificate
substantially in the form set forth as Exhibit H to the Agreement (a
"Transferor Certificate") to the effect that such Transferee has no actual
knowledge that the Person to which the Transfer is to be made is not a
Permitted Transferee.
7. The Transferee has historically paid its debts as they
have come due, intends to pay its debts as they come due in the future, and
understands that the taxes payable with respect to the Certificate may exceed
the cash flow with respect thereto in some or all periods and intends to pay
such taxes as they become due. The Transferee does not have the intention to
impede the assessment or collection of any tax legally required to be paid
with respect to the Certificate.
8. The Transferee's taxpayer identification number is
__________.
9. The Transferee is a U.S. Person as defined in Code
Section 7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other U.S. person.
12. Check one of the following:
[ ] The present value of the anticipated tax liabilities
associated with holding the Certificate, as applicable, does not exceed the
sum of:
G-2
(i) the present value of any consideration given to the
Transferee to acquire such Certificate;
(ii) the present value of the expected future
distributions on such Certificate; and
(iii) the present value of the anticipated tax savings
associated with holding such Certificate as the related REMIC generates
losses.
For purposes of this calculation, (i) the Transferee is
assumed to pay tax at the highest rate currently specified in Section 11(b) of
the Code (but the tax rate in Section 55(b)(1)(B) of the Code may be used in
lieu of the highest rate specified in Section 11(b) of the Code if the
Transferee has been subject to the alternative minimum tax under Section 55 of
the Code in the preceding two years and will compute its taxable income in the
current taxable year using the alternative minimum tax rate) and (ii) present
values are computed using a discount rate equal to the short-term Federal rate
prescribed by Section 1274(d) of the Code for the month of the transfer and
the compounding period used by the Transferee.
[ ] The transfer of the Certificate complies with U.S.
Treasury Regulations Sections 1.860E-1(c)(5) and (6) and,
accordingly,
(i) the Transferee is an "eligible corporation," as
defined in U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to which
income from the Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding any
obligation of a person related to the Transferee within the meaning of U.S.
Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100 million and
net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only
to another "eligible corporation," as defined in U.S. Treasury Regulations
Section 1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of
Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of the
U.S. Treasury Regulations; and
(iv) the Transferee determined the consideration paid to
it to acquire the Certificate based on reasonable market assumptions
(including, but not limited to, borrowing and investment rates, prepayment and
loss assumptions, expense and reinvestment assumptions, tax rates and other
factors specific to the Transferee) that it has determined in good faith.
[ ] None of the above.
13. The Transferee is not an employee benefit plan that
is subject to Title I of ERISA or a plan that is subject to Section 4975 of
the Code or a plan subject to any federal, state or local law that is
substantially similar to Title I of ERISA or Section 4975 of the Code, and the
Transferee is not acting on behalf of or investing plan assets of such a plan.
G-3
IN WITNESS WHEREOF, the Transferee has caused this
instrument to be executed on its behalf, pursuant to authority of its Board of
Directors, by its duly authorized officer and its corporate seal to be
hereunto affixed, duly attested, this ____ day of _______, 20__.
-------------------------------
Print Name of Transferee
By:______________________________
Name:
Title:
[Corporate Seal]
ATTEST:
-------------------------------
[Assistant] Secretary
Personally appeared before me the above-named __________,
known or proved to me to be the same person who executed the foregoing
instrument and to be the ___________ of the Transferee, and acknowledged that
he executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this ____ day of ________,
20__.
---------------------------
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
G-4
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: GSAA Home Equity Trust 2006-16, Asset-Backed Certificates
Series 2006-16, Class [___]
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being
disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner
that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act and (c) to the extent we are disposing of a
Residual Certificate, (A) we have no knowledge the Transferee is not a
Permitted Transferee and (B) after conducting a reasonable investigation of
the financial condition of the Transferee, we have no knowledge and no reason
to believe that the Transferee will not pay all taxes with respect to the
Residual Certificates as they become due and (C) we have no reason to believe
that the statements made in paragraphs 7, 10 and 11 of the Transferee's
Residual Transfer Affidavit are false.
Very truly yours,
---------------------------------
Print Name of Transferor
By:
------------------------------
Authorized Officer
H-1
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Xxxxx Fargo Bank, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Re: GSAA Home Equity Trust 2006-16, Asset-Backed Certificates,
Series 2006-16, Class [__]
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either we are purchasing a Class
X-0, Xxxxx X-0, Class A-3-A, Class A-3-B, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class B-1 or a Class B-2 Certificate, or we are not an
employee benefit plan that is subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or a plan or arrangement
that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended (the "Code"), or a plan subject to any federal, state or local law
materially similar to the foregoing provisions of ERISA or the Code, nor are
we acting on behalf of any such plan or arrangement or using the assets of any
such plan or arrangement to effect such acquisition, or, with respect to a
Class B-2, Class X Certificate or Class P Certificate that has been the
subject of an ERISA-Qualifying Underwriting, the purchaser is an insurance
company that is purchasing this certificate with funds contained in an
"insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and the
purchase and holding of such Certificates satisfy the requirements for
exemptive relief under Sections I and III of PTCE 95-60, (e) we have not, nor
has anyone acting on our behalf offered, transferred, pledged, sold or
otherwise disposed of the Certificates, any interest in the Certificates or
any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Certificates, any interest in the
Certificates or any other similar security from, or otherwise approached or
negotiated with respect to the Certificates, any interest in the Certificates
or any other similar security with, any person in any manner, or made any
general
I-1
solicitation by means of general advertising or in any other manner,
or taken any other action, that would constitute a distribution of the
Certificates under the Securities Act or that would render the disposition of
the Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will act, nor has authorized or will
authorize any person to act, in such manner with respect to the Certificates
and (f) we are a "qualified institutional buyer" as that term is defined in
Rule 144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are
aware that the sale to us is being made in reliance on Rule 144A. We are
acquiring the Certificates for our own account or for resale pursuant to Rule
144A and further, understand that such Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the resale, pledge
or transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the Securities Act.
I-2
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $___________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance with Rule
144A and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a bank, savings
and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is supervised by
the State or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial statements, a
copy of which is attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a foreign
savings and loan association or equivalent institution and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision
by the insurance commissioner or a similar official or agency of a State,
territory or the District of Columbia.
------------------------
(1) Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.
I-3
____ State or Local Plan. The Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor registered under
the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development company as
defined in Section 202(a)(22) of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the Buyer
reports its securities holdings in its financial statements on the basis of
their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance
with generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such securities
were not included if the Buyer is a majority-owned, consolidated subsidiary of
another enterprise and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of
any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Buyer is a bank or savings and loan is provided above, the
Buyer agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.
I-4
-----------------------------
Print Name of Transferee
By:
----------------------------------
Name:
Title:
Date:
--------------------------------
I-5
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities
(other than the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year. For purposes of determining the amount of
securities owned by the Buyer or the Buyer's Family of Investment Companies,
the cost of such securities was used, except (i) where the Buyer or the
Buyer's Family of Investment Companies reports its securities holdings in its
financial statements on the basis of their market value, and (ii) no current
information with respect to the cost of those securities has been published.
If clause (ii) in the preceding sentence applies, the securities may be valued
at market.
____ The Buyer owned $___________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule
144A).
____ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $__________ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue
of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii)
currency, interest rate and commodity swaps.
I-6
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
---------------------------------
Print Name of Transferee
By:_______________________________
Name:
Title:
IF AN ADVISER:
----------------------------------
Print Name of Buyer
Date:______________________________
I-7
EXHIBIT J-1
FORM OF BACK-UP CERTIFICATION
(Master Servicer)
RE: Master Servicing and Trust Agreement, dated as of
September 1, 2006 (the "Agreement"), among GS Mortgage
Securities Corp., as depositor (the "Depositor"),
Deutsche Bank National Trust Company, as trustee (in such
capacity, the "Trustee"), JPMorgan Chase Bank, National
Association, Deutsche Bank National Trust Company and
U.S. Bank National Association, each as a custodian, and
Xxxxx Fargo Bank, National Association, as master
servicer (in such capacity, the "Master Servicer")
securities administrator (in such capacity, the
"Securities Administrator") and as a custodian.
I, ________________________________, the _______________________ of
[NAME OF COMPANY] (the "Company"), certify to the Depositor, and its officers,
with the knowledge and intent that they will rely upon this certification,
that:
(1) I have reviewed the servicer compliance statement of
the Company provided in accordance with Item 1123 of Regulation AB
(the "Compliance Statement"), the report on assessment of the
Company's compliance with the servicing criteria set forth in Item
1122(d) of Regulation AB (the "Servicing Criteria"), provided in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange
Act of 1934, as amended (the "Exchange Act") and Item 1122 of
Regulation AB (the "Servicing Assessment"), the registered public
accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b)
of Regulation AB (the "Attestation Report"), all servicing reports,
officer's certificates and other information relating to the
servicing of the Mortgage Loans by the Company during 2006 that
were delivered by the Company to the Depositor and the Securities
Administrator pursuant to the Agreement (collectively, the "Company
Servicing Information");
(2) Based on my knowledge, the Company Servicing
Information, taken as a whole, does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in the light of the
circumstances under which such statements were made, not misleading
with respect to the period of time covered by the Company Servicing
Information;
(3) Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the
Agreement has been provided to the Depositor;
(4) I am responsible for reviewing the activities
performed by the Company as a servicer under the Agreement, and
based on my knowledge and the compliance review conducted in
preparing the Compliance Statement and except as disclosed in the
Compliance Statement, the Servicing Assessment or the Attestation
Report, the Company has fulfilled its obligations under the
Agreement; and
J-1-1
(5) The Compliance Statement required to be delivered by
the Company pursuant to the Agreement, and the Servicing Assessment
and Attestation Report required to be provided by the Company and
by any Subservicer or Subcontractor pursuant to the Agreement, have
been provided to the Master Servicer. Any material instances of
noncompliance described in such reports have been disclosed to the
Master Servicer. Any material instance of noncompliance with the
Servicing Criteria has been disclosed in such reports.
Date: _________________________
By: ________________________________
Name:
Title:
X-0-0
XXXXXXX X-0
FORM OF BACK-UP CERTIFICATION
(Securities Administrator)
RE: Master Servicing and Trust Agreement, dated as of
September 1, 2006 (the "Agreement"), among GS Mortgage
Securities Corp., as depositor (the "Depositor"),
Deutsche Bank National Trust Company, as trustee (in such
capacity, the "Trustee"), JPMorgan Chase Bank, National
Association, Deutsche Bank National Trust Company and
U.S. Bank National Association, each as a custodian and
Xxxxx Fargo Bank, National Association, as master
servicer (in such capacity, the "Master Servicer")
securities administrator (in such capacity, the
"Securities Administrator") and as a custodian.
I, ________________________________, the _______________________ of
[NAME OF COMPANY] (the "Company"), certify to the Depositor, and its officers,
with the knowledge and intent that they will rely upon this certification,
that:
(1) I have reviewed the report on assessment of the
Company's compliance with the servicing criteria set forth in Item
1122(d) of Regulation AB (the "Servicing Criteria"), provided in
accordance with Rules 13a-18 and 15d-18 under Securities Exchange
Act of 1934, as amended (the "Exchange Act") and Item 1122 of
Regulation AB (the "Servicing Assessment"), the registered public
accounting firm's attestation report provided in accordance with
Rules 13a-18 and 15d-18 under the Exchange Act and Section 1122(b)
of Regulation AB (the "Attestation Report"), all reports on Form
10-D containing statements to certificateholders filed in respect
of the period included in the year covered by the annual report of
the Trust Fund (collectively, the "Distribution Date Statements");
(2) Assuming the accuracy and completeness of the
information delivered to the Company by the Master Servicer as
provided in the Agreement and subject to paragraph (4) below, the
distribution information determined by the Company and set forth in
the Distribution Date Statements contained in all Form 10-D's
included in the year covered by the annual report of such Trust on
Form 10-K for the calendar year 200[ ], is complete and does not
contain any material misstatement of fact as of the last day of the
period covered by such annual report;
(3) Based solely on the information delivered to the
Company by the Master Servicer as provided in the Agreement, (i)
the distribution information required under the Agreement to be
contained in the Trust Fund's Distribution Date Statements and (ii)
the servicing information required to be provided by the Master
Servicer to the Securities Administrator for inclusion in the Trust
Fund's Distribution Date Statements, to the extent received by the
Securities Administrator from the Master Servicer in accordance
with the Agreement, is included in such Distribution Date
Statements;
J-2-1
(4) The Company is not certifying as to the accuracy,
completeness or correctness of the information which it received
from the Master Servicer and did not independently verify or
confirm the accuracy, completeness or correctness of the
information provided by the Master Servicer;
(5) I am responsible for reviewing the activities
performed by the Company as a person "performing a servicing
function" under the Agreement, and based on my knowledge and the
compliance review conducted in preparing the Servicing Assessment
and except as disclosed in the Servicing Assessment or the
Attestation Report, the Company has fulfilled its obligations under
the Agreement; and
(6) The Servicing Assessment and Attestation Report
required to be provided by the Company pursuant to the Agreement,
have been provided to the Depositor. Any material instances of
noncompliance described in such reports have been disclosed to the
Depositor. Any material instance of noncompliance with the
Servicing Criteria has been disclosed in such reports.
Date: ________________________________
By: ________________________________
Name:
Title:
J-2-2
EXHIBIT K
FORM OF SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF
COMPLIANCE STATEMENT
The assessment of compliance to be delivered by the [Master
Servicer] [Securities Administrator] [Custodians] shall address, at
a minimum, the criteria identified as below as "Applicable Servicing
Criteria":
-----------------------------------------------------------------------------------------------------------------------------------
Master Securities
Servicing Criteria Servicer Administrator Custodians
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
-----------------------------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
1122(d)(1)(i) accordance with the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
If any material servicing activities are
outsourced to third parties, policies and
procedures are instituted to monitor the third
party's performance and compliance with such
1122(d)(1)(ii) servicing activities.
-----------------------------------------------------------------------------------------------------------------------------------
Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans
1122(d)(1)(iii) are maintained.
-----------------------------------------------------------------------------------------------------------------------------------
A fidelity bond and errors and omissions policy
is in effect on the party participating in the
servicing function throughout the reporting X
period in the amount of coverage required by and
otherwise in accordance with the terms of the
1122(d)(1)(iv) transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Cash Collection and Administration
-----------------------------------------------------------------------------------------------------------------------------------
Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related
bank clearing accounts no more than two business X
days following receipt, or such other number of
1122(d)(2)(i) days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Disbursements made via wire transfer on behalf of
an obligor or to an investor are made only by X
1122(d)(2)(ii) authorized personnel.
-----------------------------------------------------------------------------------------------------------------------------------
K-1
-----------------------------------------------------------------------------------------------------------------------------------
Master Securities
Servicing Criteria Servicer Administrator Custodians
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Advances of funds or guarantees regarding
collections, cash flows or distributions, and any
interest or other fees charged for such advances, X
are made, reviewed and approved as specified
1122(d)(2)(iii) in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
The related accounts for the transaction, such as
cash reserve accounts or accounts established as
a form of overcollateralization, are separately X
maintained (e.g., with respect to commingling of
cash) as set forth in the transaction
1122(d)(2)(iv) agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Each custodial account is maintained at a
federally insured depository institution as set
forth in the transaction agreements. For purposes
of this criterion, "federally insured depository X
institution" with respect to a foreign financial
institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1)
1122(d)(2)(v) of the Securities Exchange Act.
-----------------------------------------------------------------------------------------------------------------------------------
Unissued checks are safeguarded so as to prevent
1122(d)(2)(vi) unauthorized access. X
-----------------------------------------------------------------------------------------------------------------------------------
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 X
approved by someone other than the person who prepared
the reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved
within 90 calendar days of their original identification,
or such other number of days specified in the transaction
1122(d)(2)(vii) agreements.
-----------------------------------------------------------------------------------------------------------------------------------
K-2
-----------------------------------------------------------------------------------------------------------------------------------
Master Securities
Servicing Criteria Servicer Administrator Custodians
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
-----------------------------------------------------------------------------------------------------------------------------------
Reports to investors, including those to be filed
with the Commission, are maintained in accordance
with the transaction agreements and applicable
Commission requirements. Specifically, such
reports (A) are prepared in accordance with
timeframes and other terms set forth in the
transaction agreements; (B) provide information
calculated in accordance with the terms specified X X
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
1122(d)(3)(i) mortgage loans serviced by the Servicer.
-----------------------------------------------------------------------------------------------------------------------------------
Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and X X
1122(d)(3)(ii) other terms set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Disbursements made to an investor are posted
within two business days to the Servicer's
investor records, or such other number of days
1122(d)(3)(iii) specified in the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------------------------
Amounts remitted to investors per the investor
reports agree with cancelled checks, or other X
1122(d)(3)(iv) form of payment, or custodial bank statements.
-----------------------------------------------------------------------------------------------------------------------------------
Pool Asset Administration
-----------------------------------------------------------------------------------------------------------------------------------
Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related mortgage X
1122(d)(4)(i) loan documents.
-----------------------------------------------------------------------------------------------------------------------------------
Mortgage loan and related documents are safeguarded as
1122(d)(4)(ii) required by the transaction agreements. X
-----------------------------------------------------------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to
-----------------------------------------------------------------------------------------------------------------------------------
K-3
-----------------------------------------------------------------------------------------------------------------------------------
Master Securities
Servicing Criteria Servicer Administrator Custodians
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
the asset pool are made, reviewed and approved in
accordance with any conditions or requirements in
the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
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
1122(d)(4)(iv) with the related mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------------------------
The Servicer's records regarding the mortgage
loans agree with the Servicer's records with
respect to an obligor's unpaid
1122(d)(4)(v) principal balance.
-----------------------------------------------------------------------------------------------------------------------------------
Changes with respect to the terms or 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
1122(d)(4)(vi) related pool asset documents.
-----------------------------------------------------------------------------------------------------------------------------------
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
1122(d)(4)(vii) requirements established by the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Records documenting collection efforts are
maintained during the period a mortgage loan is
delinquent in accordance with the transaction
agreements. Such records are maintained on at
least a monthly basis, or such other period
specified in the transaction agreements, and
describe the entity's activities in monitoring
1122(d)(4)(viii) delinquent mortgage
-----------------------------------------------------------------------------------------------------------------------------------
K-4
-----------------------------------------------------------------------------------------------------------------------------------
Master Securities
Servicing Criteria Servicer Administrator Custodians
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
loans including, for example, phone calls, letters
and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
-----------------------------------------------------------------------------------------------------------------------------------
Adjustments to interest rates or rates of return
for mortgage loans with variable rates are
1122(d)(4)(ix) computed based on the related mortgage loan documents.
-----------------------------------------------------------------------------------------------------------------------------------
Regarding any funds held in trust for an obligor
(such as escrow accounts): (A) such funds are
analyzed, in accordance with the obligor's
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
1122(d)(4)(x) transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
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
1122(d)(4)(xi) number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Any late payment penalties in connection with any
payment to be made on behalf of an obligor are
paid from the servicer's funds and not charged to
the obligor, unless the late payment was due
1122(d)(4)(xii) to the obligor's error or omission.
-----------------------------------------------------------------------------------------------------------------------------------
Disbursements made on behalf of an obligor are
posted within two business days to the obligor's
1122(d)(4)(xiii) records maintained by the servicer,
-----------------------------------------------------------------------------------------------------------------------------------
K-5
-----------------------------------------------------------------------------------------------------------------------------------
Master Securities
Servicing Criteria Servicer Administrator Custodians
-----------------------------------------------------------------------------------------------------------------------------------
Reference Criteria
-----------------------------------------------------------------------------------------------------------------------------------
or such other number of days specified in the
transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
1122(d)(4)(xiv) agreements.
-----------------------------------------------------------------------------------------------------------------------------------
Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
1122(d)(4)(xv) maintained as set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
K-6
EXHIBIT L
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: U.S. Bank National Assoc. Attention: Document Custody Services
0000 Xxxxxx Xxxxx 000 Xxxxxxxxx Xxxx
XX-XX-XXXX FAX: (000) 000-0000 or 000-0000
Xx. Xxxx, XX 00000
RE: Custodial Agreement between U.S. Bank National Association, a custodian,
and ___________________ as the company stated in the "agreement".
In connection with and pursuant to Section____________, of the agreement, we
request the release and acknowledge of the custodial file for the mortgage
loan described below, for the reason indicated:
FROM: Servicer:________________________________________________________,
City/State______________
SERVICER LOAN #: ___________________________,
U.S. BANK NATIONAL ASSOC. #_____________________________________,
Deal Name: ____________________,
Mortgagor's Name: _____________________________________________ Original loan
amount: ________
Property Address: _____________________________________________ Payment amount:
____________
City/State/Zip: _______________________________________________ Interest rate:
________________
REASON FOR REQUESTING DOCUMENTS (check one)
________1. Loan paid in full
________2. Loan in foreclosure
________3. Loan being substituted
________4. Loan being liquidated by company
________5. Other (please explain)
_________________________________________________________
L-1
If box 1 or 4 above is checked, and if all or part of the Custodial File was
previously released to us, then please provide a copy of the previous release
request (RR) to us as well as any additional documents in your possession
relating to the above specified mortgage loan.
If box 2 or 5 above is checked, then upon our return to you as custodian, all
of the documents for the above specified mortgage loan, please acknowledge
your receipt by signing in the space indicated below, and returning this form
to us.
COMPANY NAME:_________________________PHONE#__________________________________
_____________
AUTHORIZED SIGNER:
_________________________________________________________________________
NAME(TYPED):_______________________________________________DATE:_____________
PHONE #:____________________________________________________
DATE:__________________________
-------------------------------------------------------------------------------
PLEASE MAIL DOCUMENTS BACK TO:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
X-0
XXXXXXX X-0
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx,
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Mortgage Custody - GS0616
RE: Master Servicing and Trust Agreement, dated as of September 1, 2006 (the
"Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Deutsche Bank National Trust Company, as trustee (in such
capacity, the "Trustee"), JPMorgan Chase Bank, National Association, Deutsche
Bank National Trust Company and U.S. Bank National Association, each as a
custodian and Xxxxx Fargo Bank, National Association, as master servicer (in
such capacity, the "Master Servicer"), securities administrator (in such
capacity, the "Securities Administrator") and as a custodian.
In connection with and pursuant to Section____________, of the agreement, we
request the release and acknowledge of the custodial file for the mortgage
loan described below, for the reason indicated below. Further, any payments
received by the Servicer listed below in connection with this request for
release have been deposited into the Distribution Account for the benefit of
the Trust.
FROM: Servicer:______________________________________________________,
City/State______________
SERVICER LOAN #: ___________________________,
DEUTSCHE BANK NATIONAL TRUST COMPANY
#________________________________,
Deal Name: ____________________,
Mortgagor's Name: ______________________________ Original loan
amount: ________
Property Address: ______________________________ Payment amount:
____________
City/State/Zip: ________________________________ Interest rate:
________________
REASON FOR REQUESTING DOCUMENTS (check one)
________1. Loan paid in full
________2. Loan in foreclosure
________3. Loan being substituted
L-1-1
________4. Loan being liquidated by company
________5. Other (please explain)
_________________________________________________________
If box 1 or 4 above is checked, and if all or part of the Custodial File was
previously released to us, then please provide a copy of the previous release
request (RR) to us as well as any additional documents in your possession
relating to the above specified mortgage loan.
If box 2 or 5 above is checked, then upon our return to you as custodian, all
of the documents for the above specified mortgage loan, please acknowledge
your receipt by signing in the space indicated below, and returning this form
to us.
COMPANY NAME:____________________________________________PHONE#_______________
_________________
AUTHORIZED SIGNER:
_________________________________________________________________________
NAME(TYPED):________________________________________DATE:____________________
______________
PHONE #:________________________________________
DATE:__________________________
-------------------------------------------------------------------------------
PLEASE MAIL DOCUMENTS BACK TO:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
X-0-0
XXXXXXX X-0
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: JPMorgan Chase Bank, National Association
0000 Xxxxxxxxxx Xxxx., Xxxxx 000,
Xxxxxx, Xxxxx 00000
RE: Master Servicing and Trust Agreement, dated as of September 1, 2006 (the
"Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Deutsche Bank National Trust Company, as trustee (in such
capacity, the "Trustee"), JPMorgan Chase Bank, National Association, Deutsche
Bank National Trust Company and U.S. Bank National Association, each as a
custodian and Xxxxx Fargo Bank, National Association, as master servicer (in
such capacity, the "Master Servicer"), securities administrator (in such
capacity, the "Securities Administrator") and as a custodian.
In connection with and pursuant to Section____________, of the agreement, we
request the release and acknowledge of the custodial file for the mortgage
loan described below, for the reason indicated below:
FROM: Servicer:____________________________________________,
City/State______________
SERVICER LOAN #: ___________________________,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
#_____________________________________,
Deal Name: ____________________,
Mortgagor's Name: ________________________________________ Original loan
amount: ________
Property Address: ________________________________________ Payment amount:
____________
City/State/Zip: __________________________________________ Interest rate:
________________
REASON FOR REQUESTING DOCUMENTS (check one)
________1. Loan paid in full
________2. Loan in foreclosure
________3. Loan being substituted
________4. Loan being liquidated by company
L-2-1
________5. Other (please explain)
_________________________________________________________
If box 1 or 4 above is checked, and if all or part of the Custodial File was
previously released to us, then please provide a copy of the previous release
request (RR) to us as well as any additional documents in your possession
relating to the above specified mortgage loan.
If box 2 or 5 above is checked, then upon our return to you as custodian, all
of the documents for the above specified mortgage loan, please acknowledge
your receipt by signing in the space indicated below, and returning this form
to us.
COMPANY NAME:___________________________________PHONE#_____________________
____________
AUTHORIZED SIGNER:
_________________________________________________________________________
NAME(TYPED):______________________________________DATE:_________________
___________
PHONE #:_____________________________________________________
DATE:__________________________
------------------------------------------------------------------------------
PLEASE MAIL DOCUMENTS BACK TO:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
X-0-0
XXXXXXX X-0
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: Xxxxx Fargo Bank, National Association
0000 00xx Xxxxxx XX
Xxxxxxxxxxx, XX 00000
Attention: GSAA 2006-16
RE: Master Servicing and Trust Agreement, dated as of September 1, 2006 (the
"Agreement"), among GS Mortgage Securities Corp., as depositor (the
"Depositor"), Deutsche Bank National Trust Company, as trustee (in such
capacity, the "Trustee"), JPMorgan Chase Bank, National Association, Deutsche
Bank National Trust Company and U.S. Bank National Association, each as a
custodian, and Xxxxx Fargo Bank, National Association, as master servicer (in
such capacity, the "Master Servicer"), securities administrator (in such
capacity, the "Securities Administrator") and as a custodian.
In connection with and pursuant to Section____________, of the agreement, we
request the release and acknowledge of the custodial file for the mortgage
loan described below, for the reason indicated below:
FROM: Servicer:________________________________________________________,
City/State______________
SERVICER LOAN #: ___________________________,
XXXXX FARGO BANK, NATIONAL ASSOCIATION
#_____________________________________,
Deal Name: ____________________,
Mortgagor's Name: ____________________________________________ Original loan
amount: ________
Property Address: ____________________________________________ Payment amount:
____________
City/State/Zip: ______________________________________________ Interest rate:
________________
REASON FOR REQUESTING DOCUMENTS (check one)
________1. Loan paid in full
________2. Loan in foreclosure
________3. Loan being substituted
________4. Loan being liquidated by company
L-2-3
________5. Other (please explain)
_________________________________________________________
If box 1 or 4 above is checked, and if all or part of the Custodial File was
previously released to us, then please provide a copy of the previous release
request (RR) to us as well as any additional documents in your possession
relating to the above specified mortgage loan.
If box 2 or 5 above is checked, then upon our return to you as custodian, all
of the documents for the above specified mortgage loan, please acknowledge
your receipt by signing in the space indicated below, and returning this form
to us.
COMPANY NAME:____________________________________________PHONE#_______________
___________________
AUTHORIZED SIGNER:
_________________________________________________________________________
NAME(TYPED):____________________________________DATE:_____________________
___________
PHONE #:_______________________________________ DATE:__________________________
-------------------------------------------------------------------------------
PLEASE MAIL DOCUMENTS BACK TO:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
L-2-4
EXHIBIT M
Form 8-K Disclosure Information
-----------------------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
-----------------------------------------------------------------------------------------------------------------------------------
Item on Form 8-K Responsible Party
------------------------------------------------------------------- ---------------------------------------------------------------
Item 1.01- Entry into a Material Definitive
Agreement
Disclosure is required regarding entry into or amendment of any
definitive agreement that is material to the securitization, even The party to this Agreement entering into such Material
if depositor is not a party. Definitive Agreement.
Examples: servicing agreement, custodial agreement.
Note: disclosure not required as to definitive agreements that
are fully disclosed in the prospectus
------------------------------------------------------------------- ---------------------------------------------------------------
Item 1.02- Termination of a Material Definitive Agreement
Disclosure is required regarding termination of any definitive
agreement that is material to the securitization (other than The party to this Agreement requesting termination
expiration in accordance with its terms), even if depositor is of a Material Definitive Agreement.
not a party.
Examples: servicing agreement, custodial agreement.
------------------------------------------------------------------- ---------------------------------------------------------------
Item 1.03- Bankruptcy or Receivership
Disclosure is required regarding the bankruptcy or receivership, with respect
to any of the following:
------------------------------------------------------------------- ---------------------------------------------------------------
o Sponsor (Seller) Depositor/Sponsor (Seller)
------------------------------------------------------------------- ---------------------------------------------------------------
o Depositor Depositor
------------------------------------------------------------------- ---------------------------------------------------------------
o Master Servicer Master Servicer
------------------------------------------------------------------- ---------------------------------------------------------------
o Affiliated Servicer Servicer
------------------------------------------------------------------- ---------------------------------------------------------------
o Other Servicer servicing 20% or more of the pool assets at the Servicer
time of the report
------------------------------------------------------------------- ---------------------------------------------------------------
o Other material servicers Servicer
------------------------------------------------------------------- ---------------------------------------------------------------
o Trustee Trustee
------------------------------------------------------------------- ---------------------------------------------------------------
o Securities Administrator Securities Administrator
------------------------------------------------------------------- ---------------------------------------------------------------
o Significant Obligor Depositor
------------------------------------------------------------------- ---------------------------------------------------------------
o Credit Enhancer (10% or more) Depositor
------------------------------------------------------------------- ---------------------------------------------------------------
o Derivative Counterparty Depositor
------------------------------------------------------------------- ---------------------------------------------------------------
M-1
-----------------------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
-----------------------------------------------------------------------------------------------------------------------------------
Item on Form 8-K Responsible Party
------------------------------------------------------------------- ---------------------------------------------------------------
o Custodian Custodian
------------------------------------------------------------------- ---------------------------------------------------------------
Item 2.04- Triggering Events that Accelerate or Increase a Direct Master Servicer and Securities Administrator
Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement
Includes an early amortization, performance trigger or other event,
including event of default, that would materially alter the payment
priority/distribution of cash flows/amortization schedule.
Disclosure will be made of events other than waterfall triggers which are
disclosed in the monthly statements to the certificateholders.
------------------------------------------------------------------- ---------------------------------------------------------------
Item 3.03- Material Modification to Rights of Security Holders Securities Administrator
Disclosure is required of any material modification to documents defining the
rights of Certificateholders, including the Pooling and Servicing Agreement.
------------------------------------------------------------------- ---------------------------------------------------------------
Item 5.03- Amendments of Articles of Incorporation or Bylaws; (i) Securities Administrator and (ii) Depositor
Change of Fiscal Year with respect to any information relating to the
Depositor
Disclosure is required of any amendment "to the governing documents of the
issuing entity".
------------------------------------------------------------------- ---------------------------------------------------------------
Item 6.01- ABS Informational and Computational Material Depositor
------------------------------------------------------------------- ---------------------------------------------------------------
Item 6.02- Change of Servicer or Securities Administrator Master Servicer/Securities Administrator/
Servicer
Requires disclosure of any removal, replacement, substitution or addition of
any master servicer, affiliated servicer, other servicer servicing 10% or more
of pool assets at time of report, other material servicers or trustee.
------------------------------------------------------------------- ---------------------------------------------------------------
Reg AB disclosure about any new servicer or master servicer is Servicer/Master Servicer/Depositor
also required.
---------------------------------------------------------------- ------------------------------------------------------------------
Reg AB disclosure about any new Trustee is also required. Depositor/Successor Trustee
---------------------------------------------------------------- ------------------------------------------------------------------
Item 6.03- Change in Credit Enhancement or External Support Depositor and Securities Administrator
Covers termination of any enhancement in manner other
than by its terms, the addition of an
---------------------------------------------------------------- ------------------------------------------------------------------
M-2
-----------------------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
-----------------------------------------------------------------------------------------------------------------------------------
Item on Form 8-K Responsible Party
------------------------------------------------------------------- ---------------------------------------------------------------
enhancement, or a material change in the enhancement provided.
Applies to external credit enhancements as well as
derivatives.
---------------------------------------------------------------- ------------------------------------------------------------------
Reg AB disclosure about any new enhancement provider is also Depositor
required.
---------------------------------------------------------------- ------------------------------------------------------------------
Item 6.04- Failure to Make a Required Distribution Securities Administrator
---------------------------------------------------------------- ------------------------------------------------------------------
Item 6.05- Securities Act Updating Disclosure Depositor
If any material pool characteristic differs by 5% or more at the time of
issuance of the securities from the description in the final prospectus,
provide updated Reg AB disclosure about the actual asset pool.
---------------------------------------------------------------- ------------------------------------------------------------------
If there are any new servicers or originators required to be Depositor
disclosed under Regulation AB as a result of the foregoing, provide the
information called for in Items 1108 and 1110 respectively.
---------------------------------------------------------------- ------------------------------------------------------------------
Item 7.01- Reg FD Disclosure All Parties (excluding Custodian and Trustee)
---------------------------------------------------------------- ------------------------------------------------------------------
Item 8.01- Other Events Depositor
Any event, with respect to which information is not otherwise called for in
Form 8-K, that the registrant deems of importance to certificateholders.
---------------------------------------------------------------- ------------------------------------------------------------------
Item 9.01- Financial Statements and Exhibits Responsible party for reporting/disclosing the
financial statement or exhibit
---------------------------------------------------------------- ------------------------------------------------------------------
M-3
EXHIBIT N
Additional Form 10-D Disclosure
-----------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-----------------------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Responsible Party
-----------------------------------------------------------------------------------------------------------------------------------
Item 1: Distribution and Pool Performance Information
-----------------------------------------------------------------------------------------------------------------------------------
Information included in the [Monthly Statement] Servicer, Master Servicer and Securities Administrator
-----------------------------------------------------------------------------------------------------------------------------------
Any information required by 1121 which is NOT included on the Depositor
[Monthly Statement]
-----------------------------------------------------------------------------------------------------------------------------------
Item 2: Legal Proceedings
Any legal proceeding pending against the following entities or their
respective property, that is material to Certificateholders, including
any proceedings known to be contemplated by governmental authorities:
-----------------------------------------------------------------------------------------------------------------------------------
o Issuing Entity (Trust Fund) Master Servicer, Securities Administrator and Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Sponsor (Seller) Seller (if a party to the Pooling and Servicing Agreement) or
Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Depositor Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Trustee Trustee
-----------------------------------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
-----------------------------------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
-----------------------------------------------------------------------------------------------------------------------------------
o Custodian Custodian
-----------------------------------------------------------------------------------------------------------------------------------
o 1110(b) Originator Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1108(a)(2) Servicer (other than the Master Servicer or Servicer
Securities Administrator)
-----------------------------------------------------------------------------------------------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
-----------------------------------------------------------------------------------------------------------------------------------
Item 3: Sale of Securities and Use of Proceeds (i) Depositor (with respect to the Closing Date) and
Information from Item 2(a) of Part II of Form 10-Q: (ii) Master Servicer
With respect to any sale of securities by the sponsor, depositor or issuing
entity, that are backed by the same asset pool or are otherwise issued by the
issuing entity, whether or not registered, provide the sales and use of
proceeds information in Item 701 of Regulation S-K. Pricing information can be
omitted if securities were not registered.
-----------------------------------------------------------------------------------------------------------------------------------
N-1
ADDITIONAL FORM 10-D DISCLOSURE
-----------------------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Responsible Party
-----------------------------------------------------------------------------------------------------------------------------------
Item 4: Defaults Upon Senior Securities Securities Administrator
Information from Item 3 of Part II of Form 10-Q:
Report the occurrence of any Event of Default (after expiration of any grace
period and provision of any required notice)
-----------------------------------------------------------------------------------------------------------------------------------
Item 5: Submission of Matters to a Vote of Security Holders Securities Administrator
Information from Item 4 of Part II of Form 10-Q
-----------------------------------------------------------------------------------------------------------------------------------
Item 6: Significant Obligors of Pool Assets Depositor
Item 1112(b) - Significant Obligor Financial Information*
-----------------------------------------------------------------------------------------------------------------------------------
*This information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the Item.
-----------------------------------------------------------------------------------------------------------------------------------
Item 7: Significant Enhancement Provider Information
Item 1114(b)(2) - Credit Enhancement Provider Financial
Information*
-----------------------------------------------------------------------------------------------------------------------------------
o Determining applicable disclosure threshold Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Requesting required financial information (including any Depositor
required accountants' consent to the use thereof) or effecting
incorporation by reference
-----------------------------------------------------------------------------------------------------------------------------------
Item 1115(b) - Derivative Counterparty Financial Information*
-----------------------------------------------------------------------------------------------------------------------------------
o Determining current maximum probable exposure Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Determining current significance percentage Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Requesting required financial information (including any Depositor
required accountants' consent to the use thereof) or effecting
incorporation by reference
-----------------------------------------------------------------------------------------------------------------------------------
*This information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the Items.
-----------------------------------------------------------------------------------------------------------------------------------
N-2
-----------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-----------------------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Responsible Party
-----------------------------------------------------------------------------------------------------------------------------------
Item 8: Other Information Any party responsible for the applicable disclosure items on
Form 8-K
Disclose any information required to be reported on Form 8-K
during the period covered by the Form 10-D but not reported
-----------------------------------------------------------------------------------------------------------------------------------
Item 9: Exhibits
-----------------------------------------------------------------------------------------------------------------------------------
Monthly Statement to Certificateholders Securities Administrator
-----------------------------------------------------------------------------------------------------------------------------------
Exhibits required by Item 601 of Regulation S-K, such as material Depositor
agreements
------------------------------------------------------------------- ---------------------------------------------------------------
N-3
EXHIBIT O
Additional Form 10-K Disclosure
-----------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
-----------------------------------------------------------------------------------------------------------------------------------
Item on Form 10-K Responsible Party
-----------------------------------------------------------------------------------------------------------------------------------
Item 1B: Unresolved Staff Comments Depositor
---------------------------------------------------------------- ------------------------------------------------------------------
Item 9B: Other Information Any responsible party for Disclosure Item on
Disclose any information required to be reported on Form 8-K during the Form 8-K
fourth quarter covered by the Form 10-K but not reported
-----------------------------------------------------------------------------------------------------------------------------------
Item 15: Exhibits, Financial Statement Schedules (i) As to agreements, Securities
Administrator/Depositor and (ii) as to financial
statements, Reporting Parties (as to themselves)
(excluding Custodian or Trustee)
-----------------------------------------------------------------------------------------------------------------------------------
Reg AB Item 1112(b): Significant Obligors of Pool Assets
-----------------------------------------------------------------------------------------------------------------------------------
Significant Obligor Financial Information* Depositor
-----------------------------------------------------------------------------------------------------------------------------------
*This information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the Item.
-----------------------------------------------------------------------------------------------------------------------------------
Reg AB Item 1114(b)(2): Credit Enhancement Provider Financial
Information
-----------------------------------------------------------------------------------------------------------------------------------
o Determining applicable disclosure threshold Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Requesting required financial information (including any Depositor
required accountants' consent to the use thereof) or effecting
incorporation by reference
-----------------------------------------------------------------------------------------------------------------------------------
*This information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the Items.
-----------------------------------------------------------------------------------------------------------------------------------
Reg AB Item 1115(b): Derivative Counterparty Financial
Information
-----------------------------------------------------------------------------------------------------------------------------------
o Determining current maximum probable exposure Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Determining current significance percentage Depositor
------------------------------------------------------------------------------------------------------------------------------------
o Requesting required financial information (including any Depositor
required accountants' consent to the use thereof) or effecting
incorporation by reference
-----------------------------------------------------------------------------------------------------------------------------------
*This information need only be reported on the Form 10-D for the distribution
period in which updated information is required pursuant to the
-----------------------------------------------------------------------------------------------------------------------------------
O-1
-----------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
-----------------------------------------------------------------------------------------------------------------------------------
Item on Form 10-K Responsible Party
-----------------------------------------------------------------------------------------------------------------------------------
Items.
-----------------------------------------------------------------------------------------------------------------------------------
Reg AB Item 1117: Legal Proceedings
Any legal proceeding pending against the following entities or their
respective property, that is material to Certificateholders, including any
proceedings known to be contemplated by governmental authorities:
-----------------------------------------------------------------------------------------------------------------------------------
o Issuing Entity (Trust Fund) Master Servicer, Securities Administrator and Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Sponsor (Seller) Seller (if a party to the Pooling and Servicing Agreement) or
Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Depositor Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Trustee Trustee
-----------------------------------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
-----------------------------------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
-----------------------------------------------------------------------------------------------------------------------------------
o Custodian Custodian
-----------------------------------------------------------------------------------------------------------------------------------
o 1110(b) Originator Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1108(a)(2) Servicer (other than the Master Servicer or Servicer
Securities Administrator)
-----------------------------------------------------------------------------------------------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
-----------------------------------------------------------------------------------------------------------------------------------
Reg AB Item 1119: Affiliations and Relationships
-----------------------------------------------------------------------------------------------------------------------------------
Whether (a) the Sponsor (Seller), Depositor or Issuing Entity is Depositor as to (a)
an affiliate of the following parties, and (b) to the extent Sponsor/Seller as to (a)
known and material, any of the following parties are
affiliated with one another:
-----------------------------------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
-----------------------------------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
-----------------------------------------------------------------------------------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
Whether there are any "outside the ordinary course business Depositor as to (a)
arrangements" other than would be obtained in an arm's length Sponsor/Seller as to (a)
transaction between (a) the Sponsor (Seller), Depositor or
Issuing Entity on the one hand, and (b) any of the following
parties (or their affiliates) on the other hand, that exist
currently or within the past two years and that are material to a
Certificateholder's understanding of the Certificates:
-----------------------------------------------------------------------------------------------------------------------------------
O-2
-----------------------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
-----------------------------------------------------------------------------------------------------------------------------------
Item on Form 10-K Responsible Party
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
-----------------------------------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
-----------------------------------------------------------------------------------------------------------------------------------
o Trustee Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
Whether there are any specific relationships involving the Depositor as to (a)
transaction or the pool assets between (a) the Sponsor (Seller), Sponsor/Seller as to (a)
Depositor or Issuing Entity on the one hand, and (b)
any of the following parties (or their affiliates) on the other hand, that
exist currently or within the past two years and that are material:
Sponsor/Seller as to (a)
-----------------------------------------------------------------------------------------------------------------------------------
o Master Servicer Master Servicer
-----------------------------------------------------------------------------------------------------------------------------------
o Securities Administrator Securities Administrator
-----------------------------------------------------------------------------------------------------------------------------------
o Trustee Depositor
-----------------------------------------------------------------------------------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
-----------------------------------------------------------------------------------------------------------------------------------
O-3
EXHIBIT P
Form of Master Loan Purchase Agreement, between various sellers
and Xxxxxxx Xxxxx Mortgage Company
[See Exhibit 99.1 to Form 8-K/A filed with the Commission on
February 14, 2006, Accession No. 0000905148-06-001326]
P-1
EXHIBIT Q
Flow Servicing Agreement, dated as of January 1, 2006,
between Avelo Mortgage, L.L.C. and Xxxxxxx Sachs Mortgage Company
[See Exhibit 99.13 to Form 8-K filed with the Commission on
March 14, 2006, Accession No. 0000905148-06-00297]
Q-1
EXHIBIT R
Servicing Agreement, dated as of July 1, 2004,
between Countrywide Home Loans Servicing LP and Xxxxxxx Xxxxx Mortgage
Company, as amended by Amendment Reg AB
[See Exhibit 99.3 to Form 8-K filed with the Commission on March 13, 2006,
Accession No. 0000905148-06-002297]
R-1
EXHIBIT S
Master Mortgage Loan Purchase Agreement, dated as of July 1, 2004, between
Countrywide Home Loans, Inc. and Xxxxxxx Sachs Mortgage
Company, as amended by Amendment Reg AB
[See Exhibit 99.3 to Form 8-K filed with the Commission on
March 13, 2006, Accession No. 0000905148-06-002297]
S-1
EXHIBIT T
Amendment Reg AB to the Master Mortgage Loan Purchase and Servicing
Agreement, dated as of January 1, 2006, among Xxxxxxx Xxxxx
Mortgage Company, Countrywide Home Loans, Inc. and
Countrywide Home Loans Servicing LP
[See Exhibit 99.1 to Form 8-K filed with the Commission on
March 14, 2006, Accession No. 0000905148-06-002297]
T-1
EXHIBIT U
Amended and Restated Master Mortgage Loan Purchase Agreement, dated as of
November 1, 2005, between GreenPoint Mortgage Funding,
Inc. and Xxxxxxx Sachs Mortgage Company
[See Exhibit 99.9 to Form 8-K/A filed with the Commission on
February 14, 2006, Accession No. 0000905148-06-001326]
U-1
EXHIBIT V
Servicing Agreement, dated as of November 1, 2005, between GreenPoint
Mortgage Funding, Inc. and Xxxxxxx Xxxxx Mortgage Company
[See Exhibit 99.9 to Form 8-K/A filed with the Commission on
February 14, 2006, Accession No. 0000905148-06-001326]
V-1
EXHIBIT W
Second Amended and Restated Flow Seller's Warranties and Servicing Agreement,
dated as of January 1, 2006, between National City
Mortgage Co. and Xxxxxxx Sachs Mortgage Company
[See Exhibit 99.7 to Form 8-K filed with the
Commission on March 14, 2006, Accession No. 0000905148-06-00297]
W-1
EXHIBIT X
Second Amended and Restated Master Seller's Warranties and Servicing
Agreement, dated as of November 1, 2005, between Xxxxxxx Xxxxx
Mortgage Company and Xxxxx Fargo Bank, National Association
[See Exhibit 99.1 to Form 8-K filed with the Commission on
May 12, 2006, Accession No. 0000905148-06-003718]
X-1
EXHIBIT Y
Mortgage Loan Sale and Servicing Agreement, dated as of April 1, 2005,
between First Horizon Loan Corporation and Xxxxxxx Xxxxx
Mortgage Corporation
------------------------------------------------------------------------------
MORTGAGE LOAN SALE AND SERVICING AGREEMENT
between
FIRST HORIZON LOAN CORPORATION,
as Seller,
FIRST TENNESSEE MORTGAGE SERVICES, INC.,
as Servicer
and
XXXXXXX SACHS MORTGAGE COMPANY,
as Purchaser
Dated as of July 1, 2006
Conventional,
Fixed and Adjustable Rate,
Residential Mortgage Loans
------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS.................................................................................1
SECTION 2. PURCHASE AND CONVEYANCE....................................................................17
SECTION 3. MORTGAGE LOAN SCHEDULE.....................................................................18
SECTION 4. PURCHASE PRICE.............................................................................18
SECTION 5. EXAMINATION OF CREDIT FILES................................................................18
SECTION 6. DELIVERY OF MORTGAGE LOAN DOCUMENTS........................................................19
Subsection 6.01 Possession of Credit Files and Mortgage Files...........................................19
Subsection 6.02 Books and Records.......................................................................19
Subsection 6.03 Delivery of Mortgage Loan Documents.....................................................20
Subsection 6.04 MERS Designated Loans...................................................................21
SECTION 7. REPRESENTATIONS, WARRANTIES AND COVENANTS; REMEDIES FOR BREACH.............................21
Subsection 7.01 Representations and Warranties Regarding Individual Mortgage Loans......................21
Subsection 7.02 Seller and Servicer Representations.....................................................36
Subsection 7.03 Remedies for Breach of Representations and Warranties...................................39
Subsection 7.04 Repurchase of Mortgage Loans with Early Payment Defaults................................42
Subsection 7.05 Premium Recapture.......................................................................42
SECTION 8. CLOSING....................................................................................43
SECTION 9. CLOSING DOCUMENTS..........................................................................43
SECTION 10. COSTS......................................................................................45
SECTION 11. ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS.........................................45
Subsection 11.01 Servicer to Act as Servicer.............................................................45
Subsection 11.02 Liquidation of Mortgage Loans...........................................................46
Subsection 11.03 Collection of Mortgage Loan Payments....................................................47
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Subsection 11.04 Establishment of Custodial Account; Deposits in Custodial Account.......................47
Subsection 11.05 Withdrawals From the Custodial Account..................................................48
Subsection 11.06 Establishment of Escrow Account; Deposits in Escrow Account.............................49
Subsection 11.07 Withdrawals From Escrow Account.........................................................50
Subsection 11.08 Payment of Taxes, Insurance and Other Charges; Collections Thereunder...................50
Subsection 11.09 Transfer of Accounts....................................................................51
Subsection 11.10 Maintenance of Hazard Insurance.........................................................51
Subsection 11.11 Fidelity Bond; Errors and Omissions Insurance...........................................52
Subsection 11.12 Title, Management and Disposition of REO Property.......................................52
Subsection 11.13 Servicing Compensation..................................................................54
Subsection 11.14 Distributions...........................................................................54
Subsection 11.15 Statements to the Purchaser.............................................................54
Subsection 11.16 Reserved................................................................................55
Subsection 11.17 Assumption Agreements...................................................................55
Subsection 11.18 Satisfaction of Mortgages and Release of Mortgage Files.................................56
Subsection 11.19 Annual Statement as to Compliance.......................................................56
Subsection 11.20 Annual Independent Public Accountants' Servicing Report or Attestation..................56
Subsection 11.21 Servicer Shall Provide Access and Information as Reasonably Required....................56
Subsection 11.22 Transfer of Servicing...................................................................57
Subsection 11.23 Notification of Maturity Date...........................................................59
Subsection 11.24 Notification of Adjustments.............................................................59
SECTION 12. THE SERVICER...............................................................................60
Subsection 12.01 Indemnification; Third Party Claims.....................................................60
Subsection 12.02 Merger or Consolidation of the Servicer.................................................61
Subsection 12.03 Limitation on Liability of the Servicer and Others......................................62
Subsection 12.04 Seller and Servicer Not to Resign.......................................................62
SECTION 13. DEFAULT..............................................................................62
Subsection 13.01 Events of Default.......................................................................62
Subsection 13.02 Waiver of Defaults......................................................................64
SECTION 14. TERMINATION..........................................................................64
Subsection 14.01 Termination.............................................................................64
Subsection 14.02 Termination of the Servicer Without Cause...............................................64
Subsection 14.03 Successors to the Servicer..............................................................64
SECTION 15. COOPERATION OF SELLER WITH A RECONSTITUTION................................................65
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SECTION 16. NOTICES....................................................................................67
SECTION 17. SEVERABILITY CLAUSE........................................................................68
SECTION 18. NO PARTNERSHIP.............................................................................69
SECTION 19. COUNTERPARTS...............................................................................69
SECTION 20. GOVERNING LAW JURISDICTION; CONSENT TO SERVICE OF PROCESS..................................69
SECTION 21. MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.............................................70
SECTION 22. INTENTION OF THE PARTIES...................................................................70
SECTION 23. SUCCESSORS AND ASSIGNS.....................................................................70
SECTION 24. WAIVERS....................................................................................71
SECTION 25. EXHIBITS...................................................................................71
SECTION 26. GENERAL INTERPRETIVE PRINCIPLES............................................................71
SECTION 27. REPRODUCTION OF DOCUMENTS..................................................................71
SECTION 28. AMENDMENT..................................................................................71
SECTION 29. CONFIDENTIALITY............................................................................72
SECTION 30. ENTIRE AGREEMENT...........................................................................72
SECTION 31. FURTHER AGREEMENTS.........................................................................72
SECTION 32. NO SOLICITATION............................................................................73
SECTION 33. WAIVER OF JURY TRIAL.......................................................................73
SECTION 34. COMPLIANCE WITH REGULATION AB..............................................................73
Subsection 34.01 Intent of the Parties; Reasonableness...................................................73
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Subsection 34.02 Additional Representations and Warranties of the Seller and the Servicer................74
Subsection 34.03 Information to Be Provided by the Seller and the Servicer...............................75
Subsection 34.04 Servicer Compliance Statement...........................................................80
Subsection 34.05 Report on Assessment of Compliance and Attestation......................................80
Subsection 34.06 Use of Subservicers and Subcontractors..................................................81
Subsection 34.07 Indemnification; Remedies...............................................................82
EXHIBITS
EXHIBIT 1 MORTGAGE FILE
EXHIBIT 2 CONTENTS OF EACH CREDIT FILE
EXHIBIT 3 FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
EXHIBIT 4 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
EXHIBIT 6 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 7 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 8 SELLER'S UNDERWRITING GUIDELINES
EXHIBIT 9 REQUIRED FIELDS OF MONTHLY REMITTANCE REPORT
EXHIBIT 10 FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT 11 FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT 12 FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT 13 FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT 14 FORM OF ASSIGNMENT AND CONVEYANCE AGREEMENT
EXHIBIT 15 FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
EXHIBIT 16 FORM OF ANNUAL CERTIFICATION
EXHIBIT 17 SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
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MORTGAGE LOAN SALE AND SERVICING AGREEMENT
THIS MORTGAGE LOAN SALE AND SERVICING AGREEMENT (the "Agreement"),
dated as of July 1, 2006 is hereby executed by and between XXXXXXX XXXXX
MORTGAGE COMPANY, a New York limited partnership (the "Purchaser"), and FIRST
HORIZON LOAN CORPORATION, a Kansas corporation, in its capacity as seller (the
"Seller") and First Tennessee Mortgage Services, Inc., a Tennessee
corporation, in its capacity as servicer (the "Servicer").
W I T N E S S E T H:
- - - - - - - - - -
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 and adjustable rate residential first and
second lien mortgage loans (the "Mortgage Loans") on a servicing-retained
basis as described herein, and which shall be delivered in pools of whole
loans (each, a "Mortgage Loan Package") 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;
WHEREAS, the Purchaser, the Seller and the Servicer wish to
prescribe the manner of the conveyance, servicing and control of the Mortgage
Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction.
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,
the Seller and the Servicer agree as follows:
Section 1. Definitions. For purposes of this Agreement, the
following capitalized terms shall have the respective meanings set forth
below.
40/30 Mortgage Loan: A Mortgage Loan with a balloon payment feature
that requires principal and interest payments sufficient to amortize the
Mortgage Loan fully by the stated maturity date, over an original term of not
more than forty (40) years from commencement of amortization.
Accepted Servicing Procedures: Procedures (including collection
procedures) that the Servicer customarily employs and exercises in servicing
and administering mortgage loans for its own account that are similar to the
Mortgage Loans and which are in accordance
with accepted mortgage servicing practices of prudent mortgage lending
institutions which service mortgage loans of the same type as the Mortgage
Loans in the jurisdictions where the related Mortgaged Properties are located.
Adjustable Rate Mortgage Loan: A Mortgage Loan purchased pursuant to
this Agreement, the Mortgage Interest Rate of which is adjusted from time to
time in accordance with the terms of the related Mortgage Note.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: A Xxxxxx Mae Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Mortgage Loan Sale and Servicing Agreement including
all exhibits, schedules, amendments and supplements hereto.
Alt-A Mortgage Loan: A Mortgage Loan originated and designated as
"Alt-A" pursuant to the Underwriting Guidelines.
ALTA: The American Land Title Association.
Alternative Title Product: means, with respect to any Second Lien
Mortgage Loan, one of the following: (i) lien protection insurance issued by
Integrated Loan Services or ATM Corporation of America, (ii) a mortgage lien
report issued by EPN Solutions/ACEAnet, (iii) a Property Plus report issued by
Rapid Refinance Service through XxxxxxxXxxxxxx.xxx, or (iv) such other
alternative title insurance product that the Seller utilized in connection the
Underwriting Guidelines applicable to the related Mortgage Loan and is
reasonably acceptable to the Purchaser.
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 a
Qualified Appraiser and (ii) the purchase price paid for the related Mortgaged
Property by the Mortgagor with the proceeds of the Mortgage Loan; provided,
however, that 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 a Qualified Appraiser.
Assignment and Conveyance Agreement: As defined in Section 2.
Assignment of Mortgage: An individual assignment of the Mortgage,
notice of transfer or equivalent instrument in recordable form and in blank,
sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to give record notice of the sale of the Mortgage to the
Purchaser.
-2-
Balloon Mortgage Loan: Any Mortgage Loan (a) that requires only
payments of interest until the stated maturity date of the Mortgage Loan or
(b) for which Monthly Payments of principal (not including the payment due on
its stated maturity date) are based on an amortization schedule that would be
insufficient to fully amortize the principal thereof by the stated maturity
date of the Mortgage Loan.
Business Day: Any day other than a Saturday or Sunday, or a day on
which banking and savings and loan institutions in the state in which (i) the
Servicer is located or (ii) the Custodial Account is maintained, are
authorized or obligated by law or executive order to be closed.
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, the Mortgage
Loans listed on the related Mortgage Loan Schedule with respect to the related
Mortgage Loan Package.
Closing Documents: The documents required to be delivered on each
Closing Date pursuant to Section 9.
CLTA: The California Land Title Association.
CLTV: As of the date of origination and as to any Second Lien
Mortgage Loan, the ratio, expressed as a percentage, of the (a) sum of (i) the
outstanding principal balance of the Second Lien Mortgage Loan as of the date
of origination and (ii) the outstanding principal balance as of the date of
origination of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Mortgage Loan and which are secured by the same
Mortgaged Property to (b) the Appraised Value.
Code: The Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards, compensation and settlements in
respect of a taking of all or part of a Mortgaged Property, whether permanent
or temporary, partial or entire, by exercise of the power of condemnation or
the right of eminent domain, to the extent not required to be released to a
Mortgagor in accordance with the terms of the related Mortgage Loan Documents.
Co-op Lease: With respect to a Co-op Loan, the lease with respect to
a dwelling unit occupied by the Mortgagor and relating to the stock allocated
to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock allocated
to a dwelling unit in a residential cooperative housing corporation and a
collateral assignment of the related Co-op Lease.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby
the Mortgagor is
-3-
permitted to convert the Adjustable Rate Mortgage Loan to a fixed rate
Mortgage Loan in accordance with the terms of the related Mortgage Note.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit 2 annexed hereto, and any additional documents required
to be added to the Credit File pursuant to this Agreement.
Custodial Account: As defined in Subsection 11.04.
Custodial Agreement: The agreement governing the retention of the
originals of each Mortgage Note, Mortgage, Assignment of Mortgage and other
Mortgage Loan Documents. If more than one Custodial Agreement is in effect at
any given time, all of the individual Custodial Agreements shall collectively
be referred to as the "Custodial Agreement."
Custodian: Deutsche Bank National Trust Company (or such other
Custodian as specified in the related Purchase Price and Terms Agreement), or
its successors in interest or permitted assigns, or any successor to the
Custodian under the Custodial Agreement as therein provided.
Cut-off Date: The date or dates designated as such on the related
Mortgage Loan Schedule with respect to the related Mortgage Loan Package.
Deemed Material Breach Representation: Each representation and
warranty identified as such in Subsection 7.01.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Delinquent Mortgage Loans: As defined in Subsection 11.01.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Determination Date: With respect to each Remittance Date, the 8th
day (or, if such 8th day is not a Business Day, the following Business Day) of
the month in which such Remittance Date occurs.
Due Date: With respect to each Remittance Date, the first day of the
calendar month in which such Remittance 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 Remittance Date and any Mortgage
Loan, the calendar month preceding the month in which such Remittance Date
occurs.
-4-
Eligible Investments: Any one or more of the following obligations
or securities:
(a) obligations of or guaranteed as to principal and interest by
Xxxxxxx Mac, Xxxxxx Xxx or any agency or instrumentality of the United States
when such obligations are backed by the full faith and credit of the United
States; provided, however, that such obligations of Xxxxxxx Mac or Xxxxxx Xxx
shall be limited to senior debt obligations and mortgage participation
certificates except that investments in mortgage-backed or mortgage
participation securities with yields evidencing extreme sensitivity to the
rate of principal payments on the underlying mortgages shall not constitute
Eligible Investments hereunder;
(b) repurchase agreements on obligations specified in clause (a)
maturing not more than one month from the date of acquisition thereof;
(c) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an original maturity
of not more than ninety (90) days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or a
remaining maturity of more than thirty (30) days) denominated in United States
dollars of any United States depository institution or trust company
incorporated under the laws of the United States or any state thereof or of
any domestic branch of a foreign depository institution or trust company;
(d) commercial paper (having original maturities of not more than
365 days) of any corporation incorporated under the laws of the United States
or any state thereof which is rated not lower than "P-2" by Xxxxx'x Investors
Service, Inc. and rated not lower than "A-2" by Standard & Poor's; and
(e) a money market fund;
provided, however, that no instrument shall be an Eligible Investment if it
represents, either (1) the right to receive only interest payments with
respect to the underlying debt instrument or (2) the right to receive both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest with respect to such instrument
provide a yield to maturity greater than 120% of the yield to maturity at par
of such underlying obligations.
Escrow Account: As defined in Subsection 11.06.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the Mortgagee pursuant to the Mortgage or any other
document.
Event of Default: Any one of the conditions or circumstances
enumerated in Subsection 13.01.
Exchange Act: The Securities Exchange Act of 1934, as amended.
-5-
Xxxxxx Xxx: The Federal National Mortgage Association or any
successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide, as amended or restated from time to time.
Xxxxxx Xxx Transfer: As defined in Section 15.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto
and including the Federal Housing Commissioner and the Secretary of Housing
and Urban Development where appropriate under the FHA Regulations.
FHA Regulations: The regulations promulgated by the Department of
Housing and Urban Development under the National Housing Act, as amended from
time to time and codified in 24 Code of Federal Regulations, and other
Department of Housing and Urban Development issuances relating to FHA Loans,
including the related handbooks, circulars, notices and mortgagee letters.
FICO: Fair Xxxxx Corporation, or any successor thereto.
Fidelity Bond: The fidelity bond required to be obtained by the
Servicer pursuant to Subsection 11.11.
FIRREA: The Financial Institutions Reform, Recovery, and Enforcement
Act of 1989, as amended and in effect from time to time.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 15.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which
amount is added to the Index in accordance with the terms of the related
Mortgage Note to determine on each Interest Rate Adjustment Date the Mortgage
Interest Rate for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994 ("HOEPA"), (b) with an "annual percentage
rate" or total "points and fees" payable by the related Mortgagor (as each
such term is calculated under HOEPA) that exceed the thresholds set forth by
HOEPA and its implementing regulations, including 12 C.F.R. ss.
226.32(a)(1)(i) and (ii), (c) classified as a "high cost home," "threshold,"
"covered," "high risk home," "predatory" or similar loan under any other
applicable state, federal or local law (or a
-6-
similarly classified loan using different terminology under any applicable law
imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees) or
(d) categorized as High Cost pursuant to Appendix E of Standard & Poor's
Glossary. For avoidance of doubt, the parties agree that this definition shall
apply to any law regardless of whether such law is presently, or in the future
becomes, the subject of judicial review or litigation.
Home Loan: A Mortgage Loan categorized as a Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the
functions thereof with regard to Mortgage Insurance issued by the FHA. The
term "HUD," for purposes of this Agreement, is also deemed to include
subdivisions thereof such as the FHA and Government National Mortgage
Association.
Index: The index indicated in the related Mortgage Note for each
Adjustable Rate Mortgage Loan.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the
related Mortgage Loan Schedule, on which the Mortgage Interest Rate is
adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS System as the interim funder pursuant to the MERS
Procedures Manual.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the term of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage
Interest Rate at the time of origination of such Adjustable Rate Mortgage Loan
by more than the amount per annum set forth on the related Mortgage Loan
Schedule.
Liquidation Proceeds: The proceeds received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan, other than amounts
received following the acquisition of REO Property, Insurance Proceeds and
Condemnation Proceeds.
-7-
Loan-to-Value Ratio: With respect to any Mortgage Loan, as of any
date of determination, the ratio (expressed as a percentage) the numerator of
which is the outstanding principal balance of the Mortgage Loan as of the
related Cut-off Date (unless otherwise indicated), and the denominator of
which is the lesser of (a) the Appraised Value of the Mortgaged Property at
origination and (b) if the Mortgage Loan was made to finance the acquisition
of the related Mortgaged Property, the purchase price of the Mortgaged
Property.
LPMI Fee: With respect to each Mortgage Loan which has an LPMI
Policy, the portion of the Mortgage Interest Rate as set forth on the related
Mortgage Loan Schedule (which shall be payable solely from the interest
portion of Monthly Payments, Insurance Proceeds, Condemnation Proceeds or
Liquidation Proceeds), which, during such period prior to the required
cancellation of the LPMI Policy, shall be used to pay the premium due on the
related LPMI Policy.
LPMI Loan: Any Mortgage Loan with respect to which Servicer is
responsible for paying the premium due on the related LPMI Policy with the
proceeds generated by the LPMI Fee relating to such Mortgage Loan, as set
forth on the related Mortgage Loan Schedule.
LPMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located, pursuant
to which the related premium is to be paid by the Servicer of the related
Mortgage Loan from payments of interest made by the Mortgagor in an amount as
is set forth in the related Mortgage Loan Schedule.
LTV: Loan-to-Value Ratio.
Manufactured Home: A single family residential unit that is
constructed in a factory in sections in accordance with the Federal
Manufactured Home Construction and Safety Standards adopted on June 15, 1976,
by the Department of Housing and Urban Development ("HUD Code"), as amended in
2000, which preempts state and local building codes. Each unit is identified
by the presence of a HUD Plate/Compliance Certificate label. The sections are
then transported to the site and joined together and affixed to a pre-built
permanent foundation (which satisfies the manufacturer's requirements and all
state, county, and local building codes and regulations). The manufactured
home is built on a non-removable, permanent frame chassis that supports the
complete unit of walls, floors, and roof. The underneath part of the home may
have running gear (wheels, axles, and brakes) that enable it to be transported
to the permanent site. The wheels and hitch are removed prior to anchoring the
unit to the permanent foundation. The manufactured home must be classified as
real estate and taxed accordingly. The permanent foundation may be on land
owned by the mortgager or may be on leased land.
MERS: Mortgage Electronic Registration Systems, Inc., a Delaware
corporation, and its successors in interest.
MERS Designated Mortgage Loan: Mortgage Loans for which the Seller
has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as
nominee for the Seller, in accordance with the MERS Procedures Manual.
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MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS System listing MERS Designated
Mortgage Loans and other information.
MERS System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: With respect to any Mortgage Loan, the scheduled
payment of principal and interest payable by a Mortgagor under the related
Mortgage Note on each Due Date.
Mortgage: With respect to a Mortgage Loan that is not a Co-op Loan,
the mortgage, deed of trust or other instrument securing a Mortgage Note,
which creates a first or second lien on the Mortgaged Property. With respect
to a Co-op Loan, the Security Agreement.
Mortgage File: With respect to any Mortgage Loan, the Mortgage Loan
Documents and the items listed in Exhibit 1 hereto and any additional
documents required to be added to the Mortgage File pursuant to this
Agreement.
Mortgage Interest Rate: With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time
in accordance with the provisions of the related Mortgage Note.
Mortgage Loan: Each mortgage loan sold, assigned and transferred
pursuant to this Agreement and identified on the applicable 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, excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents in the Mortgage File.
Mortgage Loan Package: Each pool of Mortgage Loans, which shall be
purchased by the Purchaser from the Seller from time to time on each Closing
Date.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan,
the annual rate of interest payable to the Purchaser, which shall be equal to
the related Mortgage Interest Rate minus the related Servicing Fee Rate.
Mortgage Loan Schedule: The schedule of Mortgage Loans, forwarded in
electronic format with respect to each Mortgage Loan Package, attached as
Exhibit A to the related Assignment and Conveyance, setting forth the
following information with respect to each Mortgage Loan in the related
Mortgage Loan Package: (1) the Seller's Mortgage Loan identifying number; (2)
the Mortgagor's name; (3) the street address of the Mortgaged Property
including the city, state and zip code; (4) a code indicating whether the
Mortgaged Property is owner-occupied, a second home or investment property;
(5) the number and type of residential
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units constituting the Mortgaged Property (i.e. a single family residence, a
2-4 family residence, a unit in a condominium project or a unit in a planned
unit development, manufactured housing); (6) the original months to maturity
or the remaining months to maturity from the related Cut-off Date, in any case
based on the original amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual amortization schedule;
(7) the LTV and CLTV, each at the origination; (8) the Mortgage Interest Rate
as of the related Cut-off Date; (9) the date on which the 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; (10) the stated maturity date; (11) the
amount of the Monthly Payment as of the related Cut-off Date; (12) the last
payment date on which a Monthly Payment was actually applied to pay interest
and the outstanding principal balance; (13) the original principal amount of
the Mortgage Loan; (14) the principal balance of the Mortgage Loan as of the
close of business on the related Cut-off Date, after deduction of payments of
principal due and collected on or before the related Cut-off Date; (15) with
respect to Adjustable Rate Mortgage Loans, the Interest Rate Adjustment Date;
(16) with respect to Adjustable Rate Mortgage Loans, the Gross Margin; (17)
with respect to Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under
the terms of the Mortgage Note; (18) with respect to Adjustable Rate Mortgage
Loans, a code indicating the type of Index; (19) with respect to Adjustable
Rate Mortgage Loans, the Periodic Rate Cap under the terms of the Mortgage
Note; (20) with respect to Adjustable Rate Mortgage Loans, the Periodic Rate
Floor under the terms of the Mortgage Note; (21) the type of Mortgage Loan
(i.e., Fixed Rate, Adjustable Rate, First Lien, Second Lien); (22) a code
indicating the purpose of the loan (i.e., purchase, rate and term refinance,
equity take-out refinance); (23) a code indicating the documentation style
(i.e. full, alternative or reduced); (24) the loan credit classification (as
described in the Underwriting Guidelines); (25) whether such Mortgage Loan
provides for a Prepayment Penalty; (26) the Prepayment Penalty period of such
Mortgage Loan, if applicable; (27) a description of the Prepayment Penalty, if
applicable; (28) the Mortgage Interest Rate as of origination; (29) the credit
risk score (FICO score) at origination; (30) the date of origination; (31) the
Mortgage Interest Rate adjustment period; (32) the Mortgage Interest Rate
adjustment percentage; (33) the Mortgage Interest Rate floor; (34) the
Mortgage Interest Rate calculation method (i.e., 30/360, simple interest,
other); (35) a code indicating whether the Mortgage Loan is a Section 32
Mortgage Loan; (36) a code indicating whether the Mortgage Loan is assumable;
(37) a code indicating whether the Mortgage Loan has been modified; (38) the
one-year payment history; (39) the Due Date for the first Monthly Payment;
(40) the original Monthly Payment due; (41) with respect to the related
Mortgagor, the debt-to-income ratio; (42) the Appraised Value of the Mortgaged
Property; (43) the sales price of the Mortgaged Property if the Mortgage Loan
was originated in connection with the purchase of the Mortgaged Property; (44)
a code indicating if the Mortgage Loan is a High Cost Loan or Home Loan as
such terms are defined in the then current Standard & Poor's Glossary and (45)
flood zone field. With respect to the Mortgage Loans 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
aggregate outstanding 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. In addition, with respect to
Prime Mortgage Loans and Alt-A Mortgage Loans, the Mortgage Loan Schedule
shall set forth: (1) a code indicating whether such Mortgage Loan is covered
by a PMI Policy and if so, identifying the PMI Policy Provider; (2) the
certificate
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number of the PMI Policy, if applicable and (3) the amount of coverage of the
PMI Policy, if applicable.
Mortgage Note: The original executed note or other evidence of the
Mortgage Loan indebtedness of a Mortgagor, including any riders or addenda
thereto.
Mortgaged Property: With respect to a Mortgage Loan that is not a
Co-op Loan, the Mortgagor's real property securing repayment of a related
Mortgage Note, consisting of an unsubordinated estate in fee simple or, with
respect to real property located in jurisdictions in which the use of
leasehold estates for residential properties is a widely-accepted practice, a
leasehold estate, in a single parcel or multiple parcels of real property
improved by a Residential Dwelling. With respect to a Co-op Loan, the stock
allocated to a dwelling unit in the residential cooperative housing
corporation that was pledged to secure such Co-op Loan and the related Co-op
Lease.
Mortgagee: The mortgagee or beneficiary named in the Mortgage and
the successors and assigns of such mortgagee or beneficiary.
Mortgagor: The obligor on a Mortgage Note, who is an owner of the
Mortgaged Property and the grantor or mortgagor named in the Mortgage and such
grantor's or mortgagor's successors in title to the Mortgaged Property.
NAIC: The National Association of Insurance Commissioners or any
successor thereto.
Officer's Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, a President or a Vice President and by
the Treasurer, the Secretary, or one of the Assistant Treasurers or the
Assistant Secretaries of the Person on behalf of whom such certificate is
being delivered.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller or the Servicer, reasonably acceptable to the Purchaser,
provided that any Opinion of Counsel relating to (a) the qualification of any
account required to be maintained pursuant to this Agreement as an eligible
account, (b) qualification of the Mortgage Loans in a REMIC or (c) compliance
with the REMIC Provisions, must be (unless otherwise stated in such Opinion of
Counsel) an opinion of counsel who (i) is in fact independent of the Seller
and any servicer of the Mortgage Loans, (ii) does not have any material direct
or indirect financial interest in the Seller or Servicer or in an Affiliate of
either and (iii) is not connected with the Seller or Servicer as an officer,
employee, director or person performing similar functions.
OTS: The Office of Thrift Supervision or any successor thereto.
Owner: As defined in Subsection 11.12.
Payment Adjustment Date: As to each Adjustable Rate Mortgage Loan,
the date on which an adjustment to the Monthly Payment on a Mortgage Note
becomes effective.
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Periodic Rate Cap: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute
maximum amount by which the Mortgage Interest Rate therein may increase or
decrease on an Interest Rate Adjustment Date above or below the Mortgage
Interest Rate previously in effect. The Periodic Rate Cap for each Adjustable
Rate Mortgage Loan is the rate set forth as such on the related Mortgage Loan
Schedule.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute
maximum amount by which the Mortgage Interest Rate therein may decrease on an
Interest Rate Adjustment Date below the Mortgage Interest Rate previously in
effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the amount
of any premium or penalty required to be paid by the Mortgagor if the
Mortgagor prepays such Mortgage Loan as provided in the related Mortgage Note
or Mortgage.
Prime Mortgage Loan: A Mortgage Loan made to Mortgagor with a prime
credit rating as designated in the Underwriting Guidelines.
Prime Rate: The prime rate announced to be in effect from time to
time, as published as the average rate in The Wall Street Journal (Northeast
edition).
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 thereon, and which is not accompanied by an
amount of interest representing scheduled interest due on any date or dates in
any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans purchased on such
Closing Date as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: Each of those certain agreements
setting forth the general terms and conditions of the purchase and sale of the
Mortgage Loans to be purchased from time to time hereunder, each by and
between the Seller and the Purchaser.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, a New York limited
partnership, and its successors in interest and assigns, or any successor to
the Purchaser under this Agreement as herein provided.
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Qualified Appraiser: An 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, and whose compensation was not affected by the
approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfied the requirements of Title XI
of FIRREA and the regulations promulgated thereunder, all as in effect on the
date the Mortgage Loan was originated.
Qualified 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 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 Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date
of such substitution, (i) have an outstanding principal balance, after
deduction of all scheduled payments due in the month of substitution (or in
the case of a substitution of more than one mortgage loan for a Deleted
Mortgage Loan, an aggregate principal balance), not in excess of the
outstanding principal balance of the Deleted Mortgage Loan (the amount of any
shortfall will be deposited in the Custodial Account by the Seller in the
month of substitution); (ii) have a Mortgage Interest Rate not less than and
not more than one percent (1%) greater than the Mortgage Interest Rate of the
Deleted Mortgage Loan; (iii) have a remaining term to maturity not greater
than and not more than one (1) year less than that of the Deleted Mortgage
Loan; (iv) be of the same type as the Deleted Mortgage Loan (i.e., fixed rate
or adjustable rate with same Periodic Rate Cap, Lifetime Rate Cap, Index and
lien priority); (v) comply with each representation and warranty (respecting
individual Mortgage Loans) set forth in Section 7 hereof.
Reconstitution: Any Securitization Transaction 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
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transaction pursuant to Section 15, including, but not limited
to, a seller's warranties and servicing agreement with respect to a Whole Loan
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Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to
a Securitization Transaction.
Reconstitution Date: As defined in Section 15.
Record Date: The close of business of the last Business Day of the
month preceding the month of the related Remittance Date.
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. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of
Chapter 1, Subtitle A of the Code, and related provisions and regulations,
rulings or pronouncements promulgated thereunder, as the foregoing may be in
effect from time to time.
Remittance Date: On the 10th day of any month (or, if such 10th day
is not a Business Day, the following Business Day).
REO Disposition: The final sale by the Servicer of an REO Property.
REO Disposition Proceeds: All amounts received with respect to an
REO Disposition pursuant to Subsection 11.12.
REO Property: A Mortgaged Property acquired by the Servicer through
foreclosure or deed in lieu of foreclosure, as described in Subsection 11.12.
Repurchase Price: With respect to any Mortgage Loan, a price equal
to the sum of: (i) the unpaid principal balance of such Mortgage Loan, (ii)
accrued interest on such unpaid principal balance at the applicable Mortgage
Interest Rate from the date interest was last paid through the date such
repurchase takes place, (iii) the amount of any outstanding advances owed to
any servicer if the Seller is not the Servicer, (iv) all costs and expenses
incurred by the Purchaser or any servicer arising out of or based upon such
breach, including without limitation costs and expenses incurred in the
enforcement of the Seller's repurchase obligation hereunder and (v) any costs
and damages incurred by the related trust with respect to any securitization
of the Mortgage Loan in connection with any violation by such Mortgage Loan of
any predatory or abusive lending law.
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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 a condominium project, or (iv) a one-family
dwelling in a planned unit development, none of which is a co-operative,
mobile or Manufactured Home.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The federal 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.
Security Agreement: The agreement creating a security interest in
the stock allocated to a dwelling unit in the residential cooperative housing
corporation that was pledged to secure such Co-op Loan and the related Co-op
Lease.
Seller: First Horizon Loan Corporation, its successors in interest
and assigns.
Servicer: As defined in the initial paragraph of this Agreement,
together with its successors and assigns as permitted under the terms of this
Agreement.
Servicer Information: As defined in Subsection 34.07(a).
Servicing Advances: All customary, reasonable and necessary
out-of-pocket costs and expenses incurred in the performance by the Servicer
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 Mortgaged Property if the Mortgaged Property
is acquired in satisfaction of the Mortgage, and (iv) payments made by the
Servicer with respect to a Mortgaged Property pursuant to Subsection 11.08.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of the
annual fee the Purchaser shall pay to the Servicer, which shall, for each
month, be equal to one-twelfth of (i) the product of the Servicing Fee Rate
and (ii) 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,
and shall be pro rated (based upon the number of days of the related month the
Servicer so acted as
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Servicer relative to the number of days in that month) for each part thereof.
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 Subsection 11.05) of related Monthly Payments collected by the
Servicer, or as otherwise provided under Subsection 11.05.
Servicing Fee Rate: With respect to each Mortgage Loan, the per
annum rate set forth in the applicable Purchase Price and Terms Agreement.
Servicing File: With respect to each Mortgage Loan, the portion of
the Mortgage File, excluding the Mortgage Loan Documents, retained by the
Servicer pursuant to the terms of this Agreement.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name appears on a list of servicing officers furnished to the Purchaser by the
Servicer, as such list may be amended from time to time.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received
by the Seller for servicing the Mortgage Loans; (c) any late fees, penalties
or similar payments with respect to the Mortgage Loans; (d) all agreements or
documents creating, defining or evidencing any such servicing rights to the
extent they relate to such servicing rights and all rights of the Seller
thereunder; (e) Escrow Payments or other similar payments with respect to the
Mortgage Loans and any amounts actually collected by the Seller with respect
thereto; (f) all accounts and other rights to payment related to any of the
property described in this paragraph; and (g) any and all documents, files,
records, servicing files, servicing documents, servicing records, data tapes,
computer records, or other information pertaining to the Mortgage Loans or
pertaining to the past, present or prospective servicing of the Mortgage
Loans.
Sponsor: The sponsor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan as to any date of
determination, (i) the principal balance of the Mortgage Loan at the related
Cut-off Date after giving effect to payments of principal due on or before
such date, whether or not received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the related Mortgage Loan
representing payments or recoveries of principal, or advances in lieu thereof
on such Mortgage Loan.
Static Pool Information: Static pool information as described in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
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Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood
by participants in the mortgage-backed securities market) of Mortgage Loans
but performs one or more discrete functions identified in Item 1122(d) of
Regulation AB with respect to Mortgage Loans under the direction or authority
of the Seller or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of
the Seller or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion
of the material servicing functions required to be performed by the Seller
under this Agreement or any Reconstitution Agreement that are identified in
Item 1122(d) of Regulation AB.
Successor Servicer: Any servicer of one or more Mortgage Loans
designated by the Purchaser as being entitled to the benefits of the
indemnifications set forth in Subsections 7.03 and 12.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Transaction Servicer: As defined in Subsection 34.03(c).
Transfer Date: In the event the Servicer is terminated as servicer
of a Mortgage Loan pursuant to Subsections 12.04, 13.01, 14.01(c) or 14.02,
the date on which the Purchaser, or its designee, shall receive the transfer
of servicing responsibilities and begin to perform the servicing of such
Mortgage Loans, and the Seller, as Servicer, shall cease all servicing
responsibilities.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached hereto as Exhibit 8 and a then-current copy of
which shall be attached as an exhibit to the related Assignment and
Conveyance.
VA: The Department of Veterans Affairs.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
Section 2. Purchase and Conveyance. The Seller agrees to sell from
time to time, and the Purchaser agrees to purchase from time to time, Mortgage
Loans having an aggregate actual unpaid principal balance on the related
Cut-off Date in an amount as set forth in the related Purchase Price and Terms
Agreement, or in such other amount as agreed by the Purchaser and the Seller
as evidenced by the aggregate actual unpaid principal balance of the Mortgage
Loans accepted by the Purchaser on each Closing Date, together with the
related Mortgage Files and all rights and obligations arising under the
documents contained therein. The Seller, simultaneously with the delivery of
the Mortgage Loan Schedule with respect to the related Mortgage Loan Package
to be purchased on each Closing Date, shall execute and deliver an Assignment
and Conveyance Agreement in the form attached hereto as Exhibit 14 (the
"Assignment and Conveyance Agreement").
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With respect to each Mortgage Loan purchased, the Purchaser shall
own and be entitled to receive: (a) all actual principal due after the related
Cut-off Date, (b) all other payments and/or recoveries of principal collected
after the related Cut-off Date and (c) and (3) all payments of interest on the
Mortgage Loans net of applicable Servicing Fees (minus that portion of any
such payment which is allocable to the period prior to the related Cut-off
Date). The outstanding principal balance of each Mortgage Loan as of the
related Cut-off Date is determined after application of payments of principal
due on or before the related Cut-off Date, to the extent actually collected,
together with any unscheduled principal prepayments collected prior to such
Cut-off Date; provided, however, that payments of scheduled principal and
interest paid prior to such Cut-off date, but to be applied on 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 shall be the property of
the Purchaser. The Seller shall deposit any such prepaid amounts into the
Custodial Account, which account is established for the benefit of the
Purchaser for subsequent remittance by the Seller to the Purchaser.
Section 3. Mortgage Loan Schedule. The Seller from time to time
shall provide the Purchaser in an electronic format with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on
each Closing Date in accordance with the related Purchase Price and Terms
Agreement and this Agreement (each, a "Preliminary Mortgage Schedule").
The Seller shall deliver the related Mortgage Loan Schedule for the
Mortgage Loans to be purchased on a particular Closing Date to the Purchaser
at least five (5) Business Days prior to the related Closing Date. The related
Mortgage Loan Schedule shall be the related Preliminary Mortgage Schedule with
those Mortgage Loans which have not been funded prior to the related Closing
Date deleted.
Section 4. Purchase Price. The Purchase Price for each Mortgage Loan
shall be the percentage of par as stated in the related Purchase Price and
Terms Agreement (subject to adjustment as provided therein), multiplied by the
aggregate principal balance, as of the related Cut-off Date, of the Mortgage
Loans listed on the related Mortgage Loan Schedule, after application of
scheduled payments of principal due on or before the related Cut-off Date, but
only to the extent such payments were actually received. The initial principal
amount of the related Mortgage Loans shall be the aggregate principal balance
of the Mortgage Loans, so computed as of the related Cut-off Date. If so
provided in the related Purchase Price and Terms Agreement, portions of the
Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans as of the related Cut-off Date at the
weighted average Mortgage Interest Rate of those Mortgage Loans. The Purchase
Price plus accrued interest as set forth in the preceding paragraph shall be
paid to the Seller by wire transfer of immediately available funds to an
account designated by the Seller in writing.
Section 5. Examination of Credit Files. At least ten (10) Business
Days prior to the Closing Date, the Seller shall either (a) deliver to the
Purchaser or its designee in escrow,
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for examination with respect to each Mortgage Loan to be purchased, the
related Credit File, including a copy of the Assignment of Mortgage,
pertaining to each Mortgage Loan, or (b) make the related Credit File
available to the Purchaser for examination at such other location as shall
otherwise be acceptable to the Purchaser. The related Credit File may be
delivered in electronic format for purposes of this due diligence examination.
Such examination of the Credit Files may be made by the Purchaser or its
designee at any reasonable time before or after the related Closing Date. If
the Purchaser makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loans do not conform to
any of the requirements set forth in the related Purchase Price and Terms
Agreement, or as an Exhibit annexed thereto, the Purchaser may delete such
Mortgage Loans from the related Mortgage Loan Schedule, and such Deleted
Mortgage Loan (or Loans) may be replaced by a Qualified Substitute Mortgage
Loan (or Loans) acceptable to the Purchaser. The Purchaser may, at its option
and without notice to the Seller, purchase some or all of the Mortgage Loans
without conducting any partial or complete examination. The fact that the
Purchaser or its designee has conducted or has failed to conduct any partial
or complete examination of the Credit File shall not impair in any way the
Purchaser's (or any of its successor's) rights to demand repurchase,
substitution or other relief as provided in this Agreement. In the event that
the Seller fails to deliver the Credit File with respect to any Mortgage Loan,
the Seller shall, upon the request of the Purchaser, repurchase such Mortgage
Loan as the price and in the manner specified in Subsection 7.03.
Section 6. Delivery of Mortgage Loan Documents.
Subsection 6.01 Possession of Credit Files and Mortgage Files. The
contents of each Credit File required to be retained by or delivered to the
Servicer to service the Mortgage Loans pursuant to this Agreement and thus not
delivered to the Purchaser, or its designee, are and shall be held in trust by
the Servicer for the benefit of the Purchaser as the owner thereof. The
Servicer's possession of any portion of each such Credit File is at the will
of the Purchaser for the sole purpose of facilitating servicing of the
Mortgage Loans pursuant to this Agreement, and such retention and possession
by the Servicer shall be in a custodial capacity only. The ownership of each
Mortgage Note, each Mortgage and the contents of each Mortgage File and Credit
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 Servicer shall immediately vest in the Purchaser and shall
be retained and maintained, in trust, by the Servicer at the will of the
Purchaser in such custodial capacity only. The Credit File retained by the
Servicer with respect to each Mortgage Loan pursuant to this Agreement shall
be appropriately identified in the Servicer's computer system and/or books and
records to reflect clearly the sale of such related Mortgage Loan to the
Purchaser. The Servicer shall release from its custody the contents of any
Credit 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 if required under applicable law or court
order.
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; provided, however, that if a Mortgage has been recorded in the
name of MERS or its designee, the Seller is shown as the owner of the related
Mortgage Loan on the records of MERS for purposes of the
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system of recording transfers of beneficial ownership of mortgages maintained
by MERS. Notwithstanding the foregoing, 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 Servicer after the related Cut-off Date on or in connection with a
Mortgage Loan as provided in Section 2 shall be vested in the Purchaser or one
or more designees of the Purchaser; provided, however, that all such funds
received on or in connection with a Mortgage Loan as provided in Section 2
shall be received and held by the Servicer in trust for the benefit of the
Purchaser or the appropriate designee 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 related
Mortgage Loans by the Seller and not a pledge of such 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 purchase
on the Purchaser's business records, tax returns and financial statements, and
as a sale of assets on the Seller's business records, tax returns and
financial statements.
Subsection 6.03 Delivery of Mortgage Loan Documents. The Seller
shall, at least ten (10) Business Days prior to the related Closing Date (or
such later date as the Purchaser may reasonably request) deliver and release
to the Purchaser, or its designee, the Mortgage Loan Documents with respect to
each Mortgage Loan pursuant to a bailee letter agreement. In connection with
the foregoing, the Seller shall indemnify the Purchaser and its present and
former directors, officers, employees and agents and any Successor Servicer
and its present and former directors, officers, employees and agents, and hold
such parties harmless against any losses, damages, penalties, fines,
forfeitures, legal fees and expenses and related costs, judgments, and other
costs and expenses based on or grounded upon, or resulting from, the fact that
any Mortgage Loan is not covered by an ALTA or CLTA lender's title insurance
policy. For purposes of the previous sentence, "Purchaser" shall mean the
Person then acting as the Purchaser under this Agreement and any and all
Persons who previously were "Purchasers" under this Agreement and "Successor
Servicer" shall mean any Person designated as the Successor Servicer pursuant
to this Agreement and any and all Persons who previously were "Successor
Servicers" pursuant to this Agreement.
To the extent received by it, the Servicer shall forward to the
Purchaser, or its designee, original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan entered into in
accordance with this Agreement within two (2) weeks after their execution;
provided, however, that the Servicer shall provide the Purchaser, or its
designee, with a copy, certified by the Servicer as a true copy, of any such
document submitted for recordation within two (2) weeks after its execution,
and shall promptly 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 two (2)
weeks following receipt of the original document by the Servicer; provided,
however, that such original recorded document or certified copy thereof shall
be delivered to the Purchaser no later than 180 days following the related
Closing Date, unless there has been a delay at the applicable recording
office.
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If the original or copy of any document submitted for recordation to
the appropriate public recording office is not delivered to the Purchaser or
its designee within 180 days following the related Closing Date, the related
Mortgage Loan shall, upon the request of the Purchaser, be repurchased by the
Seller at the price and in the manner specified in Subsection 7.03. The
foregoing repurchase obligation shall not apply if the Seller cannot cause the
Servicer to deliver such original or copy of any document submitted for
recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided that (i) the Servicer shall instead deliver a recording
receipt of such recording office or, if such recording receipt is not
available, an officer's certificate of a servicing officer of the Servicer,
confirming that such document has been sent for recording, and (ii) such
document is delivered within twelve (12) months of the related Closing Date.
The Seller shall pay all initial recording fees, if any, for the
Assignments of Mortgage and any other fees or costs in transferring all
original documents to the Custodian or, upon written request of the Purchaser,
to the Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's
designee shall be responsible for recording the Assignments of Mortgage and
shall be reimbursed by the Seller for the costs associated therewith pursuant
to the preceding sentence.
Subsection 6.04 MERS Designated Loans. With respect to each MERS
Designated Mortgage Loan, the Seller shall, on or prior to the related Closing
Date, designate the Purchaser as the Investor, and no Person shall be listed
as Interim Funder on the MERS System. In addition, eight (8) to ten (10) days
after the related Closing Date, Seller shall provide the Custodian and the
Purchaser with a MERS Report listing the Purchaser as the Investor, and no
Person listed as Interim Funder with respect to each MERS Designated Mortgage
Loan.
Section 7. Representations, Warranties and Covenants; Remedies for
Breach.
Subsection 7.01 Representations and Warranties Regarding Individual
Mortgage Loans. The Seller hereby represents and warrants to the Purchaser and
its successors and assigns that, as to each Mortgage Loan, as of the related
Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
related Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage
Note, other than payments for which the related due date was not thirty (30)
or more days prior to the related Closing Date, have been made and credited.
No Mortgage Loan has been delinquent for thirty (30) or more days at any time
since the origination of the Mortgage Loan;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground
rents which previously became due and owing have been paid, or an escrow of
funds has been established in an amount sufficient to
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pay for every such item which remains unpaid and which has been assessed but
is not yet due and payable. The Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other than the
Mortgagor, directly or indirectly, for the payment of any amount required
under the Mortgage Loan, except for interest accruing from the date of the
Mortgage Note or date of disbursement of the Mortgage Loan proceeds, whichever
is earlier, to the day which precedes by one month the Due Date of the first
installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which
has been delivered to the Custodian or to such other Person as the Purchaser
shall designate in writing, and the terms of which are reflected in the
related Mortgage Loan Schedule. No Mortgage Loan has been modified so as to
restructure the payment obligations or re-age the Mortgage Loan. The substance
of any such waiver, alteration or modification has been approved by the title
insurer, if any (and with respect to Prime Mortgage Loans and Alt-A Mortgage
Loans, the issuer of any related PMI Policy, if any), to the extent required
by the policy, and its terms are reflected on the related Mortgage Loan
Schedule, if applicable. No Mortgagor has been released, in whole or in part,
except in connection with an assumption agreement, approved by the issuer of
the title insurer (and with respect to Prime Mortgage Loans and Alt-A Mortgage
Loans, the issuer of any related PMI Policy), to the extent required by the
policy, and which assumption agreement is part of the Mortgage File delivered
to the Custodian or to such other Person as the Purchaser shall designate in
writing and the terms of which are reflected in the related Mortgage Loan
Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either
the Mortgage Note or the Mortgage unenforceable, in whole or in part, or
subject to any right of rescission, set-off, counterclaim or defense,
including without limitation the defense of usury, and no such right of
rescission, set-off, counterclaim or defense has been asserted with respect
thereto, and no Mortgagor was a debtor in any state or federal bankruptcy or
insolvency proceeding at the time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards as are provided for in the Underwriting
Guidelines, the Xxxxxx Xxx Guides or by Xxxxxxx Mac. If required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration as in effect which policy
conforms with the Underwriting Guidelines and the Xxxxxx Xxx and Xxxxxxx Mac
guidelines. All individual insurance policies contain a standard mortgagee
clause naming the Seller and its successors and assigns as mortgagee, and all
premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the
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Mortgagor. Where required by state law or regulation, the Mortgagor has been
given an opportunity to choose the carrier of the required hazard insurance,
provided the policy is not a "master" or "blanket" hazard insurance policy
covering a condominium, or any hazard insurance policy covering the common
facilities of a planned unit development. The hazard insurance policy is the
valid and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser
upon the consummation of the transactions contemplated by this Agreement. The
Seller has not engaged in, and has no knowledge of the Mortgagor's or any
servicer's having engaged in, any act or omission which would impair the
coverage of any such policy, the benefits of the endorsement provided for
herein, or the validity and binding effect of such policy, without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or value
of any kind has been or will be received, retained or realized by any
attorney, firm or other person or entity, and no such unlawful items have been
received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
applicable federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, predatory, abusive and fair lending laws, equal credit opportunity
and disclosure laws or unfair and deceptive practice laws, including, without
limitation, any provisions relating to a Prepayment Penalty, have been
complied with, the consummation of the transactions contemplated hereby will
not involve the violation of any such laws or regulations, and the Seller
shall maintain in its possession, available for the Purchaser's inspection,
and shall deliver to the Purchaser upon demand, evidence of compliance with
all such requirements. This representation and warranty is a Deemed Material
Breach Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in
whole or in part, nor has any instrument been executed that would effect any
such release, cancellation, subordination or rescission. 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;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the related Mortgage Loan Schedule and
consists of real property with a detached single family residence erected
thereon, or a two- to four-family dwelling, or an individual condominium unit
in a low-rise condominium project, or an individual unit in a planned unit
development or a de minimis planned unit development which is in each case
four stories or less, provided, however, that any mobile home (double wide
only) or manufactured dwelling shall conform with the applicable Xxxxxx Xxx
and Xxxxxxx Mac requirements regarding such dwellings and that no Mortgage
Loan is secured by a single parcel of real property with a cooperative housing
corporation, a log home or a mobile home erected thereon or by a mixed-use
property, a property in excess of 10 acres, or other unique property types. As
of the date of origination, no portion of the Mortgaged Property was used for
commercial purposes, and since the date of origination, no portion of the
Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
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been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. With respect to any Mortgage Loan secured by a
Mortgaged Property improved by manufactured housing, (i) the related
manufactured housing unit is permanently affixed to the land, (ii) the related
manufactured housing unit and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming the
Seller as mortgagee, (iii) the related Mortgaged Property is not located in
the state of New Jersey and (iv) as of the origination date of the related
Mortgage Loan, the related manufactured housing unit that secures such
Mortgage Loan either: (x) was the principal residence of the Mortgagor or (y)
was classified as real property under applicable state law. This
representation and warranty is a Deemed Material Breach Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first or second lien (as applicable) on the
Mortgaged Property, including all buildings and improvements on the Mortgaged
Property and all installations and mechanical, electrical, plumbing, heating
and air conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to the
foregoing. The lien of the Mortgage is subject only to:
(1) the lien of current real property taxes and assessments not
yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal;
(3) other matters to which like properties are commonly subject
which do not materially interfere with the benefits of the security
intended to be provided by the Mortgage or the use, enjoyment, value
or marketability of the related Mortgaged Property; and
(4) with respect to Second Lien Mortgage Loans, the lien of the
first mortgage on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting, enforceable and perfected (A) first lien and
first priority security interest with respect to each first lien mortgage
loan, or (B) second lien and second priority security interest with respect to
each Second Lien Mortgage Loan, in either case, on the property described
therein and Seller has full right to sell and assign the same to Purchaser.
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage
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Loan are genuine, and each is the legal, valid and binding obligation of the
maker thereof enforceable in accordance with its terms (including, without
limitation, any provisions therein relating to Prepayment Penalties). All
parties to the Mortgage Note, the Mortgage and any other such related
agreement had legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note, the Mortgage and any such agreement, and the
Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence 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 or servicing of the Mortgage Loan. The
Seller has reviewed all of the documents constituting the Servicing File and
has made such inquiries as it deems necessary to make and confirm the accuracy
of the representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is
no requirement for future advances 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 were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged, and the Seller has good,
indefeasible and marketable title thereto, and has full right to transfer and
sell the Mortgage Loan to the Purchaser free and clear of any encumbrance,
equity, participation interest, lien, pledge, charge, claim or security
interest, and has full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign each
Mortgage Loan pursuant to this Agreement and following the sale of each
Mortgage Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan. After the related Closing Date, the
Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase
the Mortgage Loan or substitute another Mortgage Loan, except as provided in
this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1)
in compliance with any and all applicable licensing requirements of the laws
of the state wherein the Mortgaged Property is located, and (2) either (i)
organized under the laws of such state, or (ii) qualified to do business in
such state, or (iii) a federal savings and loan association, a savings bank or
a national bank having a principal office in such state, or (3) not doing
business in such state;
(o) CLTV, LTV, PMI Policy. No Mortgage Loan that is a Second Lien
Mortgage Loan has a CLTV in excess of 100%. No Mortgage Loan has an LTV
greater than 100%. Any Prime Mortgage Loan or Alt-A Mortgage Loan that had at
the time of origination an LTV in excess of 100% is insured as to payment
defaults by a PMI Policy. Any such PMI Policy
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in effect covers the related Mortgage Loan for the life of such Mortgage Loan.
All provisions of such PMI Policy have been and are being complied with, such
policy is in full force and effect, and all premiums due thereunder have been
paid. No action, inaction, or event has occurred and no state of facts exists
that has, or will result in the exclusion from, denial of, or defense to
coverage. Any Prime Mortgage Loan or Alt-A Mortgage Loan subject to a PMI
Policy obligates the Mortgagor thereunder to maintain the PMI Policy and to
pay all premiums and charges in connection therewith, and the Mortgage
Interest Rate for such Mortgage Loan as set forth on the related Mortgage Loan
Schedule is net of any such insurance premium;
(p) Title Insurance. The Mortgage Loan is either (i) a Second Lien
Mortgage Loan for which an Alternative Title Product has been obtained, or
(ii) covered by an ALTA lender's title insurance policy, or with respect to
any Mortgage Loan for which the related Mortgaged Property is located in
California a CLTA lender's title insurance policy, or other generally
acceptable form of policy or insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac
and each such title insurance policy is issued by a title insurer acceptable
to Xxxxxx Mae or Xxxxxxx Mac and qualified to do business in the jurisdiction
where the Mortgaged Property is located, insuring the Seller, its successors
and assigns, as to the first priority lien (with respect to first lien
Mortgage Loans) or second priority lien (with respect to Second Lien Mortgage
Loans) of the Mortgage in the original principal amount of the Mortgage Loan,
subject only to the exceptions contained in clauses (1), (2), (3) and (4) of
paragraph (j) of this Subsection 7.01, and in the case of adjustable rate
Mortgage Loans, against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment to the Mortgage Interest Rate and Monthly Payment.
Where required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures
ingress and egress, and against encroachments by or upon the Mortgaged
Property or any interest therein. The title policy does not contain any
special exceptions (other than the standard exclusions) for zoning and uses
and has been marked to delete the standard survey exceptions or to replace the
standard survey exception with a specific survey reading. The Seller, its
successors and assigns, are the sole insureds of such lender's title insurance
policy, and such lender's title insurance policy is valid and remains in full
force and effect and will be in force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have been made under
such lender's title insurance policy, and no prior holder of the related
Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such lender's title insurance policy, including
without limitation, no unlawful fee, commission, kickback or other unlawful
compensation or value of any kind has been or will be received, retained or
realized by any attorney, firm or other person or entity, and no such unlawful
items have been received, retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet thirty (30)
days or more delinquent, there is no default, breach, violation or event which
would permit acceleration existing under the Mortgage or the Mortgage Note and
no event which, with the passage of time or with notice and the expiration of
any grace or cure period, would constitute a default, breach, violation or
event which would permit acceleration, and neither the Seller nor any of its
affiliates nor any of their respective predecessors, have waived any default,
breach, violation or event which would permit acceleration. With respect to
each Second Lien Mortgage Loan, (i) the prior mortgage is in full force and
effect, (ii) there is no default, breach, violation or event of
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acceleration existing under such prior mortgage or the related mortgage note,
(iii) as of the related Closing Date, no event which, with the passage of time
or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration thereunder,
and either (A) the prior mortgage contains a provision which allows or (B)
applicable law requires, the mortgagee under the Second Lien Mortgage Loan to
receive notice of, and affords such mortgagee an opportunity to cure any
default by payment in full or otherwise under the prior mortgage;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the
related Mortgaged Property which are or may be liens prior to, or equal or
coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of
the Mortgaged Property, and no improvements on adjoining properties encroach
upon the Mortgaged Property. No improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act, a savings and
loan association, a savings bank, a commercial bank, credit union, insurance
company or other similar institution which is supervised and examined by a
federal or state authority. The documents, instruments and agreements
submitted for loan underwriting were not falsified and contain no untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the information and statements therein not
misleading. No Mortgage Loan contains terms or provisions which would result
in negative amortization. Principal payments on the Mortgage Loan commenced no
more than sixty (60) days after funds were disbursed in connection with the
Mortgage Loan. The Mortgage Interest Rate as well as the Lifetime Rate Cap and
the Periodic Rate Cap, are as set forth on the related Mortgage Loan Schedule.
The Mortgage Note is payable in equal monthly installments of principal and
interest, which installments of interest, with respect to Adjustable Rate
Mortgage Loans, are subject to change due to the adjustments to the Mortgage
Interest Rate on each Interest Rate Adjustment Date, with interest calculated
and payable in arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty (30) years
from commencement of amortization (except with respect to a 40/30 Mortgage
Loan). The Mortgage Loan is payable on the first day of each month. There are
no Convertible Mortgage Loans which contain a provision allowing the Mortgagor
to convert the Mortgage Note from an adjustable interest rate Mortgage Note to
a fixed interest rate Mortgage Note. No Mortgage Loan is a Balloon Mortgage
Loan that has an original stated maturity of less than seven (7) years;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and
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(ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged Property
pursuant to the proper procedures, the holder of the Mortgage Loan will be
able to deliver good and merchantable title to the Mortgaged Property. There
is no homestead or other exemption available to a Mortgagor which would
interfere with the right to sell the Mortgaged Property at a trustee's sale or
the right to foreclose the Mortgage, subject to applicable federal and state
laws and judicial precedent with respect to bankruptcy and right of redemption
or similar law;
(v) Conformance with Agency and Underwriting Standards. The Mortgage
Loan was underwritten in accordance with the Underwriting Standards (a copy of
which is attached hereto as Exhibit 8). The Mortgage Note and Mortgage are on
forms acceptable to Xxxxxxx Mac or Xxxxxx Mae and the Seller has not made any
representations to a Mortgagor that are inconsistent with the mortgage
instruments used;
(w) Occupancy of the Mortgaged Property. 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 and fire
underwriting certificates, have been made or obtained from the appropriate
authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage
and the security interest of any applicable security agreement or chattel
mortgage referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and 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 to the trustee under the deed of trust, except in connection with a
trustee's sale after default by the Mortgagor;
(z) Acceptable Investment. Seller is not aware of any circumstances
or conditions with respect to the Mortgage, the Mortgaged Property, the
Mortgagor, the Credit File or the Mortgagor's credit standing that can
reasonably be expected to cause private institutional investors to regard the
Mortgage Loan as an unacceptable investment, cause the Mortgage Loan to become
delinquent, or adversely affect the value or marketability of the Mortgage
Loan, or cause the Mortgage Loans to prepay during any period materially
faster or slower than the mortgage loans originated by the Seller generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents constituting the
Mortgage File for each Mortgage Loan have been delivered to the Custodian. The
Seller is in possession of a complete, true and accurate Mortgage File in
compliance with Exhibit 1 hereto, except for such documents the originals of
which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was
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originated in accordance with, and the Mortgaged Property meets the guidelines
set forth in the Seller's Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or its
designee), with respect to each Mortgage Loan is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located. The transfer, assignment and conveyance of the
Mortgage Notes and the Mortgages by the Seller are not subject to the bulk
transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, 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, and such provision is enforceable;
(ee) Assumability. None of the Mortgage Loans are, by their terms,
assumable;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on behalf
of the Mortgagor, or paid by any source other than the Mortgagor nor does it
contain any other similar provisions which 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;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the related 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 having first or second lien priority (as
applicable) by a title insurance policy, an endorsement to the policy insuring
the mortgagee's consolidated interest or by other title evidence acceptable to
Xxxxxx Xxx and Xxxxxxx Mac. The consolidated principal amount does not exceed
the original principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, hurricane,
tornado or other casualty so as to affect adversely the value of the Mortgaged
Property as security for the Mortgage Loan or the use for which the premises
were intended and each Mortgaged Property is in good repair. There have not
been any condemnation proceedings with respect to the Mortgaged Property and
the Seller has no knowledge of any such proceedings in the future;
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(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Seller, and any prior servicer with respect to the Mortgage Loan have been in
all respects in compliance with Accepted Servicing Procedures, applicable laws
and regulations, and have been in all respects legal and proper and prudent in
the mortgage origination and servicing business. With respect to escrow
deposits and Escrow Payments, 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. All Escrow Payments have been collected in full compliance with any
applicable state and federal law and the provisions of the related Mortgage
Note and Mortgage. An escrow of funds is not prohibited by applicable law and
has been established in an amount sufficient to pay for every item that
remains unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller have
been capitalized under the Mortgage or the Mortgage Note. All Mortgage
Interest Rate adjustments have been made in strict compliance with any
applicable state and federal law and the terms of the related Mortgage and
Mortgage Note on the related Interest Rate Adjustment Date. The Seller
executed and delivered any and all notices required under applicable law and
the terms of the related Mortgage Note and Mortgage regarding the Mortgage
Interest Rate and the Monthly Payment adjustments. Any interest required to be
paid pursuant to any applicable state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable special hazard insurance policy or bankruptcy bond (or, with
respect to Prime Mortgage Loans and Alt-A Mortgage Loans, any applicable PMI
Policy), irrespective of the cause of such failure of coverage. In connection
with the placement of any such insurance, no commission, fee, or other
compensation has been or will be received by the Seller or by any officer,
director, or employee of the Seller or any designee of the Seller or any
corporation in which the Seller or any officer, director, or employee had a
financial interest at the time of placement of such insurance;
(ll) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or
regulation. There is no pending action or proceeding directly involving the
Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue; there is no violation of any environmental law, rule
or regulation with respect to the Mortgage Property; and nothing further
remains to be done to satisfy in full all requirements of each such law, rule
or regulation constituting a prerequisite to use and enjoyment of said
property;
(mm) Servicemembers Civil Relief Act of 2003. 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 of 2003;
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(nn) Appraisal. The Credit File contains an appraisal of the related
Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the related
originator, who had no interest, direct or indirect in the Mortgaged Property
or in any loan made on the security thereof, and whose compensation is not
affected by the approval or disapproval of the Mortgage Loan, and the
appraisal and appraiser both satisfy the requirements of Xxxxxx Xxx or Xxxxxxx
Mac and Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 and the regulations promulgated thereunder, all as in
effect on the date the Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required
by, and the Seller has complied with, all applicable law with respect to the
making of the Mortgage Loans. The Seller shall maintain such statement in the
Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation
of a Mortgaged Property or facilitating the trade-in or exchange of a
Mortgaged Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could be expected to adversely affect the value or
the marketability of any Mortgaged Property or Mortgage Loan or to cause the
Mortgage Loans to prepay during any period materially faster or slower than
similar mortgage loans held by the Seller generally secured by properties in
the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. The Seller has caused or will
cause to be performed any and all acts required to preserve the rights and
remedies of the Purchaser in any insurance policies applicable to the Mortgage
Loans including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. No action has
been taken or failed to be taken, no event has occurred and no state of facts
exists or has existed on or prior to the related Closing Date (whether or not
known to the Seller on or prior to such date) which has resulted or will
result in an exclusion from, denial of, or defense to coverage under any
primary mortgage insurance (including, without limitation, any exclusions,
denials or defenses which would limit or reduce the availability of the timely
payment of the full amount of the loss otherwise due thereunder to the
insured) whether arising out of actions, representations, errors, omissions,
negligence, or fraud of the Seller, the related Mortgagor or any party
involved in the application for such coverage, including the appraisal, plans
and specifications and other exhibits or documents submitted therewith to the
insurer under such insurance policy, or for any other reason under such
coverage, but not including the failure of such insurer to pay by reason of
such insurer's breach of such insurance policy or such insurer's financial
inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller has
within the last twelve (12) months (unless such Mortgage was originated within
such twelve-month period) analyzed the required Escrow Payments for each
Mortgage and adjusted the amount of such payments so that, assuming all
required payments are timely made, any deficiency will be
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eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
(tt) Prior Servicing. Each Mortgage Loan has been serviced in strict
compliance with Accepted Servicing Procedures;
(uu) Credit Information. 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. The Seller shall hold the Purchaser
harmless from any and all damages, losses, costs and expenses (including
attorney's fees) arising from disclosure of credit information furnished by
the Seller in connection with the Purchaser's secondary marketing operations
and the purchase and sale of mortgages. The Seller has in its capacity as
servicer, for each Mortgage Loan, 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 Company (three of the
credit repositories), on a monthly basis. The Servicer will transmit full-file
credit reporting data for each Mortgage Loan pursuant to Xxxxxx Xxx Guide
Announcement 95-19 and that for each Mortgage Loan, Servicer agrees it shall
report one of the following statuses each month as follows: new origination,
current, delinquent (30-, 60-, 90-days, etc.), foreclosed, or charged-off.
This representation and warranty is a Deemed Material Breach Representation;
(vv) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest
in the land; (2) the terms of such lease expressly permit the mortgaging of
the leasehold estate, the assignment of the lease without the lessor's consent
and the acquisition by the holder of the Mortgage of the rights of the lessee
upon foreclosure or assignment in lieu of foreclosure or provide the holder of
the Mortgage with substantially similar protections; (3) the terms of such
lease do not (a) allow the termination thereof upon the lessee's default
without the holder of the Mortgage being entitled to receive written notice
of, and opportunity to cure, such default, (b) allow the termination of the
lease in the event of damage or destruction as long as the Mortgage is in
existence, (c) prohibit the holder of the Mortgage from being insured (or
receiving proceeds of insurance) under the hazard insurance policy or policies
relating to the Mortgaged Property or (d) permit any increase in rent other
than pre-established increases set forth in the lease; (4) the original term
of such lease is not less than fifteen (15) years; (5) the term of such lease
does not terminate earlier than five (5) years after the maturity date of the
Mortgage Note; and (6) the Mortgaged Property is located in a jurisdiction in
which the use of leasehold estates in transferring ownership in residential
properties is a widely accepted practice;
(ww) Prepayment Penalty. The Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note except as set
forth on the related Mortgage Loan Schedule. With respect to each Mortgage
Loan that has a prepayment penalty feature, each such Prepayment Penalty is
enforceable and will be enforced by the Seller for the benefit of the
Purchaser, and each Prepayment Penalty is permitted pursuant to applicable
federal, state and local law. Each such Prepayment Penalty is in an amount not
more than the maximum amount
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permitted under applicable law and no such Prepayment Penalty may provide for
a term in excess of five (5) years with respect to Mortgage Loans originated
prior to October, 1, 2002. With respect to Mortgage Loans originated on or
after October 1, 2002, the duration of the Prepayment Penalty period shall not
exceed three (3) years from the date of the Mortgage Note unless the Mortgage
Loan was modified to reduce the Prepayment Penalty period to no more than
three (3) years from the date of the note and the Mortgagor was notified in
writing of such reduction in Prepayment Penalty period. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium
upon a prepayment prior to maturity: (i) the Mortgage Loan provides some
benefit to the Mortgagor (e.g., a rate or fee reduction) in exchange for
accepting such Prepayment Penalty, (ii) prior to the Mortgage Loan's
origination the Mortgagor, was offered the option of obtaining a mortgage loan
that did not require payment of such a penalty, (iii) the prepayment penalty
was adequately disclosed to the Mortgagor in the mortgage loan documents
pursuant to applicable state, local and federal law, and (iv) notwithstanding
any state, local or federal law to the contrary, the Servicer shall not impose
such prepayment penalty in any instance when the mortgage debt is accelerated
as the result of the Mortgagor's default in making the loan payments. This
representation and warranty is a Deemed Material Breach Representation;
(xx) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable. No Mortgage Loan is covered by the Home
Ownership and Equity Protection Act of 1994 and no Mortgage Loan is in
violation of any applicable comparable state or local law. The Mortgaged
Property is not located in a jurisdiction where a breach of this
representation with respect to the related Mortgage Loan may result in
additional assignee liability to the Purchaser, as determined by Purchaser in
its reasonable discretion. This representation and warranty is a Deemed
Material Breach Representation;
(yy) Single-premium credit life insurance policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance or acquire a single-premium credit life insurance policy. No
Mortgagor was required to purchase any single premium credit insurance policy
(e.g., life, disability, property, accident, unemployment 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
insurance policy (e.g., life, disability, property, accident, unemployment,
mortgage or health insurance) in connection with the origination of the
Mortgage Loan. No proceeds from any Mortgage Loan were used to purchase single
premium credit insurance policies as part of the origination of, or as a
condition to closing, such Mortgage Loan. This representation and warranty is
a Deemed Material Breach Representation;
(zz) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by, a paid in full, tax service contract and a paid
in full, flood certification contract and each of these contracts is either
transferable to the Purchaser or its designee, or Servicer shall pay any
associated costs with obtaining transferable tax service and flood
certification contracts upon the related Transfer Date, if any;
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
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(bbb) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a
"living trust" and such "living trust" is in compliance with Xxxxxx Mae
guidelines for such trusts;
(ccc) Recordation. Each original Mortgage was recorded and, except
for those Mortgage Loans subject to the MERS identification system, all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein
such recordation is necessary to perfect the lien thereof as against creditors
of the Seller, or is in the process of being recorded;
(ddd) FICO Scores. Each Mortgagor has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than 500;
(eee) Compliance with Anti-Money Laundering Laws. 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;
(fff) Litigation. The Mortgage Loan is not subject to any
outstanding litigation for fraud, origination, predatory lending, servicing or
closing practices;
(ggg) [Reserved];
(hhh) Reports. On or prior to the related Closing Date, the Seller
has provided the Custodian and the Purchaser with a MERS Report;
(iii) Origination Practices. The Mortgagor was not encouraged or
required to select a Mortgage Loan product offered by the Mortgage Loan's
originator which is a higher cost product designed for less creditworthy
borrowers, unless at the time of the Mortgage Loan's origination, such
Mortgagor did not qualify taking into account such facts as, without
limitation, the Mortgage Loan's requirements and the Mortgagor's credit
history, income, assets, and liabilities and debt-to-income ratios for a
lower-cost credit product then offered by the Mortgage Loan's originator or
any affiliate of the Mortgage Loan's originator. For a Mortgagor who seeks
financing through a Mortgage Loan originator's higher-priced subprime lending
channel, the Mortgagor was directed towards or offered the Mortgage Loan
originator's standard mortgage line if the Mortgagor was able to qualify for
one of the standard products. This representation and warranty is a Deemed
Material Breach Representation;
(jjj) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan does not rely solely on the
extent of the Mortgagor's equity in the collateral as the principal
determining factor in approving such extension of credit. The methodology
employed objective criteria as the Mortgagor's income, assets and liabilities,
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to the proposed mortgage payment and, based on such methodology, the Mortgage
Loan's originator made a reasonable determination that at the time of
origination the Mortgagor had the ability to make timely payments on the
Mortgage Loan. Such underwriting methodology confirmed that at the time of
origination (application/approval) the Mortgagor had a reasonable ability to
make timely payments on the Mortgage Loan. This representation and warranty is
a Deemed Material Breach Representation;
(kkk) Points and Fees. No Mortgagor was charged "points and fees"
(whether or not financed) in an amount greater than (i) $1,000, or (ii) 5% of
the principal amount of such Mortgage Loan, whichever is greater. For purposes
of this representation, such 5% limitation is calculated in accordance with
Xxxxxx Mae's anti-predatory lending requirements as set forth in the Xxxxxx
Mae Guides and "points and fees" (x) include origination, underwriting, broker
and finder fees and charges that the mortgagee imposed as a condition of
making the Mortgage Loan, whether they are paid to the mortgagee or a third
party, and (y) exclude bona fide discount points, fees paid for actual
services rendered in connection with the origination of the Mortgage Loan
(such as attorneys' fees, notaries fees and fees paid for property appraisals,
credit reports, surveys, title examinations and extracts, flood and tax
certifications, and home inspections), the cost of mortgage insurance or
credit-risk price adjustments, the costs of title, hazard, and flood insurance
policies, state and local transfer taxes or fees, escrow deposits for the
future payment of taxes and insurance premiums, and other miscellaneous fees
and charges which miscellaneous fees and charges, in total, do not exceed
0.25% of the principal amount of such Mortgage Loan. This representation and
warranty is a Deemed Material Breach Representation; and
(lll) Fees Charges. 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 has been
disclosed in writing to the Mortgagor in accordance with applicable state and
federal law and regulation. This representation and warranty is a Deemed
Material Breach Representation;
(mmm) Arbitration. With respect to any Mortgage Loan originated on
or after August 1, 2004, 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. This
representation and warranty is a Deemed Material Breach Representation; and
(nnn) Second Lien Mortgage Loans. With respect to each Second Lien
Mortgage Loan:
(i) No Negative Amortization of Related First Lien Mortgage
Loan. The related first lien mortgage loan does not permit negative
amortization;
(ii) Request for Notice; No Consent Required. Where required or
customary in the jurisdiction in which the Mortgaged Property is
located, the original lender has filed for record a request for
notice of any action by the related senior lienholder, and the
Seller has notified such senior lienholder in writing of the
existence of the Second Lien Mortgage Loan and requested
notification of any action to be taken against the Mortgagor by such
senior lienholder. Either (a) no
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consent for the Second Lien Mortgage Loan is required by the holder
of the related first lien mortgage loan or (b) such consent has been
obtained and is contained in the related Mortgage File;
(iii) No Default Under First Lien. To the best of Seller's
knowledge, the related first lien mortgage loan is in full force and
effect, and there is no default lien, breach, violation or event
which would permit acceleration existing under such first lien
mortgage or mortgage note, and no event which, with the passage of
time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event which would
permit acceleration under such first lien mortgage loan;
(iv) Right to Cure First Lien. The related first lien mortgage
contains a provision which provides for giving notice of default or
breach to the mortgagee under the Mortgage Loan and allows such
mortgagee to cure any default under the related first lien mortgage;
and
(v) Principal Residence. The related Mortgaged Property is the
Mortgagor's principal residence.
This representation and warranty is a Deemed Material and Adverse
Representation.
Subsection 7.02 Seller and Servicer Representations. Each of the
Seller and Servicer hereby represents and warrants to the Purchaser and its
successors and assigns that, as of the related Closing Date:
(a) Due Organization and Authority. It is a corporation duly
organized, validly existing and in good standing under the laws of the state
of Kansas, in the case of the Seller and [Tennessee, in the case of the
Servicer, and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state
wherein it owns or leases any material properties or where a Mortgaged
Property is located, if any applicable law requires licensing or qualification
in order to conduct business of the type conducted by it, and in any event it
is in compliance with any applicable laws of any such state to the extent
necessary to ensure the enforceability of the related Mortgage Loan in
accordance with the terms of this Agreement; it has the full power, authority
and legal right to hold, transfer and convey the Mortgage Loans and to execute
and deliver this Agreement and to perform its obligations hereunder; the
execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by it and
the consummation of the transactions contemplated hereby have been duly and
validly authorized; this Agreement and all agreements contemplated hereby have
been duly executed and delivered and constitute the valid, legal, binding and
enforceable obligations of it, regardless of whether such enforcement is
sought in a proceeding in equity or at law; and all requisite corporate action
has been taken by it to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of its
business, and the transfer,
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assignment and conveyance of the Mortgage Notes and the Mortgages by the
Seller pursuant to this Agreement are not subject to the bulk transfer or any
similar statutory provisions in effect in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with
the terms and conditions of this Agreement, will conflict with or result in a
breach of any of the terms, conditions or provisions of its charter or by-laws
or other organizational documents or any legal restriction or any agreement or
instrument to which its is now a party or by which it is bound, or constitute
a default or result in an acceleration under any of the foregoing, or result
in the violation of any law, rule, regulation, order, judgment or decree to
which it or its property is subject, or result in the creation or imposition
of any lien, charge or encumbrance that would have an adverse effect upon any
of its properties pursuant to the terms of any mortgage, contract, deed of
trust or other instrument, or impair the ability of the Purchaser to realize
on the Mortgage Loans, impair the value of the Mortgage Loans, or impair the
ability of the Purchaser to realize the full amount of any insurance benefits
accruing pursuant to this Agreement;
(d) Ability To Perform; Solvency. It does not believe, nor does it
have any reason or cause to believe, that it cannot perform each and every
covenant contained in this Agreement. The Seller is solvent and the sale of
the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or
defraud any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against either the Seller or the Servicer,
before any court, administrative agency or other tribunal asserting the
invalidity of this Agreement, seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or which, either in any one
instance or in the aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of either the
Seller or the Servicer, or in any material impairment of the right or ability
of rather the Seller or the Servicer to carry on its business substantially as
now conducted, or in any material liability on the part of either the Seller
or the Servicer, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of either the Seller or the Servicer
contemplated herein, or which would be likely to impair materially the ability
of either the Seller or the Servicer to perform under the terms of this
Agreement. There is no action, suit, proceeding or investigation pending
against either the Seller or the Servicer with respect to the Mortgage Loans
relating to fraud, predatory lending, servicing or closing practices;
(f) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or
governmental agency or body including HUD, the FHA or the VA is required for
the execution, delivery and performance by either the Seller or the Servicer
of or compliance by either the Seller or the Servicer with this Agreement or
the Mortgage Loans, the delivery of a portion of the Mortgage Files to the
Custodian or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval has
been obtained prior to the related Closing Date;
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(g) Ability to Service. Servicer has the facilities, procedures, and
experienced personnel necessary for the sound servicing of mortgage loans of
the same type as the Mortgage Loans. Each of the Seller and the Servicer is
duly qualified, licensed, registered and otherwise authorized under all
applicable federal, state and local laws, and regulations, if applicable,
meets the minimum capital requirements set forth by HUD, the OTS, the OCC or
the FDIC, if applicable, and is in good standing to enforce, originate, sell
mortgage loans to, and service mortgage loans in the jurisdiction wherein the
Mortgaged Properties are located;
(h) Reasonable Servicing Fee. Each of the Seller and the Servicer
acknowledges and agrees that the Servicing Fee represents reasonable
compensation for performing such services and that the entire Servicing Fee
shall be treated by the Servicer, for accounting and tax purposes, as
compensation for the servicing and administration of the Mortgage Loans
pursuant to this Agreement;
(i) Selection Process. The Mortgage Loans were selected from among
the outstanding 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 Subsection 7.01 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(j) Delivery to the Custodian. 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, shall be
delivered to the Custodian all in compliance with the specific requirements of
the Custodial Agreement. With respect to each Mortgage Loan, the Servicer will
be in possession of a complete Mortgage File in compliance with Exhibit 2
hereto, except for such documents as will be delivered to the Custodian;
(k) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans are as set forth on the description of the pool characteristics
for the Mortgage Loans delivered pursuant to Section 9 on the related Closing
Date in the form attached as Exhibit B to the Assignment and Conveyance;
(l) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby
(including any Securitization Transaction, Whole Loan Transfer or Agency
Transfer) contains or will contain any untrue statement of fact or omits or
will omit to state a fact necessary to make the statements contained herein or
therein not misleading;
(m) Financial Statements. The Seller has delivered to the Purchaser
audited financial statements of First Horizon National Corporation ("FHNC") as
to its last two (2) complete fiscal years and special purpose consolidated
financials and un-audited financials of the Seller as to its last complete
fiscal year and in each case any later quarter ended more than sixty (60) days
prior to the execution of this Agreement. All such financial statements fairly
present the pertinent results of operations and changes in financial position
for each of such periods and the financial position at the end of each such
period of FHNC and their Seller and their subsidiaries and have been prepared
in accordance with generally accepted accounting principles
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consistently applied throughout the periods involved, except as set forth in
the notes thereto. There has been no change in the business, operations,
financial condition, properties or assets of FHNC or the Seller since the date
of such financial statements that would have a material adverse effect on its
ability to perform its obligations under this Agreement. Each of the Seller
and the Servicer has completed any forms requested by the Purchaser in a
timely manner and in accordance with the provided instructions;
(n) [Reserved].
(o) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(p) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting
purposes;
(q) Owner of Record. Except for a MERS Designated Mortgage Loan, the
Seller is the owner of record of each Mortgage and the indebtedness evidenced
by each Mortgage Note, except for any Assignments of Mortgage which have been
sent for recording, and upon recordation the Seller will be the owner of
record of each Mortgage and the indebtedness evidenced by each Mortgage Note,
and upon the sale of the Mortgage Loans to the Purchaser, the Servicer will
retain the Credit Files with respect thereto in trust only for the purpose of
servicing and supervising the servicing of each Mortgage Loan;
(r) Reasonable Purchase Price. The Seller deems the consideration
received upon the sale of the Mortgage Loans under this Agreement to be fair
consideration and reasonably equivalent value for the Mortgage Loans;
(s) Seller's Origination. The Seller's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Seller's underwriting guidelines, and is in no way made as
a result of Purchaser's decision to purchase, or not to purchase, or the price
Purchaser may offer to pay for, any such mortgage loan, if originated;
(t) [Reserved].
(u) MERS Designations. With respect to each MERS Designated Mortgage
Loan, no Person is listed as Interim Funder on the MERS(R) System; and
(v) Prior Servicing. Prior to the date hereof, each Mortgage Loan
has been serviced in all material respects in strict compliance with Accepted
Servicing Procedures and the Servicer has reported the borrower Credit Files
to each of the three credit repositories on a monthly basis in a timely
manner.
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
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7.02 shall survive the sale of the Mortgage Loans to the Purchaser and shall
inure to the benefit of the Purchaser and its successors and assigns, and the
Successor Servicer notwithstanding any restrictive or qualified endorsement on
any Mortgage Note or Assignment of Mortgage or the examination or failure to
examine any Credit File. Upon discovery by either the Seller, the Servicer or
the Purchaser of a breach of any of the foregoing representations and
warranties, the party discovering such breach shall give prompt written notice
to the other relevant parties.
With respect to those representations and warranties which are made
to the best of the Seller's knowledge, if it is discovered by the Seller or
the Purchaser that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of
the related Mortgage Loan or the interest of the Purchaser (or which
materially and adversely affects the value of a Mortgage Loan or the interests
of the Purchaser in the related Mortgage Loan in the case of a representation
and warranty relating to a particular Mortgage Loan), notwithstanding the
Seller's lack of knowledge with respect to the substance of such
representation and warranty, such inaccuracy shall be deemed a breach of the
applicable representation and warranty.
Within sixty (60) days after the earlier of either discovery by or
notice to the Seller of any breach of a representation or warranty, which
materially and adversely affects the value of the Mortgage Loans or the
interest of the Purchaser therein (or which materially and adversely affects
the value of the applicable Mortgage Loan or the interest of the Purchaser
therein in the case of a representation and warranty relating to a particular
Mortgage Loan), 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 or
Mortgage Loans at the Repurchase Price. Notwithstanding the above sentence,
(i) within thirty (30) days of the earlier of either discovery by, or notice
to, the applicable Seller of any breach of the representation and warranty set
forth in clause (aaa) of Subsection 7.01, 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 and (ii) any breach of a Deemed
Material Breach Representation shall automatically be deemed to materially and
adversely affect the value of the Mortgage Loan and the interest of the
Purchaser therein. In the event that a breach shall involve any representation
or warranty set forth in Subsection 7.02, and such breach cannot be cured
within sixty (60) days of the earlier of either discovery by or notice to the
Seller of such breach, all of the Mortgage Loans affected by such breach
shall, at the Purchaser's option, be repurchased by the Seller at the
Repurchase Price. However, if the breach, shall involve a representation or
warranty set forth in Subsection 7.01 (other than the representation and
warranty set forth in clause (aaa) of such Subsection or any Deemed Material
Breach Representation) and the Seller discovers or receives notice of any such
breach within 120 days of the related Closing Date, the Seller shall, at the
Purchaser's option and provided that the Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted Mortgage Loan") and substitute in its
place a Qualified Substitute Mortgage Loan or Loans; provided that any such
substitution shall be effected not later than one hundred twenty (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 pursuant to the foregoing provisions of this Subsection
7.03 shall occur on a date designated by the Purchaser, and acceptable to the
Seller, and shall be accomplished by the Seller remitting to the Servicer for
deposit the amount of the Repurchase
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Price in the Custodial Account for distribution to the Purchaser on the next
scheduled Remittance Date.
At the time of repurchase of any deficient Mortgage Loan (or removal
of any Deleted Mortgage Loan), the Purchaser and the Seller shall arrange for
the assignment of the repurchased Mortgage Loan (or Deleted Mortgage Loan) to
the Seller or its designee and the delivery to the Seller of any documents
held by the Purchaser relating to the repurchased Mortgage Loan in the manner
required by this Agreement with respect to the purchase and sale of such
Mortgage Loan on the related Closing Date. In the event the Repurchase Price
is deposited in the Custodial Account, the Seller shall, simultaneously with
its remittance to the Servicer of such Repurchase Price for deposit, give
written notice to the Purchaser that such deposit has taken place. Upon such
repurchase, the Seller shall amend the related Mortgage Loan Schedule to
reflect the withdrawal of the repurchased Mortgage Loan from this Agreement.
As to any Deleted Mortgage Loan for which the Seller substitutes one
or more Qualified Substitute Mortgage Loans, the Seller shall be deemed to
have made the representations and warranties set forth in this Agreement
except that all such representations and warranties set forth in this
Agreement shall be deemed made as of the date of such substitution. No
substitution will be made in any calendar month after the Determination Date
for such month. The Seller shall effect such substitution by delivering to the
Purchaser for each Qualified Substitute Mortgage Loan the Mortgage Note, the
Mortgage, the Assignment of Mortgage and such other documents and agreements
as are required by Subsection 6.03. The Seller shall remit to the Servicer for
deposit in the Custodial Account the Monthly Payment less the Servicing Fee
due on each Qualified Substitute Mortgage Loan in the month following the date
of such substitution. Monthly Payments due with respect to Qualified
Substitute Mortgage Loans in the month of substitution shall be retained by
the Seller. For the month of substitution, distributions to the Purchaser
shall include the Monthly Payment due on any 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 related 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, each Qualified Substitute Mortgage Loan 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, 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
shall 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). The amount of such shortfall shall be remitted to the
Servicer by the Seller for distribution by the Servicer in the month of
substitution pursuant to Subsection 11.04. Accordingly, on the date of such
substitution, the Seller will remit to the Servicer from its own funds for
deposit into the Custodial Account an amount equal to the amount of such
shortfall plus one month's interest thereon at the Mortgage Loan Remittance
Rate.
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In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser, its successors and assigns and the
Successor Servicer and hold them harmless against any losses, damages,
penalties, fines, forfeitures, legal fees and expenses 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 representations and warranties contained in this Agreement or any
Reconstitution Agreement. It is understood and agreed that the obligations of
the Seller set forth in this Subsection 7.03 to cure, substitute for or
repurchase a defective Mortgage Loan, and to indemnify the Purchaser, its
successors and assigns and the Successor Servicer as provided in this
Subsection 12.01 constitute the sole remedies of the Purchaser and Successor
Servicer respecting a breach of the foregoing representations and warranties.
For purposes of this paragraph, "Purchaser" shall mean the Person then acting
as the Purchaser under this Agreement and any and all Persons who previously
were "Purchasers" under this Agreement and "Successor Servicer" shall mean the
Person then acting as the Successor Servicer under this Agreement and any and
all Persons who previously were "Successor Servicers" under this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 7.01 and
7.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure
by the Seller to cure such breach or repurchase such Mortgage Loan as
specified above and (iii) demand upon the Seller by the Purchaser for
compliance with this Agreement.
Subsection 7.04 Repurchase of Mortgage Loans with Early Payment
Defaults. If the related Mortgagor fails to make the first Monthly Payment due
after the related Closing Date on or prior to the date which is thirty (30)
days following the related Due Date (an "Early Payment Default"), the Seller,
at the Purchaser's option, shall repurchase such Mortgage Loan from the
Purchaser at the Repurchase Price within twenty (20) Business Days of the date
on which the Purchaser made such claim The Purchaser shall notify and invoice
the Seller of any obligation to repurchase such Mortgage Loan pursuant to this
Subsection 7.04 within one hundred eighty (180) days following the Closing
Date, provided that Purchaser has received receipt of notice from the Servicer
of such default.
Subsection 7.05 Premium Recapture. With respect to any Mortgage Loan
which prepays in full on or prior to the date which is 90 (90) days after the
related Closing Date, the Seller shall pay the Purchaser, within fifteen (15)
days of such prepayment in full (a) with respect to any Mortgage Loan without
a Prepayment Penalty, an amount equal to the difference between (i) the
Purchase Price (as adjusted) for such Mortgage Loan and (ii) the unpaid
principal balance as of the pay-off date of such Mortgage Loan, and (b) with
respect to any Mortgage Loan with a Prepayment Penalty, an amount equal to the
difference between (i) the Purchase Price (as adjusted) for such Mortgage Loan
and (ii) the sum of the unpaid principal balance as of the pay-off date of
such Mortgage Loan and the Prepayment Penalty actually received by the
Purchaser; provided that the Purchaser shall notify and invoice the Seller of
any obligation to remit to the Purchaser the premium with respect to such
Mortgage Loan pursuant to this Subsection 7.05 within one hundred eighty (180)
days following the related Closing Date, provided that the Purchaser has
received notice from the Servicer of such prepayment.
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Section 8. Closing. The closing for the purchase and sale of each
Mortgage Loan Package shall take place on the related Closing Date. At the
Purchaser's option, each 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. Each closing shall be subject to each of the
following conditions:
(a) at least two Business Days prior to the related Closing
Date, the Seller shall deliver to the Purchaser an excel spreadsheet listing
on a loan-level basis all the necessary information to compute the Purchase
Price of the Mortgage Loans delivered on such Closing Date (including accrued
interest), and prepare a Mortgage Loan Schedule;
(b) all of the representations and warranties of the Seller in
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 an Event of Default under this Agreement;
(c) the Purchaser's attorneys shall have received in escrow,
all Closing Documents as specified in Section 9, in such forms as are agreed
upon and acceptable to the Purchaser, duly executed by all signatories as
required pursuant to the terms hereof; and
(d) all other terms and conditions of this Agreement shall have
been complied with.
Section 9. Closing Documents. On the related Closing Date, the
Seller or Custodian, as applicable shall deliver to the Purchaser's attorneys
in escrow fully executed originals of:
(a) this Agreement (to be executed and delivered only for the
initial Closing Date);
(b) the related Purchase Price and Terms Agreement, executed in four
(4) counterparts;
(c) with respect to the initial Closing Date, the Custodial
Agreement, dated as of the initial Cut-off Date to be provided by the
Custodian;
(d) with respect to the initial Closing Date, a Custodial Account
Certification in the form attached as Exhibit 4 hereto or a Custodial Account
Letter Agreement in the form attached as Exhibit 5 hereto;
(e) with respect to the initial Closing Date, an Escrow Account
Certification in the form attached as Exhibit 6 hereto or an Escrow Account
Letter Agreement in the form attached as Exhibit 7 hereto;
(f) the related Mortgage Loan Schedule, in an electronic format,
segregated by Mortgage Loan Package, one copy to be attached hereto, one copy
to be attached to the
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Custodian's counterpart of the Custodial Agreement, and one copy to be
attached to the related Assignment and Conveyance as the Mortgage Loan
Schedule thereto;
(g) with respect to the initial Closing Date, an Officer's
Certificate, in the form of Exhibit 10 hereto with respect to each of the
Seller and Servicer, including all attachments thereto and with respect to
subsequent Closing Dates, an Officer's Certificate upon request of the
Purchaser; and
(h) with respect to the initial Closing Date, an Opinion of Counsel
of each of the Seller and Servicer (who may be an employee of the Seller), in
the form of Exhibit 11 hereto and with respect to subsequent Closing Dates, an
Opinion of Counsel upon request of the Purchaser;
(i) with respect to the initial Closing Date, an Opinion of Counsel
of the Custodian (who may be an employee of the Custodian), in the form of an
exhibit to the Custodial Agreement, if required to be provided by the
Custodian ;
(j) a Security Release Certification, in the form of Exhibit 12 or
Exhibit 13, as applicable, hereto executed by any person, as requested by the
Purchaser, if any of the Mortgage Loans have at any time been subject to any
security interest, pledge or hypothecation for the benefit of such person to
be provided by the Custodian ;
(k) a certificate or other evidence of merger or change of name,
signed or stamped by the applicable regulatory authority, if any of the
Mortgage 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;
(l) with respect to the initial Closing Date, the Underwriting
Guidelines to be attached hereto as Exhibit 8 and with respect to each
subsequent Closing Date, the Underwriting Guidelines to be attached to the
related Assignment and Conveyance;
(m) Assignment and Conveyance Agreement in the form of Exhibit 14
hereto, including all exhibits thereto;
(n) a Custodian's Certification, as required under the Custodial
Agreement; and
(o) a MERS Report reflecting the Purchaser as Investor, and no
Person as Interim Funder for each MERS Designated Mortgage Loan.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
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Section 10. Costs. The Purchaser shall pay any commissions due its
salesmen and the legal fees and expenses of its attorneys and custodial fees.
All other costs and expenses incurred in connection with the transfer and
delivery of the Mortgage including recording fees, fees for title policy
endorsements and continuations, fees for recording Assignments of Mortgage,
and the Seller's attorney's fees, shall be paid by the Seller.
Section 11. Administration and Servicing of the Mortgage Loans.
Subsection 11.01 Servicer to Act as Servicer. The Servicer shall
service and administer the Mortgage Loans in accordance with this Agreement
and Accepted Servicing Procedures and the terms of the Mortgage Notes and
Mortgages, and shall have full power and authority, acting alone or through
sub-servicers or agents, to do or cause to be done any and all things in
connection with such servicing and administration which the Servicer may deem
necessary or desirable and consistent with the terms of this Agreement. The
Servicer may perform its servicing responsibilities through agents or
independent contractors, but shall not thereby be released from any of its
responsibilities hereunder.
Consistent with the terms of this Agreement, the Servicer may waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor; provided, however, that (unless the Mortgagor is in default with
respect to the Mortgage Loan, or such default is, in the judgment of the
Servicer, imminent, and the Servicer has the consent of the Purchaser) the
Servicer shall not permit any modification with respect to any Mortgage Loan
which materially and adversely affects the Mortgage Loan, including without
limitation, any modification that would defer or forgive the payment of any
principal or interest, change the outstanding principal amount (except for
actual payments of principal), make any future advances, extend the final
maturity date or change the Mortgage Interest Rate, as the case may be, with
respect to such Mortgage Loan. With respect to loans subject to the
Servicemember Civil Relief Act, Servicer shall reduce the mortgage interest
according to servicemember order and remit funds collected according to
Section 11.04. Notwithstanding the foregoing, the Servicer shall not waive any
Prepayment Penalty or portion thereof unless (i) the enforceability thereof
shall have been limited by bankruptcy, insolvency, moratorium, receivership or
other similar laws relating to creditors' rights generally or is otherwise
prohibited by law, or (ii) the enforceability thereof shall have been
permanently limited due to acceleration in connection with a foreclosure or
other involuntary payment or (iii) in the Servicer's reasonable judgment, (x)
such waiver relates to a default or a reasonably foreseeable default, (y) such
waiver would maximize recovery of total proceeds taking into account the value
of such Prepayment Penalty and related Mortgage Loan and (z) doing so is
standard and customary in servicing Mortgage Loans (including any waiver of a
Prepayment Penalty in connection with a refinancing of a Mortgage Loan that is
related to a default or reasonably foreseeable default). Except as provided in
the preceding sentence, in no event will the Servicer waive a Prepayment
Penalty in connection with a refinancing of a Mortgage Loan that is not
related to a default or a reasonably foreseeable default. If the Servicer
waives or does not collect all or a portion of a Prepayment Penalty relating
to a Principal Prepayment in full or in part due to any action or omission of
the Servicer, other than as permitted above, the Servicer shall deposit from
its own funds without any right of reimbursement therefor the amount of such
Prepayment Penalty (or such portion thereof as had
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been waived for deposit) into the Custodial Account for distribution in
accordance with the terms of this Agreement. In connection with any waiver of
a Prepayment Penalty by the Servicer, the Servicer shall account for such
waiver in its monthly reports as agreed upon by the Servicer and the
Purchaser. Without limiting the generality of the foregoing, the Servicer in
its own name or acting through sub-servicers or agents is hereby authorized
and empowered by the Purchaser when the Servicer believes it appropriate and
reasonable in its best judgment, 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 the Mortgaged Properties and to institute
foreclosure proceedings or chargeoff (provided, that a chargeoff for Second
Lien Mortgage Loans occurs within 180 days of delinquency and a chargeoff for
first lien Mortgage Loans occurs in accordance with generally accepted
servicing standards, supported by good faith equity analysis) or obtain a
deed-in-lieu of foreclosure so as to convert the ownership of such properties,
and to hold or cause to be held title to such properties, on behalf of the
Purchaser pursuant to the provisions of Subsection 11.12. The Servicer shall
make all required Servicing Advances and shall service and administer the
Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
The Purchaser shall furnish to the Servicer any powers of attorney and other
documents reasonably necessary or appropriate to enable the Servicer to carry
out its servicing and administrative duties under this Agreement.
Notwithstanding anything to the contrary in this Agreement, the
Purchaser may at any time and from time to time, in its sole discretion, upon
written notice to the Seller, with respect to (1) any REO Property or (2) all
Mortgage Loans that are 90 or more days delinquent as of the date of such
notice and any Mortgage Loans that subsequently become 90 or more days
delinquent following the date of such notice (for the purposes of this
paragraph such Mortgage Loans, "Delinquent Mortgage Loans"), either (i)
terminate the Seller's servicing obligations hereunder with respect to such
REO Properties and Delinquent Mortgage Loans, upon reimbursement of any
unreimbursed advances owed to the Servicer and payment of the termination fee
referred to in Subsection 14.02, or (ii) assume the absolute right to direct
the Seller to take such actions with respect to such REO Property and
Delinquent Mortgage Loans as the Seller would otherwise be able to undertake
pursuant to Subsection 11.12. Upon the effectiveness of any such termination
of the Seller's servicing obligations with respect to any such REO Property or
Delinquent Mortgage Loan, the Seller shall deliver all agreements, documents,
and instruments related thereto to the Purchaser, in accordance with Accepted
Servicing Procedures and applicable law and shall transfer servicing to the
Purchaser's designee in accordance with Acceptable Servicing Procedures.
Notwithstanding the foregoing, upon any Mortgage Loan becoming an REO
Property, Servicer shall have the option to transfer servicing of such REO
Property to a successor servicer designated by Purchaser.
Subsection 11.02 Liquidation of Mortgage Loans. If 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 Servicer shall take such action as it shall deem to be in the best
interest of the Purchaser. If any payment due under any Mortgage Loan remains
delinquent for a period of one hundred twenty (120) days or more, the Servicer
shall commence foreclosure proceedings in accordance with the guidelines set
forth by Fannie
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Mae or Xxxxxxx Mac. In such event, the Servicer shall from its own funds make
all necessary and proper Servicing Advances.
Subsection 11.03 Collection of Mortgage Loan Payments. Continuously
from the date hereof until the principal and interest on all Mortgage Loans
are paid in full, the Servicer will proceed diligently, in accordance with
this Agreement, to collect all payments due under each of the Mortgage Loans
when the same shall become due and payable. Further, the Servicer will in
accordance with Accepted Servicing Procedures ascertain and estimate taxes,
assessments, fire and hazard insurance premiums, and all other charges that,
as provided in any 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. Notwithstanding anything contrary
contained herein, Servicer will cease collection activity on any delinquent
Second Lien Mortgage Loan in which the holder of the senior lien has completed
foreclosure proceedings on the Mortgaged Property or such Mortgage Loan has
otherwise become unsecured.
Subsection 11.04 Establishment of Custodial Account; Deposits in
Custodial Account. The Servicer shall segregate and hold all funds collected
and received pursuant to each Mortgage Loan separate and apart from any of its
own funds and general assets and shall establish and maintain one or more
Custodial Accounts (collectively, the "Custodial Account"), titled "First
Horizon Home Loan Corporation, in trust for Xxxxxxx Sachs Mortgage Company as
Purchaser of Mortgage Loans and various Mortgagors." Such Custodial Account
shall be established with a commercial bank, a savings bank or a savings and
loan association (which may be a depository affiliate of the Servicer) which
meets the guidelines set forth by Xxxxxx Xxx or Xxxxxxx Mac as an eligible
depository institution for custodial accounts. In any case, the Custodial
Account shall be insured by the FDIC in a manner which shall provide maximum
available insurance thereunder and which may be drawn on by the Servicer. The
creation of any Custodial Account shall be evidenced by (i) a certification in
the form of Exhibit 4 hereto, in the case of an account established with a
depository affiliate of the Servicer, or (ii) a letter agreement in the form
of Exhibit 5 hereto, in the case of an account held by a depository other than
an affiliate of the Servicer. In either case, a copy of such certification or
letter agreement shall be furnished to the Purchaser upon request.
The Servicer shall deposit in the Custodial Account on a daily basis
within two (2) Business Days following receipt thereof, and retain therein the
following payments and collections received or made by it subsequent to the
related Cut-off Date (other than in respect of principal and interest on the
Mortgage Loans due on or before the related Cut-off Date):
(a) all payments on account of principal, including all Principal
Prepayments, on the Mortgage Loans;
(b) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(c) all Liquidation Proceeds;
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(d) all proceeds received by the Servicer under any title insurance
policy, hazard insurance policy, or other insurance policy 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
Accepted Servicing Procedures;
(e) all awards or settlements in respect of condemnation proceedings
or eminent domain affecting any Mortgaged Property which are not released to
the Mortgagor in accordance with Accepted Servicing Procedures;
(f) any amount required to be deposited in the Custodial Account
pursuant to Subsections 11.14 and 11.18;
(g) any amount required to be deposited by the Servicer in
connection with any REO Property pursuant to Subsection 11.12;
(h) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to Subsection 7.03, and all amounts required to be
deposited by the Servicer in connection with shortfalls in principal amount of
Qualified Substitute Mortgage Loans pursuant to Subsection 7.03; and
(i) with respect to each Principal Prepayment, an amount (to be paid
by the Servicer out of its own funds) which, when added to all amounts
allocable to interest received in connection with the Principal Prepayment,
equals one month's interest on the amount of principal so prepaid for the
month of prepayment at the applicable Mortgage Loan Remittance Rate; provided,
however, that the Servicer's aggregate obligations under this paragraph for
any month shall be limited to the total amount of Servicing Fees actually
received with respect to the Mortgage Loans by the Servicer during such month.
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,
assumption fees and other ancillary fees need not be deposited by the Servicer
in the Custodial Account.
The Servicer may invest the funds in the Custodial Account in
Eligible Investments designated in the name of the Servicer for the benefit of
the Purchaser, which shall mature not later than the Business Day next
preceding the Remittance Date next following the date of such investment
(except that (A) any investment in the institution with which the Custodial
Account is maintained may mature on such Remittance Date and (B) any other
investment may mature on such Remittance Date if the Servicer shall advance
funds on such Remittance Date, pending receipt thereof to the extent necessary
to make distributions to the Owner) and shall not be sold or disposed of prior
to maturity. Notwithstanding anything to the contrary herein and above, all
income and gain realized from any such investment shall be for the benefit of
the Servicer and shall be subject to withdrawal by the Servicer. The amount of
any losses incurred in respect of any such investments shall be deposited in
the Custodial Account by the Servicer out of its own funds immediately as
realized.
Subsection 11.05 Withdrawals From the Custodial Account. The
Servicer shall, from time to time, withdraw funds from the Custodial Account
for the following purposes:
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(a) to make payments to the Purchaser in the amounts and in the
manner provided for in Subsection 11.14;
(b) to reimburse itself for any unpaid Servicing Fees and for
unreimbursed Servicing Advances, the Servicer's right to reimburse itself
pursuant to this subclause (c) with respect to any Mortgage Loan being limited
to related Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition Proceeds and such other amounts as may be collected by the
Servicer from the Mortgagor or otherwise relating to the Mortgage Loan, it
being understood that, in the case of any such reimbursement, the Servicer's
right thereto shall be prior to the rights of the Purchaser unless the Seller
is required to repurchase a Mortgage Loan pursuant to Subsection 7.03, in
which case the Servicer'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 Loan;
(c) to reimburse itself for unreimbursed Servicing Advances to the
extent that such amounts are nonrecoverable by the Servicer pursuant to
subclause (b) above, provided that the Mortgage Loan for which such advances
were made is not required to be repurchased by the Seller pursuant to
Subsection 7.03;
(d) to reimburse itself for expenses incurred by and reimbursable to
it pursuant to Subsection 12.01;
(e) to pay to itself any interest earned or any investment earnings
on funds deposited in the Custodial Account;
(f) to withdraw any amounts inadvertently deposited in the Custodial
Account; and
(g) to clear and terminate the Custodial Account upon the
termination of this Agreement.
Subsection 11.06 Establishment of Escrow Account; Deposits in Escrow
Account. The Servicer shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts (collectively, the "Escrow
Account"), titled "First Horizon Home Loan Corporation, in trust for Xxxxxxx
Sachs Mortgage Company as Purchaser of Mortgage Loans and various Mortgagors."
The Escrow Account shall be established with a commercial bank, a savings bank
or a savings and loan association (which may be a depository affiliate of
Servicer), which meets the guidelines set forth by Xxxxxx Xxx or Xxxxxxx Mac
as an eligible institution for escrow accounts. In any case, the Escrow
Account shall be insured by the FDIC in a manner which shall provide maximum
available insurance thereunder and which may be drawn on by the Servicer. The
creation of any Escrow Account shall be evidenced by a certification in the
form of Exhibit 6 hereto, in the case of an account established with a
depository affiliate of the Servicer, or by a letter agreement in the form of
Exhibit 7 hereto, in the case of an account held by a depository. In either
case, a copy of such certification or letter agreement shall be furnished to
the Purchaser upon request.
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The Servicer shall deposit in the Escrow Account on a daily basis
within two (2) Business Days of receipt thereof and retain therein: (a) all
Escrow Payments collected on account of the Mortgage Loans, as applicable for
the purpose of effecting timely payment of any such items as required under
the terms of this Agreement, and (b) all amounts representing proceeds of any
hazard insurance policy which are to be applied to the restoration or repair
of any Mortgaged Property. The Servicer shall make withdrawals therefrom only
in accordance with Subsection 11.07. As part of its servicing duties, the
Servicer shall pay to the Mortgagors interest on funds in the Escrow Account,
to the extent required by law.
Subsection 11.07 Withdrawals From Escrow Account. Withdrawals from
the Escrow Account shall be made by the Servicer only (a) to effect timely
payments of ground rents, taxes, assessments, fire and hazard insurance
premiums or other items constituting Escrow Payments for the related Mortgage,
(b) to reimburse the Servicer for any Servicing Advance made by Servicer
pursuant to Subsection 11.08 with respect to a related Mortgage Loan, (c) to
refund to any Mortgagor any funds found to be in excess of the amounts
required under the terms of the related Mortgage Loan, (d) for transfer to the
Custodial Account upon default of a Mortgagor or in accordance with the terms
of the related Mortgage Loan and if permitted by applicable law, (e) for
application to restore or repair of the Mortgaged Property, (f) to pay to the
Mortgagor, to the extent required by law, any interest paid on the funds
deposited in the Escrow Account, (g) to pay to itself any interest earned on
funds deposited in the Escrow Account (and not required to be paid to the
Mortgagor), (h) to the extent permitted under the terms of the related
Mortgage Note and applicable law, to pay late fees with respect to any Monthly
Payment which is received after the applicable grace period, (i) to withdraw
suspense payments that are deposited into the Escrow Account, (j) to withdraw
any amounts inadvertently deposited in the Escrow Account or (k) to clear and
terminate the Escrow Account upon the termination of this Agreement.
Subsection 11.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder. With respect to each Mortgage Loan, the Servicer shall
maintain accurate records reflecting the status of ground rents, taxes,
assessments and other charges which are or may become a lien upon the
Mortgaged Property and the status of fire and hazard insurance coverage and
shall obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) and shall effect payment thereof prior to the
applicable penalty or termination date and at a time appropriate for securing
maximum discounts allowable, employing for such purpose deposits of the
Mortgagor in the Escrow Account which shall have been estimated and
accumulated by the Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Mortgage. If a Mortgage does not provide for
Escrow Payments, the Servicer shall determine that any such payments are made
by the Mortgagor. The Servicer assumes full responsibility for the timely
payment of all such bills and shall effect timely payments of all such bills
irrespective of each Mortgagor's faithful performance in the payment of same
or the making of the Escrow Payments and shall make Servicing Advances to
effect such payments, subject to its ability to recover such Servicing
Advances pursuant to Subsection 11.07(b). With respect to each Mortgage Loan,
on or before January 31st of each year during the term of this Agreement,
beginning January 31, 2007, the Servicer shall ensure that all taxes due
during the prior calendar year have been paid on the related Mortgaged
Property.
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With respect to each Mortgage Loan identified on the Mortgage Loan
Schedule as an LPMI Loan, the Servicer shall maintain in full force and effect
any LPMI Policy, and from time to time, withdraw the premium with respect to
such Mortgage Loans from the Custodial Account in order to pay the premium
thereon on a timely basis. In the event that the interest payments made with
respect to the Mortgage Loan are less than the premium with respect to the
LPMI Policy, the Servicer shall advance from its own funds the amount of any
such shortfall in the LPMI Policy premiums, in payment of such premium. Any
such advance shall be a Servicing Advance subject to reimbursement. In the
event that such LPMI Policy shall be terminated, the Servicer shall obtain
from another insurer acceptable under the Underwriting Guidelines, a
comparable replacement policy, with a total coverage equal to the remaining
coverage of such terminated LPMI Policy, at substantially the same fee level.
If the insurer shall cease to be an insurer acceptable under the Underwriting
Guidelines, the Servicer shall determine whether recoveries under the LPMI
Policy are jeopardized for reasons related to the financial condition of such
insurer, it being understood that the Servicer shall in no event have any
responsibility or liability for any failure to recover under the LPMI Policy
for such reason. If the Servicer determines that recoveries are so
jeopardized, it shall notify the Purchaser and the Mortgagor, if required, and
obtain from another insurer acceptable under the Underwriting Guidelines a
replacement insurance policy. The Servicer shall not take any action which
would result in noncoverage under any applicable LPMI Policy of any loss
which, but for the actions of the Servicer would have been covered thereunder.
In connection with any assumption or substitution agreement entered into or to
be entered into, the Servicer shall promptly notify the insurer under the
related LPMI Policy, if any, of such assumption or substitution of liability
in accordance with the terms of such LPMI Policy and shall take all actions
which may be required by such insurer as a condition to the continuation of
coverage under such LPMI Policy. If such LPMI Policy is terminated as a result
of such assumption or substitution of liability, the Servicer shall obtain a
replacement LPMI Policy as provided above.
Purchaser, in its sole discretion, at any time, may (i) either
obtain an additional LPMI Policy on any Mortgage Loan which already has an
LPMI Policy in place, or (ii) obtain a LPMI Policy for any Mortgage Loan which
does not already have a LPMI Policy in place. In any event, the Servicer
agrees to administer such LPMI Policies in accordance with the Agreement or
any Reconstitution Agreement.
In connection with its activities as servicer, the Servicer agrees
to prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any PMI Policy or LPMI Policy in a timely fashion in accordance
with the terms of such PMI Policy and LPMI Policy and, in this regard, to take
such action as shall be necessary to permit recovery under any PMI Policy or
LPMI Policy respecting a defaulted Mortgage Loan. Any amounts collected by the
Servicer under any PMI Policy shall be deposited in the Escrow Account.
Subsection 11.09 Transfer of Accounts. The Servicer may transfer the
Custodial Account or the Escrow Account to a different depository institution.
Such transfer shall be made only upon obtaining the prior written consent of
the Purchaser; such consent not to be unreasonably withheld.
Subsection 11.10 Maintenance of Hazard Insurance. The Servicer shall
cause to be maintained for each Mortgage Loan fire and hazard insurance with
extended
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coverage customary in the area where the Mortgaged Property is located that
conforms to the requirements of Xxxxxx Xxx or Xxxxxxx Mac. If the Mortgaged
Property is in an area identified in the Federal Register by the Federal
Emergency Management Agency as having special flood hazards (and such flood
insurance has been made available) the Servicer will cause to be maintained a
flood insurance policy meeting the requirements of Xxxxxx Mae or Xxxxxxx Mac.
The Servicer shall also maintain on REO Property fire and hazard insurance
with extended coverage in an amount which meets the requirements of Xxxxxx Mae
or Xxxxxxx Mac. Any amounts collected by the Servicer under any such policies
(other than amounts to be deposited in the Escrow Account and applied to the
restoration or repair of the property subject to the related Mortgage or
property acquired in liquidation of the Mortgage Loan, or to be released to
the Mortgagor in accordance with Accepted Servicing Procedures) shall be
deposited in the Custodial Account, subject to withdrawal pursuant to
Subsection 11.05. It is understood and agreed that no earthquake or other
additional insurance need be required by the Servicer of any Mortgagor or
maintained on REO Property 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 policies required hereunder shall be endorsed with
standard mortgagee clauses with loss payable to Servicer, and shall provide
for at least thirty (30) days prior written notice of any cancellation,
reduction in amount or material change in coverage to the Servicer. The
Servicer shall not interfere with the Mortgagor's freedom of choice in
selecting either its insurance carrier or agent; provided, however, that the
Servicer shall not accept any such insurance policies that do not conform to
the requirements of Xxxxxx Mae or Xxxxxxx Mac.
Subsection 11.11 Fidelity Bond; Errors and Omissions Insurance. The
Servicer shall maintain, at its own expense, a blanket Fidelity Bond and an
errors and omissions insurance policy, with broad coverage on all officers,
employees or other persons acting in any capacity requiring such persons to
handle funds, money, documents or papers relating to the Mortgage Loans. These
policies shall insure the Servicer against losses resulting from dishonest or
fraudulent acts committed by the Servicer's personnel, any employees of
outside firms that provide data processing services for the Servicer, and
temporary contract employees or student interns. The Fidelity Bond shall also
protect and insure the Servicer against losses in connection with the release
or satisfaction of a Mortgage Loan without having obtained payment in full of
the indebtedness secured thereby. No provision of this Subsection 11.11
requiring such Fidelity Bond and errors and omissions insurance shall diminish
or relieve the Servicer of its duties and obligations as set forth in this
Agreement. The minimum coverage under any such Fidelity Bond and insurance
policy shall be at least equal to the corresponding amounts required by Xxxxxx
Mae in the Xxxxxx Xxx Servicing Guide or by Xxxxxxx Mac in the Xxxxxxx Xxx
Xxxxxxx' & Servicers' Guide, as amended or restated from time to time, or in
an amount as may be permitted to the Servicer by express waiver of Xxxxxx Mae
or Xxxxxxx Mac.
Subsection 11.12 Title, Management and Disposition of REO Property.
If 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 Servicer or its nominee, in either case as nominee, for the
benefit of the Purchaser of record on the date of acquisition of title (the
"Owner"). If the Servicer 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
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Servicer, at the expense of the Purchaser, from an attorney duly licensed to
practice law in the state where the REO Property is located. The Person or
Persons holding such title other than the Owner shall acknowledge in writing
that such title is being held as nominee for the Owner.
The Servicer shall cause to be deposited on a daily basis in the
Custodial Account all revenues received with respect to the conservation and
disposition of 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
Subsection 11.10 and the fees of any managing agent acting on behalf of the
Servicer. Any disbursement in excess of $5,000 shall be made only with the
written approval of the Purchaser. The Servicer shall make distributions as
required on each Remittance Date to the Purchaser of the net cash flow from
the REO Property (which shall equal the revenues from such REO Property net of
the expenses described above and of any reserves reasonably required from time
to time to be maintained to satisfy anticipated liabilities for such
expenses).
The disposition of REO Property shall be carried out by the Servicer
in accordance with the provisions of this Agreement and shall be made at such
price, and upon such terms and conditions, as the Servicer deems to be in the
best interests of the Owner. Upon the request of the Owner, and at the Owner's
expense, the Servicer shall cause an appraisal of the REO Property to be
performed for the Owner. The proceeds of sale of the REO Property shall be
promptly deposited in the Custodial Account and, as soon as practical
thereafter, the expenses of such sale shall be paid, the Servicer shall
reimburse itself for any related unreimbursed Servicing Advances, unpaid
Servicing Fees and any appraisal performed pursuant to this paragraph and the
net cash proceeds of such sale remaining in the Custodial Account shall be
distributed to the Purchaser.
The Servicer shall either itself or through an agent selected by the
Servicer, manage, conserve, protect and operate the REO Property in the same
manner that it manages, conserves, protects and operates other foreclosed
property for its own account, and in the same manner that similar property in
the same locality as the REO Property is managed. The Servicer shall attempt
to sell the same (and may temporarily rent the same) on such terms and
conditions as the Servicer deems to be in the best interest of the Owner.
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
Servicer shall manage, conserve, protect and operate each REO Property in a
manner which 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.
Upon request, with respect to any REO Property, the Servicer shall
furnish to the Owner a statement covering the Servicer's efforts in connection
with the sale of that REO Property and any rental of the REO Property
incidental to the sale thereof for the previous month (together with an
operating statement).
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Subsection 11.13 Servicing Compensation. As compensation for its
services hereunder, the Servicer shall be entitled to retain the Servicing Fee
from interest payments on the Mortgage Loans. Additional servicing
compensation in the form of assumption fees, late payment charges and other
ancillary income shall be retained by the Servicer to the extent not required
to be deposited in the Custodial Account. The Servicer shall be required to
pay all expenses incurred by it in connection with its servicing activities
hereunder and shall not be entitled to reimbursement therefor except as
specifically provided for herein.
Subsection 11.14 Distributions. On each Remittance Date the Servicer
shall remit by wire transfer of immediately available funds to the account
designated in writing by the Purchaser of record on the preceding Record Date
(a) all Monthly Payments due in the Due Period relating to such Remittance
Date and received by the Servicer prior to the related Determination Date,
plus (b) all amounts, if any, which the Servicer is obligated to distribute
pursuant to Subsection 11.16, plus (c) any amounts attributable to Principal
Prepayments received in the calendar month preceding the month in which the
Remittance Date occurs, together with any additional interest required to be
deposited in the Custodial Account in connection with such Principal
Prepayments in accordance with Subsection 11.04(i), minus (d) all amounts that
may be withdrawn from the Custodial Account pursuant to Subsections 11.05(b)
through (d).
With respect to any remittance received by the Purchaser after the
Business Day on which such payment was due, the Servicer shall pay to the
Purchaser interest on any such late payment at an annual rate equal to the
Prime Rate, adjusted as of the date of each change, plus three percent (3%),
but in no event greater than the maximum amount permitted by applicable law.
Such interest shall be paid by the Servicer to the Purchaser on the date such
late payment is made and shall cover the period commencing with the Business
Day on which such payment was due and ending with the Business Day on which
such payment is made, both inclusive. The payment by the Servicer of any such
interest shall not be deemed an extension of time for payment or a waiver of
any Event of Default by the Servicer.
Subsection 11.15 Statements to the Purchaser. Not later than the 8th
calendar day of each month (or, if such 8th day is not a Business Day, the
following Business Day), the Servicer shall forward to the Purchaser via
electronic medium in a mutually acceptable format to the Purchaser and the
Seller, a statement containing the information fields set forth on, Exhibit 9
and certified by a Servicing Officer. Such statement shall also include (i)
information regarding delinquencies on Mortgage Loans, indicating the number
and aggregate principal amount of Mortgage Loans which are delinquent
(including number of days delinquent through liquidation of the related REO
Property) and the book value of any REO Property and (ii) Static Pool
Information regarding the Mortgage Loans. The Servicer shall submit to the
Purchaser monthly a liquidation report with respect to each Mortgaged Property
sold in a foreclosure sale as of the related Record Date and not previously
reported. Such liquidation report shall be incorporated into the remittance
report delivered to Purchaser.
The Servicer shall furnish to the Purchaser an individual loan
accounting report in hard copy and electronic format mutually acceptable to
the Purchaser and the Seller, as of the last Business Day of each month, in
the Purchaser's assigned loan number order (provided that such loan numbers
previously have been provided in writing by the Purchaser to the Servicer) to
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document Mortgage Loan payment activity on an individual Mortgage Loan basis.
With respect to each month, the corresponding individual loan accounting
report shall be received by the Purchaser no later than the fifth Business Day
of the following month, which report shall contain the following:
(i) with respect to each Monthly Payment, the amount of such
remittance allocable to principal (including a separate
breakdown of any Principal Prepayment, including the date of
such prepayment, along with a detailed report of interest on
principal prepayment amounts remitted in accordance with
Subsection 11.14);
(ii) with respect to each Monthly Payment, the amount of such
remittance allocable to interest; and
(iii) the next actual due date for each Mortgage Loan.
In addition, within a reasonable period of time after the end of
each calendar year, the Servicer will furnish a report to each Person that was
a Purchaser at any time during such calendar year. Such report shall state the
aggregate of amounts distributed to the Purchaser for such calendar year. Such
obligation of the Servicer shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the
Servicer pursuant to any requirements of the Code.
The Servicer 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 the Purchaser pursuant to any applicable
law with respect to the Mortgage Loans and the transactions contemplated
hereby. In addition, the Servicer shall provide the Purchaser with such
information concerning the Mortgage Loans as is necessary for such Purchaser
to prepare federal income tax returns as the Purchaser may reasonably request
from time to time.
Subsection 11.16 Reserved.
Subsection 11.17 Assumption Agreements. The Servicer will use its
best efforts to enforce any "due-on-sale" provision contained in any Mortgage
or Mortgage Note, provided that the Servicer shall permit such assumption if
so required in accordance with the terms of the Mortgage or the Mortgage Note.
When the Mortgaged Property has been conveyed by the Mortgagor, the Servicer
will, to the extent it has knowledge of such conveyance, exercise its rights
to accelerate the maturity of such Mortgage Loan under the "due-on-sale"
clause applicable thereto; provided, however, the Servicer will not exercise
such rights if prohibited by law from doing so. In connection with any such
assumption, the outstanding principal amount, the Monthly Payment or the
Mortgage Interest Rate of the related Mortgage Note shall not be changed, and
the term of the Mortgage Loan will not be increased or decreased. If an
assumption is allowed pursuant to this Subsection 11.17, the Servicer is
authorized to enter into a substitution of liability agreement with the
purchaser of the Mortgaged Property pursuant to which the original Mortgagor
is released from liability and the purchaser of the Mortgaged Property is
substituted as Mortgagor and becomes liable under the Mortgage Note.
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Subsection 11.18 Satisfaction of Mortgages and Release of Mortgage
Files. Upon the payment in full of any Mortgage Loan, or the receipt by the
Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Servicer will obtain the portion of the
Mortgage File that is in the possession of the Purchaser or its designee,
prepare and process any required satisfaction or release of the Mortgage and
notify the Purchaser in accordance with the provisions of this Agreement. The
Purchaser agrees to deliver to the Servicer the original Mortgage Note for any
Mortgage Loan not later than three (3) Business Days following its receipt of
a notice from the Servicer that such a payment in full has been received or
that a notification has been received that such a payment in full shall be
made. Such Mortgage Note shall be held by the Servicer, in trust, for the
purpose of canceling such Mortgage Note and delivering the cancelled Mortgage
Note to the Mortgagor in a timely manner as and to the extent provided under
applicable state law. If the Mortgage has been recorded in the name of MERS or
its designee, the Servicer shall take all necessary action to effect the
release of the Mortgage Loan on the records of MERS.
If the Servicer grants a satisfaction or release of a Mortgage
without having obtained payment in full of the indebtedness secured by the
Mortgage or should the Servicer otherwise prejudice any right the Purchaser
may have under the mortgage instruments, the Servicer, upon written demand of
the Purchaser, shall remit to the Purchaser the Stated Principal Balance of
the related Mortgage Loan by deposit thereof in the Custodial Account. The
Fidelity Bond shall insure the Servicer against any loss it may sustain with
respect to any Mortgage Loan not satisfied in accordance with the procedures
set forth herein.
Subsection 11.19 Annual Statement as to Compliance. The Servicer
shall deliver to the Purchaser on or before March 1st of each year but in no
event later than March 15th of each calendar year beginning in 2007, an
Officer's Certificate stating that (i) a review of the activities of the
Servicer during the preceding calendar year and if performance under this
Agreement has been made under such officer's supervision, and (ii) to the best
of such officer's knowledge, based on such review, the Servicer has fulfilled
all 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 and the
action being taken by the Servicer to cure such default.
Subsection 11.20 Annual Independent Public Accountants' Servicing
Report or Attestation. On or before March 1st of each year, but in no event
later than March 15th of each calendar year beginning in 2007, the Servicer,
at its expense, shall cause a firm of independent public accountants which is
a member of the American Institute of Certified Public Accountants to furnish
a statement to the Purchaser to the effect that such firm has, with respect to
the Servicer's overall servicing operations, examined such operations in
accordance with the requirements of the Uniform Single Attestation Program for
Mortgage Bankers, stating such firm's conclusions relating thereto.
Subsection 11.21 Servicer Shall Provide Access and Information as
Reasonably Required. The Servicer shall provide to the Purchaser, and for any
Purchaser insured by FDIC or NAIC, the supervisory agents and examiners of
FDIC and OTS or NAIC, access to any documentation regarding the Mortgage Loans
which may be required by applicable
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regulations. Such access shall be afforded without charge, but only upon
reasonable request, during normal business hours and at the offices of the
Servicer.
In addition, the Servicer shall furnish upon request by the
Purchaser, during the term of this Agreement, such periodic, special or other
reports or information, whether or not provided for herein, as shall be
necessary, reasonable and appropriate with respect to the purposes of this
Agreement and applicable regulations. All such reports or information shall be
provided by and in accordance with all reasonable instructions and directions
the Purchaser may require. The Servicer agrees to execute and deliver all such
instruments and take all such action as the Purchaser, from time to time, may
reasonably request in order to effectuate the purposes and to carry out the
terms of this Agreement.
Subsection 11.22 Transfer of Servicing. On the related Transfer
Date, if any, the Purchaser, or its designee, shall assume all servicing
responsibilities related to, and the Seller cease all servicing
responsibilities related to, the related Mortgage Loans subject to such
Transfer Date. On or prior to the related Transfer Date, the Seller shall, at
its sole cost and expense, take such steps as may be necessary or appropriate
to effectuate and evidence the transfer of the servicing of the related
Mortgage Loans to the Purchaser, or its designee, including but not limited to
the following:
(a) Notice to Mortgagors. The Seller shall mail to the Mortgagor of
each related Mortgage Loan a letter advising such Mortgagor of the transfer of
the servicing of the related Mortgage Loan to the Purchaser, or its designee,
in accordance with the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of
1990, as amended; provided, however, the content and format of the letter
shall have the prior approval of the Purchaser. The Seller shall provide the
Purchaser with copies of all such related notices no later than the related
Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall transmit to the applicable taxing authorities and insurance companies
(including primary mortgage insurance policy insurers, if applicable) and/or
agents, notification of the transfer of the servicing to the Purchaser, or its
designee, and instructions to deliver all notices, tax bills and insurance
statements, as the case may be, to the Purchaser from and after the related
Transfer Date. The Seller shall provide the Purchaser and its designee with an
electronic file of all such notices within five (5) Business Days of the
related Transfer Date.
(c) Delivery of Servicing Records. The Seller shall forward to the
Purchaser, or its designee, all servicing records and the Servicing File in
the Seller's possession relating to each related Mortgage Loan.
(d) Escrow Payments. The Seller shall provide the Purchaser, or its
designee, with immediately available funds by wire transfer in the amount of
the net Escrow Payments and suspense balances and all loss draft balances
associated with the related Mortgage Loans. The Seller shall provide the
Purchaser with an accounting statement, in electronic format acceptable to the
Purchaser in its sole discretion, of Escrow Payments and suspense balances and
loss draft balances sufficient to enable the Purchaser to reconcile the amount
of such payment with the accounts of the Mortgage Loans. Additionally, the
Seller shall wire transfer to the Purchaser the
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amount of any agency, trustee or prepaid Mortgage Loan payments and all other
similar amounts held by the Seller.
(e) Payoffs and Assumptions. The Seller shall provide to the
Purchaser, or its designee, copies of all assumption and payoff statements
generated by the Seller on the related Mortgage Loans from the related Cut-off
Date to the related Transfer Date.
(f) Mortgage Payments Received Prior to Transfer Date. Prior to the
related Transfer Date all payments received by the Seller on each related
Mortgage Loan shall be properly applied by the Seller to the account of the
particular Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of
any related Monthly Payments received by the Seller after the related Transfer
Date shall be forwarded to the Purchaser by overnight mail on or prior to the
date which is one (1) Business Day after the date of receipt. The Seller shall
notify the Purchaser of the particulars of the payment, which notification
requirement shall be satisfied if the Seller forwards with its payment
sufficient information to permit appropriate processing of the payment by the
Purchaser. The Seller assumes full responsibility for the necessary and
appropriate legal application of such Monthly Payments received by it after
the Transfer Date for a period not to exceed 90 days, thereafter any payments
by the Seller shall be returned to the related Mortgagor; provided, for
purposes of this Agreement, necessary and appropriate legal application of
such Monthly Payments shall include, but not be limited to, endorsement of a
Monthly Payment to the Purchaser with the particulars of the payment such as
the account number, dollar amount, date received and any special Mortgagor
application instructions and the Seller shall comply with the foregoing
requirements with respect to all Monthly Payments received by the Seller after
the related Transfer Date.
(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(i) All parties shall cooperate in correcting misapplication
errors;
(ii) The party receiving notice of a misapplied payment
occurring prior to the related Transfer Date and
discovered after such Transfer Date shall immediately
notify the other party;
(iii) If a misapplied payment which occurred prior to the
related Transfer Date cannot be identified and said
misapplied payment has resulted in a shortage in a
Custodial Account or Escrow Account, the Seller shall be
liable for the amount of such shortage. The Seller shall
reimburse the Purchaser for the amount of such shortage
within thirty (30) days after receipt of written demand
therefor from the Purchaser;
(iv) If a misapplied payment which occurred prior to the
related Transfer Date has created an improper Purchase
Price as the result of an inaccurate outstanding principal
balance, a check shall be issued to the party shorted by
the improper payment application
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within five (5) Business Days after notice thereof by the
other party; and
(v) Any check issued under the provisions of this Section
11.22(h) shall be accompanied by a statement indicating
the corresponding Seller and/or the Purchaser Mortgage
Loan identification number and an explanation of the
allocation of any such payments.
(i) Books and Records. On the related Transfer Date, the books,
records and accounts of the Seller with respect to the related Mortgage Loans
shall be in accordance with all applicable Purchaser requirements.
(j) Reconciliation. The Seller shall, on or before the related
Transfer Date, reconcile principal balances and make any monetary adjustments
required by the Purchaser. Any such monetary adjustments will be transferred
between the Seller and the Purchaser as appropriate.
(k) IRS Forms. The Seller shall file all IRS forms 1099, 1099A, 1098
which are required to be filed on or before the related Transfer Date in
relation to the servicing and ownership of the related Mortgage Loans. The
Seller shall provide copies of such forms to the Purchaser upon request and
shall reimburse the Purchaser for any costs or penalties incurred by the
Purchaser due to the Seller's failure to comply with this paragraph.
(l) Mortgage Loans in Foreclosure. The servicing with respect to
Mortgage Loans in foreclosure on or before the related Transfer Date shall not
be transferred from the Servicer to the Purchaser or its designee, as the case
may be, and such Mortgage Loans shall continue to be serviced by the Servicer
pursuant to the terms of this Agreement. However, if the Purchaser so elects,
the Purchaser may waive the provisions of this paragraph and accept transfer
of servicing of such Mortgage Loans and all amounts received by the Servicer
thereunder.
(m) Servicing Advances. Notwithstanding the fact that the related
Transfer Date has occurred, the Servicer shall not be reimbursed for any
Servicing Advances in relation to any Mortgage Loan until the Servicer or the
successor servicer receives a Monthly Payment or Liquidation Proceeds in
relation to such Mortgage Loan. At such time, the Servicer shall be entitled
to be reimbursed for all unreimbursed Servicing Advances with respect to such
Mortgage Loan on a first priority basis from the Monthly Payment or
Liquidation Proceeds received with respect to such Mortgage Loan. This clause
shall survive each Transfer Date.
Subsection 11.23 Notification of Maturity Date. With respect to each
Mortgage Loan, the Seller shall execute and deliver to the Mortgagor any and
all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the maturity date if required
under applicable law.
Subsection 11.24 Notification of Adjustments. With respect to each
ARM Mortgage Loan, Seller shall adjust the Mortgage Interest Rate on the
related Interest Rate Adjustment Date and shall adjust the Monthly Payment on
the related Payment Adjustment Date in compliance with the requirements of
applicable law and the related Mortgage and Mortgage Note. If, pursuant to the
terms of the Mortgage Note, another index is selected for determining
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the Mortgage Interest Rate because the original index is no longer available,
the same index will be used with respect to each Mortgage Note which requires
a new index to be selected, provided that such selection does not conflict
with the terms of the related Mortgage Note. Seller shall execute and deliver
any and all necessary notices required under applicable law and the terms of
the related Mortgage Note and Mortgage regarding the Mortgage Interest Rate
and the Monthly Payment adjustments. Seller shall promptly, upon written
request therefor, deliver to the Purchaser such notifications and any
additional applicable data regarding such adjustments and the methods used to
calculate and implement such adjustments. Upon the discovery by Seller or the
Purchaser that Seller has failed to adjust a Mortgage Interest Rate or a
Monthly Payment pursuant to the terms of the related Mortgage Note and
Mortgage, Seller shall within two (2) Business Days deposit in the Custodial
Account, from its own funds, the amount of any interest loss caused the
Purchaser thereby without reimbursement therefor.
Section 12. The Servicer.
Subsection 12.01 Indemnification; Third Party Claims. The Servicer
agrees to indemnify and hold the Purchaser and any Successor Servicer and
their respective present and former directors, officers, employees and agents
harmless from any and all claims, losses, damages, penalties, fines,
forfeitures, legal fees and expenses (including, without limitation, any legal
fees and expenses, judgments or expenses relating to such liability, claim,
loss or damage) and related costs, judgments, and any other costs, fees and
expenses that such parties may sustain in any way related to the Servicer's
failure:
(a) to observe and perform any or all of Servicer's duties,
obligations, covenants, agreements, warranties or representations contained in
this Agreement or in the related Purchase Price and Terms Agreement; or
(b) to comply with all applicable requirements contained in this
Agreement or the related Purchase Price and Terms Agreement with respect to
the servicing of the Mortgage Loan and the transfer of Servicing Rights.
The Servicer immediately shall notify the Purchaser if a claim is
made by a third party with respect to this Agreement.
For purposes of this Section, "Purchaser" shall mean the Person then
acting as the Purchaser under this Agreement and any and all Persons who
previously were "Purchasers" under this Agreement and "Successor Servicer"
shall mean any Person designated as the Successor Servicer pursuant to this
Agreement and any and all Persons who previously were "Successor Servicers"
pursuant to this Agreement.
If any action is commenced for which indemnification may be
available under this Subsection 12.01 of which an indemnified party has
notice, promptly after receipt by such indemnified party under this Subsection
12.01 of notice of the commencement of such action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Subsection 12.01, notify the indemnifying party in writing of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have
to any indemnified party under this
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Subsection 12.01, except to the extent that it has been prejudiced in any
material respect, or from any liability which it may have, otherwise than
under this Subsection 12.01. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and
to the extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified
party, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party; provided that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party or parties shall have reasonably concluded that there may be
legal defenses available to it or them and/or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate
counsel to assert such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to
such indemnified party for expenses incurred by the indemnified party in
connection with the defense thereof unless (i) the indemnified party shall
have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence (it
being understood, however, that the indemnifying party shall not be liable for
the expenses of more than one separate counsel (together with one local
counsel, if applicable)), (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized in writing the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
Notwithstanding anything to the contrary contained herein, in no
event shall a termination of this Agreement or the Servicer hereunder
terminate any indemnification obligations of the Servicer under this
Agreement, which obligations shall survive any such termination.
Subsection 12.02 Merger or Consolidation of the Servicer. The Seller
will keep in full effect its existence, rights and franchises under the laws
of its jurisdiction of incorporation or organization, and will obtain and
preserve its qualification to do business in each other 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 entity 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
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consented to by the Purchaser, which consent shall not be unreasonably
withheld, and shall be qualified to service mortgage loans on behalf of Xxxxxx
Xxx or Xxxxxxx Mac.
Subsection 12.03 Limitation on Liability of the Servicer and Others.
The duties and obligations of the Servicer shall be determined solely by the
express provisions of this Agreement, the Servicer shall not be liable except
for the performance of such duties and obligations as are specifically set
forth in this Agreement and no implied covenants or obligations shall be read
into this Agreement against the Servicer. Neither the Servicer nor any of the
directors, officers, employees or agents of the Servicer shall be under any
liability to the Purchaser for any action taken or for refraining from the
taking of any action in accordance with Accepted Servicing Procedures and
otherwise in good faith pursuant to this Agreement or for errors in judgment;
provided, however, that this provision shall not protect the Servicer against
any liability resulting from any breach of any representation or warranty made
herein, or from any liability specifically imposed on the Servicer herein;
and, provided, further, that this provision shall not protect the Servicer
against any liability that would otherwise be imposed by reason of the willful
misfeasance, bad faith or negligence in the performance of duties or by reason
of reckless disregard of the obligations or duties hereunder. The Servicer and
any director, officer, employee or agent of the Servicer may rely on any
document of any kind which it in good faith reasonably believes to be genuine
and to have been adopted or signed by the proper authorities respecting any
matters arising hereunder. Subject to the terms of Subsection 12.01, the
Servicer shall have no obligation to appear with respect to, prosecute or
defend any legal action which is not incidental to the Servicer's duty to
service the Mortgage Loans in accordance with this Agreement.
Subsection 12.04 Seller and Servicer Not to Resign. 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, neither Seller nor Servicer shall assign this Agreement or the
servicing hereunder or delegate its rights or duties hereunder or any portion
thereof, or sell or otherwise dispose of all or substantially all of its
property or assets, without the prior written approval of the Purchaser, which
consent shall be granted or withheld in the Purchaser's sole discretion or
upon the determination that the Servicer's duties hereunder are no longer
permissible under applicable law and such incapacity cannot be cured by the
Servicer. Any such determination permitting the unilateral resignation of the
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. No such resignation or assignment shall become
effective until a successor has assumed the Servicer's responsibilities and
obligations hereunder in accordance with Subsection 14.03.
Section 13. Default.
Subsection 13.01 Events of Default. In case one or more of the
following Events of Default by the Servicer shall occur and be continuing:
(a) any failure by the Servicer 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
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(1) Business Day after the date upon which written notice of such failure,
requiring the same to be remedied, shall have been given to the Servicer by
the Purchaser;
(b) any failure by the Servicer to duly observe or perform, in any
material respect, any other covenants, obligations or agreements of the
Servicer as set forth in this Agreement which failure continues unremedied for
a period of thirty (30) days (or, in the case of (i) the officer's certificate
required under Subsection 11.19, (ii) the annual independent public
accountants' servicing report required under Subsection 11.20 or (iii) the
certification required under Section 15 in the form of Exhibit 16, five (5)
days) after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given to the Servicer by the Purchaser;
(c) 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 Servicer and
such decree or order shall have remained in force, undischarged or unstayed
for a period of thirty (30) days;
(d) the Servicer 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 Servicer or relating to all or substantially all of the Servicer's
property; or
(e) the Servicer shall admit in writing its inability to pay its
debts 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;
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 Servicer,
may, in addition to whatever rights the Purchaser may have at law or equity to
damages, including injunctive relief and specific performance, commence
termination of all the rights and obligations of the Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof. Upon
receipt by the Servicer of such written notice from the Purchaser stating that
it intends to terminate the Servicer as a result of such Event of Default, all
authority and power of the Servicer under this Agreement, whether with respect
to the Mortgage Loans or otherwise, shall pass to and be vested in the
successor appointed pursuant to Subsection 14.03. Upon written request from
the Purchaser, the Servicer shall, in accordance with Subsection 11.22
prepare, execute and deliver to a successor any and all documents and other
instruments, place in such successor's possession all Mortgage Files and do or
cause to be done all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, including, but not limited to, the
transfer and endorsement or assignment of the Mortgage Loans and related
documents to the successor at the Servicer's sole expense. The Servicer agrees
to cooperate with the Purchaser and such successor in effecting the
termination of the Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to such successor for
administration by it of all amounts which
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shall at the time be credited by the Servicer to the Custodial Account or
Escrow Account or thereafter received with respect to the Mortgage Loans.
Subsection 13.02 Waiver of Defaults. The Purchaser may waive any
default by the Servicer in the performance of its obligations hereunder and
its consequences. Upon any waiver of a past default, such default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been remedied for every purpose of this Agreement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereto
except to the extent expressly so waived.
Section 14. Termination.
Subsection 14.01 Termination. The respective obligations and
responsibilities of the Servicer, as servicer, shall terminate upon (a) the
distribution to the Purchaser of the final payment or liquidation with respect
to the last Mortgage Loan (or advances of same by the Servicer); (b) 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 or (c) by mutual consent of the Servicer and the Purchaser
in writing. Upon written request from the Purchaser in connection with any
such termination, the Servicer shall prepare, execute and deliver, any and all
documents and other instruments, place in the Purchaser's possession all
Credit 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 Purchaser's sole expense. The Servicer
agrees to cooperate with the Purchaser and such successor in effecting the
termination of the Servicer'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 Servicer to the Custodial Account or Escrow Account or thereafter
received with respect to the Mortgage Loans.
Subsection 14.02 Termination of the Servicer Without Cause.
Notwithstanding anything herein to the contrary, the Purchaser may terminate
the obligations and responsibilities of the Servicer in its capacity as
Servicer, without cause, upon payment to the Servicer of a termination fee.
With respect to each Mortgage Loan, a fee equal to the greater of (i) the
product of the excess (if any) of the Purchase Price Percentage (as specified
in the related Purchase Price and Terms Agreement) over 100% multiplied by the
Stated Principal Balance of such Mortgage Loan and (ii) the fair value of the
related Servicing Rights, in each case as of the date of termination. The
termination fee provided for in this Subsection 14.02 shall be paid by the
Purchaser on the applicable Transfer Date.
Subsection 14.03 Successors to the Servicer. Prior to the
termination of the Servicer's responsibilities and duties under this Agreement
pursuant to Subsections 12.04, 13.01, 14.01 or 14.02, the Purchaser shall, (a)
succeed to and assume all of the Servicer's responsibilities, rights, duties
and obligations under this Agreement or (b) appoint a successor which shall
succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Servicer under this Agreement upon such termination. 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. If the Servicer's duties,
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responsibilities and liabilities under this Agreement shall be terminated
pursuant to the aforementioned Subsections, the Servicer shall discharge such
duties and responsibilities during the period from the date it acquires
knowledge of such termination until the effective date thereof with the same
degree of diligence and prudence which it is obligated to exercise under this
Agreement, and shall take no action whatsoever that might impair or prejudice
the rights or financial condition of its successor. The resignation or removal
of the Servicer pursuant to the aforementioned Subsections shall not become
effective until a successor shall be appointed pursuant to this Subsection
14.03 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, it being understood and
agreed that the provisions of such Subsections 7.01 and 7.02 shall be
applicable to the Seller notwithstanding any such resignation or termination
of the Servicer, or the termination of this Agreement.
Any successor appointed as provided herein shall execute,
acknowledge and deliver to the Servicer and to the 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 Servicer, with like effect as if originally named as a
party to this Agreement. Any termination or resignation of the Servicer or
this Agreement pursuant to Subsections 12.04, 13.01, 14.01 or 14.02 shall not
affect any claims that the Purchaser may have against the Servicer arising
prior to any such termination or resignation.
Upon a successor's acceptance of appointment as such, the Servicer
shall notify by mail the Purchaser of such appointment.
Section 15. Cooperation of Seller with a Reconstitution. The Seller
and the Purchaser agree that with respect to some or all of the Mortgage
Loans, after the related Closing Date, on one or more dates (each, a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may
effect a sale (each, a "Reconstitution") of up to five (5) Reconstitutions
with respect to each pool of Mortgage Loans sold to the Purchaser under a
Purchase Price and Terms Agreement of some or all of the Mortgage Loans then
subject to this Agreement, without recourse, to:
(a) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each, a "Xxxxxx Mae Transfer"); or
(b) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(c) one or more third party purchasers in one or more Whole Loan
Transfers; or
(d) one or more trusts or other entities to be formed as part of one
or more Securitization Transactions.
The Seller and Servicer agrees to execute in connection with any
Agency Transfer, any and all reasonably acceptable pool purchase contracts,
and/or agreements among the Purchaser, the Seller, Servicer, Xxxxxx Xxx or
Xxxxxxx Mac (as the case may be) and any servicer in connection with a Whole
Loan Transfer, a seller's warranties and servicing agreement
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or a participation and servicing agreement in form and substance reasonably
acceptable to the parties, and in connection with a Securitization
Transaction, a pooling and servicing agreement in form and substance
reasonably acceptable to the parties or an Assignment and Recognition
Agreement substantially in the form attached hereto as Exhibit 15
(collectively, the agreements referred to herein are designated, the
"Reconstitution Agreements"), together with an opinion of counsel with respect
to such Reconstitution Agreements.
With respect to each Whole Loan Transfer and each Securitization
Transaction entered into by the Purchaser, each of the Seller and Servicer
agrees (1) to cooperate fully with the Purchaser and any prospective purchaser
with respect to all reasonable requests and due diligence procedures; (2) to
execute, deliver and perform all Reconstitution Agreements required by the
Purchaser in good faith; and (3) to restate the representations and warranties
set forth in this Agreement as of the settlement or closing date in connection
with such Reconstitution (each, a "Reconstitution Date") or make the
representations and warranties set forth in the related selling/servicing
guide of the servicer or issuer, as the case may be, or such representations
or warranties as may be required by any rating agency or prospective purchaser
of the related securities or such Mortgage Loans, in connection with such
Reconstitution; provided, however that any such representations and/or
warranties shall not conflict with the representations and warranties made by
the Seller or Servicer in this Agreement and shall not in any event materially
expand or increase the duties, obligations and/or liabilities of Seller or
Servicer beyond the duties, obligations and liabilities agreed to by Seller or
Servicer in this Agreement without the written consent of Seller (which will
not be unreasonably withheld). The Seller or Servicer shall provide to such
servicer or issuer, as the case may be, and any other participants or
purchasers in such Reconstitution: (i) any and all information and appropriate
verification of information which may be reasonably available to the Seller or
its affiliates, whether through letters of its auditors and counsel or
otherwise, as the Purchaser or any such other participant shall request; (ii)
such additional representations, warranties, covenants, opinions of counsel,
letters from auditors, and certificates of public officials or officers of the
Seller or the Servicer as are reasonably believed necessary by the Purchaser
or any such other participant (including, without limitation, such revisions
to this Agreement relating to the servicing of REO Property and the provision
of remittance reports as the Purchaser may reasonably believe to be necessary
to enable such servicer to fulfill its master servicing obligations) and (iii)
to execute, deliver and satisfy all conditions set forth in any indemnity
agreement required by the Purchaser or any such participant, including,
without limitation, an Indemnification and Contribution Agreement in
substantially the form attached hereto as Exhibit 3. Moreover, each of the
Seller and Servicer agrees to cooperate with all reasonable requests made by
the Purchaser to effect such Reconstitution Agreements. Each of the Seller and
Servicer shall indemnify the Purchaser, each Affiliate of the Purchaser
participating in the Reconstitution, each Person who controls the Purchaser or
such Affiliate and each underwriter and initial purchaser participating in the
Reconstitution, and their respective present and former directors, officers,
employees and agents, and hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that each of
them may sustain in any way related to any information provided by or on
behalf of the Seller or Servicer regarding the Seller or the Servicer (or if
the Seller is not the originator, the originator of the Mortgage Loans), the
Seller's or the Servicer's servicing practices or the performance of the
Mortgage Loans or the Underwriting Guidelines set forth in any offering
document prepared in connection with any Reconstitution. For purposes of the
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previous sentence, "Purchaser" shall mean the Person then acting as the
Purchaser under this Agreement and any and all Persons who previously were
"Purchasers" under this Agreement.
With respect to any Mortgage Loans sold in a Securitization
Transaction in which the Servicer is the servicer, the Servicer agrees that on
or before March 15th of each year beginning March 15, 2007, the Servicer shall
deliver to the depositor, the master servicer (if any) and the trustee for the
securitization trust in the Securitization Transaction, and their officers,
directors and affiliates, a certification in the form attached as Exhibit 16
hereto, executed by the senior officer in charge of servicing at the Servicer
for use in connection with any Form 10-K to be filed with the Securities and
Exchange Commission with respect to the securitization trust. The Servicer
shall indemnify and hold harmless the depositor, the master servicer (if any)
and the trustee, and their respective officers, directors and Affiliates, from
and against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments and other costs and expenses arising out
of or based upon any breach of the Servicer's obligations under this paragraph
or any material misstatement or omission, negligence, bad faith or willful
misconduct of the Servicer in connection therewith. If the indemnification
provided for in the preceding sentence is unavailable or insufficient to hold
harmless any indemnified party, then the Servicer agrees that it shall
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities of such indemnified party in
such proportion as is appropriate to reflect the relative fault of such
indemnified party, on the one hand, and the Servicer, on the other, in
connection with a breach of the Servicer's obligations under this paragraph or
any material misstatement or omission, negligence, bad faith or willful
misconduct of the Servicer in connection therewith.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and shall continue to be
serviced in accordance with the terms of this Agreement, and with respect
thereto this Agreement shall remain in full force and effect.
Section 16. Notices. All demands, notices and communications
hereunder shall be in writing and shall be given via email, facsimile
transmission or registered or certified mail to the person at the address set
forth below:
(a) if to the Purchaser:
Xxxxxxx Xxxxx Mortgage Company
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000 Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
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With a copy to:
Xxxxxxx Xxxxx Mortgage Company
000 0xx Xxx. xxxxx, Xxxxx 000X
Xx. Xxxxxxxxxx, Xxxxxxx, 00000
Attention: Xxxxxxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
(b) if to the Servicer:
First Horizon Home Loan Corporation
0000 Xxxxxxx Xxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxx
Fax: (000) 000-0000
Email: xxxxxxxx@xxxxx.xxx
(c) if to the Seller:
First Horizon Home Loan Corporation
0000 Xxxxxxx Xxx
Xxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxx
Fax: (000) 000-0000
Email: xxxxxxxxx@xxxxx.xxx
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 17. Severability Clause. Any part, provision representation
or warranty of this Agreement which is prohibited or unenforceable or is held
to be void or unenforceable in any jurisdiction shall be ineffective, as to
such jurisdiction, to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction as to any Mortgage Loan shall not
invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, the parties hereto waive any
provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good-faith, to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
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Section 18. No Partnership. Nothing herein contained shall be deemed
or construed to create a co-partnership or joint venture between the parties
hereto and the services of the Servicer shall be rendered as an independent
contractor and not as agent for the Purchaser.
Section 19. 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 20. Governing Law Jurisdiction; Consent to Service of
Process. THIS AGREEMENT SHALL BE DEEMED IN EFFECT WHEN A FULLY EXECUTED
COUNTERPART THEREOF IS RECEIVED BY THE PURCHASER IN THE STATE OF NEW YORK AND
SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK. THIS AGREEMENT
SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ITS CHOICE OF LAW RULES AND PRINCIPLES. EACH OF THE PURCHASER
AND THE SELLER IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE FEDERAL COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT; (II) WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM IN ANY ACTION OR
PROCEEDING IN ANY SUCH COURT; (III) AGREES THAT A FINAL JUDGMENT IN ANY ACTION
OR PROCEEDING IN ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY
OTHER JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
LAW; AND (IV) CONSENTS TO SERVICE OF PROCESS UPON IT BY MAILING A COPY THEREOF
BY CERTIFIED MAIL ADDRESSED TO IT AS PROVIDED FOR NOTICES HEREUNDER.
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Section 21. Mandatory Delivery; Grant of Security Interest. The sale
and delivery on the related Closing Date of the Mortgage Loans described on
the related Mortgage Loan Schedule is mandatory from and after the date of the
execution of the related Purchase Price and Terms Agreement, it being
specifically understood and agreed that each Mortgage Loan is unique and
identifiable on the date hereof and that an award of money damages would be
insufficient to compensate the Purchaser for the losses and damages incurred
by the Purchaser (including damages to prospective purchasers of the Mortgage
Loans) in the event of the Seller's failure to deliver (i) each of the related
Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans or
(iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. The Seller hereby grants to the 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 under the related Purchase Price
and Terms Agreement, and the Seller agrees that it shall hold such Mortgage
Loans in custody for the Purchaser subject to the Purchaser's (i) right to
reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under the
terms of this Agreement and to require another Mortgage Loan (or Qualified
Substitute Mortgage Loan) to be substituted therefor, and (ii) obligation to
pay the 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 22. Intention of the Parties. It is the intention of the
parties that the 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. Moreover, the arrangement under which the
Mortgage Loans are held shall be consistent with classification of such
arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The 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 Purchaser in the course of such
review.
Section 23. 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 permitted successors and assigns of the Seller and the
successors and assigns of the Purchaser. This Agreement shall not be assigned,
pledged or hypothecated by the Seller to a third party without the prior
written consent of the Purchaser, which consent may be withheld by the
Purchaser in its sole discretion. This Agreement may be assigned, pledged or
hypothecated by the Purchaser in whole or in part, and with respect to one or
more of the Mortgage Loans, without the consent of the Seller. There shall be
no limitation on the number of assignments or transfers allowable by the
Purchaser with respect to the Mortgage Loans and this Agreement. In the event
the Purchaser assigns this Agreement, and the assignee assumes any of the
Purchaser's obligations hereunder, the Seller acknowledges and agrees to look
solely to such assignee, and not to the Purchaser, for performance of the
obligations so assumed and the Purchaser shall be relieved from any liability
to the Seller with respect thereto.
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Section 24. 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 25. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this
Agreement.
Section 26. General Interpretive Principles. For purposes of this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs" and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions
of this Agreement;
(d) 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 terms "include" and "including" shall mean without
limitation by reason of enumeration.
Section 27. 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 hereto 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 hereto in
the regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
Section 28. Amendment. This Agreement may be amended from time to
time by the Purchaser, the Seller and the Servicer by written agreement signed
by the parties hereto.
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Section 29. Confidentiality. Each of the Purchaser, the Seller and
the Servicer shall employ proper procedures and standards designed to maintain
the confidential nature of the terms of this Agreement, except to the extent:
(a) the disclosure of which is reasonably believed by such party to be
required in connection with regulatory requirements or other legal
requirements relating to its affairs; (b) disclosed to any one or more of such
party's employees, officers, directors, agents, attorneys or accountants who
would have access to the contents of this Agreement and such data and
information in the normal course of the performance of such Person's duties
for such party, to the extent such party has procedures in effect to inform
such Person of the confidential nature thereof; (c) that is disclosed in a
prospectus, prospectus supplement or private placement memorandum relating to
a securitization of the Mortgage Loans by the Purchaser (or an affiliate
assignee thereof) or to any Person in connection with the resale or proposed
resale of all or a portion of the Mortgage Loans by such party in accordance
with the terms of this Agreement; and (d) that is reasonably believed by such
party to be necessary for the enforcement of such party's rights under this
Agreement.
Notwithstanding any other express or implied agreement to the
contrary, each of the Purchaser, the Seller and the Servicer agree and
acknowledge that each of them and each of their employees, representatives,
and other agents may disclose to any and all persons, without limitation of
any kind, the tax treatment and tax structure of the transaction and all
materials of any kind (including opinions or other tax analyses) that are
provided to any of them relating to such tax treatment and tax structure,
except to the extent that confidentiality is reasonably necessary to comply
with U.S. federal or state securities laws. For purposes of this paragraph,
the terms "tax treatment" and "tax structure" have the meanings specified in
Treasury Regulation section 1.6011-4(c).
Section 30. Entire Agreement. This Agreement constitutes the entire
agreement and understanding relating to the subject matter hereof between the
parties hereto and any prior oral or written agreements between them shall be
deemed to have merged herewith.
Section 31. Further Agreements. The Seller, the Servicer 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.
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Section 32. No Solicitation. The Seller, Servicer and Purchaser
understand and agree that this Agreement, any other agreements executed in
connection with the sale contemplated hereunder, any agreements executed in
connection with any Reconstitution, and any offering circulars or other
disclosure documents produced in connection with any Reconstitution are
confidential and proprietary to the Purchaser, Seller or Servicer, and the
Seller, Servicer and Purchaser agree to hold such documents confidential and
not to divulge such documents to anyone except (a) to the extent required by
law or judicial order or to enforce its rights or remedies under this
Agreement, (b) to the extent such information enters into the public domain
other than through the wrongful act of the Seller, Servicer or the Purchaser,
as the case may be, (c) as is necessary in working with legal counsel, rating
agencies, auditors, agents, taxing authorities or other governmental agencies
or (d) the federal income tax treatment of the transactions hereunder, any
fact relevant to understanding the federal tax treatment of the transactions
hereunder, and all materials of any kind (including opinions or other tax
analyses) relating to such federal income tax treatment; provided that neither
the Seller nor Servicer may disclose the name of or identifying information
with respect to Purchaser or any pricing terms or other nonpublic business or
financial information that is unrelated to the purported or claimed federal
income tax treatment of the transactions hereunder and is not relevant to
understanding the purported or claimed federal income tax treatment of the
transactions hereunder. Moreover, each of the Seller and Servicer understands
and agrees that this Agreement, any other agreements executed in connection
with the sale contemplated hereunder, any agreements executed in connection
with the securitization of the Mortgage Loans, and any offering circulars or
other disclosure documents produced in connection with such securitization are
confidential and proprietary to the Purchaser, and the Seller and Servicer
agrees to hold such documents confidential and not to divulge such documents
to anyone except (a) to the extent required by law or judicial order or to
enforce its rights or remedies under this Agreement, (b) to the extent such
information enters into the public domain other than through the wrongful act
of the Seller or Servicer, or (c) as is necessary in working with legal
counsel, auditors, agents, rating agencies, taxing authorities or other
governmental agencies.
Section 33. Waiver of Jury Trial. THE SELLER AND THE PURCHASER EACH
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY
DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 34. Compliance With Regulation AB
Subsection 34.01 Intent of the Parties; Reasonableness. The
Purchaser, the Seller and the Servicer acknowledge and agree that the purpose
of Section 34 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 Company acknowledges that investors in privately
offered securities may require that the Purchaser or any Depositor provide
comparable disclosure in unregistered offerings. References in this Agreement
to compliance with Regulation AB include provision of comparable disclosure in
private offerings.
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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). Each of the Seller and
the Servicer acknowledges that interpretations of the requirements of
Regulation AB may change over time, whether due to interpretive guidance
provided by the Commission or its staff, consensus among participants in the
asset-backed securities markets, advice of counsel, or otherwise, and agrees
to comply with requests made by the Purchaser 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, each of the Seller and the Servicer shall cooperate fully with
the Purchaser to deliver to the Purchaser (including any of its assignees or
designees) and any Depositor, any and all statements, reports, certifications,
records and any other information necessary in the good faith determination of
the Purchaser or any Depositor to permit the Purchaser or such Depositor to
comply with the provisions of Regulation AB, together with such disclosures
relating to the Seller, the Servicer, 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.
Subsection 34.02 Additional Representations and Warranties of the
Seller and the Servicer.
(a) Each of the Seller and the Servicer shall be deemed to represent
to the Purchaser and to any Depositor, as of the date on which information is
first provided to the Purchaser or any Depositor under Subsection 34.03 that,
except as disclosed in writing to the Purchaser or such Depositor prior to
such date: (i) the Servicer 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
Servicer; (ii) the Servicer has not been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing default or
to application of a servicing performance test or trigger; (iii) no material
noncompliance with the applicable servicing criteria with respect to other
securitizations of residential mortgage loans involving the Servicer as
servicer has been disclosed or reported by the Servicer; (iv) no material
changes to the Servicer'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 Servicer's financial condition
that could have a material adverse effect on the performance by the Servicer
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, the Servicer, any
Subservicer or any Third-Party Originator; and (vii) there are no
affiliations, relationships or transactions relating to the Seller, the
Servicer, any Subservicer or any Third-Party Originator with respect to any
Securitization Transaction and
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any party thereto identified by the related Depositor of a type described in
Item 1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Subsection 34.03, the Seller and the Servicer shall,
within five Business Days following such request, confirm in writing the
accuracy of the representations and warranties set forth in paragraph (a) of
this Section 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 34.03 Information to Be Provided by the Seller and the
Servicer. In connection with any Securitization Transaction the Seller and the
Servicer shall (i) within five 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 (f) of this Section, and (ii) as promptly as
practicable following notice to or discovery by the Seller or the Servicer,
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 Section.
(a) If so requested by the Purchaser or any Depositor, the Seller
and the Servicer 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) the Servicer and, 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) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the
Seller, the Servicer, each Third-Party Originator and each
Subservicer; and
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(D) a description of any affiliation or relationship between
the Servicer, each Third-Party Originator, each Subservicer and any
of the following parties to a Securitization Transaction, as such
parties are identified to the Servicer by the Purchaser or any
Depositor in writing in advance of such Securitization Transaction:
(1) the sponsor;
(2) the depositor;
(3) the issuing entity;
(4) any servicer;
(5) any trustee;
(6) any originator;
(7) any significant obligor;
(8) any enhancement or support provider; and
(9) any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, to the extent
required by Regulation AB, the Seller shall provide or, as applicable, cause
each Third Party Originator to provide, to the extent available to the Seller
or such Third-Party Originator, as applicable, (and not otherwise available to
the Purchaser) without unreasonable effort or expense, 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) that have been
serviced by the Seller or any Third-Party Originator for a period of one
hundred twenty (120) days or more and 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 in each case to the extent such Mortgage Loans were purchased from
the Seller by the Purchaser. 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 for such period of time that the Seller (or such Third-Party Originator)
serviced such mortgage loans. To the extent that there is reasonably available
to the Seller (or Third-Party Originator), without unreasonable effort or
expense, 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 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.
The Purchaser agrees that it will cooperate with the Seller and
provide sufficient and timely notice of any information requirement pertaining
to a Securitization Transaction. The
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Purchaser will make all reasonable efforts to contain requests for
information, reports or any other materials to items required for compliance
with Regulation AB, and will refrain from requesting information that is not
required for such compliance. The Seller shall use commercially reasonable
efforts to provide the Static Pool Information required hereunder; provided,
however, that failure of the Seller to perform such obligations, after
applying commercially reasonable efforts, shall not result in a breach by the
Seller of the provisions of this Agreement.
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 and the Servicer 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 or the Servicer.
If so requested by the Purchaser or any Depositor, the Seller and
the Servicer shall provide (or, as applicable, cause each Third-Party
Originator to provide), at the expense of the requesting party (to the extent
of any additional incremental expense associated with delivery pursuant to
this Agreement), such 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
and the Servicer shall provide such information regarding the Seller, the
Servicer as servicer of the Mortgage Loans, and each Subservicer (each of the
Servicer and each Subservicer, for purposes of this paragraph, a "Transaction
Servicer"), as is requested for the purpose of compliance with Items 1108 of
Regulation AB. Such information shall include, at a minimum:
(A) the Transaction Servicer's form of organization;
(B) a description of how long the Transaction Servicer has been
servicing residential mortgage loans; a general discussion of the
Transaction Servicer's experience in servicing assets of any type as
well as a more detailed discussion of the Transaction 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
Transaction Servicer's portfolio of residential mortgage loans of a
type similar to the Mortgage Loans and information on factors
related to the Transaction Servicer
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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 Transaction
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 Transaction 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 Transaction Servicer as a servicer during the
three-year period immediately preceding the related
Securitization Transaction;
(4) whether the Transaction 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 Transaction 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 Transaction Servicer's financial
condition, to the extent that there is a material risk that an
adverse financial event or circumstance involving the Transaction
Servicer could have a material adverse effect on the performance by
the Transaction Servicer of its servicing obligations under this
Agreement or any Reconstitution Agreement;
(E) information regarding advances made by the Transaction
Servicer on the Mortgage Loans and the Transaction 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 Transaction Servicer to the effect that the
Transaction 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;
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(F) a description of the Transaction 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 Transaction Servicer's processes for
handling delinquencies, losses, bankruptcies and recoveries, such as
through liquidation of mortgaged properties, sale of defaulted
mortgage loans or workouts; and
(H) information as to how the Transaction 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.
(d) If so requested by the Purchaser or any Depositor for the
purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Seller and the Servicer
shall (or shall cause each Subservicer and Third-Party Originator to) (i)
notify the Purchaser and any Depositor in writing of (A) any material
litigation or governmental proceedings pending against the Servicer, any
Subservicer or any Third-Party Originator and (B) any affiliations or
relationships that develop following the closing date of a Securitization
Transaction between the Seller, the Servicer, 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, 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, the Servicer or
any Subservicer as servicer or subservicer under this Agreement or any
Reconstitution Agreement by any Person (i) into which the Servicer or such
Subservicer may be merged or consolidated, or (ii) which may be appointed as a
successor to the Servicer or any Subservicer, the Servicer shall provide to
the 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 Servicer, as servicer, is
obligated to provide pursuant to other provisions of this Agreement, if so
requested by the Purchaser or any Depositor, the Servicer shall provide such
information reasonably available to the Servicer regarding the performance or
servicing of the Mortgage Loans as is reasonably required by the Purchaser or
any Depositor to facilitate preparation of distribution reports in accordance
with Item 1121 of Regulation AB and to permit the Purchaser or such Depositor
to comply with the provisions of Regulation AB relating to Static Pool
Information regarding the performance of the Mortgage Loans on the basis of
the Purchaser's or such Depositor's reasonable, good faith interpretation of
the requirements of Item 1105(a)(1)-(3) of Regulation AB (including without
limitation as to the format and content of such Static Pool Information).
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Subsection 34.04 Servicer Compliance Statement. On or before March
15 of each calendar year, commencing in 2007, the Servicer shall deliver to
the Purchaser and any Depositor a statement of compliance addressed to the
Purchaser and such Depositor and signed by an authorized officer of the
Servicer, to the effect that (i) a review of the Servicer's activities during
the immediately preceding calendar year (or applicable portion thereof) and of
its performance under this Agreement and any applicable Reconstitution
Agreement during such period has been made under such officer's supervision,
and (ii) to the best of such officers' knowledge, based on such review, the
Servicer 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 34.05 Report on Assessment of Compliance and Attestation.
(a) On or before March 15 of each calendar year, commencing in 2007,
the Servicer shall:
(i) deliver to the Purchaser and any Depositor a report (in
form and substance reasonably satisfactory to the
Purchaser and such Depositor) regarding the Servicer'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 and such Depositor and signed
by an authorized officer of the Servicer, and shall
address each of the Servicing Criteria specified on a
certification substantially in the form of Exhibit 17
hereto delivered to the Purchaser concurrently with the
execution of this Agreement;
(ii) deliver to the Purchaser and any Depositor a report of a
registered public accounting firm reasonably acceptable to
the Purchaser and such Depositor that attests to, and
reports on, the assessment of compliance made by the
Servicer 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 Servicer pursuant to Subsection 34.06(b) to be
"participating in the servicing function" within the
meaning of Item 1122 of Regulation AB, to deliver to the
Purchaser and any Depositor an assessment of compliance
and accountants' attestation as and when provided in
paragraphs (a) and (b) of this Section; and
(iv) deliver to the Purchaser, any Depositor and any other
Person that will be responsible for signing the
certification (a "Sarbanes
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Certification") required by Rules 13a-14(d) and 15d-14(d)
under the Exchange Act (pursuant to Section 302 of the
Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed
issuer with respect to a Securitization Transaction a
certification in the form attached hereto as Exhibit 16.
The Servicer acknowledges that the parties identified in clause
(a)(iv) above may rely on the certification provided by the Servicer pursuant
to such clause in signing a Sarbanes Certification and filing such with the
Commission.
(b) Each assessment of compliance provided by a Subservicer pursuant
to Subsection 34.05(a)(i) shall address each of the Servicing Criteria
specified on a certification substantially in the form of Exhibit 17 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 34.05(a)(iii) need not address any
elements of the Servicing Criteria other than those specified by the Servicer
pursuant to Subsection 34.06.
Subsection 34.06 Use of Subservicers and Subcontractors. The
Servicer shall not hire or otherwise utilize the services of any Subservicer
to fulfill any of the obligations of the Servicer as servicer under this
Agreement or any Reconstitution Agreement unless the Servicer complies with
the provisions of paragraph (a) of this Section. The Servicer shall not hire
or otherwise utilize the services of any Subcontractor, and shall not permit
any Subservicer to hire or otherwise utilize the services of any
Subcontractor, to fulfill any of the obligations of the Servicer as servicer
under this Agreement or any Reconstitution Agreement unless the Servicer
complies with the provisions of paragraph (b) of this Section.
(a) It shall not be necessary for the Servicer to seek the consent
of the Purchaser or any Depositor to the utilization of any Subservicer. The
Servicer shall cause any Subservicer used by the Servicer (or by any
Subservicer) for the benefit of the Purchaser and any Depositor to comply with
the provisions of this Section and with Subsections 34.02, 34.03(c) and (e),
34.04, 34.05 and 34.07 of this Agreement to the same extent as if such
Subservicer were the Servicer, and to provide the information required with
respect to such Subservicer under Subsection 34.03(d) of this Agreement. The
Servicer 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 34.04,
any assessment of compliance and attestation required to be delivered by such
Subservicer under Subsection 34.05 and any certification required to be
delivered to the Person that will be responsible for signing the Sarbanes
Certification under Subsection 34.05 as and when required to be delivered.
(b) It shall not be necessary for the Servicer to seek the consent
of the Purchaser or any Depositor to the utilization of any Subcontractor. The
Servicer shall promptly upon request provide to the Purchaser and any
Depositor (or any designee of the Depositor, such as a master servicer or
administrator) a written description (in form and substance satisfactory to
the Purchaser and such Depositor) of the role and function of each
Subcontractor utilized by the Servicer or any Subservicer, specifying (i) the
identity of each such Subcontractor, (ii) which (if any) of such
Subcontractors are "participating in the servicing function" within the
meaning of
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Item 1122 of Regulation AB, and (iii) which elements of the Servicing Criteria
will be addressed in assessments of compliance provided by each Subcontractor
identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to
be "participating in the servicing function" within the meaning of Item 1122
of Regulation AB, the Servicer shall cause any such Subcontractor used by the
Servicer (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Subsections 34.05 and 34.07 of this
Agreement to the same extent as if such Subcontractor were the Servicer. The
Servicer shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation required to be delivered by such Subcontractor under Subsection
34.05, in each case as and when required to be delivered.
Subsection 34.07 Indemnification; Remedies.
(a) Each of the Seller and the Servicer shall indemnify the
Purchaser, each affiliate of the Purchaser, the Depositor and each of the
following parties participating in a Securitization Transaction: each sponsor
and issuing entity; 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; 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 and agents of each of the foregoing and of the
Depositor, and shall hold each of them harmless from and against any losses,
damages, penalties, fines, forfeitures, legal fees and expenses and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or
alleged to be contained in any information, report,
certification, accountants' letter or other material
provided under this Section 34 by or on behalf of the
Seller or the Servicer, or provided under this Section 34
by or on behalf of any Subservicer, Subcontractor or
Third-Party Originator (collectively, the "Servicer
Information"), or (B) the omission or alleged omission to
state in the Servicer Information a material fact required
to be stated in the Servicer Information or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this
paragraph shall be construed solely by reference to the
Servicer Information and not to any other information
communicated in connection with a sale or purchase of
securities, without regard to whether the Servicer
Information or any portion thereof is presented together
with or separately from such other information;
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(ii) any failure by the Seller, the Servicer, 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 34, including any failure by the Servicer to
identify pursuant to Subsection 34.06(b) any Subcontractor
"participating in the servicing function" within the
meaning of Item 1122 of Regulation AB; or
(iii) any breach by the Seller or the Servicer of a
representation or warranty set forth in Subsection
34.02(a) or in a writing furnished pursuant to Subsection
34.02(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 or the Servicer of a representation
or warranty in a writing furnished pursuant to Subsection
34.02(b) to the extent made as of a date subsequent to
such closing date.
In the case of any failure of performance described in clause
(a)(ii) of this Section, the Seller and the Servicer 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, the Servicer, any Subservicer, any
Subcontractor or any Third-Party Originator.
(b) (i) Any failure by the Seller, the Servicer, 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 34, or any breach by the Seller or the Servicer of
a representation or warranty set forth in Subsection 34.02(a) or in a writing
furnished pursuant to Subsection 34.02(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 Servicer
of a representation or warranty in a writing furnished pursuant to Subsection
34.02(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 Servicer under this Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations of
the Servicer 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 Servicer; 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 Servicer as servicer, such provision shall be given effect.
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(ii) Any failure by the Seller, the Servicer, any Subservicer
or any Subcontractor to deliver any information, report, certification or
accountants' letter when and as required under Subsection 34.04 or 34.05,
including any failure by the Servicer to identify pursuant to Subsection
34.06(b) any Subcontractor "participating in the servicing function" within
the meaning of Item 1122 of Regulation AB, which continues unremedied for ten
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 Servicer under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Servicer 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 Servicer as servicer, such
provision shall be given effect.
(iii) The Servicer 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 Servicer as servicer and the transfer of servicing of the
Mortgage Loans to a successor servicer. The provisions of this paragraph shall
not limit whatever rights the 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.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Purchaser, the Seller and the Servicer have
caused their names to be signed hereto by their respective officers thereunto
duly authorized on the date first above written.
XXXXXXX XXXXX MORTGAGE
COMPANY, a New York limited partnership
(Purchaser)
By: XXXXXXX SACHS REAL ESTATE
FUNDING CORP., a New York
corporation, its General Partner
By:__________________________________
Name:
Title:
FIRST HORIZON HOME CORPORATION, a
Kansas corporation
(Seller)
By:_____________________________________
Name:
Title:
FIRST TENNESSEE MORTGAGE
SERVICES, INC., a [Tennessee]
corporation
(Servicer)
By:_____________________________________
Name:
Title:
-85-
EXHIBIT 1
MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall consist
of the following:
(a) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _________, without recourse" and signed in the
name of the last endorsee (the "Last Endorsee") by an authorized officer. The
endorsement may be contained on an allonge, if state law so allows. If the
Mortgage Loan was acquired by the Seller in a merger, the endorsement must be
by "[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 "[Last Endorsee],
formerly known as [previous name]";
(b) if applicable, the original of any guarantee executed in
connection with the Mortgage Note;
(c) with respect to Mortgage Loans that are not Co-op Loans, the
original Mortgage with evidence of recording thereon. With respect to any
Co-op Loan, an original or copy of the Security Agreement. If in connection
with any Mortgage Loan, the Seller cannot deliver or cause to be delivered the
original Mortgage with evidence of recording thereon on or prior to the
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 Seller shall deliver or cause to be delivered to the
Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or a certified copy from the title company, escrow agent, or closing
attorney) stating that such Mortgage has been dispatched to the appropriate
public recording office for recordation and that the original recorded
Mortgage or a copy of such Mortgage certified by such public recording office
to be a true and complete copy of the original recorded Mortgage will be
promptly delivered to the Custodian upon receipt thereof by the Seller; or
(ii) in the case of a Mortgage 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;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon or copies of
such documents certified by Seller to be true and complete copies thereof that
have been sent for recording;
(e) with respect to Mortgage Loans that are not Co-op Loans, the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording (except with respect to MERS Designated Loans). The
Assignment of Mortgage must be duly recorded only if recordation is either
necessary under applicable law or commonly
EXH. 1-1
required by private institutional mortgage investors in the area where the
Mortgaged Property is located or on direction of the Purchaser as provided in
this Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage
shall be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of
Mortgage must be made by "[SELLER], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Seller
while doing business under another name, the Assignment of Mortgage must be by
"[SELLER], formerly known as [previous name]";
(f) with respect to Mortgage Loans that are not Co-op Loans, the
originals of all intervening assignments of mortgage (if any) evidencing a
complete chain of assignment from the Seller to the Last Endorsee (or, in the
case of a MERS Designated Loan, MERS) with evidence of recording thereon, or
if any such intervening assignment has not been returned from the applicable
recording office or has been lost or if such public recording office retains
the original recorded assignments of mortgage, the Seller shall deliver or
cause to be delivered to the Custodian, a photocopy of such intervening
assignment, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Seller (or a certified copy
from the title company, escrow agent, or closing attorney) stating that such
intervening assignment of mortgage has been dispatched 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 Seller; or
(ii) in the case of an intervening assignment where a public recording office
retains the original recorded intervening assignment or in the case where an
intervening assignment is lost after recordation in a public recording office,
a copy of such intervening assignment certified by such public recording
office to be a true and complete copy of the original recorded intervening
assignment;
(g) with respect to Mortgage Loans that are not Co-op Loans, the
original mortgagee policy of title insurance or, in the event such original
title policy is unavailable, a certified true copy of the related policy
binder or commitment for title certified to be true and complete by the title
insurance company;
(h) the original or, if unavailable, a copy of any security
agreement, chattel mortgage or equivalent document executed in connection with
the Mortgage;
(i) with respect to any Co-op Loan: (i) a copy of the Co-op Lease
and the assignment of such Co-op Lease, with all intervening assignments
showing a complete chain of title and an assignment thereof by Seller; (ii)
the stock certificate together with an undated stock power relating to such
stock certificate executed in blank; (iii) the recognition agreement of the
interests of the Mortgagee with respect to the Co-op Loan by the residential
cooperative housing corporation, the stock of which was pledged by the related
Mortgagor to the originator of such Co-op Loan; and (iv) copies of the
financial statement filed by the originator as secured party and, if
applicable, a filed UCC-3 assignment of the subject security interest showing
a complete chain of title, together with an executed UCC-3 assignment of such
security interest by the Seller in a form sufficient for filing; and
EXH. 1-2
(j) if any of the above documents has been executed by a person
holding a power of attorney, an original or photocopy of such power certified
by the Seller to be a true and correct copy of the original.
In the event an Officer's Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within one hundred eighty (180) days of the related Closing Date, an Officer's
Certificate which shall (i) identify the recorded document and (ii) state that
the recorded document has not been delivered to the Custodian due solely to a
delay caused by the public recording office.
EXH. 1-3
EXHIBIT 2
CONTENTS OF EACH CREDIT FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, unless otherwise disclosed to the Purchaser on
the data tape, which shall be available for inspection by the Purchaser and
which shall be retained by the Servicer or delivered to the Purchaser:
(a) Copies of the Mortgage File documents.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income, if required.
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on Mortgagor, in a form acceptable to either
Xxxxxx Xxx or Xxxxxxx Mac.
(g) Residential appraisal report.
(h) Photograph of the Mortgaged Property and photographs of
comparable properties.
(i) Survey of the Mortgaged Property, unless a survey is not
required by the title insurer.
(j) 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, home owner association declarations,
etc.
(k) Copies of all required disclosure statements.
(l) If applicable, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales Contract, if applicable.
(n) Copy of the owner's title insurance policy or attorney's opinion
of title and abstract of title, as applicable.
(o) Evidence of electronic notation of the hazard insurance policy,
and, if required by law, evidence of the flood insurance policy.
EXH. 2-1
EXHIBIT 3
FORM OF INDEMNIFICATION AND CONTRIBUTION AGREEMENT
This INDEMNIFICATION AND CONTRIBUTION AGREEMENT ("Agreement"), dated
as of [_______], 200_, among [________________] (the "Depositor"), a
[______________] corporation (the "Depositor"), Xxxxxxx Sachs Mortgage
Company, a New York corporation ("Goldman"), First Horizon Home Loan
Corporation, a Kansas corporation (the "Seller") and First Tennesee Mortgage
Services, Inc., a [Tennesseee] corporation (the "Servicer").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Depositor is acting as depositor and registrant with
respect to the Prospectus, dated [________________], and the Prospectus
Supplement to the Prospectus, [________________] (the "Prospectus
Supplement"), relating to [________________] Certificates (the "Certificates")
to be issued pursuant to a Pooling and Servicing Agreement, dated as of
[________________] (the "P&S"), among the Depositor, as depositor,
[________________], as servicer (the "Servicer"), and [________________], as
trustee (the "Trustee");
WHEREAS, as an inducement to the Depositor to enter into the P&S,
and [____________________] (the "Underwriter[s]") to enter into the
Underwriting Agreement, dated [____________________] (the "Underwriting
Agreement"), between the Depositor and the Underwriter[s], and
[_______________] (the "Initial Purchaser[s]") to enter into the Certificate
Purchase Agreement, dated [____________] (the "Certificate Purchase
Agreement"), between the Depositor and the Initial Purchaser[s], Seller and
Servicer have agreed to provide for indemnification and contribution on the
terms and conditions hereinafter set forth;
WHEREAS, Goldman purchased from Seller certain of the Mortgage Loans
underlying the Certificates (the "Mortgage Loans") pursuant to a Mortgage Loan
Sale and Servicing Agreement, dated as of July 1, 2006 (the "Sale and
Servicing Agreement"), by and between Goldman, Seller and Servicer; and
WHEREAS, pursuant to Section 15 of the Sale and Servicing Agreement,
the Seller and Servicer have agreed to indemnify the Depositor, Goldman, the
Underwriter[s], the Initial Purchaser[s] and their respective affiliates,
present and former directors, officers, employees and agents.
EXH. 3-1
NOW THEREFORE, in consideration of the agreements contained herein,
and other valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the Depositor, Goldman, the Seller and the Servicer agree
as follows:
1. Indemnification and Contribution.
(a) Each of the Seller and the Servicer agrees to indemnify and hold
harmless the Depositor, Goldman, the Underwriter[s], the Initial Purchaser[s]
and their respective affiliates and their respective present and former
directors, officers, employees and agents and each person, if any, who
controls the Depositor, Goldman, the Underwriter[s], the Initial Purchaser[s]
or such affiliate within the meaning of either Section 15 of the Securities
Act of 1933, as amended (the "1933 Act"), or Section 20 of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the 1933 Act, the 1934 Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based in whole or in part upon (i) any breach of the
representation and warranty set forth in Section 2(vii) below or (ii) any
untrue statement or alleged untrue statement of a material fact contained in
the Prospectus Supplement, the Offering Circular or in the Free Writing
Prospectus or any omission or alleged omission to state in the Prospectus
Supplement, the Offering Circular, any Free Writing Prospectus or any
amendment or supplement thereto a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading, or any such untrue statement or omission
or alleged untrue statement or alleged omission made in any amendment of or
supplement to the Prospectus Supplement, the Offering Circular or the Free
Writing Prospectus and agrees to reimburse the Depositor, Goldman, the
Underwriter[s], the Initial Purchaser[s] or such affiliates and each such
officer, director, employee, agent and controlling person promptly upon demand
for any legal or other expenses reasonably incurred by any of them in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that Seller and Servicer shall be liable in any such case
only to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with the Seller Information. The foregoing indemnity agreement is
in addition to any liability which Seller or Servicer may otherwise have to
the Depositor, Goldman, the Underwriter[s], the Initial Purchaser[s] their
affiliates or any such director, officer, employee, agent or controlling
person of the Depositor, Goldman, the Underwriter[s], the Initial Purchaser[s]
or their respective affiliates.
As used herein:
"Free Writing Prospectus" means any written communication that
constitutes a "free writing prospectus," as defined in Rule 405 under the 1933
Act.
"Seller Information" means (A) all information in the Prospectus
Supplement, the Offering Circular or any Free Writing Prospectus or any
amendment or supplement thereto, (i) contained under the headings
["Transaction Overview--Parties--The Responsible Party", "-The Servicer"] and
["The Mortgage Loan Pool--Underwriting Guidelines", "-Servicing"] and (ii)
regarding the Mortgage Loans, the related Mortgagors and/or the related
Mortgaged Properties
EXH. 3-2
(but in the case of this clause (ii), only to the extent any untrue statement
or omission or alleged untrue statement or omission arises from or is based
upon errors or omissions in the information concerning the Mortgage Loans, the
related Mortgagors and/or the related Mortgaged Properties, as applicable,
provided to the Depositor or any Affiliate thereof by or on behalf of the
Seller, Servicer or any Affiliate thereof), and (B) [and static pool
information regarding mortgage loans originated or acquired by the Seller [and
included in the Prospectus Supplement, the Offering Circular or the Free
Writing Prospectus] [incorporated by reference from the website located at
______________].
"Offering Circular" means the offering circular, dated [__________]
relating to the private offering of the [_______________] Certificates.
"Regulation AB" means Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
(b) Promptly after receipt by any indemnified party under this
Section 1 of notice of any claim or the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
any indemnifying party under this Section 1, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 1 except to the extent it has
been materially prejudiced by such failure; and provided, further, however,
that the failure to notify any indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise than under
this Section 1.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, except as
provided in the following paragraph, the indemnifying party shall not be
liable to the indemnified party under this Section 1 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by
the indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
necessary or appropriate for such indemnified party to employ separate
counsel; or (iii) the indemnifying party has failed to assume the defense of
such
EXH. 3-3
action and employ counsel reasonably satisfactory to the indemnified party, in
which case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to assume
the defense of such action on behalf of such indemnified party, it being
understood, however, the indemnifying party shall not, in connection with any
one such action or separate but substantially similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to local counsel) at any time for all
such indemnified parties.
Each indemnified party, as a condition of the indemnity agreements
contained in this Section 1, shall cooperate with the indemnifying party in
the defense of any such action or claim. No indemnifying party shall be liable
for any settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with its
written consent or if there be a final judgment for the plaintiff in any such
action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of
such settlement.
(c) If the indemnification provided for in this Section 1 is
unavailable to an indemnified party, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages
or liabilities, in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and the indemnified party, respectively, in
connection with the statements or omissions that result in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the indemnified party and indemnifying
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
such parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission and any other
equitable considerations.
(d) The indemnity and contribution agreements contained in this
Section 1 and the representations and warranties set forth in Section 2 shall
remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by the Depositor,
Goldman, the Underwriter[s], the Initial Purchaser[s], their respective
affiliates, directors, officers, employees or agents or any person controlling
the Depositor, Goldman, the Underwriter[s], the Initial Purchaser[s] or any
such affiliate, and (iii) acceptance of and payment for any of the Offered
Certificates or Private Certificates.
EXH. 3-4
2. Representations and Warranties. Each of the Seller and Servicer
represents and warrants that:
(i) it is validly existing and in good standing under the laws of
its jurisdiction of formation or incorporation, as applicable, and has
full power and authority to own its assets and to transact the business
in which it is currently engaged. It is duly qualified to do business and
is in good standing in each jurisdiction in which the character of the
business transacted by it or any properties owned or leased by it
requires such qualification and in which the failure so to qualify would
have a material adverse effect on its business, properties, assets or
condition (financial or otherwise);
(ii) It is not required to obtain the consent of any other person or
any consent, license, approval or authorization from, or registration or
declaration with, any governmental authority, bureau or agency in
connection with the execution, delivery, performance, validity or
enforceability of this Agreement;
(iii) the execution, delivery and performance of this Agreement by
it will not violate any provision of any existing law or regulation or
any order decree of any court applicable to it or any provision of its
charter or bylaws, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which it is a party or by which
it may be bound;
(iv) (a) no proceeding of or before any court, tribunal or
governmental body is currently pending or, (b) to its knowledge,
threatened against it or any of its properties or with respect to this
Agreement or the Offered Certificates, in either case, which would have a
material adverse effect on its the business, properties, assets or
condition (financial or otherwise);
(v) It has full power and authority to make, execute, deliver and
perform this Agreement and all of the transactions contemplated
hereunder, and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement. When executed and
delivered, this Agreement will constitute the legal, valid and binding
obligation of it enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally, by the availability of equitable remedies, and by
limitations of public policy under applicable securities law as to rights
of indemnity and contribution thereunder;
(vi) this Agreement has been duly executed and delivered by it; and
(vii) the Seller Information satisfies the requirements of the
applicable provisions of Regulation AB.
3. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to Seller, will be mailed, delivered
or faxed or emailed and confirmed by mail [______________________]; if sent to
Goldman, will be mailed, delivered or faxed or emailed and confirmed by mail
to Xxxxxxx Sachs Mortgage Company, 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000 Xxxxx,
Xx. Xxxxxxxxxx, Xxxxxxx 00000, Attention: Xxxxxxx Xxxx, Tel:
EXH. 3-5
(000) 000-0000, Fax: (000) 000-0000, with a copy to Xxxxxxx Sachs Mortgage
Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Tel: (000) 000-0000, Fax
(000) 000-0000; if to the Depositor, will be mailed, delivered or telegraphed
and confirmed to [____________________]; or if to the Underwriter[s], will be
mailed, delivered or telegraphed and confirmed to [_____________________]; or
if to the Initial Purchaser[s], will be mailed, delivered or telegraphed and
confirmed to [_____________________].
4. Miscellaneous. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without giving effect to
the conflict of laws provisions thereof. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their successors and
assigns and the controlling persons referred to herein, and no other person
shall have any right or obligation hereunder. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the party against whom enforcement of
the change, waiver, discharge or termination is sought. This Agreement may be
executed in counterparts, each of which when so executed and delivered shall
be considered an original, and all such counterparts shall constitute one and
the same instrument. Capitalized terms used but not defined herein shall have
the meanings provided in the P&S.
5. Submission To Jurisdiction; Waivers. Each of the Seller and the
Servicer hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF
ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF THE UNITED STATES
OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM
ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE DEPOSITOR SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO XXX IN ANY OTHER JURISDICTION.
EXH.3-6
[SIGNATURE PAGE FOLLOWS]
EXH. 3-7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers hereunto duly authorized, this
__th day of [_____________].
[DEPOSITOR]
By: ___________________________________
Name:
Title:
XXXXXXX SACHS MORTGAGE
COMPANY
By: ___________________________________
Name:
Title:
FIRST HORIZON HOME LOAN
CORPORATION
By: ___________________________________
Name:
Title:
FIRST TENNESSEE MORTGAGE
SERVICES, INC.
By: ___________________________________
Name:
Title:
EXH.3-8
EXHIBIT 4
CUSTODIAL ACCOUNT CERTIFICATION
_________ __, 200__
[_____________________] hereby certifies that it has established the
account described below as a Custodial Account pursuant to Subsection 11.04 of
the Mortgage Loan Sale and Servicing Agreement, dated as of July 1, 2006,
Fixed and Adjustable Rate Mortgage Loans.
Title of Account: "First Tennessee Mortgage Services, Inc., in trust for
Xxxxxxx Xxxxx Mortgage Company as Purchaser of Mortgage Loans and various
Mortgagors."
Account Number: __________________________
Address of office or
branch of [_____________________]
at which the Custodial
Account is maintained: ______________________
______________________
______________________
FIRST TENNESSEE MORTGAGE
SERVICES, INC.
By:_____________________________
Name:
Title:
EXH.4-1
EXHIBIT 5
CUSTODIAL ACCOUNT LETTER AGREEMENT
_________ __, 200__
To:
(the "Depository")
As Servicer under the Mortgage Loan Sale and Servicing Agreement,
dated as of July 1, 2006, we hereby authorize and request you to establish an
account, as a Custodial Account, to be designated as "First Tennessee Mortgage
Services, Inc., in trust for Xxxxxxx Sachs Mortgage Company as Purchaser of
Mortgage Loans and various Mortgagors." All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Servicer. You may
refuse any deposit which would result in violation of the requirement that the
account be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to us.
FIRST TENNESSEE MORTGAGE
SERVICES, INC.
By: ___________________________________
Name:
Title:
EXH.5-1
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 account
will be insured by the Federal Deposit Insurance Corporation through the Bank
Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF"). The
parties hereto intend that the Custodial Account established hereby shall be a
special deposit account. This letter shall be construed in accordance with the
laws of the State of New York.
[_________________________],
as Depository
By:_________________________________
Name:
Title:
Date:
EXH.5-2
EXHIBIT 6
ESCROW ACCOUNT CERTIFICATION
_________ __, 200__
[_____________________] hereby certifies that it has established the
account described below as an Escrow Account pursuant to Subsection 11.06 of
the Mortgage Loan Sale and Servicing Agreement, dated as of July 1, 2006 Fixed
and Adjustable Rate Mortgage Loans.
Title of Account: "First Tennessee Mortgage Services, Inc., in trust for
Xxxxxxx Xxxxx Mortgage Company as Purchaser of Mortgage Loans and various
Mortgagors."
Account Number: __________________________
Address of office or
branch of [_____________________]
at which the Escrow
Account is maintained: ______________________
______________________
______________________
FIRST TENNESSEE MORTGAGE
SERVICES, INC.
By:_____________________________
Name:
Title:
EXH. 6-1
EXHIBIT 7
ESCROW ACCOUNT LETTER AGREEMENT
_________ __, 200__
To:
(the "Depository")
As Servicer under the Mortgage Loan Sale and Servicing Agreement,
dated as of July 1, 2006, we hereby authorize and request you to establish an
account, as an Escrow Account, to be designated as "First Tennessee Mortgage
Services, Inc., in trust for Xxxxxxx Sachs Mortgage Company as Purchaser of
Mortgage Loans and various Mortgagors." All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Servicer. You may
refuse any deposit which would result in violation of the requirement that the
account be fully insured as described below. This letter is submitted to you
in duplicate. Please execute and return one original to us.
FIRST TENNESSEE MORTGAGE
SERVICES, INC.
By:_____________________________
Name:
Title:
EXH. 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 account
will be insured by the Federal Deposit Insurance Corporation through the Bank
Insurance Fund ("BIF") or the Savings Association Insurance Fund ("SAIF"). The
parties hereto intend that the Escrow Account established hereby shall be a
special deposit account. This letter shall be construed in accordance with the
laws of the State of New York.
[_________________________],
as Depository
By:_________________________________
Name:
Title:
Date:
EXH.7-2
EXHIBIT 8
UNDERWRITING GUIDELINES
[SELLER TO PROVIDE]
EXH. 8-1
EXHIBIT 9
REQUIRED FIELDS FOR MONTHLY REMITTANCE REPORT
Actual/Actual Single Debit Reporting Fields
P139- Trial Balance:
Report Date
Loan Number
Investor Code
Category Code
P&I Constant
Annual Interest Rate
Service Fee Rate
Due Date
Unpaid Principal Balance
S-215 - Remittance Report
Report Date
Loan Number
Investor Loan Number
Investor Code
Category Code
Date Paid (Payment Applied)
Payment Number
Due Date
Payment Breakdown:
Escrow Applied
Principal Applied
Interest Applied
Service Fee Applied
Net Interest
Total Deposited Remittance
Unpaid Principal Balance
S-214 - Payoff Remittance Report
Report Date
Loan Number
Investor Loan Number
Investor Code
Category Code
Date Paid (Payment Applied)
Payment Number
Payoff Breakdown:
Escrow Applied
Principal Applied
Interest Applied
Service Fee Applied
EXH.9-1
Net Interest
Total Deposited Remittance
Unpaid Principal Balance
P&I Constant
Annual Interest Rate
Service Fee Rate
S-213- Additional Principal Remittance Report
Report Date
Loan Number
Investor Loan Number
Investor Code
Category Code
Date Paid (Payment Applied)
Payment Number
Principal Applied
Total Deposited Remittance
Unpaid Principal Balance
P&I Constant
Annual Interest Rate
Service Fee Rate
S-212 - Prepaid Payments Remittance Report
Report Date
Loan Number
Investor Loan Number
Investor Code
Category Code
Date Paid (Payment Applied)
Payment Number
Due Date
Payment Breakdown:
Escrow Applied
Principal Applied
Interest Applied
Service Fee Applied
Net Interest
Total Deposited Remittance
Unpaid Principal Balance
EXH. 9-2
EXHIBIT 10
FORM OF SELLER'S/SERVICER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly
elected [Vice] President of ________________ [COMPANY], a [state] [federally]
chartered institution organized under the laws of the [state of ____________]
[United States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and
complete copy of the charter of the Company which is in full force
and effect on the date hereof and which has been in effect without
amendment, waiver, rescission or modification since ___________.
2. Attached hereto as Exhibit 2 is a true, correct and
complete copy of the bylaws of the Company which are in effect on the
date hereof and which have been in effect without amendment, waiver,
rescission or modification since
-----------.
3. Attached hereto as Exhibit 3 is an original certificate
of good standing of the Company issued within ten (10) days of the
date hereof, and no event has occurred since the date thereof which
would impair such standing.
4. Attached hereto as Exhibit 4 is a true, correct and
complete copy of the corporate resolutions of the Board of Directors
of the Company authorizing the Company to execute and deliver each of
the Mortgage Loan Sale and Servicing Agreement, dated as of July 1,
2006, by and between Xxxxxxx Xxxxx Mortgage Company (the
"Purchaser",) [SERVICER/SELLER] and the Company (the "Sale and
Servicing Agreement") [and to endorse the Mortgage Notes and execute
the Assignments of Mortgages by original [or facsimile] signature],
and such resolutions are in effect on the date hereof and have been
in effect without amendment, waiver, rescission or modification since
____________.
5. Either (i) no consent, approval, authorization or order
of any court or governmental agency or body is required for the
execution, delivery and performance by the Company of or compliance
by the Company with the Sale and Servicing Agreement, the sale of the
mortgage loans or the consummation of the transactions contemplated
by the agreements; or (ii) any required consent, approval,
authorization or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated
by, nor the fulfillment of the terms of the Sale and Servicing
Agreement conflicts or will conflict with or results or will result
in a breach of or constitutes or will constitute a default under the
charter or by-laws of the Company, the terms of any indenture or
other agreement or instrument to which the Company is a party or by
which it is bound or to which it is subject, or any statute or order,
rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company is
subject or by which it is bound.
EXH. 10-1
7. To the best of my knowledge, there is no action, suit,
proceeding or investigation pending or threatened against the Company
which, in my judgment, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Company
or in any material impairment of the right or ability of the Company
to carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would draw
into question the validity of the Sale and Servicing Agreement, or
the mortgage loans or of any action taken or to be taken in
connection with the transactions contemplated hereby, or which would
be likely to impair materially the ability of the Company to perform
under the terms of the Sale and Servicing Agreement.
8. Each person listed on Exhibit 5 attached hereto who, as
an officer or representative of the Company, signed (a) the Sale and
Servicing Agreement and (b) any other document delivered or on the
date hereof in connection with any purchase described in the
agreements set forth above was, at the respective times of such
signing and delivery, and is now, a duly elected or appointed,
qualified and acting officer or representative of the Company, who
holds the office set forth opposite his or her name on Exhibit 5, and
the signatures of such persons appearing on such documents are their
genuine signatures.
9. The Company is duly authorized to engage in the
transactions described and contemplated in the Sale and Servicing
Agreement.
EXH. 10-2
IN WITNESS WHEREOF, I have hereunto signed my name and
affixed the seal of the Company.
Dated:
------------------------------------------
By:
------------------------------------------
Name:
------------------------------------------
[Seal] Title: [Vice] President
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:
------------------------------------------
By:
------------------------------------------
Name:
------------------------------------------
Title:
--------------------------------------------
[Assistant] Secretary
EXH. 10-3
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
______________________ _________________________________ ___________________
______________________ _________________________________ ___________________
______________________ _________________________________ ___________________
______________________ _________________________________ ___________________
______________________ _________________________________ ___________________
______________________ _________________________________ ___________________
______________________ _________________________________ ___________________
______________________ _________________________________ ___________________
EXH. 10-4
EXHIBIT 11
FORM OF OPINION OF COUNSEL TO SELLER/SERVICER
(date)
Xxxxxxx Sachs Mortgage Company
000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000 Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant]
General Counsel to First Horizon Home Loan Corporation (the "Company") and
First Tennessee Mortgage Servicers, Inc. (the "Servicer" and together with the
Company, the "Seller Entities")), with respect to certain matters in
connection with the sale by the Company of the Mortgage Loans pursuant to that
certain Mortgage Loan Sale and Servicing Agreement, by and between the
Company, the Servicer and Xxxxxxx Xxxxx Mortgage Company (the "Purchaser"),
dated as of July 1, 2006 (the "Agreement") which sale is in the form of whole
loans. Capitalized terms not otherwise defined herein have the meanings set
forth in the Agreement.
[We] [I] have examined the following documents:
1. the Agreement;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have
deemed necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper,
[we] [I] have relied upon the representations and warranties of the Seller
Entities contained in the Sale and Servicing Agreement. [We] [I] have assumed
the authenticity of all documents submitted to [us] [me] as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all documents.
Based upon the foregoing, it is [our] [my] opinion that:
1._______Each Seller Entity Company is a [type of entity]
duly organized, validly existing and in good standing under the laws of the
[United States] and is qualified to transact business in, and is in good
standing under, the laws of [the state of incorporation/formation].
EXH. 11-1
2. Each Seller Entity has the power to engage in the
transactions contemplated by the Agreement and all requisite power, authority
and legal right to execute and deliver the Agreement and to perform and
observe the terms and conditions of the Agreement.
3. The Agreement has been duly authorized, executed
and delivered by each Seller Entity, and is a legal, valid and binding
agreement enforceable in accordance with its respective terms against such
Seller Entity, subject to bankruptcy laws and other similar laws of general
application affecting rights of creditors and subject to the application of
the rules of equity, including those respecting the availability of specific
performance, none of which will materially interfere with the realization of
the benefits provided thereunder or with the Purchaser's ownership of the
Mortgage Loans.
4. Each Seller Entity has been duly authorized to
allow any of its officers to execute any and all documents by original
signature in order to complete the transactions contemplated by the Agreement.
5. The Company has been duly authorized to allow any
of its officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of Mortgages, and the
original [or facsimile] signature of the officer at the Company executing the
endorsements to the Mortgage Notes and the Assignments of Mortgages represents
the legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or
order of any court or governmental agency or body is required for the
execution, delivery and performance by either Seller Entity of or compliance
by either Seller Entity with the Agreement and the sale of the Mortgage Loans
by the Company or the consummation of the transactions contemplated by the
Agreement or (ii) any required consent, approval, authorization or order has
been obtained by the Seller Entities.
7. Neither the consummation of the transactions
contemplated by, nor the fulfillment of the terms of, the Agreement conflicts
or will conflict with or results or will result in a breach of or constitutes
or will constitute a default under the charter or by-laws of either Seller
Entity, the terms of any indenture or other agreement or instrument to which
either Seller Entity is a party or by which it is bound or to which it is
subject, or violates any statute or order, rule, regulations, writ, injunction
or decree of any court, governmental authority or regulatory body to which
either Seller Entity is subject or by which it is bound.
8. There is no action, suit, proceeding or
investigation pending or, to the best of [our] [my] knowledge, threatened
against either Seller Entity which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material adverse change in the
business, operations, financial condition, properties or assets of either
Seller Entity or in any material impairment of the right or ability of either
Seller Entity to carry on its business substantially as now conducted or in
any material liability on the part of either Seller Entity or which would draw
into question the validity of the Agreement or the Mortgage Loans or of any
action taken or to be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the ability of either
Seller Entity to perform under the terms of the Agreement.
XXX. 00-0
0. The sale of each Mortgage Note and Mortgage as and
in the manner contemplated by the Agreements is sufficient to fully transfer
to the Purchaser all right, title and interest of the Company thereto as
noteholder and mortgagee.
10. The Mortgages have been duly assigned and the
Mortgage Notes have been duly endorsed as provided in the Agreement. The
Assignments of Mortgage are in recordable form, except for the insertion of
the name of the assignee, and upon the name of the assignee being inserted,
are acceptable for recording under the laws of the state where each related
Mortgaged Property is located. The endorsement of the Mortgage Notes, the
delivery to the Purchaser, or its designee, of the Assignments of Mortgage,
and the delivery of the original endorsed Mortgage Notes to the Purchaser, or
its designee, are sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims of any present or
future creditors of the Company, and are sufficient to prevent any other sale,
transfer, assignment, pledge or hypothecation of the Mortgages and the
Mortgage Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no
other person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of the date of this
opinion.
Very truly yours,
-----------------------------------------------------
[Name]
-----------------------------------------------------
[Assistant] General Counsel
EXH. 11-3
EXHIBIT 12
FORM OF SECURITY RELEASE CERTIFICATION
---------------, -----
------------------------
------------------------
------------------------
Attention: ---------------------------
---------------------------
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that First Horizon Home Loan
Corporation a corporation, organized pursuant to the laws of the state of
Kansas (the "Company") has committed to sell to Xxxxxxx Sachs Mortgage Company
under a Mortgage Loan Sale and Servicing Agreement, dated as of July 1, 2006,
certain mortgage loans originated by the Company. The Company warrants that
the mortgage loans to be sold to Xxxxxxx Xxxxx Mortgage Company are in
addition to and beyond any collateral required to secure advances made by you
to the Company.
The Company acknowledges that the mortgage loans to be sold
to Xxxxxxx Sachs Mortgage Company shall not be used as additional or
substitute collateral for advances made by [____________]. Xxxxxxx Xxxxx
Mortgage Company understands that the balance of the Company's mortgage loan
portfolio may be used as collateral or additional collateral for advances made
by [___________], and confirms that it has no interest therein.
EXH. 12-1
Execution of this letter by [___________] shall constitute a
full and complete release of any security interest, claim, or lien which
[___________] may have against the mortgage loans to be sold to Xxxxxxx Sachs
Mortgage Company.
Very truly yours,
By: _____________________________________________
Name: ___________________________________________
Title:___________________________________________
Date:____________________________________________
Acknowledged and approved:
--------------------------
By:_______________________________________________________
Name:_____________________________________________________
Title:____________________________________________________
Date:_____________________________________________________
EXH. 12-2
EXHIBIT 13
FORM OF SECURITY RELEASE CERTIFICATION
I. Release of Security Interest
The financial institution named below hereby relinquishes
any and all right, title, interest, lien or claim of any kind it may have in
all mortgage loans described on the attached Schedule A (the "Mortgage Loans")
to be purchased by Xxxxxxx Xxxxx Mortgage Company from the company named on
the next page pursuant to that certain Mortgage Loan Sale and Servicing
Agreement, dated as of July 1, 2006 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 Company or its designees, as of
the date and time of the sale of such Mortgage Loans to Xxxxxxx Sachs Mortgage
Company. Such release shall be effective automatically without any further
action by any party upon payment in one or more installments, in immediately
available funds, of $_____________, in accordance with the wire instructions
set forth below.
Name, Address and Wire Instructions of Financial Institution
--------------------------------
(Name)
--------------------------------
(Address)
--------------------------------
--------------------------------
--------------------------------
By:_____________________________
EXH. 13-1
II. Certification of Release
The Company named below hereby certifies to Xxxxxxx Xxxxx
Mortgage Company that, as of the date and time of the sale of the
above-mentioned Mortgage Loans to Xxxxxxx Sachs Mortgage Company the security
interests in the Mortgage Loans released by the above-named financial
institution comprise all security interests relating to or affecting any and
all such Mortgage Loans. The Company warrants that, as of such time, there are
and will be no other security interests affecting any or all of such Mortgage
Loans.
---------------------------
By:___________________________
Title:________________________
Date:_________________________
EXH. 13-2
EXHIBIT 14
FORM OF ASSIGNMENT AND CONVEYANCE
On this ___ day of __________, ____, First Horizon Home Loan
Corporation ("Seller") and First Tennessee Mortgage Services, Inc. (the
"Servicer"), as (i) the Seller and Servicer under that certain Purchase Price
and Terms Agreement, dated as of ___________, _____ (the "PPTA"), (ii) the
Seller and Servicer under that certain Mortgage Loan Sale and Servicing
Agreement, dated as of July 1, 2006 (the "Sale and Servicing Agreement") and,
together with the PPTA, the "Agreements") does hereby sell, transfer, assign,
set over and convey to Xxxxxxx Xxxxx Mortgage Company ("Purchaser") as the
Purchaser under the Agreements, without recourse, but subject to the terms of
the Agreements, all right, title and interest of, in and to the Mortgage Loans
listed on the Mortgage Loan Schedule attached hereto as Exhibit A (the
"Mortgage Loans"), together with the Mortgage Files and all rights and
obligations arising under the documents contained therein. Each Mortgage Loan
subject to the Agreements was underwritten in accordance with, and conforms
to, the Underwriting Guidelines attached hereto as Exhibit C. Pursuant to
Section 6 of the Sale and Servicing Agreement, the Seller has delivered to the
Custodian the documents for each Mortgage Loan to be purchased. The contents
of each Servicing File required to be retained by the Servicer to service the
Mortgage Loans pursuant to the Sale and Servicing Agreement and thus not
delivered to the Purchaser are and shall be held in trust by the Servicer in
its capacity as Servicer for the benefit of the Purchaser as the owner
thereof. The Servicer's possession of any portion of the Servicing File is at
the will of the Purchaser for the sole purpose of facilitating servicing of
the related Mortgage Loan pursuant to the Sale and Servicing Agreement, and
such retention and possession by the Servicer shall be in a custodial capacity
only. The ownership of each Mortgage Note, 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 or the Servicer
shall immediately vest in the Purchaser and shall be retained and maintained,
in trust, by the Servicer at the will of the Purchaser in such custodial
capacity only.
The Mortgage Loan Package characteristics of the Mortgage
Loans subject hereto are set forth on Exhibit B hereto.
In accordance with Section 6 of the Sale and Servicing
Agreement, the Purchaser accepts the Mortgage Loans listed on Exhibit A
attached hereto. Notwithstanding the foregoing the Purchaser does not waive
any rights or remedies it may have under the Agreements.
Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Sale and Servicing Agreement.
[Signature Page Follows]
XXX. 00-0
FIRST HORIZON HOME LOAN CORPORATION
By: _______________________________________________
Name:
Title:
FIRST TENNESSEE MORTGAGE SERVICES, INC.
By: _______________________________________________
Name:
Title:
Accepted and Agreed:
XXXXXXX SACHS MORTGAGE COMPANY
By:
---------------------------------------
Name:
Title:
XXX. 00-0
EXHIBIT A
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
THE MORTGAGE LOANS
XXX. 00-0
XXXXXXX X
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE POOL
CHARACTERISTICS OF EACH MORTGAGE LOAN PACKAGE
Pool Characteristics of the Mortgage Loan Package as
delivered on the related Closing Date:
No Mortgage Loan has: (1) an outstanding principal balance
less than $_________; (2) an origination date earlier than _ months prior to
the related Cut-off Date; (3) an LTV of greater than _____%; (4) a FICO Score
of less than ___; or (5) a debt-to-income ratio of more than __%. Each
Mortgage Loan has a Mortgage Interest Rate of at least ___% per annum and an
outstanding principal balance of less than $_________. Each Adjustable Rate
Mortgage Loan has an Index of [_______].
EXH. 14-4
EXHIBIT C
TO ASSIGNMENT AND CONVEYANCE AGREEMENT
UNDERWRITING GUIDELINES
EXH. 14-5
EXHIBIT 15
FORM OF ASSIGNMENT AND RECOGNITION AGREEMENT
THIS ASSIGNMENT AND RECOGNITION AGREEMENT, dated
[____________ __, 20__] ("Agreement"), among Xxxxxxx Xxxxx Mortgage Company
("Assignor"), [____________________] ("Assignee"), [SELLER] (the "Company")
and {SERVICER] (the "Servicer" and together with the Company, the "Seller
Entities"):
For and in consideration of the sum of TEN DOLLARS ($10.00)
and other valuable consideration the receipt and sufficiency of which hereby
are acknowledged, and of the mutual covenants herein contained, the parties
hereto hereby agree as follows:
Assignment and Conveyance
1. The Assignor hereby conveys, sells, grants,
transfers and assigns to the Assignee all of the right, title and interest of
the Assignor, as purchaser, in, to and under (a) those certain Mortgage Loans
listed on the schedule (the "Mortgage Loan Schedule") attached hereto as
Exhibit A (the "Mortgage Loans") and (b) except as described below, that
certain Mortgage Loan Sale and Servicing Agreement (the "Sale and Servicing
Agreement"), dated as of July 1, 2006 between the Assignor, as purchaser (the
"Purchaser"), the Company, as seller, and the Servicer, as servicer, solely
insofar as the Sale and Servicing Agreement relates to the Mortgage Loans.
The Assignor specifically reserves and does not assign to
the Assignee hereunder any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to (a) Subsection 7.05 of the
Sale and Servicing Agreement or (b) any mortgage loans subject to the Sale and
Servicing Agreement which are not the Mortgage Loans set forth on the Mortgage
Loan Schedule and are not the subject of this Agreement.
Recognition of the Company
2. From and after the date hereof (the "Securitization
Closing Date"), each Seller Entity shall and does hereby recognize that the
Assignee will transfer the Mortgage Loans and assign its rights under the Sale
and Servicing Agreement (solely to the extent set forth herein) and this
Agreement to [__________________] (the "Trust") created pursuant to a Pooling
and Servicing Agreement, dated as of [__________, 200_] (the "Pooling
Agreement"), among the Assignee, the Assignor, [___________________], as
trustee (including its successors in interest and any successor trustees under
the Pooling Agreement, the "Trustee"), [____________________], as master
servicer (including its successors in interest and any successor servicer
under the Pooling Agreement, the "Master Servicer"). Each Seller Entity hereby
acknowledges and agrees that from and after the date hereof (i) the Trust will
be the owner of the Mortgage Loans, (ii) each Seller Entity shall look solely
to the Trust for performance of any obligations of the Assignor insofar as
they relate to the Mortgage Loans, (iii) the Trust (including the Trustee and
the Master Servicer acting on the Trust's behalf) shall have all the rights
and remedies available to the Assignor, insofar as they relate to the Mortgage
Loans, under the Sale and Servicing Agreement, including, without limitation,
the enforcement
XXX. 00-0
of the document delivery requirements set forth in Section 6 of the Sale and
Servicing Agreement, and shall be entitled to enforce all of the obligations
of each Seller Entity thereunder insofar as they relate to the Mortgage Loans,
and (iv) all references to the Purchaser, the Custodian or the Bailee under
the Sale and Servicing Agreement insofar as they relate to the Mortgage Loans,
shall be deemed to refer to the Trust (including the Trustee and the Master
Servicer acting on the Trust's behalf). None of any Seller Entity nor the
Assignor shall amend or agree to amend, modify, waiver, or otherwise alter any
of the terms or provisions of the Sale and Servicing Agreement which
amendment, modification, waiver or other alteration would in any way affect
the Mortgage Loans or each Seller Entity's performance under the Sale and
Servicing Agreement with respect to the Mortgage Loans without the prior
written consent of the Trustee.
Representations and Warranties of the Company
3. Each Seller Entity warrants and represents to the
Assignor, the Assignee and the Trust as of the date hereof that:
(a) Each Seller Entity is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation;
(b) Each Seller Entity has full power and authority to
execute, deliver and perform its obligations under this Agreement and
has full power and authority to perform its obligations under the Sale
and Servicing Agreement. The execution by each Seller Entity of this
Agreement is in the ordinary course of its business and will not
conflict with, or result in a breach of, any of the terms, conditions
or provisions of its charter or bylaws or any legal restriction, or any
material agreement or instrument to which it is now a party or by which
it is bound, or result in the violation of any law, rule, regulation,
order, judgment or decree to which it or its property is subject. The
execution, delivery and performance by each Seller Entity of this
Agreement have been duly authorized by all necessary corporate action
on part of such Seller Entity. This Agreement has been duly executed
and delivered by each Seller Entity, and, upon the due authorization,
execution and delivery by the Assignor and the Assignee, will
constitute the valid and legally binding obligation of each Seller
Entity, enforceable against such Seller Entity in accordance with its
terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and by
general principles of equity regardless of whether enforceability is
considered in a proceeding in equity or at law;
(c) No consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is
required to be obtained or made by either Seller Entity in connection
with the execution, delivery or performance by such Seller Entity of
this Agreement; and
(d) There is no action, suit, proceeding or investigation
pending or threatened against either Seller Entity, before any court,
administrative agency or other tribunal, which would draw into question
the validity of this Agreement or the Sale and Servicing Agreement, or
which, either in any one instance or in the aggregate, would result in
any material adverse change in the ability of either Seller Entity to
perform its obligations
XXX. 00-0
under this Agreement or the Sale and Servicing Agreement, and each
Seller Entity is solvent.
4. Pursuant to Section 15 of the Sale and Servicing
Agreement, each Seller Entity hereby represents and warrants, for the benefit
of the Assignor, the Assignee and the Trust, that the representations and
warranties set forth in Section 7.01 and Section 7.02 of the Sale and
Servicing Agreement are true and correct as of the date hereof as if such
representations and warranties were made on the date hereof unless otherwise
specifically stated in such representations and warranties.
Remedies for Breach of Representations and Warranties
5. Each Seller Entity hereby acknowledges and agrees
that the remedies available to the Assignor, the Assignee and the Trust
(including the Trustee and the Servicer acting on the Trust's behalf) in
connection with any breach of the representations and warranties made by such
Seller Entity set forth in Sections 3 and 4 hereof shall be as set forth in
Subsection 7.03 of the Sale and Servicing Agreement as if they were set forth
herein (including without limitation the repurchase and indemnity obligations
set forth therein).
Miscellaneous
6. This Agreement shall be construed in accordance
with the laws of the State of New York, without regard to conflicts of law
principles, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
7. 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, with the prior written consent of the Trustee.
8. This Agreement shall inure to the benefit of (i)
the successors and assigns of the parties hereto and (ii) the Trust (including
the Trustee and the Master Servicer acting on the Trust's behalf). Any entity
into which Assignor, Assignee or either Seller Entity may be merged or
consolidated shall, without the requirement for any further writing, be deemed
Assignor, Assignee or either Seller Entity, respectively, hereunder.
9. Each of this Agreement and the Sale and Servicing
Agreement shall survive the conveyance of the Mortgage Loans and the
assignment of the Sale and Servicing Agreement (to the extent assigned
hereunder) by Assignor to Assignee and by Assignee to the Trust and nothing
contained herein shall supersede or amend the terms of the Sale and Servicing
Agreement.
10. 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.
11. In the event that any provision of this Agreement
conflicts with any provision of the Sale and Servicing Agreement with respect
to the Mortgage Loans, the terms of this Agreement shall control.
XXX. 00-0
00. Capitalized terms used in this Agreement (including
the exhibits hereto) but not defined in this Agreement shall have the meanings
given to such terms in the Sale and Servicing Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed by their duly authorized officers as of the date first above
written.
FIRST HORIZON HOME LOAN CORPORATION
By: ___________________________________________________
Name:
Its:
FIRST TENNESSEE MORTGAGE SERVICERS, INC.
By: ___________________________________________________
Name:
Its:
XXXXXXX XXXXX MORTGAGE COMPANY
By: ___________________________________________________
Name:
Its:
[ASSIGNEE]
By: ___________________________________________________
Name:
Its:
EXH. 15-4
EXHIBIT 16
FORM OF ANNUAL CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ] (the "Agreement"),
among [IDENTIFY PARTIES]
I, ________________________________, the
_______________________ of [NAME OF COMPANY], certify to [the Purchaser], [the
Depositor], and the [Master Servicer] [Securities Administrator] [Trustee],
and their officers, with the knowledge and intent that they will rely upon
this certification, that:
1. I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and
15d-18 under the Exchange Act and Section 1122(b) of Regulation AB
(the "Attestation Report"), and all servicing reports, officer's
certificates and other information relating to the servicing of the
Mortgage Loans by the Company during 200[ ] that were delivered by
the Company to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee] pursuant to the Agreement (collectively, the
"Company Servicing Information");
2. Based on my knowledge, the Company Servicing Information,
taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements made, in the light of the circumstances under which such
statements were made, not misleading with respect to the period of
time covered by the Company Servicing Information;
3. Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the
Agreement has been provided to the [Depositor] [Master Servicer]
[Securities Administrator] [Trustee];
4. I am responsible for reviewing the activities performed
by the Company as servicer under the Agreement, and based on my
knowledge and the compliance review conducted in preparing the
Compliance Statement and except as disclosed in the Compliance
Statement, the Servicing Assessment or the Attestation Report, the
Company has fulfilled its obligations under the Agreement; and
5. The Compliance Statement required to be delivered by the
Company pursuant to the Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Company and by any
Subservicer or Subcontractor pursuant to the Agreement, have been
provided to the [Depositor] [Master Servicer]. Any material instances
of noncompliance described in such reports have been disclosed to the
XXX. 00-0
[Xxxxxxxxx] [Master Servicer]. Any material instance of noncompliance
with the Servicing Criteria has been disclosed in such reports.
Date:______________________________________
By: _______________________________________
Name:
Title:
XXX. 00-0
XXXXXXX 00
XXXXXXXXX XXXXXXXX TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the
Company] [Name of Subservicer] shall address, at a minimum, the criteria
identified as below as "Applicable Servicing Criteria":
------------------------ -------------------------------------------------------------------- ------------------------
Applicable
Servicing Criteria Servicing Criteria
------------------------ -------------------------------------------------------------------- ------------------------
Reference 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.
------------------------ -------------------------------------------------------------------- ------------------------
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.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans
are maintained.
------------------------ -------------------------------------------------------------------- ------------------------
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.
------------------------ -------------------------------------------------------------------- ------------------------
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.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
personnel.
------------------------ -------------------------------------------------------------------- ------------------------
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.
------------------------ -------------------------------------------------------------------- ------------------------
------------------------ -------------------------------------------------------------------- ------------------------
Applicable
Servicing Criteria Servicing Criteria
------------------------ -------------------------------------------------------------------- ------------------------
Reference Criteria
------------------------ -------------------------------------------------------------------- ------------------------
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.
------------------------ -------------------------------------------------------------------- ------------------------
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.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized
access.
------------------------ -------------------------------------------------------------------- ------------------------
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. 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.
------------------------ -------------------------------------------------------------------- ------------------------
EXH. 17-2
------------------------ -------------------------------------------------------------------- ------------------------
Applicable
Servicing Criteria Servicing Criteria
------------------------ -------------------------------------------------------------------- ------------------------
Reference Criteria
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in accordance
with timeframes, distribution priority and other terms set forth
in the transaction agreements.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within two business
days to the Servicer's investor records, or such other number of
days specified in the transaction agreements.
------------------------- -------------------------------------------------------------------- ------------------------
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.
------------------------ -------------------------------------------------------------------- ------------------------
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.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans
agree with the Servicer's records with respect to an
obligor's unpaid principal balance.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance with
the transaction agreements and related pool asset documents.
------------------------ -------------------------------------------------------------------- ------------------------
EXH. 17-3
------------------------ -------------------------------------------------------------------- ------------------------
Applicable
Servicing Criteria Servicing Criteria
------------------------ -------------------------------------------------------------------- ------------------------
Reference Criteria
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g.,
forbearance plans, modifications and deeds in lieu of
foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in
accordance with the timeframes or other requirements
established by the transaction agreements.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such
records are maintained on at least a monthly basis,
or such other period specified in the transaction
agreements, and describe the entity's activities in
monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment
rescheduling plans in cases where delinquency is
deemed temporary (e.g., illness or unemployment).
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage
loans with variable rates are computed based on the related
mortgage loan documents.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor
(such as escrow accounts): (A) such funds are
analyzed, in accordance with the obligor's mortgage
loan documents, on at least an annual basis, or such
other period specified in the transaction agreements;
(B) interest on such funds is paid, or credited, to
obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are
returned to the obligor within 30 calendar days of
full repayment of the related mortgage loans, or such
other number of days specified in the transaction
agreements.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments,
provided that such support has been received by the
servicer at least 30 calendar days prior to these
dates, or such other number of days specified in the
transaction agreements.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment to be
made on behalf of an obligor are paid from the servicer's funds
and not charged to the obligor, unless the late payment was due to
the obligor's error or omission.
------------------------ -------------------------------------------------------------------- ------------------------
EXH. 17-4
------------------------ -------------------------------------------------------------------- ------------------------
Applicable
Servicing Criteria Servicing Criteria
------------------------ -------------------------------------------------------------------- ------------------------
Reference Criteria
------------------------ -------------------------------------------------------------------- ------------------------
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.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
------------------------ -------------------------------------------------------------------- ------------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the transaction agreements.
------------------------ -------------------------------------------------------------------- ------------------------
[NAME OF COMPANY] [NAME OF SUBSERVICER]
Date: _____________________________________
By: _____________________________________
Name:
Title:
EXH. 17-5
EXHIBIT Z
Seller's Purchase, Warranties and Servicing Agreement, dated as of
April 1, 2005, between Xxxxxxx Xxxxx Mortgage Company and
Wachovia Mortgage Corporation
-----------------------
EXECUTION COPY
-----------------------
XXXXXXX SACHS MORTGAGE COMPANY
Purchaser
and
WACHOVIA MORTGAGE CORPORATION
Seller
SELLER'S PURCHASE, WARRANTIES AND SERVICING AGREEMENT
Dated as of April 1, 2006
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS ......................................................................................4
Section 1.01. Defined Terms.........................................................................4
ARTICLE II SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION
OF MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL
AGREEMENT; DELIVERY OF MORTGAGE LOAN DOCUMENTS.......................................20
Section 2.01. Agreement to Purchase................................................................20
Section 2.02. Purchase Price.......................................................................20
Section 2.03. Servicing of Mortgage Loans..........................................................21
Section 2.04. Record Title and Possession of Mortgage Files; Maintenance of Servicing Files........21
Section 2.05. Books and Records....................................................................22
Section 2.06. Transfer of Mortgage Loans...........................................................22
Section 2.07. Delivery of Mortgage Loan Documents..................................................22
Section 2.08. Quality Control Procedures...........................................................23
Section 2.09. Closing..............................................................................23
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER; REPURCHASE; REVIEW OF MORTGAGE LOANS.............24
Section 3.01. Representations and Warranties of the Seller.........................................24
Section 3.02. Representations and Warranties as to Individual Mortgage Loans.......................27
Section 3.03. Repurchase; Substitution.............................................................42
Section 3.04. Purchase Price Protection............................................................44
Section 3.05. Repurchase of Mortgage Loans With First Payment Defaults.............................44
ARTICLE IV ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS..............................................44
Section 4.01. The Seller to Act as Servicer........................................................44
Section 4.02. Collection of Mortgage Loan Payments.................................................46
Section 4.03. Realization Upon Defaulted Mortgage Loans............................................46
Section 4.04. Establishment of Custodial Accounts; Deposits in Custodial Accounts..................47
Section 4.05. Permitted Withdrawals From the Custodial Account.....................................49
Section 4.06. Establishment of Escrow Accounts; Deposits in Accounts...............................50
Section 4.07. Permitted Withdrawals From the Escrow Account........................................51
i
Section 4.08. Payment of Taxes, Insurance and Charges; Maintenance of Primary Mortgage
Insurance; Collections Thereunder....................................................51
Section 4.09. Transfer of Accounts.................................................................53
Section 4.10. Maintenance of Hazard Insurance......................................................53
Section 4.11. Maintenance of Mortgage Impairment Insurance Policy..................................54
Section 4.12. Maintenance of Fidelity Bond and Errors and Omissions Insurance......................54
Section 4.13. Title, Management and Disposition of REO Property....................................55
Section 4.14. Notification of Maturity Date........................................................56
Section 4.15. Establishment of and Deposits to Buydown Account.....................................56
ARTICLE V PAYMENTS TO THE PURCHASER........................................................................57
Section 5.01. Distributions........................................................................57
Section 5.02. Statements to the Purchaser..........................................................57
Section 5.03. Monthly Advances by the Seller.......................................................59
Section 5.04. Liquidation Reports..................................................................59
ARTICLE VI GENERAL SERVICING PROCEDURES....................................................................59
Section 6.01. Assumption Agreements................................................................59
Section 6.02. Satisfaction of Mortgages and Release of Mortgage Files..............................60
Section 6.03. Servicing Compensation...............................................................61
Section 6.04. Annual Statement as to Compliance....................................................61
Section 6.05. Annual Independent Certified Public Accountants' Servicing Report....................62
Section 6.06. Purchaser's Right to Examine Seller Records..........................................62
Section 6.07. Seller Shall Provide Information as Reasonably Required..............................63
ARTICLE VII THE SELLER.....................................................................................63
Section 7.01. Indemnification; Third Party Claims..................................................63
Section 7.02. Merger or Consolidation of the Seller................................................64
Section 7.03. Limitation on Liability of the Seller and Others.....................................64
Section 7.04. Seller Not to Resign.................................................................65
Section 7.05. No Transfer of Servicing.............................................................65
ARTICLE VIII DEFAULT .....................................................................................65
Section 8.01. Events of Default....................................................................65
Section 8.02. Waiver of Defaults...................................................................67
ii
ARTICLE IX TERMINATION.....................................................................................67
Section 9.01. Termination..........................................................................67
ARTICLE X RECONSTITUTION OF MORTGAGE LOANS.................................................................68
Section 10.01. Reconstitution of Mortgage Loans.....................................................68
ARTICLE XI MISCELLANEOUS PROVISIONS........................................................................69
Section 11.01. Successor to the Seller..............................................................69
Section 11.02. Amendment............................................................................70
Section 11.03. Recordation of Agreement.............................................................70
Section 11.04. Governing Law........................................................................71
Section 11.05. Notices..............................................................................71
Section 11.06. Severability of Provisions...........................................................72
Section 11.07. Exhibits.............................................................................72
Section 11.08. General Interpretive Principles......................................................72
Section 11.09. Reproduction of Documents............................................................73
Section 11.10. Confidentiality of Information.......................................................73
Section 11.11. Recordation of Assignments of Mortgage...............................................73
Section 11.12. Assignment by Purchaser..............................................................74
Section 11.13. No Partnership.......................................................................74
Section 11.14. Execution; Successors and Assigns....................................................74
Section 11.15. Entire Agreement.....................................................................74
Section 11.16. No Solicitation......................................................................74
Section 11.17. Costs................................................................................75
Section 11.18. Protection of Mortgagor Personal Information.........................................75
EXHIBITS
A-1 Contents of Mortgage File
A-2 Contents of Servicing File
B Form of Custodial Account Letter Agreement
C Form of Escrow Account Letter Agreement
D Form of Assignment, Assumption and Recognition Agreement
E Form of Assignment and Conveyance
F Request for Release of Documents and Receipt
G Regulation AB Compliance Addendum
iii
This is a Seller's Purchase, Warranties and Servicing Agreement,
dated as of April 1, 2006 and is executed by and between Xxxxxxx Xxxxx Mortgage
Company, as purchaser (the "Purchaser"), and Wachovia Mortgage Corporation, as
seller and servicer (in such capacity, the "Seller").
WITNESSETH:
WHEREAS, the Purchaser has heretofore agreed to purchase from the
Seller and the Seller has heretofore agreed to sell to the Purchaser certain
Mortgage Loans, servicing rights retained, from time to time, pursuant to the
terms of a letter agreement by and between the Seller and the Purchaser (the
"Purchase Price and Terms Letter");
WHEREAS, each of the Mortgage Loans is secured by a mortgage, deed
of trust or other security instrument creating a first or second lien on a
residential dwelling located in the jurisdiction indicated on the related
Mortgage Loan Schedule, which is annexed to the related Assignment and
Conveyance. The Mortgage Loans as described herein shall be delivered in groups
of whole loans (each, a "Mortgage Loan Package") on various dates as provided
herein (each, a "Closing Date"); and
WHEREAS, the Purchaser and the Seller wish to prescribe the
representations and warranties of the Seller with respect to itself, the
Mortgage Loans and the management, servicing and control of the Mortgage Loans
by the Seller.
NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Purchaser and the
Seller agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meaning
specified in this Article:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices (including collection procedures) of prudent
mortgage banking institutions which service mortgage loans of the same type as
such Mortgage Loan in the jurisdiction where the related Mortgaged Property is
located, and which are in accordance with Xxxxxx Mae servicing practices and
procedures, for MBS pool mortgages, as defined in the Xxxxxx Xxx Guides,
including future updates.
Adjustable Rate Mortgage Loan: A Mortgage Loan as to which the
related Mortgage Note provides that the Mortgage Interest Rate may be adjusted
periodically.
4
Adjustment Date: With respect to each Adjustable Rate Mortgage
Loan, the date set forth in the related Mortgage Note on which the Mortgage
Interest Rate on the Mortgage Loan is adjusted in accordance with the terms of
the Mortgage Note.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agency Transfer: The sale or transfer by the Purchaser of some or
all of the Mortgage Loans to Xxxxxx Mae or Xxxxxxx Mac.
Agreement: This Seller's Purchase, Warranties and Servicing
Agreement including all exhibits hereto, amendments hereof and supplements
hereto.
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 a
Qualified Appraiser, 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 underwriting requirements
of the originator.
Assignment and Conveyance: As defined in Section 2.03.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form and in blank, sufficient
under the laws of the jurisdiction wherein the related Mortgaged Property is
located to reflect the transfer of the Mortgage.
Balloon Mortgage Loan: Any Mortgage Loan which by its original
terms or any modifications thereof provides for amortization beyond its
scheduled maturity date.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or a Sunday, or
(ii) a legal holiday in the States of New York or StateNorth Carolina, or (iii)
a day on which banks in the States of New York or placeStateNorth Carolina are
authorized or obligated by law or executive order to be closed.
Buydown Account: An account maintained by the Seller specifically
to hold all Buydown Funds to be applied to individual Buydown Mortgage Loans.
5
Buydown Agreement: An agreement between the Seller and a Mortgagor,
or an agreement among the Seller, a Mortgagor and a seller of a Mortgaged
Property or a third party with respect to a Mortgage Loan which provides for
the application of Buydown Funds.
Buydown Funds: In respect of any Buydown Mortgage Loan, any amount
contributed by the seller of a Mortgaged Property subject to a Buydown Mortgage
Loan, the buyer of such property, the Seller or any other source, plus interest
earned thereon, in order to enable the Mortgagor to reduce the payments
required to be made from the mortgagor's funds in the early years of a Mortgage
Loan.
Buydown Mortgage Loan: Any Mortgage Loan in respect of which,
pursuant to a Buydown Agreement, (i) the Mortgagor pays less than the full
monthly payments specified in the Mortgage Note for a specified period, and
(ii) the difference between the payments required under such Buydown Agreement
and the Mortgage Note is provided from Buydown Funds.
Buydown Period: The period of time when a Buydown Agreement is in
effect with respect to a related Buydown Mortgage Loan.
Closing Date: The date or dates set forth in the related Purchase
Price and Terms Letter 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.
Combined Loan-to-Value Ratio or CLTV: As of any date and as to any
Second Lien Loan, the ratio, expressed as a percentage, of the (a) sum of (i)
the outstanding principal balance of the Second Lien Loan and (ii) the
outstanding principal balance as of such date of any mortgage loan or mortgage
loans that are senior or equal in priority to the Second Lien Loan and which
are secured by the same Mortgaged Property to (b) the Appraised Value as
determined pursuant to the Underwriting Standards of the related Mortgaged
Property as of the origination of the Second Lien Loan.
Code: The Internal Revenue Code of 1986, as the same may be amended
from time to time (or any successor statute thereto).
Commission: The placecountry-regionUnited States Securities and
Exchange Commission.
Compensating Interest: For any Remittance Date, the lesser of (i)
the aggregate Servicing Fee payable to the Seller for such Remittance Date and
(ii) the aggregate Prepayment Interest Shortfall for such Remittance Date.
Condemnation Proceeds: All awards, compensation and settlements in
respect of a Mortgaged Property, whether permanent or temporary, partial or
entire, by exercise of the power of eminent domain or condemnation, to the
extent not required to be released to a Mortgagor in accordance with the terms
of the related Mortgage Loan Documents.
Convertible Mortgage Loan: Any Adjustable Rate Mortgage Loan
purchased pursuant to this Agreement as to which the related Mortgage Note
permits the Mortgagor to convert the Mortgage Interest Rate on such Mortgage
Loan to a fixed Mortgage Interest Rate.
6
Co-op Lease: With respect to a Co-op Loan, the lease with respect
to a dwelling unit occupied by the Mortgagor and relating to the stock
allocated to the related dwelling unit.
Co-op Loan: A Mortgage Loan secured by the pledge of stock
allocated to a dwelling unit in a residential cooperative housing corporation
and a collateral assignment of the related Co-op Lease.
Co-op Stock: With respect to a Co-op Loan, the single outstanding
class of stock, partnership interest or other ownership instrument in the
related residential cooperative housing corporation.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Credit Score: The credit score for each Mortgage Loan shall be the
minimum of two credit bureau scores obtained at origination or such other time
by the Seller. If two credit bureau scores are obtained, the Credit Score will
be the lower score. If three credit bureau scores are obtained, the Credit
Score will be the middle of the three. When there is more than one applicant,
the lowest of the applicants' Credit Scores will be used. There is only one (1)
score for any loan regardless of the number of borrowers and/or applicants.
Custodial Account: Each separate demand account or accounts created
and maintained pursuant to Section 4.04 which shall be entitled "Wachovia
Mortgage Corporation, in trust for the Purchaser, owner of various whole loan
series" and shall be established as an Eligible Account, in the name of the
Person that is the "Purchaser" with respect to the related Mortgage Loans.
Cut-off Date: With respect to each Mortgage Loan Package, the first
Business Day of the month of the related Closing Date, or as otherwise set
forth in the related Purchase Price and Terms Letter.
Determination Date: With respect to each Remittance Date, the 15th
day (or if such 15th day is not a Business Day, the Business Day immediately
preceding such 15th day) of the month in which such Remittance Date occurs.
Due Date: With respect to any Mortgage Loan, the day of the month
on which the Monthly Payment is due on such Mortgage Loan, exclusive of any
days of grace.
Due Period: With respect to each Remittance Date, the period
commencing on the second day of the month preceding the month of such
Remittance Date and ending on, and including the first day of the month of the
Remittance Date.
Eligible Account: An account established and maintained: (a) within
FDIC insured accounts (or other accounts with comparable insurance coverage
acceptable to the Rating Agencies) created, maintained and monitored by the
Seller so that all funds deposited therein are fully insured, (b) with the
corporate trust department of a financial institution assigned a short-term
debt rating of not less than "A-1" by Standard & Poor's or "P-1" by Xxxxx'x
Investors Service, Inc. and, if ownership of the Mortgage Loans is evidenced by
mortgaged backed
7
securities, the equivalent ratings of the rating agencies, and held such that
the rights of the Purchaser and the owner of the Mortgage Loans shall be fully
protected against the claims of any creditors of the Seller and of any
creditors or depositors of the institution in which such account is maintained
or (c) in a separate non-trust account without FDIC or other insurance in an
Eligible Institution. In the event that a Custodial Account is established
pursuant to clause (b) or (c) of the preceding sentence, the Seller shall
provide the Purchaser with written notice on the Business Day following the
date on which the applicable institution fails to meet the applicable ratings
requirements.
Eligible Institution: An institution having (i) the highest
short-term debt rating, and one of the two highest long-term debt ratings of
the Rating Agency; or (ii) with respect to any Custodial Account, an unsecured
long-term debt rating of at least one of the two highest unsecured long-term
debt ratings of the Rating Agencies.
Eligible Investments: Any one or more of the following obligations
or securities:
(a) direct obligations of, and obligations fully guaranteed by
the country-regionUnited States of America or any agency or instrumentality of
the country-regionUnited States of America the obligations of which are backed
by the full faith and credit of the placecountry-regionUnited States of
America;
(b) (i) demand or time deposits, federal funds or bankers'
acceptances issued by any depository institution or trust company incorporated
under the laws of the United States of America or any state thereof and subject
to supervision and examination by federal and/or state banking authorities,
provided that the commercial paper and/or the short-term deposit rating and/or
the long-term unsecured debt obligations or deposits of such depository
institution or trust company at the time of such investment or contractual
commitment providing for such investment are rated in one of the two highest
rating categories by each Rating Agency and (ii) any other demand or time
deposit or certificate of deposit that is fully insured by the FDIC;
(c) repurchase obligations with a term not to exceed thirty (30)
days and with respect to (i) any security described in clause (a) above and
entered into with a depository institution or trust company (acting as
principal) described in clause (b)(ii) above;
(d) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of America or
any state thereof that are rated in one of the two highest rating categories by
each Rating Agency at the time of such investment or contractual commitment
providing for such investment; provided, however, that securities issued by any
particular corporation will not be Eligible Investments to the extent that
investments therein will cause the then outstanding principal amount of
securities issued by such corporation and held as Eligible Investments to
exceed 10% of the aggregate outstanding principal balances of all of the
Mortgage Loans and Eligible Investments;
(e) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand or on a
specified date not more than one year after the date of issuance thereof) which
are rated in one of the two highest rating categories by each Rating Agency at
the time of such investment;
8
(f) any other demand, money market or time deposit, obligation,
security or investment as may be acceptable to each Rating Agency as evidenced
in writing by each Rating Agency; and
(g) any money market funds the collateral of which consists of
obligations fully guaranteed by the United States of America or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America (which may
include repurchase obligations secured by collateral described in clause (a))
and other securities and which money market funds are rated in one of the two
highest rating categories by each Rating Agency.
provided, however, that no instrument or security shall be an Eligible
Investment if such instrument or security evidences a right to receive only
interest payments with respect to the obligations underlying such instrument or
if such security provides for payment of both principal and interest with a
yield to maturity in excess of 120% of the yield to maturity at par or if such
investment or security is purchased at a price greater than par.
Equity: With respect to any second lien Mortgage Loan, the
Appraised Value, less the unpaid principal balance of the related First Lien
Loan.
Equity Loan-to-Value: With respect to any second lien Mortgage
Loan, the original principal balance of such Mortgage Loan, divided by the
Equity.
Escrow Account: Each separate trust account or accounts created and
maintained pursuant to Section 4.06 which shall be entitled "Wachovia Mortgage
Corporation, in trust for the Purchaser, as owner of various whole loan series
and various Mortgagors" and shall be established as an Eligible Account, in the
name of the Person that is the "Purchaser" with respect to the related Mortgage
Loans.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed
by the Mortgagor with the mortgagee pursuant to the Mortgage, applicable law or
any other related document.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 8.01.
Xxxxxx Mae: The entity formerly known as the Federal National
Mortgage Association, or any successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto, including, but not
limited to, future updates thereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
9
Fidelity Bond: A fidelity bond to be maintained by the Seller
pursuant to Section 4.12.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, as amended and in effect from time to time.
First Lien Loan: A Mortgage Loan secured by a first lien Mortgage
on the related Mortgaged Property.
First Remittance Date: The eighteenth (18th) day of the month
following each respective Closing Date, or if such day is not a Business Day,
the first Business Day immediately thereafter.
Fixed Rate Mortgage Loan: A Mortgage Loan purchased pursuant to
this Agreement which bears a fixed Mortgage Interest Rate during the life of
the loan.
Xxxxxxx Mac: The entity formerly known as the Federal Home Loan
Mortgage Corporation, or any successor thereto.
Xxxxxxx Mac Guides: The Xxxxxxx Xxx Xxxxxxx' Guide and the Xxxxxxx
Mac Servicers' Guide and all amendments or additions thereto, including, but
not limited to, any future updates thereof.
GAAP: Generally accepted accounting principles, consistently
applied.
Gross Margin: With respect to any Adjustable 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.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," "high risk home," "predatory" or similar loan under any
other applicable state, federal or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (c) categorized as High Cost pursuant to
Appendix E of Standard & Poor's Glossary. For avoidance of doubt, the parties
agree that this definition shall apply to any law regardless of whether such
law is presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
HUD: The United States Department of Housing and Urban Development
or any successor thereto.
10
Index: With respect to any Adjustable Rate Mortgage Loan, the index
identified on the Mortgage Loan Schedule and set forth in the related Mortgage
Note for the purpose of calculating the Mortgage 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 Only Mortgage Loan: A Mortgage Loan that only requires
payments of interest for a period of time specified in the related Mortgage
Note.
Interest Rate Adjustment Date: With respect to each adjustable rate
Mortgage Loan, the date, specified in the related Mortgage Note and the related
Mortgage Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Liquidation Proceeds: Amounts received in connection with the
partial or complete liquidation of a defaulted Mortgage Loan, whether through
the sale or assignment of such Mortgage Loan, trustee's sale, foreclosure sale
or otherwise, or in connection with the sale of the Mortgaged Property if the
Mortgaged Property is acquired in satisfaction of the Mortgage.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the original outstanding principal amount
of the Mortgage Loan and, with respect to any second lien Mortgage Loan, the
outstanding principal amount of any related First Lien Loan as of the date of
origination of such mortgage loan, to the lesser of (a) the Appraised Value of
the Mortgaged Property at origination and (b) if the Mortgage Loan was made to
finance the acquisition of the related Mortgaged Property, the purchase price
of the Mortgaged Property.
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 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 placeStateDelaware, 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.
11
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 payment required to be made by the Seller with
respect to any Remittance Date pursuant to Section 5.03.
Monthly Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage
Loan pursuant to the terms of the related Mortgage Note.
Mortgage: With respect to any Mortgage Loan that is not a Co-op
Loan, the mortgage, deed of trust or other instrument securing a Mortgage Note
which creates a first or second lien on an unsubordinated estate in fee simple
in real property securing the Mortgage Note; except that with respect to real
property located in jurisdictions in which the use of leasehold estates for
residential properties is a widely-accepted practice, the mortgage, deed of
trust or other instrument securing the Mortgage Note may secure and create a
first or second lien upon a leasehold estate of the Mortgagor. With respect to
a Co-op Loan, the related Security Agreement.
Mortgage File: With respect to each Mortgage Loan, the documents
pertaining thereto specified in Exhibit A-1 and any additional documents
required to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: As to each Mortgage Loan, the annual rate
at which interest accrues on such Mortgage Loan in accordance with the
provisions 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, any escrow accounts related to
the Mortgage Loan, and all other rights, benefits, proceeds and obligations
arising from or in connection with such Mortgage Loan, excluding replaced or
repurchased mortgage loans.
Mortgage Loan Documents: The documents contained in a Mortgage
File.
Mortgage Loan Package: As defined in the Recitals to this
Agreement.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan,
the Mortgage Interest Rate less the related Servicing Fee Rate.
Mortgage Loan Schedule: The schedule of Mortgage Loans annexed to
the related Assignment and Conveyance, each such schedule setting forth the
following information with respect to each Mortgage Loan in the related
Mortgage Loan Package:
(1) the Seller's Mortgage Loan identifying number;
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(2) the Mortgagor's 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, a second home or investment property;
(5) the number of units and type of residential property
constituting the Mortgaged Property (e.g., single family, two- to four-family,
condominium, etc);
(6) the original months to maturity or the remaining months to
maturity from the related Cut-off Date, in any case based on the original
amortization schedule and, if different, the maturity expressed in the same
manner but based on the actual amortization schedule;
(7) the Loan-to-Value Ratio at origination and as of the related
Cut-off Date;
(8) with respect to any second lien Mortgage Loan, the Equity
Loan-to-Value Ratio at origination and as of the related Cut-off Date;
(9) the Mortgage Interest Rate at origination and as of the related
Cut-off Date;
(10) the Mortgage Loan origination date;
(11) the last payment date on which a Monthly Payment was actually
applied to pay interest and the outstanding principal balance;
(12) the stated maturity date of the Mortgage Loan and of the First
Lien Loan, if applicable;
(13) the amount of the Monthly Payment as of the related Cut-off
Date;
(14) the original principal amount of the Mortgage Loan and the
principal balance of the related First Lien Loan, if applicable, as of the date
of origination;
(15) the Scheduled Principal Balance of the Mortgage Loan and the
principal balance of the related first lien, in the case of a Second Lien Loan,
if applicable, as of the related Cut-off Date;
(16) a code indicating the purpose of the Mortgage Loan (i.e.,
purchase, rate and term refinance, equity take-out refinance);
(17) a code indicating the documentation style (i.e. full,
alternative or reduced);
(18) the number of times during the twelve (12) month period
preceding the related Closing Date that any Monthly Payment has been received
thirty (30) or more days after its Due Date;
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(19) the date on which the first Monthly Payment is due and the
applicable next Due Date;
(20) a code indicating whether or not the Mortgage Loan is insured
as to payment defaults by a Primary Mortgage Insurance Policy; and, in the case
of any Mortgage Loan which is insured as to payment defaults by a Primary
Mortgage Insurance Policy, the name of the provider of such Primary Mortgage
Insurance Policy;
(21) a code indicating whether or not the Mortgage Loan is the
subject of a Prepayment Penalty, and if so, a description of and the terms of
such Prepayment Penalty;
(22) the Primary Mortgage Insurance Policy certificate number, if
applicable;
(23) the Primary Mortgage Insurance Policy coverage percentage, if
applicable;
(24) a code indicating the Credit Score of the Mortgagor at the
time of origination of the Mortgage Loan;
(25) a code indicating the specific loan/underwriting program of
each Mortgage Loan as assigned by the Seller pursuant to the Underwriting
Standards;
(26) the loan type (i.e. fixed, adjustable; 2/28, 3/27, 5/25,
etc.);
(27) with respect to each Adjustable Rate Mortgage Loan, the first
Adjustment Date and the Adjustment Date frequency;
(28) with respect to each Adjustable Rate Mortgage Loan, the Gross
Margin which is also the Periodic Rate floor;
(29) with respect to each Adjustable Rate Mortgage Loan, the
Maximum Mortgage Interest Rate under the terms of the Mortgage Note;
(30) with respect to each Adjustable Rate Mortgage Loan, the
Minimum Mortgage Interest Rate under the terms of the Mortgage Note;
(31) with respect to each Adjustable Rate Mortgage Loan, the
Periodic Rate Cap;
(32) with respect to each Adjustable Rate Mortgage Loan, the first
Adjustment Date immediately following the related Cut-off Date;
(33) with respect to each Adjustable Rate Mortgage Loan, the Index;
(34) a code indicating whether the Mortgage Loan is a second lien
Mortgage Loan;
(35) a code indicating whether the Mortgage Loan is a MERS Mortgage
Loan;
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(36) a code indicating whether the Mortgage Loan is an Interest
Only Mortgage Loan and the term of the interest-only period;
(37) the Mortgage Interest Rate adjustment period;
(38) the Mortgage Interest Rate adjustment percentage;
(39) the Due Date for the first Monthly Payment;
(40) with respect to the related Mortgagor, the debt-to-income
ratio;
(41) the Appraised Value of the Mortgaged Property; and
(42) the sales price of the Mortgaged Property if the Mortgage
Loan was originated in connection with the purchase of the Mortgaged Property.
With respect to the Mortgage Loans in the aggregate in each
Mortgage Loan Package, the Mortgage Loan Schedule shall set forth the following
information, as of the related Cut-off Date unless otherwise specified:
(1) the number of Mortgage Loans;
(2) the current aggregate outstanding principal balance of the
Mortgage Loans;
(3) the weighted average Mortgage Interest Rate of the Mortgage
Loans;
(4) the weighted average original months to maturity of the
Mortgage Loans and the weighted average remaining months to maturity of the
Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to any Mortgage Loan, the
underlying real property securing repayment of the related Mortgage Note,
consisting of a fee simple parcel of real estate or a leasehold estate, the
term of which is equal to or longer than the term of such Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
Mortgagor Personal Information: Any information, including, but not
limited to, all personal information about a Mortgagor that is disclosed to the
Seller or the Purchaser by or on behalf of the Mortgagor.
OCC: Office of the Comptroller of the Currency, its successors and
assigns.
Officers' Certificate: A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, a Senior Vice President
or a Vice President and by the
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Treasurer or the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of the Seller, and delivered to the Purchaser as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be an
employee of the party on behalf of whom the opinion is being given, reasonably
acceptable to the Purchaser, provided that any Opinion of Counsel relating to
(a) the qualification of any account required to be maintained pursuant to this
Agreement as an eligible account, (b) qualification of the Mortgage Loans in a
REMIC or (c) compliance with the REMIC Provisions, must be (unless otherwise
stated in such Opinion of Counsel) an opinion of counsel who (i) is in fact
independent of the Seller and any servicer of the Mortgage Loans, (ii) does not
have any material direct or indirect financial interest in the Seller or any
servicer or in an Affiliate of either and (iii) is not connected with the
Seller or any servicer as an officer, employee, director or person performing
similar functions.
OTS: Office of Thrift Supervision or any successor thereto.
Pass-Through Transfer: As defined in Section 10.01(a)(iii).
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 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, which may be a different amount with
respect to the first Adjustment Date.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
Premium Percentage: With respect to any Mortgage Loan, a percentage
equal to the excess of the Purchase Price Percentage over 100%.
Prepayment Interest Shortfall: As to any Remittance Date and
Principal Prepayment in full, the difference between (i) one full month's
interest at the applicable Mortgage Interest Rate (after giving effect to any
applicable relief act reduction, debt service reduction and deficient
valuation), as reduced by the Servicing Fee Rate, on the outstanding principal
balance of the related Mortgage Loan immediately prior to such Principal
Prepayment and (ii) the amount of interest actually received with respect to
such Mortgage Loan in connection with such Principal Prepayment.
Prepayment Penalty: With respect to each Mortgage Loan, the amount
of any premium or penalty required to be paid by the Mortgagor if the Mortgagor
prepays such Mortgage Loan as provided in the related Mortgage Note or
Mortgage.
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Primary Mortgage Insurance Policy: Each policy of primary mortgage
insurance represented to be in effect pursuant to Section 3.02(bb), or any
replacement policy therefor obtained by the Seller pursuant to Section 4.08.
Prime Rate: The prime rate announced to be in effect from time to
time as published as the average rate in The Wall Street Journal (Northeast
Edition).
Principal Prepayment: Any full or partial 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 and which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
Purchase Price: As defined in Section 2.02.
Purchase Price and Terms Letter: As defined in the Recitals to this
Agreement which may also be a form of trade execution notice.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, its successors in
interest and assigns.
Qualified Appraiser: With respect to each Mortgage Loan, an
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,
and whose compensation is not affected by the approval or disapproval of the
Mortgage Loan, and such appraiser and the appraisal made by such appraiser both
satisfy the requirements of Xxxxxx Mae and Title XI of FIRREA and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified Insurer: An insurance company duly qualified as such
under the laws of the states in which the Mortgaged Properties are located,
duly authorized and licensed in such states to transact the applicable
insurance business and to write the insurance provided by the insurance policy
issued by it, approved as an insurer by Xxxxxx Xxx or Xxxxxxx Mac.
Rating Agencies: Standard & Poor's Ratings Services, a division of
The XxXxxx- Xxxx Companies, Inc., Xxxxx'x Investors Service, Inc. or, in the
event that some or all ownership of the Mortgage Loans is evidenced by
mortgage-backed securities, the nationally recognized rating agencies issuing
ratings with respect to such securities, if any.
Reconstitution: Any Pass-Through Transfer or Whole Loan Transfer.
Refinanced Mortgage Loan: A Mortgage Loan which was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which were used in whole or part to satisfy
an existing mortgage.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting
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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.
Remittance Date: The 18th day of each month, beginning with the
First Remittance Date, or if such day is not a Business Day, the first Business
Day thereafter.
REO Disposition: The final sale by the Seller of any REO Property.
REO Disposition Proceeds: Amounts received by the Seller in
connection with an REO Disposition.
REO Property: A Mortgaged Property acquired by or on behalf of the
Purchaser in full or partial satisfaction of the related Mortgage as described
in Section 4.13.
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty from the Agreement is found, a price
equal to the then outstanding principal balance of the Mortgage Loan to be
repurchased, plus accrued interest thereon at the Mortgage Interest Rate from
the date to which interest had last been paid through the date of such
repurchase, plus the amount of any outstanding advances owed to any servicer,
and plus all costs and expenses incurred by the Purchaser or any servicer
arising out of or based upon such breach, including without limitation costs
and expenses incurred in the enforcement of the Seller's repurchase obligation
hereunder, and plus, in the event a Mortgage Loan is repurchased during the
first twelve months following the related Closing Date and has not been placed
in a Pass-Through Transfer, an amount equal to the Premium Percentage
multiplied by the outstanding principal balance of such Mortgage Loan as of the
date of such repurchase.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Scheduled Principal Balance: As to each Mortgage Loan and any date
of determination, (i) the principal balance of such Mortgage Loan as of the
related Cut-off Date after giving effect to payments of principal due on or
before such date, whether or not received, minus (ii) all amounts previously
distributed to the Purchaser with respect to the Mortgage Loan representing
payments or recoveries of principal (or advances in lieu thereof).
Second Lien Loan: A Mortgage Loan secured by a second lien Mortgage
on the related Mortgaged Property.
Security Agreement: With respect to a Co-op Loan, the agreement or
mortgage creating a security interest in favor of the originator of the Co-op
Loan in the related Co-op Stock.
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Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Seller of its servicing
obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of a Mortgaged Property, (b) any enforcement,
administrative or judicial proceedings, or any legal work or advice
specifically related to servicing the Mortgage Loans, including but not limited
to, foreclosures, bankruptcies, condemnations, drug seizures, elections,
foreclosures by subordinate or superior lienholders, and other legal actions
incidental to the servicing of the Mortgage Loans (provided that such expenses
are reasonable and that the Seller specifies the Mortgage Loan(s) to which such
expenses relate, and provided further that any such enforcement, administrative
or judicial proceeding does not arise out of a breach of any representation,
warranty or covenant of the Seller hereunder), (c) the management and
liquidation of any REO Property, (d) taxes, assessments, water rates, sewer
rates and other charges which are or may become a lien upon the Mortgaged
Property, and Primary Mortgage Insurance Policy premiums and fire and hazard
insurance coverage, (e) any expenses reasonably sustained by the Seller with
respect to the liquidation of the Mortgaged Property in accordance with the
terms of this Agreement and (f) compliance with the obligations under Section
4.08.
Servicing Fee: With respect to each Mortgage Loan, the amount of
the annual fee the Purchaser shall pay to the Seller for servicing the Mortgage
Loans in accordance with the terms of this Agreement, which shall, for each
month, be equal to one-twelfth of the product of (i) the Servicing Fee Rate and
(ii) the Scheduled 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,
and shall be pro rated (based upon the number of days of the related month the
Seller so acted as servicer relative to the number of days in that month) for
each part thereof. 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 4.05) of related Monthly Payments collected by the
Seller, or as otherwise provided under Section 4.05.
Servicing Fee Rate: The per annum rate at which the Servicing Fee
accrues, which rate with respect to each Mortgage Loan shall be as set forth in
the related Purchase Price and Terms Letter.
Servicing File: With respect to each Mortgage Loan, the documents
pertaining thereto specified in Exhibit A-2 and copies of all documents for
such Mortgage Loan specified in Exhibit A-1.
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.
Standard & Poor's: Standard & Poor's Rating Services, a division of
The XxXxxx-Xxxx Companies Inc., and its successors in interest.
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Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Underwriting Standards: As to each Mortgage Loan, the Seller's
underwriting guidelines in effect as of the date of origination of such
Mortgage Loan.
Whole Loan Transfer: As defined in Section 10.01(a)(i).
ARTICLE II
SERVICING OF MORTGAGE LOANS; RECORD TITLE AND POSSESSION
OF MORTGAGE FILES; BOOKS AND RECORDS; CUSTODIAL AGREEMENT;
DELIVERY OF MORTGAGE LOAN DOCUMENTS
Section 2.01. Agreement to Purchase.
The Seller agrees to sell and the Purchaser agrees to purchase on
each Closing Date, pursuant to this Agreement and the related Purchase Price
and Terms Letter, the Mortgage Loans being sold by the Seller and listed on the
related Mortgage Loan Schedule, servicing rights retained, having an aggregate
Scheduled Principal Balance in an amount as set forth in the related Purchase
Price and Terms Letter, 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 such Closing Date. The Seller shall
deliver in an electronic format the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on such Closing Date to the Purchaser at least two (2)
Business Days prior to such Closing Date.
Section 2.02. Purchase Price.
The Purchase Price for the Mortgage Loans in a Mortgage Loan
Package shall be equal to the sum of (a) the percentage of par as stated in the
related Purchase Price and Terms Letter (subject to adjustment as provided
therein), multiplied by the aggregate Scheduled Principal Balance of Mortgage
Loans as of the related Cut-off Date listed on the related Mortgage Loan
Schedule plus (b) accrued interest on the aggregate Scheduled Principal Balance
as of the related Cut-off Date of the related Mortgage Loans at the weighted
average Mortgage Loan Remittance Rate of such Mortgage Loans from the related
Cut-off Date to but not including such Closing Date (the "Purchase Price"). If
so provided in the related Purchase Price and Terms Letter, portions of each
Mortgage Loan Package shall be priced separately.
The Purchase Price as set forth in the preceding paragraph for the
Mortgage Loans in a Mortgage Loan Package shall be paid on the related Closing
Date by wire transfer of immediately available funds.
With respect to each Mortgage Loan, the Purchaser shall be entitled
to (1) the principal portion of all Monthly Payments due after the related
Cut-off Date, (2) all other recoveries of principal collected on or after the
related Cut-off Date (provided, however, that the principal portion of all
Monthly Payments due on or before the related Cut-off Date and collected by the
Seller or any successor servicer after the related Cut-off Date shall belong to
the Seller), and (3) all payments of interest on the Mortgage Loans at the
related Mortgage Loan Remittance Rate (minus that portion of any such payment
which is allocable to the period prior
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to the related Cut-off Date). The Scheduled Principal Balance of each Mortgage
Loan as of the related Cut-off Date is determined after application of payments
of principal due on or before the related Cut-off Date whether or not
collected, together with any unscheduled Principal Prepayments collected prior
to the related Cut-off Date; provided, however, that Monthly Payments 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 Monthly Payments shall be the
property of the Purchaser. The Seller shall deposit any such Monthly Payments
into the Custodial Account.
Section 2.03. Servicing of Mortgage Loans.
On each Closing Date, the Mortgage Loans in the related Mortgage
Loan Package will be sold by the Seller to the Purchaser on a servicing
retained basis upon the execution and delivery of an Assignment and Conveyance
in the form attached hereto as Exhibit E (the "Assignment and Conveyance").
Simultaneously with the execution and delivery of the related
Assignment and Conveyance, for each Mortgage Loan Package, the Seller hereby
agrees to service the Mortgage Loans listed on the Mortgage Loan Schedule in
accordance with Accepted Servicing Practices and this Agreement. The rights of
the Purchaser to receive payments with respect to the related Mortgage Loans
shall be as set forth in this Agreement.
Section 2.04. Record Title and Possession of Mortgage Files;
Maintenance of Servicing Files.
As of each Closing Date, the Seller will have sold, transferred,
assigned, set over and conveyed to the Purchaser, without recourse, and the
Seller hereby acknowledges that the Purchaser will have, all the right, title
and interest of the Seller in and to the Mortgage Loans. In accordance with
Section 2.07, the Seller shall deliver at its own expense, the Mortgage Files
for the related Mortgage Loans to Purchaser or its designee. The possession of
each Servicing File by the Seller is for the sole purpose of servicing the
related Mortgage Loan. From each Closing Date, the ownership of each related
Mortgage Loan, including the Mortgage Note, the Mortgage, the contents of the
related Mortgage File and all rights, benefits, proceeds and obligations
arising therefrom or in connection therewith, has been vested in the Purchaser.
All rights arising out of the Mortgage Loans including, but not limited to, all
funds received on or in connection with the Mortgage Loans and all records or
documents with respect to the Mortgage Loans prepared by or which come into the
possession of the Seller shall be received and held by the Seller in trust for
the benefit of the Purchaser as the owner of the Mortgage Loans. Any portion of
the Mortgage Files retained by the Seller shall be appropriately identified in
the Seller's computer system to clearly reflect the ownership of the Mortgage
Loans by the Purchaser.
In addition, in connection with the assignment of any MERS Mortgage
Loan, the Seller agrees that it will cause, at its own expense, the MERS(R)
System to indicate that such Mortgage Loans have been assigned by the Seller to
the Purchaser in accordance with this Agreement by including (or deleting, in
the case of Mortgage Loans which are repurchased in accordance with this
Agreement) in such computer files the information required by the MERS(R)
System to identify the Purchaser of such Mortgage Loans. The Seller further
agrees that it will not alter the information referenced in this paragraph with
respect to any Mortgage Loan during
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the term of this Agreement unless and until such Mortgage Loan is repurchased
in accordance with the terms of this Agreement.
Section 2.05. Books and Records.
The sale of each Mortgage Loan will be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller
and will be reflected on the Purchaser's balance sheet and other financial
statements as a purchase by the Purchaser. The Seller shall maintain, a
complete set of books and records for the Mortgage Loans sold by it which shall
be appropriately identified in the Seller's computer system to clearly reflect
the ownership of the Mortgage Loans by the Purchaser. In particular, the Seller
shall maintain in its possession, available for inspection by the Purchaser, or
its designee and shall deliver to the Purchaser upon demand, evidence of
compliance with all federal, state and local laws, rules and regulations, and
requirements of Xxxxxx Xxx or Xxxxxxx Mac, as applicable, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the Flood Disaster Protection Act of 1973, as amended, to
the Mortgaged Property, documentation evidencing insurance coverage and
eligibility of any condominium project for approval by Seller and periodic
inspection reports as required by Section 4.13. To the extent that original
documents are not required for purposes of realization of Liquidation Proceeds
or Insurance Proceeds, documents maintained by the Seller may be in the form of
microfilm or microfiche or such other reliable means of recreating original
documents, including but not limited to, optical imagery techniques so long as
the Seller complies with the requirements of the Xxxxxx Mae Guides.
Section 2.06. Transfer of Mortgage Loans.
The Seller shall keep at its office books and records in which,
subject to such reasonable regulations as it may prescribe, the Seller shall
note transfers of Mortgage Loans. No transfer of a Mortgage Loan may be made
unless such transfer is in compliance with the terms of Section 11.12. For the
purposes of this Agreement, the Seller shall be under no obligation to deal
with any person with respect to this Agreement or any Mortgage Loan unless a
properly executed Assignment, Assumption and Recognition Agreement in the form
of Exhibit D with respect to such Mortgage Loan has been delivered to the
Seller; provided, that, unless otherwise provided in the related Purchase Price
and Terms Letter, in no event shall there be more than three (3) "Purchasers"
with respect to any Mortgage Loan Package. Upon receipt of notice of the
transfer, the Seller shall xxxx its books and records to reflect the ownership
of the Mortgage Loans by such assignee, and, except as otherwise provided
herein, the previous Purchaser shall be released from its obligations hereunder
with respect to the Mortgage Loans sold or transferred.
Section 2.07. Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Purchaser or its
designee the Mortgage Loan Documents no later than two (2) Business Days prior
to the related Closing Date pursuant to a bailee letter agreement. If the
Seller cannot deliver the original recorded Mortgage Loan Documents on the
related Closing Date, the Seller shall, promptly upon receipt thereof and in
any case not later than 270 days from the related Closing Date, deliver such
original recorded
22
documents to the Purchaser or its designee (unless the Seller is delayed in
making such delivery by reason of the fact that such documents shall not have
been returned by the appropriate recording office). If delivery is not
completed within 270 days of the related Closing Date solely because such
documents shall not have been returned by the appropriate recording office, the
Seller shall deliver a recording receipt of such recording office, or, if such
recording receipt is not available, an officer's certificate of a servicing
officer of the Seller, confirming that such document has been accepted for
recording and shall use its best efforts to deliver such document within twelve
(12) months of the related Closing Date.
No later than three (3) days prior to the related Closing Date, the
Seller shall provide a copy of the commitment for title insurance to the
Purchaser or its designee.
Any review by the Purchaser or its designee of the Mortgage Files
shall in no way alter or reduce the Seller's obligations hereunder.
To the extent received by it, the Seller shall forward to the
Purchaser, or its designee, original documents evidencing an assumption,
modification, consolidation or extension of any Mortgage Loan entered into in
accordance with this Agreement within two (2) weeks after their execution;
provided, however, that the Seller shall provide the Purchaser, or its
designee, with a copy, certified by the Seller as a true copy, of any such
document submitted for recordation within two (2) weeks after its execution,
and shall promptly 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 two (2)
weeks of its return from the appropriate public recording office.
The Seller shall pay all initial recording fees, if any, for the
Assignments of Mortgage and any other fees or costs in transferring all
original documents to the Custodian or, upon written request of the Purchaser,
to the Purchaser or the Purchaser's designee. The Purchaser or the Purchaser's
designee shall be responsible for recording the Assignments of Mortgage and
shall be reimbursed by the Seller for the costs associated therewith pursuant
to the preceding sentence.
Section 2.08. Quality Control Procedures.
The Seller shall have an internal quality control program that
verifies, on a regular basis, the existence and accuracy of the legal
documents, credit documents, property appraisals, and underwriting decisions.
The program must be capable of evaluating and monitoring the overall quality of
its loan production and servicing activities. The program is to ensure that the
Mortgage Loans are originated and serviced in accordance with prudent mortgage
banking practices and accounting principles; guard against dishonest,
fraudulent, or negligent acts; and guard against errors and omissions by
officers, employees, or other authorized persons.
Section 2.09. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the related Closing Date. 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.
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The closing for the Mortgage Loans to be purchased on the related
Closing Date shall be subject to each of the following conditions:
(a) at least two (2) Business Days prior to the related Closing
Date, the Seller shall deliver to the Purchaser a magnetic diskette, or
transmit by modem or e-mail, a listing on a loan-level basis of the information
contained in the Mortgage Loan Schedule;
(b) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the related Closing Date or,
with respect to representations and warranties made as of a date other than the
related Closing Date, as of such date, and no event shall have occurred which,
with notice or the passage of time, would constitute a default under this
Agreement;
(c) the Purchaser shall have received, or the Purchaser's attorneys
shall have received in escrow, all closing documents, in such forms as are
agreed upon and acceptable to the Purchaser, duly executed by all signatories
other than the Purchaser as required pursuant to the terms hereof;
(d) the Seller shall have received, or the Seller's attorneys shall
have received in escrow, all closing documents, in such forms as are agreed
upon and acceptable to the Seller, duly executed by all signatories other than
the Seller as required pursuant to the terms hereof;
(e) the Seller shall have delivered and released to the Purchaser
(or its designee) on or prior to the related Closing Date all documents
required to be delivered and released pursuant to the terms of this Agreement;
and
(f) all other terms and conditions of this Agreement, the related
Purchase Price and Terms Letter and the related Assignment and Conveyance shall
have been materially complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related Closing Date the Purchase Price pursuant to Section 2.02
of this Agreement, by wire transfer of immediately available funds to the
account designated by the Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER; REPURCHASE;
REVIEW OF MORTGAGE LOANS
Section 3.01. Representations and Warranties of the Seller.
The Seller represents, warrants and covenants to the Purchaser that
as of each Closing Date or as of such date specifically provided herein:
(a) The Seller is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation
and has all licenses necessary to carry out its business as now being
conducted, and is licensed and qualified to transact business in and is in good
standing under the laws of each state in which any Mortgaged Property is
located or is otherwise exempt under applicable law from such licensing or
qualification or is
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otherwise not required under applicable law to effect such licensing or
qualification and no demand for such licensing or qualification has been made
upon the Seller by any such state, and in any event the Seller is in compliance
with the laws of any such state to the extent necessary to ensure the
enforceability of each Mortgage Loan and the servicing of the Mortgage Loans in
accordance with the terms of this Agreement;
(b) The Seller has the full power and authority and legal right to
hold, transfer and convey 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 related Purchase Price and Terms Letter and
the related Assignment and Conveyance and to conduct its business as presently
conducted; the Seller has duly authorized the execution, delivery and
performance of this Agreement and any agreements contemplated hereby, has duly
executed and delivered this Agreement, the related Purchase Price and Terms
Letter and the related Assignment and Conveyance, and any agreements
contemplated hereby, and this Agreement, the related Purchase Price and Terms
Letter, the related Assignment and Conveyance and each Assignment of Mortgage
to the Purchaser and any agreements contemplated hereby, constitute the legal,
valid and binding obligations of the Seller, enforceable against it in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization and similar laws,
and by equitable principles affecting the enforceability of the rights of
creditors; and all requisite corporate action has been taken by the Seller to
make this Agreement, the related Purchase Price and Terms Letter, the related
Assignment and Conveyance and all agreements contemplated hereby valid and
binding upon the Seller in accordance with their respective terms;
(c) None of the execution and delivery of this Agreement, the
related Purchase Price and Terms Letter, the related Assignment and Conveyance,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, or the fulfillment of or compliance with the
terms and conditions of this Agreement, the related Purchase Price and Terms
Letter or the related Assignment and Conveyance will conflict with any of the
terms, conditions or provisions of the Seller's charter or by-laws or
materially conflict with or result in a material breach of any of the terms,
conditions or provisions of any legal restriction or any material agreement or
instrument to which the Seller is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing,
or result in the material violation of any law, rule, regulation, order,
judgment or decree to which the Seller or its property is subject;
(d) There is no litigation, suit, proceeding or investigation
pending or, to the Seller's knowledge, threatened, or any order or decree
outstanding, which is reasonably likely to have a material adverse effect on
the sale of the Mortgage Loans, the execution, delivery, performance or
enforceability of this Agreement, the related Purchase Price and Terms Letter
or the related Assignment and Conveyance, or which is reasonably likely to have
a material adverse effect on the financial condition of the Seller;
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Seller of or compliance by the Seller with this Agreement,
the related Purchase Price and Terms Letter and
25
the related Assignment and Conveyance, except for consents, approvals,
authorizations and orders which have been obtained;
(f) The consummation of the transactions contemplated by this
Agreement, the related Purchase Price and Terms Letter and the related
Assignment and Conveyance are in the ordinary course of business of the Seller,
and the transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller pursuant to this Agreement, the related Purchase Price
and Terms Letter and the related Assignment and Conveyance are not subject to
bulk transfer or any similar statutory provisions in effect in any applicable
jurisdiction;
(g) The Seller has not used selection procedures that identified
the Mortgage Loans as being less desirable or valuable than other comparable
mortgage loans in the Seller's portfolio at the Cut-off Date;
(h) The Seller will treat the sale of the Mortgage Loans to the
Purchaser as a sale for reporting and accounting purposes and, to the extent
appropriate, for federal income tax purposes;
(i) The Seller is an approved seller/servicer of residential
mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac and HUD, with such facilities,
procedures and personnel necessary for the sound servicing of such mortgage
loans. The Seller is duly qualified, licensed, registered and otherwise
authorized under all applicable federal, state and local laws and regulations,
meets the minimum capital requirements, if applicable, set forth by the OCC,
and is in good standing to sell mortgage loans to and service mortgage loans
for Xxxxxx Mae or Xxxxxxx Mac and no event has occurred which would make the
Seller unable to comply with eligibility requirements or which would require
notification to either Xxxxxx Mae or Xxxxxxx Mac;
(j) The Seller does not believe, nor does it have any cause or
reason to believe, that it cannot perform each and every covenant contained in
this Agreement and the related Purchase Price and Terms Letter. The Seller is
solvent and the sale of the Mortgage Loans will not cause the Seller to become
insolvent. The sale of the Mortgage Loans is not undertaken with the intent to
hinder, delay or defraud any of the Seller's creditors;
(k) Neither this Agreement nor any information, statement, tape,
diskette, form, report, or other document furnished or to be furnished by or on
behalf of the Seller pursuant to this Agreement or any Reconstitution Agreement
or in connection with the transactions contemplated hereby (including any
Securitization Transfer or Whole Loan Transfer) contains or will contain any
untrue statement of material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading;
(l) The Seller acknowledges and agrees that the Servicing Fee
represents reasonable compensation for performing such services and that the
entire Servicing Fee shall be treated by the Seller, for accounting and tax
purposes, as compensation for the servicing and administration of the Mortgage
Loans pursuant to this Agreement;
(m) The Seller has delivered to the Purchaser financial statements
as to its last two complete fiscal years for which financial statements are
available. All such financial statements fairly present the pertinent results
of operations and changes in financial position for
26
each of such periods and the financial position at the end of each such period
of the Seller and its subsidiaries and have been prepared in accordance with
GAAP consistently applied throughout the periods involved, except as set forth
in the notes thereto. There has been no change in the business, operations,
financial condition, properties or assets of the Seller since the date of the
Seller's financial statements that would have a material adverse effect on its
ability to perform its obligations under this Agreement, the related Purchase
Price and Terms Letter or the related Assignment and Conveyance;
(n) The Seller has not dealt with any broker, investment banker,
agent or other person that may be entitled to any commission or compensation in
connection with the sale of the Mortgage Loans; and
(o) 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.
Section 3.02. Representations and Warranties as to Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser, as to
each Mortgage Loan, as of the related Closing Date as follows:
(a) The information set forth in the Mortgage Loan Schedule,
including any diskette or other related data tapes delivered to the Purchaser,
is complete, true and correct in all material respects as of the related
Cut-off Date;
(b) With respect to a first lien Mortgage Loan that is not a Co-op
Loan, the Mortgage creates a first lien or a first priority ownership interest
in an estate in fee simple in real property securing the related Mortgage Note.
With respect to a first lien Mortgage Loan that is a Co-op Loan, the Mortgage
creates a first lien or a first priority ownership interest in the stock
ownership and leasehold rights associated with the cooperative unit securing
the related Mortgage Note;
(c) With respect to a second lien Mortgage Loan that is not a Co-op
Loan, the Mortgage creates a second lien or a second priority ownership
interest in an estate in fee simple in real property securing the related
Mortgage Note. With respect to a second lien Mortgage Loan that is a Co-op
Loan, the Mortgage creates a second lien or a second priority ownership
interest in the stock ownership and leasehold rights associated with the
cooperative unit securing the related Mortgage Note;
(d) All payments due on or prior to the related Cut-off Date for
such Mortgage Loan have been made as of the related Closing Date, the Mortgage
Loan is not delinquent thirty (30) days or more in payment and has not been
dishonored; there are no material defaults under the terms of the Mortgage
Loan; 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
Mortgaged Property subject to the Mortgage, directly or indirectly, for the
payment of any amount required by the Mortgage Loan; as to each Mortgage Loan,
there has been no more than one thirty (30) day delinquency during the
immediately preceding twelve-month period;
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(e) All taxes, governmental assessments, insurance premiums, water,
sewer and municipal charges, leasehold payments or ground rents which
previously became due and owing have been paid, or escrow funds have been
established in an amount sufficient to pay for every such escrowed item which
remains unpaid and which has been assessed but is not yet due and payable;
(f) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments which have been recorded to the extent any such recordation is
required by law, or, necessary to protect the interest of the Purchaser. No
instrument of waiver, alteration or modification has been executed in
connection with such Mortgage Loan, and no Mortgagor has been released, in
whole or in part, from the terms thereof except in connection with an
assumption agreement and which assumption agreement is part of the Mortgage
File and the terms of which are reflected in the Mortgage Loan Schedule; the
substance of any such waiver, alteration or modification has been approved by
the issuer of any related Primary Mortgage Insurance Policy and title insurance
policy, to the extent required by the related policies;
(g) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including, without limitation,
the defense of usury, nor will the operation of any of the terms of the
Mortgage Note or the Mortgage, or the exercise of any right thereunder, render
the Mortgage Note or Mortgage 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;
(h) All buildings or other customarily insured improvements upon
the Mortgaged Property are insured by an insurer acceptable under the Xxxxxx
Mae Guides, against loss by fire, hazards of extended coverage and such other
hazards as are provided for in the Xxxxxx Xxx Guides or by Xxxxxxx Mac, as well
as all additional requirements set forth in Section 4.10 of this Agreement. All
such standard hazard policies are in full force and effect and on the date of
origination contained a standard mortgagee clause naming the Seller and its
successors in interest and assigns as loss payee and such clause is still in
effect and all premiums due thereon have been paid. If required by the Flood
Disaster Protection Act of 1973, as amended, the Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration which policy conforms to Xxxxxx Xxx and
Xxxxxxx Mac requirements, as well as all additional requirements set forth in
Section 4.10 of this Agreement. Such policy was issued by an insurer acceptable
under Xxxxxx Mae or Xxxxxxx Mac guidelines. The Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost and
expense, and upon the Mortgagor's failure to do so, authorizes the holder of
the Mortgage to maintain such insurance at the Mortgagor's cost and expense and
to seek reimbursement therefor from the Mortgagor. Where required by state law
or regulation, the Mortgagor has been given an opportunity to choose the
carrier of the required hazard insurance, provided the policy is not a "master"
or "blanket" hazard insurance policy covering a condominium, or any hazard
insurance policy covering the common facilities of a planned unit development.
The hazard insurance policy is the valid and binding obligation of the insurer,
is in full force and effect, and will be in full force and effect and inure to
the benefit of the Purchaser upon the consummation of the transactions
contemplated by this Agreement. The Seller has not
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engaged in, and has no knowledge of the Mortgagor's having engaged in, any act
or omission which would impair the coverage of any such policy, the benefits of
the endorsement provided for herein, or the validity and binding effect of
either including, without limitation, no unlawful fee, commission, kickback or
other unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(i) Any and all requirements of any federal, state or local law
including, without limitation, usury, truth-in-lending, real estate settlement
procedures, consumer credit protection, equal credit opportunity and disclosure
laws or unfair and deceptive practices laws applicable to the Mortgage Loan
including, without limitation, any provisions relating to Prepayment Penalties,
have been complied with, the consummation of the transactions contemplated
hereby will not involve the violation of any such laws or regulations. The
Seller shall maintain in its possession, available for the Purchaser's
inspection, and shall deliver to the Purchaser, upon demand, evidence of
compliance with all such requirements;
(j) The Mortgage has not been satisfied, canceled or subordinated,
in whole or in part, or rescinded, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission. 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;
(k) With respect to any first lien Mortgage Loan, the related
Mortgage is a valid, subsisting, enforceable and perfected first lien on the
Mortgaged Property and, with respect to any second lien Mortgage Loan, the
related Mortgage is a valid, subsisting, enforceable and perfected second lien
on the Mortgaged Property, including for Mortgage Loans that are not Co-op
Loans, all buildings on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems affixed
to such buildings, and all additions, alterations and replacements made at any
time with respect to the foregoing securing the Mortgage Note's original
principal balance. The Mortgage and the Mortgage Note do not contain any
evidence of any security interest or other interest or right thereto. Such lien
is free and clear of all adverse claims, liens and encumbrances having priority
over the first or second lien, as applicable, of the Mortgage subject only to
(1) with respect to any second lien Mortgage Loan, the related First Lien Loan,
(2) the lien of non-delinquent current real property taxes and assessments not
yet due and payable, (3) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of recording
which are acceptable to mortgage lending institutions generally and either (A)
which are referred to or otherwise considered in the appraisal made for the
originator of the Mortgage Loan, or (B) which do not adversely affect the
appraised value of the Mortgaged Property as set forth in such appraisal, and
(4) 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 (1) with respect to any first lien Mortgage Loan, a
valid, subsisting, enforceable and perfected first lien and first priority
security interest and (2)
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with respect to any second lien Mortgage Loan, a valid, subsisting, enforceable
and perfected second lien and second priority security interest, in each case,
on the property described therein, and the Seller has the full right to sell
and assign the same to the Purchaser;
(l) The Mortgage Note and the related Mortgage are original and
genuine and each is the legal, valid and binding obligation of the maker
thereof, enforceable in all respects in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, moratorium,
reorganization and other laws of general application affecting the rights of
creditors generally and the equitable remedy of specific performance and by
general equitable principles. All parties to the Mortgage Note and the related
Mortgage had the legal capacity to enter into the Mortgage Loan and to execute
and deliver the Mortgage Note and the related Mortgage. The Mortgage Note and
the related Mortgage have been duly and properly executed by such parties. No
fraud, error, omission, misrepresentation, negligence or similar occurrence
with respect to a Mortgage Loan has taken place on the part of Seller, the
Mortgagor or any other party involved in the origination of the Mortgage Loan.
The proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or off-site improvements 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 were paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due under the Mortgage Note or related Mortgage;
(m) Except with respect to MERS Mortgage Loans, the Seller or its
affiliate is the sole owner of record and holder of the Mortgage Loan and the
indebtedness evidenced by the Mortgage Note, and upon recordation the Purchaser
or its designee will be the owner of record of the Mortgage and the
indebtedness evidenced by the Mortgage Note, and upon the sale of the Mortgage
Loan to the Purchaser, the Seller will retain the Servicing File in trust for
the Purchaser only for the purpose of servicing and supervising the servicing
of the Mortgage Loan. Immediately prior to the transfer and assignment to the
Purchaser on the related Closing Date, the Mortgage Loan, including the
Mortgage Note and the Mortgage, were not subject to an assignment or pledge,
and the Seller had good and marketable title to and was the sole owner thereof
and had 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 and has the full right and authority subject to no interest or
participation of, or agreement with, any other party, to sell and assign the
Mortgage Loan pursuant to this Agreement and following the sale of the Mortgage
Loan, the Purchaser will own such Mortgage Loan free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim or
security interest. The Seller intends to relinquish all rights to possess,
control and monitor the Mortgage Loan, except for the purposes of servicing the
Mortgage Loan as set forth in this Agreement. After the related Closing Date,
the Seller will have no right to modify or alter the terms of the sale of the
Mortgage Loan and the Seller will have no obligation or right to repurchase the
Mortgage Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Each Mortgage Loan that is not a Co-op Loan is covered by an
ALTA lender's title insurance policy or other generally acceptable form of
policy or insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac, issued by a title
insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified to do business in
the jurisdiction where the Mortgaged Property is
30
located, insuring (subject to the exceptions contained in (k)(1), (2), (3) and
(4) above) the Seller, its successors and assigns, as to the first or second
priority lien, as applicable, of the Mortgage in the original principal amount
of the Mortgage Loan. Where required by applicable state law or regulation, the
Mortgagor has been given the opportunity to choose the carrier of the required
mortgage title insurance. The Seller, its successors and assigns, are the sole
insureds of such lender's title insurance policy, such title insurance policy
has been duly and validly endorsed to the Purchaser or the assignment to the
Purchaser of the Seller's interest therein does not require the consent of or
notification to the insurer 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 contemplated by this Agreement and the related Purchase Price
and Terms Letter. 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 which would impair the coverage of such
lender's title insurance policy, including without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained or
realized by the Seller;
(o) Except with respect to Mortgage Loans less than 30 days
delinquent as of the related Closing Date, there is no default, breach,
violation or event of acceleration existing under the Mortgage or the related
Mortgage Note and no event which, with the passage of time or with notice and
the expiration of any grace or cure period, would constitute a default, breach,
violation or event permitting acceleration; and neither the Seller nor, to the
Seller's knowledge, any prior mortgagee has waived any default, breach,
violation or event permitting acceleration. With respect to each second lien
Mortgage Loan, (i) the First Lien Loan is in full force and effect, (ii) there
is no default, breach, violation or event of acceleration existing under such
prior mortgage or the related mortgage note, (iii) no event which, with the
passage of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event of acceleration
thereunder, and either (A) the prior mortgage contains a provision which allows
or (B) applicable law requires, the mortgagee under the second lien Mortgage
Loan to receive notice of, and affords such mortgagee an opportunity to cure
any default by payment in full or otherwise under the prior mortgage;
(p) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that
under law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to or equal to the lien of the related
Mortgage, which are not insured against by the title insurance policy
referenced in paragraph (n) above;
(q) All improvements subject to the Mortgage which were considered
in determining the Appraised Value of the Mortgaged Property lie wholly within
the boundaries and building restriction lines of the Mortgaged Property (and
wholly within the project with respect to a condominium unit) and no
improvements on adjoining properties encroach upon the Mortgaged Property
except those which are insured against by the title insurance policy referred
to in clause (n) above and all improvements on the property comply with all
applicable zoning and subdivision laws and ordinances;
31
(r) The Mortgage Loan was originated by or for the Seller. The
Mortgage Loan complies with the terms, conditions and requirements of the
Underwriting Standards in all material respects. The Mortgage Notes and
Mortgages (exclusive of any riders) are on forms generally acceptable to Xxxxxx
Xxx or Xxxxxxx Mac. The Mortgage Loan bears interest at the Mortgage Interest
Rate set forth in the related Mortgage Loan Schedule, and Monthly Payments
under the Mortgage Note are due and payable on the first day of each month. The
Mortgage contains the usual and enforceable provisions of the originator at the
time of origination for the acceleration of the payment of the unpaid principal
amount of the Mortgage Loan if the related Mortgaged Property is sold without
the prior consent of the mortgagee thereunder;
(s) The Mortgaged Property at origination of the related Mortgage
Loan was and, to the Seller's knowledge, currently is free of material damage
and waste. The Mortgaged Property is undamaged by waste, fire, earthquake or
earth movement, windstorm, flood, tornado or other casualty so as to affect
adversely the value of the Mortgaged Property as security for the Mortgage Loan
or the use for which the premises were intended and each Mortgaged Property is
in good repair. At origination of the Mortgage Loan there was, and there
currently is, no proceeding pending for the total or partial condemnation of
the Mortgaged Property;
(t) The related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby. Upon default by a Mortgagor on a Mortgage Loan
and foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to
the proper procedures, the holder of the Mortgage Loan will be able to deliver
good and merchantable title to the Mortgaged Property. There is no homestead or
other exemption available to the Mortgagor which would interfere with the right
to sell the Mortgaged Property at a trustee's sale or the right to foreclose
the Mortgage subject to applicable federal and state laws and judicial
precedent with respect to bankruptcy and right of redemption;
(u) If the Mortgage constitutes a deed of trust, a trustee,
authorized and duly qualified if required under applicable law to act as such,
has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses, except as may be required by local law, are
or will become payable by the Purchaser to the trustee under the deed of trust,
except in connection with a trustee's sale or attempted sale after default by
the Mortgagor;
(v) The Mortgage File contains an appraisal of the related
Mortgaged Property, in a form acceptable to Xxxxxx Mae or Xxxxxxx Mac, and such
appraisal was signed prior to the final approval of the mortgage loan
application by a Qualified Appraiser;
(w) All parties which have had any interest in the Mortgage,
whether as mortgagee, assignee, pledgee or otherwise, are (or, during the
period in which they held and disposed of such interest, were) (A) in
compliance with any and all applicable licensing requirements of the laws of
the state wherein the Mortgaged Property is located, and (B) (1) organized
under the laws of such state, or (2) qualified to do business in such state, or
(3) federal savings and loan associations or national banks or a Federal Home
Loan Bank or savings bank having principal offices in such state, or (4) not
doing business in such state;
32
(x) The related Mortgage Note is not and has not been secured by
any collateral except the lien of the corresponding Mortgage and the security
interest of any applicable security agreement or chattel mortgage referred to
in clause (k) above and such collateral does not serve as security for any
other obligation;
(y) The Mortgage Loan does not contain "graduated payment"
features; to the extent any Mortgage Loan is a Buydown Mortgage Loan:
(i) On or before the date of origination of such Mortgage Loan,
the Seller and the Mortgagor, or the Seller, the Mortgagor and the
seller of the Mortgaged Property or a third party entered into a
Buydown Agreement. The Buydown Agreement provides that the seller of
the Mortgaged Property (or third party) shall deliver to the Seller
temporary Buydown Funds in an amount equal to the aggregate
undiscounted amount of payments that, when added to the amount the
Mortgagor on such Mortgage Loan is obligated to pay on each Due Date
in accordance with the terms of the Buydown Agreement, is equal to
the full scheduled Monthly Payment due on such Mortgage Loan. The
temporary Buydown Funds enable the Mortgagor to qualify for the
Buydown Mortgage Loan. The effective interest rate of a Buydown
Mortgage Loan if less than the interest rate set forth in the related
Mortgage Note will increase within the Buydown Period as provided in
the related Buydown Agreement so that the effective interest rate
will be equal to the interest rate as set forth in the related
Mortgage Note. All Buydown Funds required to make the full payment of
principal and interest under each Buydown Loan are in the Buydown
Account held by the Seller in its capacity as servicer. The Buydown
Mortgage Loan satisfies the requirements of the Underwriting
Standards;
(ii) The Mortgage and Mortgage Note reflect the permanent
payment terms rather than the payment terms of the Buydown Agreement.
The Buydown Agreement provides for the payment by the Mortgagor of
the full amount of the Monthly Payment on any Due Date that the
Buydown Funds are not available. The Buydown Funds were not used to
reduce the original principal balance of the Mortgage Loan or to
increase the Appraised Value of the Mortgage Property when
calculating the Loan-to-Value Ratios for purposes of the Agreement;
(iii) The Buydown Funds may not be refunded to the Mortgagor
unless the Mortgagor makes a principal payment for the outstanding
balance of the Mortgage Loan; and
(iv) As of the date of origination of the Mortgage Loan, the
provisions of the related Buydown Agreement complied with the
Underwriting Standards.
(z) The Mortgagor was not in bankruptcy or insolvent as of the date
of origination of the Mortgage Loan and, to the Seller's knowledge, is not in
bankruptcy or insolvent as of the related Closing Date;
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(aa) Each Fixed Rate Mortgage Loan has an original term to maturity
of not more than thirty (30) years, with interest calculated and payable in
arrears on the first day of each month in equal monthly installments of
principal and interest. Except with respect to Interest Only Mortgage Loans,
each Mortgage Note requires a monthly payment which is sufficient to fully
amortize the original principal balance of the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty (30) years
and to pay interest at the related Mortgage Interest Rate; provided, however,
in the case of a balloon Mortgage Loan, the Mortgage Loan matures at least
seven (7) years after the first payment date thereby requiring a final payment
of the outstanding principal balance prior to the full amortization of the
Mortgage Loan. No Mortgage Loan contains terms or provisions which would result
in negative amortization;
(bb) If a Mortgage Loan has an LTV greater than 80%, the portion of
the principal balance of such Mortgage Loan in excess of the portion of the
Appraisal Value of the Mortgaged Property required by Xxxxxx Xxx, is and will
be insured as to payment defaults by a Primary Mortgage Insurance Policy issued
by a Qualified Insurer. All provisions of such Primary Mortgage 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. No action, inaction, or
event has occurred and no state of facts exists that has, or will result in the
exclusion from, denial of, or defense to coverage. Any Mortgage Loan subject to
a Primary Mortgage Insurance Policy obligates the Mortgagor thereunder to
maintain the Primary Mortgage Insurance Policy and to pay all premiums and
charges in connection therewith. The mortgage interest rate for the Mortgage
Loan as set forth on the related Mortgage Loan Schedule is net of any such
insurance premium;
(cc) The Assignment of Mortgage is in recordable form and is
acceptable for recording under the laws of the jurisdiction in which the
Mortgaged Property is located;
(dd) As to Mortgage Loans that are not Co-op Loans and that are not
secured by an interest in a leasehold estate, the Mortgaged Property is located
in the state identified in the related Mortgage Loan Schedule and consists of a
single parcel of real property with a detached single family residence erected
thereon, or a townhouse, or a two-to four-family dwelling, or an individual
condominium unit in a condominium project, or an individual unit in a planned
unit development or a de minimis planned unit development, provided, however,
that no residence or dwelling is a mobile home, geodesic dome or any other
property generally deemed unacceptable by Xxxxxx Mae or Xxxxxxx Mac. As of the
date of origination, no portion of the Mortgaged Property was used for
commercial purposes, and, since the date of origination no portion of the
Mortgaged Property has been used for commercial purposes, except as permitted
under the Underwriting Standards;
(ee) Except with respect to Interest Only Mortgage Loans, principal
payments on the Mortgage Loan commenced no more than sixty (60) days after the
funds were disbursed in connection with such Mortgage Loan;
(ff) Each Mortgage Loan that is subject to a Prepayment Penalty as
provided in the related Mortgage Note is identified on the related Mortgage
Loan Schedule. With respect
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to Mortgage Loans originated prior to October 1, 2002, no such Prepayment
Penalty may be imposed for a term in excess of five (5) years following
origination;
(gg) As of the date of origination of the Mortgage Loan, the
Mortgaged Property was lawfully occupied under applicable law, and all
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities;
(hh) If the Mortgaged Property is a condominium unit or a planned
unit development (other than a de minimis planned unit development), or stock
in a cooperative housing corporation, such condominium, cooperative or planned
unit development project meets the Seller's eligibility requirements as set
forth in Underwriting Standards;
(ii) There is no pending action or proceeding directly involving
the Mortgaged Property in which compliance with any environmental law, rule or
regulation is an issue and there is no violation of any environmental law, rule
or regulation with respect to the Mortgaged Property;
(jj) The related 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;
(kk) No action has been taken or failed to be taken by the Seller
on or prior to the related Closing Date which has resulted or will result in an
exclusion from, denial of, or defense to coverage under any Primary Mortgage
Insurance Policy (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or
fraud of the Seller, or for any other reason under such coverage;
(ll) Each Mortgage Loan has been serviced in all material respects
in compliance with Accepted Servicing Practices;
(mm) With respect to each Co-op Loan, the related Mortgage is a
valid, enforceable and subsisting first security interest on the related
cooperative shares securing the related cooperative note, subject only to (a)
liens of the 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 Security
Agreement. There are no liens against or security interest in the cooperative
shares relating to each Co-op Loan (except for unpaid maintenance, assessments
and other amounts owed to the related cooperative which individually or in the
aggregate will not have a material adverse effect on such Co-op Loan), which
have priority over the Seller's security interest in such cooperative shares;
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(nn) With respect to each Co-op Loan, a search for filings of
financing statements has been made by a company competent to make the same,
which company is acceptable to Xxxxxx Xxx and qualified to do business in the
jurisdiction where the cooperative unit is located, and such search has not
found anything which would materially and adversely affect the Co-op Loan;
(oo) With respect to each Co-op Loan, the related cooperative
corporation that owns title to the related cooperative apartment building is a
"cooperative housing corporation" within the meaning of Section 216 of the
Code, is held by a person as a tenant-stockholder (as defined in Section 216 of
the Code) and is in material compliance with applicable federal, state and
local laws which, if not complied with, could have a material adverse effect on
the Mortgaged Property;
(pp) With respect to each Co-op Loan, there is no prohibition
against pledging the shares of the cooperative corporation or assigning the
Co-op Lease;
(qq) The Mortgage Loan was originated by a mortgagee approved by
the Secretary of Housing and Urban Development pursuant to sections 203 and 211
of the National Housing Act, a savings and loan association, a savings bank, a
commercial bank, credit union, insurance company or similar institution which
is supervised and examined by a federal or state authority;
(rr) With respect to any ground lease to which a Mortgaged Property
may be subject: (i) a true, correct and complete copy of the ground lease and
all amendments, modifications and supplements thereto is included in the
Servicing File, and the Mortgagor is the owner of a valid and subsisting
leasehold interest under such ground lease; (ii) such ground lease is in full
force and effect, unmodified and not supplemented by any writing or otherwise
except as contained in the Mortgage File; (iii) all ground lease rents,
additional rent, assessments and other charges reserved therein that have
become due have been fully paid to the extent payable as of the related Closing
Date; (iv) the Mortgagor enjoys the quiet and peaceful possession of the
leasehold estate, subject to any sublease; (v) the Mortgagor is not in default
under any of the terms of such ground lease, and there are no circumstances
which, with the passage of time or the giving of notice, or both, would result
in a default under such ground lease; (vi) the lessor under such ground lease
is not in default under any of the terms or provisions of such ground lease on
the part of the lessor to be observed or performed; (vii) the lessor under such
ground lease has satisfied any repair or construction obligations due as of the
related Closing Date pursuant to the terms of such ground lease; (viii) the
execution, delivery and performance of the Mortgage do not require the consent
(other than those consents which have been obtained and are in full force and
effect) under, and will not contravene any provision of or cause a default
under, such ground lease; (ix) the ground lease will not terminate earlier than
five years after the maturity date of the related Mortgage Loan; (x) the
Purchaser has the right to cure defaults on the ground lease; (xi) the use of
leasehold estates for residential properties is a widely accepted practice in
the jurisdiction in which the Mortgage Property is located; (xii) the ground
lease protects the mortgagee's interests in the event of a property
condemnation; (xiii) the ground lease permits the mortgaging of the related
Mortgage Property; (xiv) the ground lease is assignable or transferable; and
(xv) the ground lease does not provide for termination of the lease in the
event
36
of lessee's default without the mortgagee being entitled to receive written
notice of, and a reasonable opportunity to cure, the default;
(ss) With respect to any broker fees collected and paid on any of
the Mortgage Loans, all broker fees have been properly assessed to the borrower
and no claims will arise as to broker fees that are double charged and for
which the borrower would be entitled to reimbursement;
(tt) Each Mortgage Loan constitutes a "qualified mortgage" under
Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1);
(uu) Except as provided in Section 2.07, the Mortgage Note, the
Mortgage, the Assignment of Mortgage and the other documents set forth in
Exhibit A-1 and required to be delivered on the related Closing Date have been
delivered to the Purchaser or its designee;
(vv) To the Seller's knowledge, all information supplied by, on
behalf of, or concerning the Mortgagor is true, accurate and complete and does
not contain any statement that is or will be inaccurate or misleading in any
material respect;
(ww) 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. The Seller shall
maintain such statement in the Servicing File;
(xx) No Mortgage Loan had a Loan-to-Value Ratio at the time of
origination of more than 100%. No Second Lien Mortgage Loan has an Equity LTV
in excess of 100%;
(yy) Either (a) no consent for the second lien Mortgage Loan is
required by the holder of the related First Lien Loan or (b) such consent has
been obtained and is contained in the Mortgage File;
(zz) With respect to any second lien Mortgage Loan, the Seller has
not received notice of: (1) any proceeding for the total or partial
condemnation of any Mortgaged Property, (2) any subsequent, intervening
mortgage, lien, attachment, lis pendens or other encumbrance affecting any
Mortgaged Property or (3) any default under any mortgage, lien or other
encumbrance senior to each Mortgage;
(aaa) No second lien Mortgage Loan is a "home equity line of
credit";
(bbb) As of the Closing Date, the Seller has not received a notice
of default of a First Lien Loan which has not been cured;
(ccc) No Mortgage Loan provides for negative amortization;
(ddd) No Mortgage Loan is a High Cost Loan or Covered Loan. No
Mortgage Loan is covered by the Home Ownership and Equity Protection Act of
1994 and no Mortgage Loan is in violation of any comparable state or local law.
The Mortgaged Property is not located in a jurisdiction where a breach of this
representation with respect to the related Mortgage Loan may result in
additional assignee liability to the Purchaser, as determined by Purchaser in
its
37
reasonable discretion. No predatory or deceptive lending practices were
employed in the origination of the Mortgage Loan. Each Mortgage Loan is in
compliance with the anti-predatory lending eligibility for purchase
requirements of Xxxxxx Mae's Selling Guide;
(eee) With respect to any Mortgage Loan which is a Texas Home
Equity Loan, any and all requirements of Section 50, Article XVI of the Texas
Constitution applicable to Texas Home Equity Loans which were in effect at the
time of the origination of the Mortgage Loan have been complied with;
(fff) The origination and servicing practices with respect to each
Mortgage Note and Mortgage have been legal and in accordance with applicable
laws and regulations, and in all material respects proper and prudent in the
mortgage origination and servicing business. With respect to escrow deposits
and payments that the Seller is entitled to collect, 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. All escrow payments have been collected
and are being maintained in full compliance with applicable state and federal
law and the provisions of the related Mortgage Note and Mortgage. As to any
Mortgage Loan that is the subject of an escrow, escrow of funds is not
prohibited by applicable law and has been established in an amount sufficient
to pay for every escrowed item that remains unpaid and has been assessed but is
not yet due and payable. No escrow deposits or other charges or payments due
under the Mortgage Note have been capitalized under any Mortgage or the related
Mortgage Note. All Mortgage Interest Rate adjustments have been made in strict
compliance with state and federal law and the terms of the related Mortgage
Note. Any interest required to be paid pursuant to state and local law has been
properly paid and credited;
(ggg) No Mortgage Loan is a Convertible Mortgage Loan;
(hhh) With respect to each Adjustable Rate Mortgage Loan, the
Mortgage Loan Documents provide that after the related first Interest Rate
Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(iii) Any future advances made to the Mortgagor prior to the
applicable 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 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 Xxxxxx Xxx and Xxxxxxx Mac. The consolidated principal
amount does not exceed the original principal amount of the Mortgage Loan;
(jjj) No Mortgage Loan was made in connection with the construction
(other than a "construct-to-perm" loan which has become a permanent loan and
construction has been completed) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
38
(kkk) If applicable, with respect to each Mortgage, the Seller has
within the last twelve months (unless such Mortgage was originated within such
twelve month period) analyzed the required Escrow Payments for each Mortgage
and adjusted the amount of such payments so that, assuming all required
payments are timely made, any deficiency will be eliminated on or before the
first anniversary of such analysis, or any overage will be refunded to the
Mortgagor, in accordance with RESPA and any other applicable law;
(lll) 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 from furnishing the same to any subsequent
or prospective purchaser of such Mortgage;
(mmm) Each Mortgage Loan is covered by a paid in full, life of
loan, tax service contract issued by First American Real Estate Tax Service,
and such contract is transferable;
(nnn) Each original Mortgage was recorded and all subsequent
assignments of the original Mortgage (other than the assignment to the
Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of
the Seller, or is in the process of being recorded;
(ooo) No Mortgagor with respect to any Mortgage Loan originated on
or after August 1, 2004 agreed to submit to arbitration to resolve any dispute
arising out of or relating in any way to the mortgage loan transaction;
(ppp) The Seller's parent has adopted an Anti-Money Laundering and
Terrorist-Finance Policy (the "Policy") that requires the Seller to comply with
applicable anti-money laundering law and regulations, including without
limitation on the USA Patriot Act of 2001 (collectively, the "Anti-Money
Laundering Laws") and based upon the succeeding information the Seller believes
that it is compliant with that Policy; the Seller has established an anti-money
laundering compliance program as required by Policy, has procedure in place to
conduct due diligence, based upon the Seller's risk assessment of the
applicable Mortgagor, in connection with the origination of each Mortgage Loan
for purposes of the Policy, including the verification of the identity of the
applicable Mortgagor and, where required, the origin of the assets used by the
said Mortgagor to purchase the property in question and has procedures,
including record keeping procedures, in place to comply with Section 326 of the
USA Patriot Act of 2001 and its implementing regulation 31 CFR 103.121
regarding the identity of the applicable Mortgagor. On or before the closing of
any Mortgage Loan, the Seller conducts or causes to be conducted an OFAC
screening of the Mortgagor to comply with regulations of the Office of Foreign
Assets Control ("OFAC") of the United States Department of Treasury
implementing certain United States laws and the executive orders issued under
the authority of such laws; and thereafter Seller periodically re-screens or
causes the re-screening of Mortgagors when the OFAC sanctioned parties lists
are updated;
(qqq) The Seller is the owner of record of each Mortgage and the
indebtedness evidenced by each Mortgage Note, and upon the sale of the Mortgage
Loans to the Purchaser, the
39
Seller will retain the Mortgage Files with respect thereto in trust only for
the purpose of servicing and supervising the servicing of each Mortgage Loan;
(rrr) Interest on each Mortgage Loan is calculated on the basis of
a 360-day year consisting of twelve 30-day months;
(sss) No Mortgage Loan provides for interest payable on a simple
interest basis;
(ttt) Each Mortgage Loan at the time it was made complied in all
material respects with applicable local, state and federal laws, including, but
not limited to, all applicable predatory and abusive lending laws;
(uuu) No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994 ("HOEPA");
(vvv) There is no Mortgage Loan that was originated on or after
October 1, 2002 and before March 7, 2003, which is secured by a Mortgaged
Property located in the State of placecountry-regionGeorgia. There is no
Mortgage Loan that was originated on or after March 7, 2003, which is a "high
cost home loan" as defined under the Georgia Fair Lending Act;
(www) No Mortgage Loan is a "high cost home," "high risk home" or
"predatory" loan under any applicable state, federal or local law (or a
similarly classified loan using different terminology under a law imposing
heightened regulatory scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees);
(xxx) No Mortgagor was required to purchase any single premium
credit insurance policy (e.g., life, disability, accident, unemployment, or
health insurance product) or debt cancellation agreement in connection with the
origination of the Mortgage Loan. No proceeds from any Mortgage Loan were used
to purchase single premium credit insurance policies or debt cancellation
agreements as part of the origination of, or as a condition to closing, such
Mortgage Loan;
(yyy) With respect to any Mortgage Loan that contains a provision
permitting imposition of a premium upon a prepayment prior to maturity: (i)
prior to the Mortgage Loan's origination, the borrower agreed to such premium
in exchange for a monetary benefit, to the borrower (e.g., such as rate or fee
reduction); (ii) prior to the Mortgage Loan's origination, the borrower was
offered the option of obtaining a mortgage loan that did not require payment of
such a premium; (iii) the prepayment premium was adequately disclosed to the
borrower pursuant to applicable state and federal law; (iv) no Mortgage Loan
originated on or after October 1, 2002 will impose a prepayment premium for a
term in excess of three years and any Mortgage Loans originated prior to such
date will not impose prepayment penalties in excess of five years; in each case
unless the Mortgage Loan was modified to reduce the prepayment period to no
more than three years from the date of the note and the borrower was notified
in writing of such reduction in prepayment period; and (v) notwithstanding any
state or federal law to the contrary, the Servicer shall not impose such
prepayment premium in any instance when the Mortgage Loan is accelerated or
paid off in connection with the workout of a delinquent mortgage or due to the
borrower's default, notwithstanding that the terms of the Mortgage Loan or
state or federal law might permit the Servicer to impose such premium;
40
(zzz) The Seller has and shall in its capacity as servicer, for
each Mortgage Loan, 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 Company (three of the
credit repositories), on a monthly basis unless such reporting is suspended due
to the Servicemembers Civil Relief Act or an eligible disaster declaration;
(aaaa) With respect to the Mortgage Loans, the borrower was offered
mortgage loan products suitable for such borrower and not designed for less
creditworthy borrowers;
(bbbb) The methodology used in underwriting the extension of credit
for each Mortgage Loan employs objective criteria which relate the borrower's
income, assets and liabilities (except in the case of loan programs which do
not require the borrower to report the borrower's income or assets, such as "no
income, no assets" lending programs or which rely on the borrower's
representation of the borrower's income, such as "stated income" lending
programs) to the proposed payment and such underwriting methodology does not
rely on the extent of the borrower's equity in the collateral as the principal
determining factor in approving such credit extension. Such underwriting
methodology determined that at the time of origination (application/approval)
the borrower had the reasonable ability to make timely payments on the Mortgage
Loan;
(cccc) No Mortgagor was charged "points and fees" (whether or not
financed) greater than 5% of the principal amount of such Mortgage Loan. For
purposes of this representation, such 5% limitation is calculated in accordance
with Xxxxxx Mae's anti-predatory lending requirements as set forth in the
Xxxxxx Xxx Guides and "points and fees" (i) include origination, underwriting,
broker and finder fees and charges that the mortgagee imposed as a condition of
making the Mortgage Loan, whether they are paid to the mortgagee or a third
party, and (ii) exclude bona fide discount points, fees paid for actual
services rendered in connection with the origination of the Mortgage Loan (such
as attorneys' fees, notaries fees and fees paid for property appraisals, credit
reports, surveys, title examinations and extracts, flood and tax
certifications, and home inspections), the cost of mortgage insurance or
credit-risk price adjustments, the costs of title, hazard, and flood insurance
policies, state and local transfer taxes or fees, escrow deposits for the
future payment of taxes and insurance premiums, and other miscellaneous fees
and charges that, in total, do not exceed 0.25% of the principal amount of such
Mortgage Loan. 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 has been disclosed in writing
to the borrower in accordance with applicable state and federal law and
regulation; and
(dddd) With respect to any Mortgage Loan originated on or after
August 1, 2004, neither the related Mortgage nor the related Mortgage Note
requires the borrower to submit to arbitration to resolve any dispute arising
out of or relating in any way to the Mortgage Loan transaction.
41
Section 3.03. Repurchase; Substitution.
It is understood and agreed that the representations and warranties
set forth in Sections 3.01 and 3.02 shall survive the sale of the Mortgage
Loans and delivery of the Mortgage File to the Purchaser, or its designee, 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 Loan Document. Upon
discovery by the Seller or the Purchaser of a breach of any of the foregoing
representations and warranties which materially and adversely affects the value
of the Mortgage Loans or the interest of the Purchaser in any Mortgage Loan,
the party discovering such breach shall give prompt written notice to the
others. The Seller shall have a period of ninety (90) days from the earlier of
its discovery or its receipt of notice of any such breach within which to
correct or cure such breach. Notwithstanding the above sentences, within ninety
(90) days after the earlier of either discovery by, or notice to, the Seller of
any breach of the representations or warranties set forth in clause (ttt)
through (dddd) of Section 3.02, any breach of which shall automatically be
deemed to materially and adversely affect the value of the Mortgage Loan and
the interest of the Purchaser therein, the Seller shall repurchase such
Mortgage Loan at the Repurchase Price. The Seller hereby covenants and agrees
that (except as provided in the previous sentence with respect to certain
breaches for which no substitution is permitted) if any such breach is not
corrected or cured within such ninety (90) day period, the Seller shall, at the
Purchaser's option, either repurchase such Mortgage Loan at the Repurchase
Price or substitute a mortgage loan for the Defective Mortgage Loan as provided
below. In the event that any such breach shall involve any representation or
warranty set forth in Section 3.01, and such breach is not cured within ninety
(90) of the earlier of either discovery by or notice to the Seller of such
breach, all affected Mortgage Loans shall, at the option of the Purchaser, be
repurchased by the Seller at the Repurchase Price. Any such repurchase shall be
accomplished by deposit in the Custodial Account of the amount of the
Repurchase Price.
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 the 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(R) System in accordance with MERS'
rules and regulations or (ii) cause MERS to designate on the MERS(R) System the
Seller as the beneficial holder of such Mortgage Loan.
If the Seller is required to repurchase any Mortgage Loan pursuant
to this Section 3.03 as a result of a breach of any of the representations and
warranties set forth in Section 3.02, the Seller may, with the Purchaser's
prior consent, which consent shall not be unreasonably withheld, within two (2)
years from the related Closing Date, remove such defective Mortgage Loan from
the terms of this Agreement and substitute another mortgage loan for such
defective Mortgage Loan, in lieu of repurchasing such defective Mortgage Loan.
Any substitute Mortgage Loan shall (a) have a principal balance at the time of
substitution not in excess of the principal balance of the defective Mortgage
Loan (the amount of any difference, plus one month's interest thereon at the
Mortgage Interest Rate borne by the defective Mortgage Loan, being paid by the
Seller and deemed to be a Principal Prepayment to be deposited by the Seller in
the Custodial Account), (b) have a Mortgage Interest Rate not less than, and
not more than one percentage point greater than, the Mortgage Interest Rate of
the removed Mortgage Loan, (c) have a
42
remaining term to stated maturity not later than, and not more than one year
less than, the remaining term to stated maturity of the removed Mortgage Loan,
(d) have a Loan-to-Value Ratio at origination no greater than that of the
removed Mortgage Loan, (e) with respect to any second lien Mortgage Loan, have
an Equity Loan-to-Value Ratio at origination no greater than that of the
removed Mortgage Loan, (f) have the same lien priority as that of the removed
Mortgage Loan and (g) be, in the reasonable determination of the Purchaser, in
material compliance with the representations and warranties contained in this
Agreement and described in Section 3.02 as of the date of substitution.
The Seller shall amend the related Mortgage Loan Schedule to
reflect the withdrawal of the removed Mortgage Loan from this Agreement and the
substitution of such substitute Mortgage Loan therefor. Upon such amendment,
the Purchaser shall review the Mortgage File delivered to it relating to the
substitute Mortgage Loan. The Monthly Payment on a substitute Mortgage Loan due
on the Due Date in the month of substitution shall be the property of the
Seller and the Monthly Payment on the Defective Mortgage Loan for which the
substitution is made due on the such date shall be the property of the
Purchaser.
It is understood and agreed that the obligation of the Seller set
forth in this Section 3.03 to cure, repurchase or substitute for a defective
Mortgage Loan, and to indemnify Purchaser pursuant to Section 7.01, constitutes
the sole remedies of the Purchaser respecting a breach of the foregoing
representations and warranties. If the Seller fails to repurchase or substitute
for a defective Mortgage Loan in accordance with this Section 3.03, or fails to
cure a defective Mortgage Loan to Purchaser's reasonable satisfaction in
accordance with this Section 3.03, or to indemnify Purchaser pursuant to
Section 7.01, that failure shall, upon compliance by the Purchaser with the
next to the last paragraph of this Section 3.03, be an Event of Default and the
Purchaser shall be entitled to pursue all available remedies. No provision of
this paragraph shall affect the rights of the Purchaser to terminate this
Agreement for cause, as set forth in Sections 8.01 and 9.01.
Any cause of action against the Seller relating to or arising out
of the breach of any representations and warranties made in Sections 3.01 and
3.02 shall accrue as to any Mortgage Loan upon (i) the earlier of discovery of
such breach by the Seller or notice thereof by the Purchaser to the Seller,
(ii) failure by the Seller to cure such breach or repurchase such Mortgage Loan
as specified above, and (iii) demand upon the Seller by the Purchaser for
compliance with this Agreement.
In the event that any Mortgage Loan is held by a REMIC,
notwithstanding any contrary provision of this Agreement, with respect to any
Mortgage Loan that is not in default or as to which no default is imminent,
Purchaser may, in connection with any repurchase or substitution of a Defective
Mortgage Loan pursuant to this Section 3.03, require that the Seller deliver,
at the Seller's expense, an Opinion of Counsel to the effect that such
repurchase or substitution will not (i) result in the imposition of taxes on
"prohibited transactions" of such REMIC (as defined in Section 860F of the
Code) or otherwise subject the REMIC to tax, or (ii) cause the REMIC to fail to
qualify as a REMIC at any time.
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Section 3.04. Purchase Price Protection.
With respect to any Mortgage Loan that prepays in full during the
first month following the related Closing Date, the Seller shall reimburse the
Purchaser the amount (if any) by which the Purchase Price paid by the Purchaser
to the Seller exceeded 100% of the outstanding scheduled principal balance of
the Mortgage Loan as of the related Cut-off Date, within thirty (30) days of
such payoff. Upon any assignment of a Mortgage Loan and/or this Agreement, the
Purchaser may at its option retain its rights under this Section 3.04
notwithstanding such assignment.
Section 3.05. Repurchase of Mortgage Loans With First Payment
Defaults.
If a Mortgagor is forty-five (45) days or more delinquent with
respect to the first Monthly Payment due to the Purchaser on the related
Mortgage Loan immediately following the related Closing Date, the Seller, at
the Purchaser's option, shall promptly repurchase such Mortgage Loan from the
Purchaser within thirty (30) calendar days' of receipt of written notice from
the Purchaser. Any repurchase pursuant to this Section 3.04 shall be effected
in accordance with the procedures set forth in Section 3.03 hereof, however,
any such repurchase shall be made at the Repurchase Price.
ARTICLE IV
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
Section 4.01. The Seller to Act as Servicer.
The Seller, as independent contract servicer, shall service and
administer the Mortgage Loans in accordance with this Agreement and with
Accepted Servicing Practices, and shall have full power and authority, acting
alone or through subservicers or agents, 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
and with Accepted Servicing Practices. The Seller shall service and administer
the Mortgage Loans through the exercise of the same care that it customarily
employs for its own account. The Seller may perform its servicing
responsibilities through agents or independent contractors, but shall not
thereby be released from any of its responsibilities hereunder. Notwithstanding
anything to the contrary, the Seller may delegate any of its duties under this
Agreement to one or more of its Affiliates without regard to any of the
requirements of this Section; provided, however, that the Seller shall not be
released from any of its responsibilities hereunder by virtue of such
delegation.
Except as set forth in this Agreement, the Seller shall service the
Mortgage Loans in compliance with the servicing provisions of the Xxxxxx Xxx
Guides (special servicing option), which include, but are not limited to,
provisions regarding the liquidation of Mortgage Loans, the collection of
Mortgage Loan payments, the payment of taxes, insurance and other charges, the
maintenance of hazard insurance with a Qualified Insurer, the maintenance of
mortgage impairment insurance, the maintenance of fidelity bond and errors and
omissions insurance, inspections, the restoration of Mortgaged Property, the
maintenance of Primary Mortgage Insurance Policies, insurance claims, the
title, management of REO Property, permitted
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withdrawals with respect to REO Property, liquidation reports, and reports of
foreclosures and abandonments of Mortgaged Property, the transfer of Mortgaged
Property, the release of Mortgage Files, annual statements, and examination of
records and facilities. In the event of any conflict, inconsistency or
discrepancy between any of the servicing provisions of this Agreement and any
of the servicing provisions of the Xxxxxx Mae Guides, the provisions of this
Agreement shall control and be binding upon the Purchaser and the Seller.
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
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 unless the Mortgagor is in default with respect to the
Mortgage Loan, or such default is, in the judgment of the Seller, reasonably
foreseeable, or the Seller has obtained the prior written consent of the
Purchaser, the Seller shall not permit any modification with respect to any
Mortgage Loan that would change the Mortgage Interest Rate, forgive the payment
of any principal or interest, reduce or increase the outstanding principal
balance (except for actual payments of principal), make any future advances or
extend the final maturity date, as the case may be, with respect to such
Mortgage Loan. In the event of any such modification that permits the deferral
of interest or principal payments on any Mortgage Loan, the Seller shall, on
the Business Day immediately preceding the Remittance Date in any month in
which any such principal or interest payment has been deferred, deposit in the
Custodial Account from its own funds, in accordance with Section 4.04, the
difference between (a) the otherwise scheduled Monthly Payment and (b) the
amount paid by the Mortgagor. The Seller shall be entitled to reimbursement for
such advances to the same extent as for all other advances pursuant to Section
4.05. Without limiting the generality of the foregoing, the Seller shall
continue, and is hereby authorized and empowered by the Purchaser when the
Seller believes it appropriate and reasonable in its best judgment, to prepare,
execute and deliver, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties and
to institute foreclosure proceedings or obtain a deed-in-lieu of foreclosure so
as to convert the ownership of such properties, and to hold or cause to be held
title to such properties, on behalf of the Purchaser pursuant to the provisions
of Section 4.13. Notwithstanding anything herein to the contrary, the Seller
may not enter into a forbearance agreement or similar arrangement with respect
to any Mortgage Loan which runs more than 180 days after the first delinquent
Due Date without the prior consent of the Purchaser. Any such agreement shall
be approved by any applicable holder of a Primary Mortgage Insurance Policy, if
required.
The Seller is authorized and empowered by the Purchaser, in its own
name, when the Seller believes it appropriate in its reasonable judgment to
register any Mortgage Loan on the MERS(R) System, or cause the removal from the
registration of any Mortgage Loan on the MERS(R) System, to execute and
deliver, on behalf of the Purchaser, any and all instruments of assignment and
other comparable instruments with respect to such assignment or re-recording of
a Mortgage in the name of MERS, solely as nominee for the Purchaser and its
successors and assigns.
Unless a different time period is stated in this Agreement, the
Purchaser shall be deemed to have given consent in connection with a particular
matter if the Purchaser does not
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affirmatively grant or deny consent within ten (10) Business Days from the date
the Purchaser receives a written request for consent for such matter from the
Seller.
The Seller shall accurately and fully report its borrower credit
files related to the Mortgage Loans to Equifax, Transunion and Experian in a
timely manner.
Section 4.02. Collection of Mortgage Loan Payments.
Continuously from the date hereof until the date each Mortgage Loan
ceases to be serviced subject to this Agreement, the Seller will 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, Accepted Servicing Practices, and the terms and
provisions of related Primary Mortgage Insurance Policy, follow such collection
procedures as it follows with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Further, the Seller will take
special care in ascertaining and estimating annual escrow payments, and all
other charges that, as provided in the Mortgage, will become due and payable,
so that the installments payable by the Mortgagors will be sufficient to pay
such charges as and when they become due and payable.
Section 4.03. Realization Upon Defaulted Mortgage Loans.
The Seller shall use commercially reasonable efforts, consistent
with the procedures that the Seller would use in servicing loans for its own
account, Accepted Servicing Practices, any Primary Mortgage Insurance and the
best interest of Purchaser, to foreclose upon or otherwise comparably convert
the ownership of properties securing such of the Mortgage Loans as come into
and continue in default and as to which no satisfactory arrangements can be
made for collection of delinquent payments pursuant to Section 4.01.
Foreclosure or comparable proceedings shall be initiated pursuant to Xxxxxx Xxx
guidelines and applicable state law with respect to Mortgaged Properties for
which no satisfactory arrangements can be made for collection of delinquent
payments. The Seller shall use its best efforts to realize upon defaulted
Mortgage Loans in such 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 the Mortgaged Property shall have suffered damage, the Seller
shall not be required to expend its own funds toward the restoration of such
property unless it shall determine in its discretion (i) that such restoration
will increase the proceeds of liquidation of the related Mortgage Loan to the
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 4.05. The Seller shall notify the Purchaser in writing (which may be by
electronic mail) of the commencement of foreclosure proceedings. The Seller
shall be responsible for all costs and expenses incurred by it in any such
proceedings or functions; provided, however, that it shall be entitled to
reimbursement thereof from the related property, as contemplated in Section
4.05. Notwithstanding anything to the contrary contained herein, in connection
with a foreclosure or acceptance of a deed in lieu of foreclosure, in the event
the Seller has reasonable cause to believe that a Mortgaged Property is
contaminated by hazardous or toxic substances or wastes, or if the Purchaser
otherwise requests an environmental inspection or review of such Mortgaged
Property, such an inspection or review is to be conducted by a
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qualified inspector at the Purchaser's expense. Upon completion of the
inspection, the Seller shall promptly provide the Purchaser with a written
report of the environmental inspection. After reviewing the environmental
inspection report, the Purchaser shall determine how the Seller shall proceed
with respect to the Mortgaged Property.
In the event that a Mortgage Loan becomes part of a REMIC, and
becomes REO Property, such property shall be disposed of by the Seller, with
the consent of the Purchaser as required pursuant to this Agreement, within
three (3) years after becoming an REO Property, unless the Seller provides to
the trustee under such REMIC an opinion of counsel to the effect that the
holding of such REO Property subsequent to three years after its becoming REO
Property, will not result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code, or cause the transaction
to fail to qualify as a REMIC at any time that certificates are outstanding.
The Seller shall manage, conserve, protect and operate each such REO Property
for the certificateholders solely for the purpose of its prompt disposition and
sale in a manner which does not cause such property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code, or
any "net income from foreclosure property" which is subject to taxation under
the REMIC provisions of the Code. Pursuant to its efforts to sell such
property, the Seller shall either itself or through an agent selected by the
Seller, protect and conserve such property in the same manner and to such an
extent as is customary in the locality where such property is located.
Additionally, the Seller shall provide the Purchaser or any master servicer
with information sufficient to perform the tax withholding and reporting
related to Sections 1445 and 6050J of the Code.
Section 4.04. 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 establish and maintain one or more Custodial
Accounts with a commercial bank, a savings bank or a savings and loan
association (which may be a depository Affiliate of the Seller) which meets the
guidelines set forth by Xxxxxx Mae or Xxxxxxx Mac as an eligible depository
institution for custodial accounts. Each Custodial Account shall be an Eligible
Account. Funds deposited in a Custodial Account may be drawn on in accordance
with Section 4.05. The creation of any Custodial Account shall be evidenced by
a letter agreement in the form shown in Exhibit B hereto. The original of such
letter agreement shall be furnished to the Purchaser on the initial Closing
Date, and upon the request of any subsequent purchaser.
The Seller shall deposit in the Custodial Account on a daily basis,
within one (1) Business Day of receipt thereof, and retain therein the
following payments and collections received or made 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, including Principal
Prepayments, on the Mortgage Loans;
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(ii) all payments on account of interest on the Mortgage
Loans adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) any amounts required to be deposited by the Seller in
connection with any REO Property pursuant to Section 4.13;
(v) all Insurance Proceeds including amounts required to be
deposited pursuant to Sections 4.08, 4.10 and 4.11, 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 Accepted Servicing Practices, the loan
documents or applicable law;
(vi) all Condemnation Proceeds affecting any Mortgaged
Property which are not released to the Mortgagor in accordance with
the Seller's normal servicing procedures, the loan documents or
applicable law;
(vii) any Monthly Advances;
(viii) Compensating Interest, if any, for the month of
distribution. Such deposit shall be made from the Seller's own
funds, without reimbursement therefor;
(ix) all proceeds of any Mortgage Loan repurchased in
accordance with Sections 3.03;
(x) any amounts required to be deposited by the Seller
pursuant to Section 4.11 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;
(xi) any amounts required to be deposited in the Custodial
Account pursuant to Section 4.01 or Section 6.02; and
(xii) an amount from the Buydown Account that when added to
the Mortgagor's payment will equal the full monthly amount due
under the related Mortgage Note.
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,
assumption fees and other ancillary fees, to the extent permitted by Section
6.01, need not be deposited by the Seller in the Custodial Account.
The Seller may invest the funds in the Custodial Account in
Eligible Investments designated in the name of the Seller for the benefit of
the Seller, which shall mature not later than the Business Day next preceding
the Remittance Date next following the date of such investment (except that (A)
any investment in the Eligible Institution with which the Custodial
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Account is maintained may mature on such Remittance Date and (B) any other
investment may mature on such Remittance Date if the Seller shall advance funds
on such Remittance Date, pending receipt thereof to the extent necessary to
make distributions to the Purchaser) and shall not be sold or disposed of prior
to maturity. Notwithstanding anything to the contrary herein and above, all
income and gain realized from any such investment shall be for the benefit of
the Seller and shall be subject to withdrawal by the Seller from the Custodial
Account pursuant to Section 4.05(iv). The amount of any losses incurred in
respect of any such investments shall be deposited in the Custodial Account by
the Seller out of its own funds immediately as realized.
Section 4.05. 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 payments to the Purchaser in the amounts and in
the manner provided for in Section 5.01;
(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 Fee) of
principal and/or interest 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 the
Purchaser, except that, where the Seller is required to repurchase
a Mortgage Loan, pursuant to Section 3.03, the Seller's right to
such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to such Section and all
other amounts required to be paid to the Purchaser with respect to
such Mortgage Loan;
(iii) to reimburse itself for unreimbursed Servicing Advances
and any unpaid Servicing Fees, the Seller's right to reimburse
itself pursuant to this subclause (iii) with respect to any
Mortgage Loan being limited to related proceeds from Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds and REO
Disposition Proceeds;
(iv) to pay to itself as part of its servicing compensation:
(a) any interest earned on funds or any investment earnings in the
Custodial Account net of any losses on such investments (all such
amounts to be withdrawn monthly not later than each Remittance
Date), and (b) to the extent not otherwise retained, the Servicing
Fee from that portion of any payment or recovery as to interest
with respect to a particular Mortgage Loan;
(v) to pay to itself with respect to each Mortgage Loan that
has been repurchased pursuant to Section 3.03 all amounts received
thereon and not distributed as of the date on which the related
Repurchase Price is determined;
(vi) to reimburse itself for unreimbursed Monthly Advances
and Servicing Advances to the extent not fully reimbursed pursuant
to Section 4.05(ii) or (iii) above;
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(vii) to transfer funds to another Eligible Account in
accordance with Section 4.09 hereof;
(viii) to remove funds inadvertently placed in the Custodial
Account by the Seller or for which amounts previously deposited are
returned unpaid by the related Mortgagor's banking institution; and
(ix) to clear and terminate the Custodial Account upon the
termination of this Agreement.
Section 4.06. Establishment of Escrow Accounts; Deposits in
Accounts.
The Seller shall segregate and hold all funds collected and
received pursuant to each Mortgage Loan which constitute Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more Escrow Accounts. Each Escrow Account shall
be an Eligible Account. Funds deposited in the Escrow Account may be drawn on
by the Seller in accordance with Section 4.07. The creation of any Escrow
Account shall be evidenced by a letter agreement in the form shown in Exhibit
C. The original of such letter agreement shall be furnished to the Purchaser on
the initial Closing Date, and upon request to any subsequent purchaser.
The Seller shall deposit in the Escrow Account or Accounts on a
daily basis, within two (2) Business Days of receipt thereof, and retain
therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such
items as required under the terms of this Agreement;
(ii) all Insurance Proceeds which are to be applied to the
restoration or repair of any Mortgaged Property; and
(iii) all Servicing Advances for Mortgagors whose Escrow
Payments are insufficient to cover escrow disbursements.
The Seller shall make withdrawals from the Escrow Account 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 4.07. The
Seller shall be entitled to retain any interest paid on funds deposited in an
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 such Escrow Account is non-interest bearing or that
interest paid thereon is insufficient for such purposes.
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Section 4.07. Permitted Withdrawals From the Escrow Account.
Withdrawals from the Escrow Account may be made by the Seller only:
(i) to effect timely payments of ground rents, taxes,
assessments, water rates, Primary Mortgage Insurance Policy
premiums, if applicable, fire and hazard insurance premiums,
condominium assessments and comparable items for the related
Mortgage;
(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;
(vii) to clear and terminate the Escrow Account on the
termination of this Agreement;
(viii) to pay to the Mortgagors or other parties Insurance
Proceeds deposited in accordance with Section 4.06;
(ix) to remove funds inadvertently placed in the Escrow
Account by the Seller or for which amounts previously deposited are
returned unpaid by the related Mortgagor's banking institution;
(x) to clear and terminate the Escrow Account upon the
termination of this Agreement; and
(xi) to remit to the Purchaser payments on account of Buydown
Funds, as applicable.
Section 4.08. Payment of Taxes, Insurance and Charges; Maintenance
of Primary Mortgage Insurance; 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 which are or may become a lien upon the Mortgaged
Property and the status of primary mortgage insurance premiums (if any) and
fire and hazard insurance coverage and shall obtain, from time to time, all
51
bills for the payment of such charges, including renewal premiums and shall
effect payment thereof prior to the applicable penalty or termination date and
at a time appropriate for securing maximum discounts allowable, employing for
such purpose deposits of the Mortgagor in the Escrow Account which shall have
been estimated and accumulated by the Seller in amounts sufficient for such
purposes, as allowed under the terms of the Mortgage or applicable law. To the
extent that the Mortgage does not provide for Escrow Payments, the 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 subject to its ability to recover such Servicing Advances
pursuant to Sections 4.05(ii), (iii) and (vi). Notwithstanding the foregoing,
if the Seller reasonably determines that any such Servicing Advance would not
be recoverable from amounts collected on the related Mortgage Loan, the Seller
shall have no obligation to make such Servicing Advance. Any such determination
shall be evidenced by an Officer's Certificate delivered to the Purchaser
indicating the reasons therefor.
The Seller will maintain in full force and effect Primary Mortgage
Insurance Policies issued by a Qualified Insurer with respect to each first
lien Mortgage Loan for which such coverage is herein required. Such coverage
will be maintained until the Loan-to-Value ratio of the related Mortgage Loan
is reduced to the amount for which Xxxxxx Mae no longer requires such insurance
to be maintained. The Seller will not cancel or refuse to renew any Primary
Mortgage Insurance Policy in effect on the related Closing Date that is
required to be kept in force under this Agreement unless a replacement Primary
Mortgage Insurance Policy for such canceled or non-renewed policy is obtained
from and maintained with a Qualified Insurer. The Seller shall not take any
action which would result in non-coverage under any applicable Primary Mortgage
Insurance Policy of any loss which, 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 6.01, the
Seller shall promptly notify the insurer under the related Primary Mortgage
Insurance Policy, if any, of such assumption or substitution of liability in
accordance with the terms of such policy and shall take all actions which may
be required by such insurer as a condition to the continuation of coverage
under the Primary Mortgage Insurance Policy. If such Primary Mortgage Insurance
Policy is terminated as a result of such assumption or substitution of
liability, the Seller shall obtain a replacement Primary Mortgage 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 Mortgage Insurance Policy in a timely fashion in
accordance with the terms of such Primary Mortgage Insurance Policy and, in
this regard, to take such action as shall be necessary to permit recovery under
any Primary Mortgage Insurance Policy respecting a defaulted first lien
Mortgage Loan. Pursuant to Section 4.04, any amounts collected by the Seller
under any Primary Mortgage Insurance Policy shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 4.05.
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Section 4.09. Transfer of Accounts.
The Seller may transfer a Custodial Account, Buydown Account or an
Escrow Account to a different Eligible Account from time to time. Such transfer
shall be made only upon providing notice of the transfer to the Purchaser.
Section 4.10. Maintenance of Hazard Insurance.
The Seller shall cause to be maintained for each Mortgage Loan fire
and hazard insurance with extended coverage as is acceptable to Xxxxxx Xxx or
Xxxxxxx Mac and customary in the area where the Mortgaged Property is located
in an amount which is equal to the lesser of (i) the maximum insurable value of
the improvements securing such Mortgage Loan and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan, and (b) an amount such that
the proceeds thereof shall be sufficient to prevent the Mortgagor and/or the
mortgagee from becoming a co-insurer. If required by the Flood Disaster
Protection Act of 1973, as amended, each Mortgage Loan shall be covered by a
flood insurance policy meeting the requirements of the current guidelines of
the Federal Insurance Administration in effect with an insurance carrier
acceptable to Xxxxxx Mae or Xxxxxxx Mac, in an amount representing coverage not
less than the least of (i) the outstanding principal balance of the Mortgage
Loan, (ii) the maximum insurable value of the improvements securing such
Mortgage Loan and (iii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. If at any time
during the term of the Mortgage Loan, the Seller determines in accordance with
applicable law and pursuant to the Xxxxxx Mae Guides that a Mortgaged Property
is located in a special flood hazard area and is not covered by flood insurance
or is covered in an amount less than the amount required by the Flood Disaster
Protection Act of 1973, as amended, the Seller shall notify the related
Mortgagor that the Mortgagor must obtain such flood insurance coverage, and if
the related Mortgagor fails to obtain the required flood insurance coverage
within forty-five (45) days after such notification, the Seller shall
immediately force place the required flood insurance on the Mortgagor's behalf.
To the extent the payment of the related premiums will not, in the Seller's
reasonable determination, constitute non-recoverable Servicing Advances, the
Seller shall also maintain on each REO Property, fire and hazard insurance with
extended coverage in an amount which is at least equal to the maximum insurable
value of the improvements which are a part of such property, and, to the extent
required and available under the Flood Disaster Protection Act of 1973, as
amended, flood insurance in an amount as provided above. Any amounts collected
by the 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
Accepted Servicing Practices, shall be deposited in the Custodial Account,
subject to withdrawal pursuant to Section 4.05. It is understood and agreed
that no other additional insurance need be required by the Seller or maintained
on property acquired in respect of the Mortgage Loan, other than pursuant to
this Agreement, the Xxxxxx Xxx Guides or such applicable state or federal laws
and regulations as shall at any time be in force and as shall require such
additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Seller and its successors and/or
assigns and shall provide for at least thirty (30) days prior written notice of
any cancellation, reduction in the amount or material change in coverage to the
Seller. The Seller shall not interfere with the Mortgagor's freedom of choice
in selecting either his
53
insurance carrier or agent, provided, however, that the Seller shall not accept
any such insurance policies from insurance companies unless such companies are
Qualified Insurers.
Section 4.11. Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Seller (or an Affiliate of the Seller) shall
obtain and maintain a blanket policy issued by an issuer acceptable to Xxxxxx
Mae or Xxxxxxx Mac insuring against hazard losses on all of the Mortgage Loans,
then, to the extent such policy provides coverage in an amount equal to the
amount required pursuant to Section 4.10 and otherwise complies with all other
requirements of Section 4.10, it shall conclusively be deemed to have satisfied
its obligations as set forth in Section 4.10, 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 4.10, and
there shall have been a loss which would have been covered by such policy,
deposit in the Custodial Account the amount not otherwise payable under the
blanket policy because of such deductible clause. In connection with its
activities as servicer of the Mortgage Loans, the 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 shall use commercially reasonable efforts to
obtain a statement from the insurer thereunder that such policy shall in no
event be terminated or materially modified without thirty (30) days' prior
written notice to the Purchaser.
Section 4.12. Maintenance of Fidelity Bond and 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 on all officers, employees or other persons acting in any
capacity with regard to the Mortgage Loans to handle funds, money, documents
and papers relating to the Mortgage Loans. The Fidelity Bond shall be in the
form of a mortgage banker's blanket bond and shall protect and insure the
Seller against losses, including forgery, theft, embezzlement and fraud of such
persons. The errors and omissions insurance shall protect and insure the Seller
against losses arising out of errors and omissions and negligent acts of such
persons. Such errors and omissions insurance shall also protect and insure the
Seller against losses in connection with the failure to maintain any insurance
policies required pursuant to this Agreement and the release or satisfaction of
a Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.12 requiring the Fidelity Bond
or 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 Xxxxxx Mae in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac in the Xxxxxxx Mac Guides. The Seller shall deliver to the
Purchaser a certificate from the surety and the insurer as to the existence of
the Fidelity Bond and errors and omissions insurance policy and shall obtain a
statement from the surety and the insurer that such Fidelity Bond or insurance
policy shall in no event be terminated or materially modified without thirty
(30) days' prior written notice to the Purchaser. Upon request by the
Purchaser, the Seller shall provide the Purchaser with an insurance certificate
certifying coverage under this Section 4.12, and will
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provide an update to such certificate upon request, or upon renewal or material
modification of coverage.
Section 4.13. Title, Management and Disposition of REO Property.
In the event that title to the Mortgaged Property is acquired in
foreclosure, by deed in lieu of foreclosure or other method resulting in full
or partial satisfaction of the related Mortgage, the deed or certificate of
sale shall be taken in the name of the Purchaser or its designee, or in the
event the Purchaser or its designee 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, at the expense of the Purchaser, 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 notify the Purchaser in accordance with the Xxxxxx
Mae Guides of each acquisition of REO Property upon such acquisition, and
thereafter assume the responsibility for marketing such REO Property in
accordance with Accepted Servicing Practices. Thereafter, the Seller shall
continue to provide certain administrative services to the Purchaser relating
to such REO Property as set forth in this Section 4.13.
The Seller shall, either itself or through an agent selected by the
Seller, and in accordance with the Xxxxxx Xxx Guides manage, conserve, protect
and operate each REO Property in the same manner that it manages, conserves,
protects and operates other foreclosed property for its own account, and in the
same manner that similar property in the same locality as the REO Property is
managed. 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 or more frequently as required by the
circumstances. The Seller shall make or cause to be made a written report of
each such inspection. Such reports shall be retained in the Servicing File.
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 three (3) years after title has been taken to such REO Property, unless
the Seller determines, and gives an appropriate notice to the Purchaser to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a longer period than three (3) years is permitted under the
foregoing sentence and is necessary to sell any REO Property, the Seller shall
report monthly to the Purchaser as to the progress being made in selling such
REO Property. 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 shall be entitled to immediate reimbursement from
the Purchaser for any related unreimbursed Servicing Advances. The disposition
of REO Property 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 interests of the
Purchaser. The Seller shall update the Purchaser from time-to-time as to the
status of each REO Property.
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Section 4.14. Notification of Maturity Date.
With respect to each Mortgage Loan, the Seller shall execute and
deliver to the Mortgagor any and all necessary notices required under
applicable law and the terms of the related Mortgage Note and Mortgage
regarding the maturity date if required under applicable law.
Section 4.15. Establishment of and Deposits to Buydown Account.
(a) The Seller shall segregate and hold all Buydown Funds collected
and received pursuant to the Buydown Loans separate and apart from any of its
own funds and general assets and shall establish and maintain one or more
Buydown Accounts, in the form of time deposit or demand accounts, titled
"Wachovia Mortgage Corporation, in trust for the Purchaser, its successors or
assigns, and/or subsequent purchasers of Residential Mortgage Loans, and
various Mortgagors." The Buydown Accounts shall be established with an Eligible
Account, in a manner which shall provide maximum available insurance
thereunder. Upon request of the Purchaser and within ten (10) days thereof, the
Seller shall provide the Purchaser with written confirmation of the existence
of such Buydown Account. Funds deposited in the Buydown Account may be drawn on
by the Seller in accordance with this Section 4.15.
(b) The Seller shall, from time to time, withdraw funds from the
Buydown Account for the following purposes:
(i) on or prior to each Remittance Date, to deposit in the
Custodial Account in the amounts and in the manner provided for in
Section 4.04(xi);
(ii) to transfer funds to another Eligible Account in
accordance with Section 4.09 hereof;
(iii) to withdraw funds deposited in error; and
(iv) to clear and terminate the Buydown Account upon the
termination of this Agreement.
(c) Notwithstanding anything to the contrary elsewhere in this
Agreement, the Seller may employ the Escrow Account as the Buydown Account to
the extent that the Seller can separately identify any Buydown Funds deposited
therein.
If the Mortgagor on a Buydown Mortgage Loan defaults on such Mortgage Loan
during the Buydown Period and the Mortgaged Property securing such Buydown
Mortgage Loan is sold in the liquidation thereof (either by the Seller or the
insurer under any related Primary Mortgage Insurance Policy) the Seller shall,
on the Remittance Date following the date upon which Liquidation Proceeds or
REO Disposition proceeds are received with respect to any such Buydown Mortgage
Loan, distribute to the Purchaser all remaining Buydown Funds for such Mortgage
Loan then remaining in the Buydown Account. Pursuant to the terms of each
Buydown Agreement, any amounts distributed to the Purchaser in accordance with
the preceding sentence will be applied to reduce the outstanding principal
balance of the related Buydown Mortgage Loan. If a Mortgagor on a Buydown
Mortgage Loan prepays such Mortgage Loan in
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it entirety during the related Buydown Period, the Seller shall be required to
withdraw from the Buydown Account any Buydown Funds remaining in the Buydown
Account with respect to such Buydown Mortgage Loan in accordance with the
related Buydown Agreement. If a principal prepayment by a Mortgagor on a
Buydown Mortgage Loan during the related Buydown Period, together with any
Buydown Funds then remaining in the Buydown Account related to such Buydown
Mortgage Loan, would result in a Principal Prepayment of the entire unpaid
principal balance of the Buydown Mortgage Loan, the Seller shall distribute to
the Purchaser on the Remittance Date occurring in the month immediately
succeeding the month in which such Principal Prepayment is received, all
Buydown Funds related to such Mortgage Loan so remaining in the Buydown
Account, together with any amounts required to be deposited into the Custodial
Account.
ARTICLE V
PAYMENTS TO THE PURCHASER
Section 5.01. Distributions.
On each Remittance Date, the Seller shall distribute by wire
transfer to the Purchaser (i) 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 4.05,
plus (ii) all Monthly Advances, if any, which the Seller is obligated to
distribute pursuant to Section 5.03, plus (iii) all payments in respect of
Compensating Interest for such Remittance Date required to be deposited in the
Custodial Account pursuant to Section 4.04(viii), minus (iv) any amounts
attributable to Monthly Payments collected but due on a Due Date or Dates
subsequent to the preceding Determination Date, which amounts shall be remitted
on the Remittance Date next succeeding the Due Period for such amounts, (v)
minus any amounts attributable to Buydown Funds relating to a future Due Period
being held in the Custodial Account, which amounts shall be remitted on the
Remittance Date next succeeding the Due Period for such amounts, and (vi) any
Principal Prepayments received during the month of such Remittance Date, which
amounts shall be remitted on the next succeeding Remittance Date.
With respect to any remittance received by the Purchaser after the
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 Prime Rate, adjusted as of the date of each change,
plus two percentage points, but in no event greater than the maximum amount
permitted by applicable law. Such interest shall be deposited in the Custodial
Account by the Seller on the date such late payment is made and shall cover the
period commencing with the day following the second Business Day on which such
payment was due and ending with the Business Day on which such payment is made,
both inclusive. Such interest shall be remitted along with the distribution
payable on the next succeeding Remittance Date. 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 by the Seller.
Section 5.02. Statements to the Purchaser.
The Seller shall furnish to the Purchaser an individual loan
accounting report, as of the last Business Day of each month, in the Seller's
assigned loan number order to document
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Mortgage Loan payment activity on an individual Mortgage Loan basis. With
respect to each month, the corresponding individual loan accounting report
shall be received by the Purchaser no later than the fifth (5th) Business Day
of the following month in a format mutually agreed upon by both the Purchaser
and the Seller and in hard copy, which report shall contain the following (or
such other information as is mutually agreed upon by the Seller and the
Purchaser):
(i) with respect to each Monthly Payment, the amount of such
remittance allocable to principal (including a separate breakdown
of any Principal Prepayment, including the date of such prepayment,
and any Prepayment Penalties or premiums, along with a detailed
report of interest on principal prepayment amounts remitted in
accordance with Section 4.04);
(ii) with respect to each Monthly Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by the
Seller during the prior collection period;
(iv) the aggregate Scheduled Principal Balance of the
Mortgage Loans;
(v) the aggregate of any expenses reimbursed to the Seller
during the prior distribution period pursuant to Section 4.05;
(vi) the number and aggregate outstanding principal balances
of Mortgage Loans (a) delinquent (1) 30 to 59 days, (2) 60 to 89
days, and (3) 90 days or more; (b) as to which foreclosure has
commenced; and (c) as to which REO Property has been acquired; and
(vii) the amount of any Monthly Advances.
The Seller shall also provide a monthly servicing report, sorted in
the Purchaser's assigned loan number order, in the form of Alltel reports P139,
S214, S215 and S50Y and Fidelity report P-4DL (or in such other forms as the
Purchaser and the Seller may agree), with each such report.
The Seller shall prepare and file any and all information
statements or other filings required to be delivered to any governmental taxing
authority or to the 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 the Purchaser may reasonably request from time to time.
In addition, not more than sixty (60) days after the end of each
calendar year, the Seller shall furnish to each Person who was a Purchaser at
any time during such calendar year an annual statement in accordance with the
requirements of applicable federal income tax law as to the aggregate of
remittances for the applicable portion of such year.
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Section 5.03. Monthly Advances by the Seller.
Not later than the close of business on the Business Day preceding
each Remittance Date, the Seller shall deposit in the Custodial Account an
amount equal to all Monthly Payments, whether or not deferred pursuant to
Section 4.01, which were due on a Mortgage Loan on the immediately preceding
Due Date and delinquent at the close of business on the related Determination
Date.
The Seller's obligation to make such Monthly Advances as to any
Mortgage Loan will continue through the earlier of: (i) the date of the
termination or resignation, as applicable, of the Seller pursuant to Section
7.04, 8.01 or 9.01 or (ii) the date of final disposition and liquidation of the
related Mortgage Loan or any Mortgaged Property acquired through foreclosure or
a conveyance in lieu of foreclosure, unless the Seller reasonably believes such
advance to be non-recoverable from proceeds of the related Mortgage Loan. In
such event, the Seller shall deliver to the Purchaser an Officer's Certificate
of the Seller to the effect that an officer of the Seller has reviewed the
related Servicing File and has made the reasonable determination that any
additional advances are non-recoverable from proceeds of the related Mortgage
Loan.
Section 5.04. 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. The Seller shall also provide reports on the status of
REO Property containing such information as the Purchaser may reasonably
require.
ARTICLE VI
GENERAL SERVICING PROCEDURES
Section 6.01. 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 to the extent permitted by law; provided, however, that
the Seller shall not exercise any such rights if prohibited by law or the terms
of the Mortgage Note from doing so or if the exercise of such rights would
impair or threaten to impair any recovery under the related Primary Mortgage
Insurance Policy, if any. If the Seller reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Seller will enter into
an assumption agreement with the person to whom the Mortgaged Property has been
conveyed or is proposed to be conveyed, pursuant to which such person becomes
liable under the Mortgage Note and, to the extent permitted by applicable state
law, the Mortgagor remains liable thereon. If the Seller is prohibited under
applicable law from (a) entering into an assumption agreement with the Person
to whom the Mortgaged Property has been conveyed or is proposed to be conveyed
or (b) requiring the original Mortgagor to remain liable under the
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Mortgage Note, the Seller, with the prior consent of the primary mortgage
insurer, if any, is authorized to enter into a substitution of liability
agreement with the person to whom the Mortgaged Property has been conveyed or
is proposed to be conveyed pursuant to which the original Mortgagor is released
from liability and such Person is substituted as mortgagor and becomes liable
under the related Mortgage Note. Any such substitution of liability agreement
shall be in lieu of an assumption agreement.
In connection with any such assumption or substitution of
liability, the Seller shall follow the underwriting practices and procedures of
the Xxxxxx Mae Guides. With respect to an assumption or substitution of
liability, the Mortgage Interest Rate borne by the related Mortgage Note and
the amount of the Monthly Payment may not be changed. If the credit of the
proposed transferee does not meet such underwriting criteria, the Seller
diligently shall, to the extent permitted by the Mortgage or the Mortgage Note
and by applicable law, accelerate the maturity of the Mortgage Loan. 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. All fees collected
by the Seller for entering into an assumption or substitution of liability
agreement shall belong to the Seller as additional servicing compensation.
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 6.01, the term "assumption" is deemed
to also include a sale of the Mortgaged Property subject to the Mortgage that
is not accompanied by an assumption or substitution of liability agreement.
Section 6.02. Satisfaction of Mortgages and Release of Mortgage
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, 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
4.04 have been or will be so deposited, of a Servicing Officer and shall
request delivery to it of the portion of the Mortgage File held by the
Purchaser. The Purchaser shall no later than five (5) Business Days after
receipt of such certification and request, release or cause to be released to
the Seller, the related Mortgage Loan Documents and, upon its receipt of such
documents, the Seller shall promptly prepare and deliver to the Purchaser the
requisite satisfaction or release. No later than three (3) Business Days
following its receipt of such satisfaction or release, the Purchaser shall
deliver, or cause to be delivered, to the Seller the release or satisfaction
properly executed by the owner of record of the applicable Mortgage or its duly
appointed attorney in fact. If such Mortgage Loan is a MERS Mortgage Loan, the
Seller is authorized to cause the removal from the registration on the MERS
System of such Mortgage and to execute and deliver,
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on behalf of the Purchaser, any and all instruments of satisfaction or
cancellation or of partial or full release.
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 it otherwise prejudice any right the Purchaser may have under the
Mortgage Loan Documents, the Seller, upon written demand, shall remit within
five (5) Business Days to the Purchaser the then outstanding principal balance
of the related Mortgage Loan by deposit thereof in the Custodial Account.
From time to time and as appropriate for the servicing or
foreclosure of the Mortgage Loans, including for the purpose of collection
under any Primary Mortgage Insurance Policy, the Purchaser shall, upon request
of the Seller and delivery to the Purchaser of a servicing receipt signed by a
Servicing Officer, release the portion of the Mortgage File held by the
Purchaser to the Seller. Such servicing receipt shall obligate the Seller to
return such Mortgage Loan 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 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
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 6.03. Servicing Compensation.
As compensation for its services hereunder, the Seller shall be
entitled to the Servicing Fee. Additional servicing compensation in the form of
assumption fees, as provided in Section 6.01, late payment charges, interest
and investment earning on funds on deposit in the Custodial Account and Escrow
Account (to the extent provided for herein) and other ancillary income shall be
retained by the Seller to the extent 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 herein.
Section 6.04. Annual Statement as to Compliance.
Within the later of (a) seventy-five (75) days after the end of
each calendar year or (b) fifteen (15) calendar days prior to the date on which
the Purchaser or the affiliate of the Purchaser required to file an annual
report on Form 10-K in connection with any Pass-Through Transfer is required to
file such annual report on Form 10-K with the United States Securities and
Exchange Commission (the "SEC"), the Seller will deliver to the Purchaser an
Officers' Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Seller during the preceding calendar year and of
performance under this Agreement has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Seller has fulfilled all of its obligations under this Agreement
throughout such year,
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or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officers and the nature and status
thereof. The first Officer's Certificate delivered by the Seller to the
Purchaser pursuant to this Section shall be delivered on or before March 15,
2006, or such other date as may be required pursuant to the first sentence of
this Section 6.04. Copies of such statement shall be provided by the Seller to
the Purchaser upon request.
Section 6.05. Annual Independent Certified Public Accountants'
Servicing Report.
Within the later of (a) seventy-five (75) days after the end of
each calendar year or (b) fifteen (15) calendar days prior to the date on which
the Purchaser or the affiliate of the Purchaser required to file an annual
report on Form 10-K in connection with any Pass-Through Transfer is required to
file such annual report on Form 10-K with the SEC, the Seller at its expense
shall cause a firm of independent public accountants which is a member of the
American Institute of Certified Public Accountants to furnish a statement to
the Purchaser to the effect that such firm has examined certain documents and
records relating to the Seller's servicing of residential mortgage loans, and
that, on the basis of such an examination, conducted substantially in
compliance with the Uniform Single Attestation Program for Mortgage Bankers or
the Audit Guide for HUD Approved Title II Approved Mortgagees and Loan
Correspondent Programs, such firm is of the opinion that the Seller's servicing
has been conducted in compliance with such programs, except for (i) such
exceptions as such firm shall believe to be immaterial, and (ii) such other
exceptions as shall be set forth in such statement. The first statement
delivered by the Seller to the Purchaser pursuant to this Section shall be
delivered on or before March 15, 2006, or such other date as may be required
pursuant to the first sentence of this Section 6.05. Copies of such statement
shall be provided by the Seller to the Purchaser.
Section 6.06. Purchaser's Right to Examine Seller Records.
At its expense, the Purchaser shall have the right to examine and
audit upon reasonable notice to the Seller, during business hours or at such
other times as might be reasonable under applicable circumstances, any and all
of the books, records, documentation or other information of the Seller, or
held by another for the Seller or on its behalf or otherwise, which relates to
the performance or observance by the Seller of the terms, covenants or
conditions of this Agreement.
The Seller shall provide to the Purchaser and any supervisory
agents or examiners representing a state or federal governmental agency having
jurisdiction over the Purchaser, including but not limited to, OCC, OTS, FDIC
and other similar entities, access to any documentation regarding the Mortgage
Loans in the possession of the Seller which may be required by any applicable
regulations. Such access shall be afforded without charge, upon reasonable
request, during normal business hours and at the offices of the Seller, and in
accordance with the federal government, OCC, FDIC, OTS, or any other similar
regulations; provided, however, that in connection with providing such access,
the Seller shall not be required to incur any out-of-pocket costs unless
provisions have been made for the reimbursement thereof.
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Section 6.07. Seller Shall Provide Information as Reasonably
Required.
The Seller shall furnish to the Purchaser during the term of this
Agreement such periodic, special or other reports, information or documentation
as the Purchaser may reasonably request, as shall be necessary, reasonable or
appropriate in respect to the Mortgage Loans and the performance of the Seller
under this Agreement, including any reports, information or documentation
reasonably required to comply with any regulations regarding any supervisory
agents or examiners of the Purchaser; provided, that, the Seller shall not be
liable for any out-of-pocket costs with respect to the provision of such
reports, information or documentation. All such reports or information shall be
provided by and in accordance with such applicable instructions and directions
as the Purchaser may reasonably request in relation to this Agreement or the
performance of the Seller under this Agreement. The Seller agrees to execute
and deliver all such instruments and take all such action as the Purchaser,
from time to time, may reasonably request in order to effectuate the purpose
and to carry out the terms of this Agreement.
The Seller, upon reasonable advance notice, shall make reasonably
available to the Purchaser or any prospective purchaser a knowledgeable
financial or accounting officer for the purpose of answering questions and to
permit any prospective purchaser to inspect the Seller's servicing facilities
for the purpose of satisfying such prospective purchaser that the Seller has
the ability to service the Mortgage Loans as provided in this Agreement.
The Seller shall maintain with respect to each Mortgage Loan and
shall make available for inspection by the Purchaser or its designee the
related Servicing File during the time the Purchaser retains ownership of a
Mortgage Loan and thereafter in accordance with applicable laws and
regulations.
ARTICLE VII
THE SELLER
Section 7.01. Indemnification; Third Party Claims.
The Seller agrees to indemnify and hold the Purchaser, any
Successor Servicer and their respective present and former directors, officers,
employees and agents harmless from any and all claims, losses, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and any
other costs, fees and expenses (including, without limitation, any legal fees
and expenses, judgments or expenses relating to such liability, claim, loss or
damage) that such parties may sustain in any way related to the failure of the
Seller to observe and perform its duties, obligations, covenants, and
agreements and to service the Mortgage Loans in compliance with the terms of
this Agreement or as a result of the breach of a representation or warranty set
forth in Sections 3.01 or 3.02 of this Agreement. The Seller hereunder shall
immediately notify the Purchaser if a claim is made by a third party with
respect to this Agreement or a Mortgage Loan, assume (with the consent of the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Seller shall follow any written instructions received from
the Purchaser in connection with such claim. The Purchaser shall promptly
reimburse the Seller for all amounts advanced by it pursuant to the two
preceding sentences except when the claim relates to the
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failure of the Seller to service and administer the Mortgage Loans in
compliance with the terms of this Agreement, the failure of the Seller to
perform its duties and obligations pursuant to this Agreement, the breach of
representation or warranty set forth in Sections 3.01 or 3.02, or the gross
negligence, bad faith or willful misconduct of the Seller. The provisions of
this Section 7.01 shall survive termination of this Agreement and transfer of
the related servicing rights.
Section 7.02. Merger or Consolidation of the Seller.
The Seller shall 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 shall obtain and preserve its qualification to
do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
Any Person into which the Seller may be merged or consolidated
(including by means of sale or disposal of all or substantially all of the
Seller's assets), 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, and shall
be qualified and in good standing to service mortgage loans on behalf of Xxxxxx
Xxx or Xxxxxxx Mac.
Section 7.03. Limitation on Liability of the Seller and Others.
The duties and obligations of the Seller shall be determined solely
by the express provisions of this Agreement, the Seller shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Agreement and no implied covenants or obligations shall be
read into this Agreement against the Seller. 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 made in
good faith; 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 negligence, bad faith or willful misconduct, or 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 the Purchaser respecting
any matters arising hereunder. 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 reasonable opinion may involve it in any expenses or liability;
provided, however, that the Seller may 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 as is consistent with Accepted Servicing
Practices. In such event, the
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reasonable 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 be reimbursed therefor
from the Purchaser upon written demand.
Section 7.04. 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 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 11.01.
Section 7.05. 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 7.05 and except as pursuant to Section 7.02, the
Seller shall not either assign this Agreement or the servicing hereunder or
delegate its rights or duties hereunder or any portion thereof without the
prior written approval of the Purchaser, which consent may be withheld in the
Purchaser's sole discretion. Notwithstanding the foregoing, the Seller may,
without the consent of the Purchaser, retain reasonable and necessary third
party contractors to perform certain loan administration functions, including
and limited to, hazard insurance administration, tax payment and
administration, flood certification and administration and foreclosure
activities; provided, that such contractors shall perform such loan
administrative functions in a manner consistent with this Agreement; provided,
further, that the retention of such contractors by Seller shall not limit the
obligation of the Seller to service the Mortgage Loans pursuant to the terms
and conditions of this Agreement or release it from any of its obligations
hereunder.
ARTICLE VIII
DEFAULT
Section 8.01. Events of Default.
In case one or more of the following Events of Default by the
Seller shall occur and be continuing, that is to say:
(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
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(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 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 the Purchaser; 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) the Seller ceases to be approved by Xxxxxx Xxx or
Xxxxxxx Mac as a mortgage loan seller and servicer for more than
thirty (30) days; or
(vii) the Seller attempts to assign its right to servicing
compensation hereunder or the Seller attempts, without the consent
of the Purchaser, to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or
any portion thereof in a manner not permitted under this Agreement;
or
(viii) the Seller ceases to be (a) licensed to service first
lien residential mortgage loans in each jurisdiction in which a
Mortgaged Property is located and such licensing is required, and
(b) qualified to transact business in any jurisdiction where it is
currently so qualified, but only to the extent such
non-qualification materially and adversely affects the Seller's
ability to perform its obligations hereunder;
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 under
Sections 3.03 and 7.01 and at law or equity or 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 without compensating the Seller for the same. On or after the
receipt by the Seller of such written notice of termination, 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
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in the successor appointed pursuant to Section 12.01. 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
Servicing Files, and do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise, at the 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 or any REO Property.
If any of the Mortgage Loans are MERS Mortgage Loans, in connection
with the termination or resignation (as described in Section 8.04) of the
Seller hereunder, either (i) the successor servicer 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 the successor servicer either (x) 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(R) System to the successor servicer or (y) in causing MERS to
designate on the MERS(R) System the successor servicer as the servicer of such
Mortgage Loan.
Section 8.02. Waiver of Defaults.
The Purchaser may waive only by written notice 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 in writing.
ARTICLE IX
TERMINATION
Section 9.01. Termination.
The respective obligations and responsibilities of the Seller, as
servicer, shall terminate upon (a) 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); (b) 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; (c) by mutual
consent of the Seller and the Purchaser in writing; or (d) the termination of
the Seller by the Purchaser with cause under the terms of this Agreement. Upon
written request from the Purchaser in connection with any such termination, 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
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all other acts or things reasonably 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 Purchaser'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 or Escrow Account or thereafter received with respect to the Mortgage
Loans.
ARTICLE X
RECONSTITUTION OF MORTGAGE LOANS
Section 10.01 Reconstitution of Mortgage Loans.
(a) The Seller acknowledges and the Purchaser agrees that with
respect to some or all of the Mortgage Loans, the Purchaser may effect, upon
thirty (30) calendar days prior written notice to the Seller, either:
(i) one or more sales of the Mortgage Loans as whole loan
transfers (each, a "Whole Loan Transfer");
(ii) one or more Agency Transfers; and/or
(iii) one or more sales of the Mortgage Loans as public or
private pass-through transfers (each, a "Pass-Through Transfer").
(b) With respect to each Whole Loan Transfer, Agency Transfer or
Pass-Through Transfer, as the case may be, the Seller agrees:
(i) to cooperate reasonably with the Purchaser and any
prospective purchaser with respect to all reasonable requests that
do not result in an undue burden or expense of the Seller;
(ii) to execute all agreements required to be executed by the
Seller in connection with such Whole Loan Transfer, Agency Transfer
or Pass-Through Transfer provided that any such agreements be
consistent with the terms hereof and impose no greater duties,
liabilities or obligations upon the Seller than those set forth
herein and provided that the Seller is given an opportunity to
review and reasonably negotiate in good faith the content of such
documents not specifically referenced or provided for herein;
(iii) to make all the representations and warranties set
forth in Section 3.01 as of the date of the Whole Loan Transfer,
Agency Transfer or Pass-Through Transfer;
(iv) to deliver to the Purchaser (a) for inclusion in any
prospectus or other offering material such publicly available
information regarding the Seller and its financial condition and
any additional information reasonably requested by
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the Purchaser, (b) any similar nonpublic, unaudited financial
information (which the Purchaser may, at its option and its cost,
have audited by certified public accountants) and such other
information as is 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 for any
losses, costs or damages incurred by any of them directly related
to any material misstatements contained in such information or for
any omissions of material fact required to be stated therein to the
extent such information is provided by the Seller specifically for
use in a prospectus or other offering material; provided, that, the
Purchaser shall indemnify the Seller and its affiliates for any
losses, costs or damages related to any material misstatements
contained in any prospectus or other offering material other than
in such information provided by the Seller specifically for use
therein or for any omissions of material fact required to be stated
therein and (c) such statements and audit letters of reputable,
certified public accountants pertaining to information provided by
the Seller pursuant to clause (a) above as shall be reasonably
requested by the Purchaser; and
(v) to deliver to the Purchaser, and to any Person designated
by the Purchaser, opinions of counsel in a form reasonably
acceptable to the Purchaser as are customarily delivered by sellers
and servicers and reasonably determined by the Purchaser to be
necessary in connection with Whole Loan Transfers, Agency Transfers
or Pass-Through Transfers, as the case may be, it being understood
that the cost of any opinions of counsel (other than in-house
counsel) that may be required for a Whole Loan Transfer, Agency
Transfer or Pass-Through Transfer, as the case may be, shall be the
responsibility of the Purchaser.
(c) In order to facilitate compliance with Regulation AB, the
Seller and the Purchaser agree to comply with the provisions of the Regulation
AB Compliance Addendum attached hereto as Exhibit G.
The Purchaser shall reimburse the Seller for any and all
out-of-pocket expenses, costs and fees, including reasonable attorney's fees,
provided, however, that the attorney's fees for each Whole Loan Transfer,
Agency Transfer or Pass-Through Transfer shall equal a fixed-fee of $3,000,
incurred by the Seller in response to requests for information or assistance
under this Section. All Mortgage Loans not sold or transferred pursuant to a
Whole Loan Transfer, Agency Transfer or Pass-Through Transfer shall be subject
to this Agreement and shall continue to be serviced in accordance with the
terms of this Agreement and with respect thereto this Agreement shall remain in
full force and effect.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Successor to the Seller.
Prior to termination of Seller's responsibilities and duties under
this Agreement pursuant to Section 7.04, 8.01 or 9.01, 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
69
successor having the characteristics set forth in Section 7.02 hereof and which
shall succeed to all rights and assume all of the responsibilities, duties and
liabilities of the Seller 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 the
Purchaser 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 the 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 Sections 3.01, 3.02, the remedies available under Section 3.03 and
the indemnification obligations of the Seller pursuant to Section 7.01.
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. Any termination or resignation of the Seller or this
Agreement pursuant to Section 7.04, 7.05, 8.01 or 9.01 shall not affect any
claims that the Purchaser may have against the Seller arising prior to any such
termination or resignation.
The Seller shall promptly 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. Upon appointment
of successor servicer to the Seller, the Seller shall be reimbursed for
unrecovered Servicing Advances, Monthly Advances and unpaid Servicing Fees
which would otherwise have been recovered by the Seller pursuant to this
Agreement but for the appointment such successor servicer.
Upon a successor's acceptance of appointment as such, the Seller
shall notify by mail the Purchaser of such appointment.
Section 11.02 Amendment.
This Agreement may be amended or supplemented from time to time by
written agreement executed by the Purchaser and the Seller.
Section 11.03 Recordation of Agreement.
To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any of
all the Mortgaged Properties subject to the Mortgages
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are situated, and in any other appropriate public recording office or
elsewhere, such recordation to be effected by the Seller at the Seller's
expense on direction of the Purchaser.
Section 11.04 Governing Law.
This Agreement shall be governed by and construed in accordance
with the laws of the State of PostalCodePostalCodeNew York, without regard to
its conflict of law provisions, except to the extent preempted by Federal law.
The obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
Section 11.05 Notices.
Any demands, notices or other communications permitted or required
hereunder shall be in writing and shall be deemed conclusively to have been
given if personally delivered at or mailed by registered mail, postage prepaid,
and return receipt requested or certified mail, return receipt requested, or
transmitted by telex, telegraph or telecopier and confirmed by a similar mailed
writing, as follows:
(i) if to the Seller:
Wachovia Mortgage Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 28288-1088
Attention: Xxxxxxxx Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Wachovia Mortgage Corporation
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxx Xxxxxx
Facsimile: (000) 000-0000
(ii) if to the Purchaser:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
Facsimile: (000) 000-0000
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
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Section 11.06 Severability of Provisions.
Any part, provision, representation or warranty of this Agreement
which is prohibited or which is held to be void or unenforceable shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof. Any part, provision,
representation or warranty of this Agreement which is prohibited or
unenforceable or is held to be void or unenforceable in any jurisdiction shall
be ineffective, as to such jurisdiction, to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction as to any Mortgage
Loan shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereto
waive any provision of law which prohibits or renders void or unenforceable any
provision hereof. If the invalidity of any part, provision, representation or
warranty of this Agreement shall deprive any party of the economic benefit
intended to be conferred by this Agreement, the parties shall negotiate, in
good faith, to develop a structure the economic effect of which is nearly as
possible the same as the economic effect of this Agreement without regard to
such invalidity.
Section 11.07 Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
Section 11.08 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(i) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and include the plural as well
as the singular, and the use of any gender herein shall be deemed
to include the other gender;
(ii) accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(iii) references herein to "Articles," "Sections,"
Subsections," "Paragraphs," and other subdivisions without
reference to a document are to designated Articles, Sections,
Subsections, Paragraphs and other subdivisions of this Agreement;
(iv) a reference to a Subsection without further reference to
a Section is a reference to such Subsection as contained in the
same Section in which the reference appears, and this rule shall
also apply to Paragraphs and other subdivisions;
(v) the words "herein," "hereof," "hereunder," and other
words of similar import refer to this Agreement as a whole and not
to any particular provision;
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(vi) the term "include" or "including" shall mean without
limitation by reason of enumeration; and
(vii) headings of the Articles and Sections in this Agreement
are for reference purposes only and shall not be deemed to have any
substantive effect.
Section 11.09 Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (i) consents, waivers and modifications which may hereafter
be executed, (ii) documents received by any party at the closing, and (iii)
financial statements, certificates and other information previously or
hereafter furnished, may be reproduced by any photographic, photostatic,
microfilm, micro-card, miniature photographic or other similar process. The
parties agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not
the original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
Section 11.10 Confidentiality of Information.
The Seller and the Purchaser understand and agree that this
Agreement, any other agreements executed in connection with the sale
contemplated hereunder, any agreements executed in connection with any
Reconstitution, and any offering circulars or other disclosure documents
produced in connection with any Reconstitution are confidential and proprietary
to the Purchaser or Seller, and the Seller and Purchaser agree to hold such
documents confidential and not to divulge such documents to anyone except (a)
to the extent required by law or judicial order or to enforce its rights or
remedies under this Agreement, (b) to the extent such information enters into
the public domain other than through the wrongful act of the Seller or the
Purchaser, as the case may be, (c) as is necessary in working with legal
counsel, rating agencies, auditors, agents, taxing authorities or other
governmental agencies or (d) the federal income tax treatment of the
transactions hereunder, any fact relevant to understanding the federal tax
treatment of the transactions hereunder, and all materials of any kind
(including opinions or other tax analyses) relating to such federal income tax
treatment; provided that the Seller may not disclose the name of or identifying
information with respect to Purchaser or any pricing terms or other nonpublic
business or financial information that is unrelated to the purported or claimed
federal income tax treatment of the transactions hereunder and is not relevant
to understanding the purported or claimed federal income tax treatment of the
transactions hereunder.
Section 11.11 Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, each of the Assignments
of Mortgage is subject to recordation in all appropriate public offices for
real property records in all the counties or other comparable jurisdictions in
which any or all of the Mortgaged Properties are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected (i) with respect to MERS Mortgage Loans and (ii) with respect to
Mortgage Loans that
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are not MERS Mortgage Loans, at the Seller's expense, in each case, in the
event recordation is either necessary under applicable law or requested by the
Purchaser at its sole option.
Section 11.12 Assignment by Purchaser.
The Purchaser shall have the right, upon notice to the Seller, to
assign, in whole or in part, its interest under this Agreement with respect to
some or all of the Mortgage Loans, and designate any person to exercise any
rights of the Purchaser hereunder, by executing an Assignment, Assumption and
Recognition Agreement substantially in the form of Exhibit D hereto, and the
assignee or designee shall accede to the rights and obligations hereunder of
the Purchaser with respect to such Mortgage Loans; provided, however, that, in
no event shall there be any more than three (3) "Purchasers" with respect to
any Mortgage Loan Package. In no event shall the Purchaser sell a partial
interest in any Mortgage Loan without the prior written consent of the Seller,
which consent may be granted or withheld in the Seller's sole discretion. All
references to the Purchaser in this Agreement shall be deemed to include its
assignee or designee.
Section 11.13 No Partnership.
Nothing herein contained shall be deemed or construed to create a
co-partnership or joint venture between the parties hereto and the services of
the Seller shall be rendered as an independent contractor and not as agent for
Purchaser.
Section 11.14 Execution; Successors and Assigns.
This Agreement may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same agreement. Subject to Section 7.02, this Agreement
shall inure to the benefit of and be binding upon the Seller and the Purchaser
and their respective successors and assigns.
Section 11.15 Entire Agreement.
Each of the parties to this Agreement acknowledges that no
representations, agreements or promises were made to any of the other parties
to this Agreement or any of its employees other than those representations,
agreements or promises specifically contained herein. This Agreement and the
related Purchase Price and Terms Letter set forth the entire understanding
between the parties hereto and shall be binding upon all successors of all of
the parties. In the event of any inconsistency between a Purchase Price and
Terms Letter and this Agreement, this Agreement shall control.
Section 11.16 No Solicitation.
From and after the related Closing Date, except as provided below,
the Seller agrees that it will not take any action or permit or cause any
action to be taken by any of its agents or affiliates, or by any independent
contractors on the Seller's behalf, in any manner to solicit the borrower or
obligor under any Mortgage Loan to refinance the Mortgage Loan, in whole or in
part, without the prior written consent of the Purchaser. It is understood and
agreed
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that all rights and benefits relating to the solicitation of any Mortgagors to
refinance any Mortgage Loans and the attendant rights, title and interest in
and to the list of such Mortgagors and data relating to their Mortgages
(including insurance renewal dates) shall be transferred to the Purchaser
pursuant hereto on the related Closing Date and the Seller shall take no action
to undermine these rights and benefits. Notwithstanding the foregoing, it is
understood and agreed that the following promotions or solicitations undertaken
by the Seller or any affiliate of the Seller shall not be prohibited under this
Section 11.16: (i) promotions or solicitations that are directed to the general
public at large or segments thereof, provided that no segment shall consist
primarily of the borrowers or obligors under the Mortgage Loans, including,
without limitation, mass mailing based on commercially acquired mailing lists,
newspaper, radio and television advertisements; (ii) responding to Mortgagor
requests for pay-off information and regarding other bank or financial products
or services; and (iii) promotions or solicitations to any Mortgagor for any
other bank or financial products or services, unless such promotions or
solicitations are for a prepayment of a Mortgage Loan.
Section 11.17 Costs.
The Purchaser shall pay any commissions due its salesmen, the
expenses of its accountants and attorneys and the expenses and fees of any
broker retained by the Purchaser with respect to the transactions covered by
this Agreement. To the extent not otherwise provided herein, all other costs
and expenses incurred in connection with the transfer and delivery of the
Mortgage Loans, including, without limitation, fees for recording intervening
assignments of mortgage and Assignments of Mortgage, the cost of obtaining tax
service contracts and the legal fees and expenses of its attorneys shall be
paid by the Seller. The Seller shall be responsible for causing the recordation
of all Assignments of Mortgage and all intervening assignments of mortgage, as
applicable.
Section 11.18 Protection of Mortgagor Personal Information.
Each of the Purchaser and the Seller agree that it (i) shall comply
with any applicable laws and regulations regarding the privacy and security of
Mortgagor Personal Information, (ii) shall not use Mortgagor Personal
Information in any manner inconsistent with any applicable laws and regulations
regarding the privacy and security of Mortgagor Personal Information, (iii)
shall not disclose Mortgagor Personal Information to third parties except at
the specific written direction of the other; provided, however, that the
Purchaser and the Seller may disclose Mortgagor Personal Information to third
parties in connection with secondary market transactions to the extent not
prohibited by applicable law or to the extent required by a valid and effective
subpoena issued by a court of competent jurisdiction or other governmental
body, (iv) shall maintain adequate physical, technical and administrative
safeguards to protect Mortgagor Personal Information from unauthorized access
and (v) shall immediately notify the other of any actual or suspected breach of
the confidentiality of Mortgagor Personal Information.
[SIGNATURE PAGE TO FOLLOW]
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[GRAPHIC OMITTED]
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 day and year first above written.
XXXXXXX XXXXX MORTGAGE
COMPANY, a New York limited
partnership,
By: XXXXXXX SACHS REAL
ESTATE FUNDING CORP.,
a New York corporation, as
General Partner
as Purchaser
By:_______________________________
Name:_____________________________
Title:____________________________
WACHOVIA MORTGAGE
CORPORATION, as Seller
By:_______________________________
Name:_____________________________
Title:____________________________
[Signature Page to Seller's Purchase, Warranties and Servicing Agreement,
dated as of April 1, 2006]
76
EXHIBIT A-1
-----------
Contents of 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 in the Servicing File or
delivered to the Purchaser or its designee pursuant to Sections 2.04 and 2.05
of the Seller's Purchase, Warranties and Servicing Agreement.
1. The original Mortgage Note endorsed "Pay to the order of
___________________ without recourse," and signed in the name of the Seller by
an authorized officer, with all intervening endorsements showing a complete
chain of title from the originator to the Seller. If the Mortgage Loan was
acquired by the Seller in a merger, the endorsement must be by "[Seller],
successor by merger to the [name of predecessor]". If the Mortgage Loan was
acquired or originated by the Seller while doing business under another name,
the endorsement must be by "[Seller] formerly known as [previous name]". If the
original note is unavailable, seller will provide an affidavit of lost note (in
form acceptable to the Purchaser) stating that the original Mortgage Note was
lost or destroyed, together with a copy of such Mortgage Note and indemnifying
the Purchaser against any and all claims arising as a result of any person or
entity claiming they are the holder of the note or that the note has been paid
off and returned.
2. A true certified copy, certified by the [title insurer], of the
applicable First Lien Loan.
3. Except as provided below and for each Mortgage Loan that is not
a MERS Mortgage Loan, the original Mortgage with evidence of recording thereon,
or a copy thereof certified by the public recording office in which such
mortgage has been recorded or, if the original Mortgage has not been returned
from the applicable public recording office, a true certified copy, certified
by the [title insurer], of the original Mortgage together with a certificate of
the Seller certifying that the original Mortgage has been delivered for
recording in the appropriate public recording office of the jurisdiction in
which the Mortgaged Property is located and in the case of each MERS Mortgage
Loan, the original Mortgage, noting the presence of the MIN of the Mortgage
Loans and either language indicating that the Mortgage Loan is a MOM Loan or if
the Mortgage Loan was not a MOM Loan at origination, the original Mortgage and
the assignment thereof to MERS, with evidence of recording indicated thereon,
or a copy of the Mortgage certified by the public recording office in which
such Mortgage has been recorded.
4. The original or certified to be a true copy or if in
electronic form identified on the Mortgage Loan Schedule, the certificate
number, certified by the Seller, of the related Primary Mortgage Insurance
Policy, if required.
5. In the case of each Mortgage Loan that is not a MERS Mortgage
Loan, the original Assignment, from the Seller in accordance with Purchaser's
instructions, which assignment shall, but for any blanks requested by the
Purchaser, be in form and substance acceptable for recording, or a copy
certified by the Seller as a true and correct copy of the original Assignment
which has been sent for recordation. If the Mortgage Loan was acquired or
A-1-1
originated by the Seller while doing business under another name, the
Assignment must be by "[Seller] formerly known as [previous name]".
6. With respect to Mortgage Loans that are not Co-op Loans, the
original policy of title insurance, including riders and endorsements thereto,
or if the policy has not yet been issued, a written commitment or interim
binder or preliminary report of title issued by the title insurance or escrow
company.
7. Originals of all recorded intervening Assignments, or copies
thereof, certified by the public recording office in which such Assignments
have been recorded showing a complete chain of title from the originator to the
Seller, with evidence of recording thereon, or a copy thereof certified by the
public recording office in which such Assignment has been recorded or, if the
original Assignment has not been returned from the applicable public recording
office, a true certified copy, certified by the [title insurer] of the original
Assignment together with a certificate of the [title insurer] certifying that
the original Assignment has been delivered for recording in the appropriate
public recording office of the jurisdiction in which the Mortgaged Property is
located.
8. Originals, or copies thereof certified by the public
recording office in which such documents have been recorded, of each
assumption, extension, modification, written assurance or substitution
agreements, if applicable, or if the original of such document has not been
returned from the applicable public recording office, a true certified copy,
certified by the [title insurer], of such original document together with
certificate of Seller certifying the original of such document has been
delivered for recording in the appropriate recording office of the jurisdiction
in which the Mortgaged Property is located.
9. If the Mortgage Note or Mortgage or any other material
document or instrument relating to the Mortgage Loan 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 bearing evidence
that such instrument has been recorded, if so required in the appropriate
jurisdiction where the Mortgaged Property is located (or, in lieu thereof, a
duplicate or conformed copy of such instrument, together with a certificate of
receipt from the recording office, certifying that such copy represents a true
and complete copy of the original and that such original has been or is
currently submitted to be recorded in the appropriate governmental recording
office of the jurisdiction where the Mortgaged Property is located), or if the
original power of attorney or other such instrument has been delivered for
recording in the appropriate public recording office of the jurisdiction in
which the Mortgaged Property is located.
10. With respect to a Co-op Loan: (i) a copy of the Co-op Lease
and the assignment of such Co-op Lease to the originator of the Mortgage Loan,
with all intervening assignments showing a complete chain of title and an
assignment thereof by Seller; (ii) the stock certificate together with an
undated stock power relating to such stock certificate executed in blank; (iii)
the recognition agreement in substantially the same form as standard a "AZTECH"
form; (iv) copies of the financial statement filed by the originator as secured
party and, if applicable, a filed UCC-3 Assignment of the subject security
interest showing a complete chain of title, together with an executed UCC-3
Assignment of such security interest by the Seller in a form sufficient for
filing.
A-1-2
11. The original of any guarantee executed in connection with the
Mortgage Note.
Notwithstanding anything to the contrary herein, the Seller may
provide one certificate for all of the Mortgage Loans indicating that the
documents were delivered for recording.
X-0-0
XXXXXXX X-0
-----------
Contents of Servicing File
With respect to each Mortgage Loan, the Servicing File shall
include each of the following items, which shall be available for inspection by
the Purchaser:
1. Mortgage Loan closing statement (Form HUD-1) and any other
truth-in-lending or real estate settlement procedure forms required by law.
2. Residential loan application.
3. Uniform underwriter and transmittal summary (Xxxxxx Xxx Form
1008) or reasonable equivalent.
4. Credit report on the mortgagor.
5. Business credit report, if applicable.
6. Residential appraisal report and attachments thereto.
7. Verification of employment and income except for Mortgage
Loans originated under a Limited Documentation Program, all in accordance with
Seller's Underwriting Standards.
8. Verification of acceptable evidence of source and amount of
down payment, in accordance with the Underwriting Standards.
9. Photograph of the Mortgaged Property (may be part of appraisal).
10. Survey of the Mortgaged Property, if any.
11. Sales contract, if applicable.
12. If available, termite report, structural engineer's report,
water portability and septic certification.
13. Any original security agreement, chattel mortgage or
equivalent executed in connection with the Mortgage.
14. Any ground lease, including all amendments, modifications and
supplements thereto.
15. Any other document required to service the Mortgage Loans.
16. A code indicating whether the Mortgage Loan is a temporary
buydown (Y or N).
A-2-1
EXHIBIT B
---------
Form of Custodial Account Letter Agreement
__________________ , 200_
To:
As "Seller" under the Seller's Purchase, Warranties and Servicing
Agreement, dated as of April 1, 2006 (the "Agreement"), we hereby authorize and
request you to establish an account, as a Custodial Account pursuant to Section
4.04 of the Agreement, to be designated as "Wachovia Mortgage Corporation, in
trust for the Purchaser, owner of various whole loan series - principal and
interest". All deposits in the account shall be subject to withdrawal therefrom
by order signed by the Seller. This letter is submitted to you in duplicate.
Please execute and return one original to us.
WACHOVIA MORTGAGE CORPORATION,
as SELLER
By:_______________________________
Name:_____________________________
Title:____________________________
The undersigned, as "Depository," hereby certifies that the above
described account has been established under Account Number ______________, at
the office of the depository indicated above, and agrees to honor withdrawals
on such account as provided above.
__________________________________
By:_______________________________
Name:_____________________________
Title:____________________________
B-1
EXHIBIT C
---------
Form of Escrow Account Letter Agreement
_____________________, 200_
To:
As "Seller" under the Seller's Purchase, Warranties and Servicing
Agreement, dated as of April 1, 2006 (the "Agreement"), we hereby authorize and
request you to establish an account, as an Escrow Account pursuant to Section
4.06 of the Agreement, to be designated as "Wachovia Mortgage Corporation, in
trust for the Purchaser, owner of various whole loan series, and various
Mortgagors." All deposits in the account shall be subject to withdrawal
therefrom by order signed by the Seller. This letter is submitted to you in
duplicate. Please execute and return one original to us.
WACHOVIA MORTGAGE CORPORATION,
as SELLER
By:_______________________________
Name:_____________________________
Title:____________________________
The undersigned, as "Depository," hereby certifies that the above
described account has been established under Account Number ______________, at
the office of the depository indicated above, and agrees to honor withdrawals
on such account as provided above.
By:_______________________________
Name:_____________________________
Title:____________________________
C-1
EXHIBIT D
---------
Form of Assignment, Assumption and Recognition Agreement
This Assignment, Assumption and Recognition Agreement (this
"Assignment Agreement"), dated as of _________, between Xxxxxxx Sachs Mortgage
Company, a New York corporation (the "Assignor"), ______________________, a
________ corporation (the "Assignee"), and Wachovia Mortgage Corporation, a
North Carolina corporation (the "Seller"):
For good and valuable consideration the receipt and sufficiency of
which hereby are acknowledged, and of the premises and mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. The Assignor hereby grants, transfers and assigns to Assignee
all of the right, title and interest of Assignor, as Purchaser, in, to and
under (a) those certain mortgage loans listed on Exhibit A attached hereto (the
"Mortgage Loans"); and (b) the Seller's Purchase, Warranties and Servicing
Agreement dated as of April 1, 2006, but only to the extent of the Mortgage
Loans (the "Purchase Agreement"). For purposes of this Assignment Agreement,
the term "Purchase Agreement" includes any separate Assignment and Conveyance
pursuant to which Seller and Assignor effectuated the purchase and sale of any
Mortgage Loan following the execution and delivery of the Seller's Purchase,
Warranties and Servicing Agreement dated as of April 1, 2006.
The Assignor specifically reserves and does not assign to the
Assignee hereunder any and all right, title and interest in, to and under any
all obligations of the Assignor with respect to any mortgage loans subject to
the Purchase Agreement which are not the Mortgage Loans set forth on Exhibit A
attached hereto and are not the subject of this Assignment Agreement.
2. Each of the Seller and the Assignor represent and warrant to
the Assignee that (a) the copy of the Purchase Agreement, attached hereto as
Exhibit B, provided to the Assignee, is a true, complete and accurate copy of
the Purchase Agreement, (b) the Purchase Agreement is in full force and effect
as of the date hereof, (c) the provisions thereof have not been waived, amended
or modified in any respect, nor have any notices of termination been given
thereunder, (d) the Purchase Agreement contains all of the terms and conditions
governing the sale of the Mortgage Loans by Seller to Assignor and the purchase
of the Mortgage Loans by Assignor from Seller; provided, however, that the date
of purchase and sale and the amount of payment for the Mortgage Loans may be
set out in a Purchase Price and Terms Letter, as defined in the Purchase
Agreement, and (e) Seller sold, conveyed and transferred each Mortgage Loan to
Assignor pursuant to the Purchase Agreement.
3. The Assignor warrants and represents to, and covenants with,
the Assignee and the Seller that:
(a) As of the date hereof, the Assignor is not in default under
the Purchase Agreement;
D-1
(b) The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans and any and all of its interests,
rights and obligations under the Purchase Agreement, free from any and all
claims and encumbrances arising out of the Assignor's ownership thereof, and
the Mortgage Loans, as well as the Purchase Agreement, upon the transfer
thereof to the Assignee as contemplated herein, shall be free and clear of all
such liens, claims and encumbrances or any lien claim or encumbrance arising
out of the ownership of the Mortgage Loans by any person at any time after
Assignor first acquired any Mortgage Loan from the Seller;
(c) The Assignor has not received notice of, and has no knowledge
of, any offsets, counterclaims or other defenses available to the Seller with
respect to the Purchase Agreement or the Mortgage Loans;
(d) The Assignor has not waived or agreed to any waiver under, or
agreed to any amendment or other modification of, the Purchase Agreement or the
Mortgage Loans. The Assignor has no knowledge of, and has not received notice
of, any waivers under or amendments or other modifications of, or assignments
of rights or obligations under or defaults under, the Purchase Agreement, or
the Mortgage Loans;
(e) The Assignor is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite corporate power and authority to sell,
transfer and assign the Mortgage Loans;
(f) The Assignor has full corporate power and authority to
execute, deliver and perform under this Assignment Agreement, and to consummate
the transactions set forth herein. The consummation of the transactions
contemplated by this Assignment Agreement is in the ordinary course of the
Assignor's business and will not conflict with, or result in a breach of, any
of the terms, conditions or provisions of the Assignor's charter or by-laws, or
any legal restriction, or any material agreement or instrument to which the
Assignor is now a party or by which it is bound, or result in the violation of
any law, rule, regulation, order, judgment or decree to which the Assignor or
its property is subject. The execution, delivery and performance by the
Assignor of this Assignment Agreement, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action of the Assignor. This Assignment Agreement has been duly
executed and delivered by the Assignor and constitutes the valid and legally
binding obligation of the Assignor enforceable against the Assignor in
accordance with its respective terms except as enforceability thereof may be
limited by bankruptcy, insolvency, or reorganization or other similar laws now
or hereinafter in effect relating to creditor's rights generally and by general
principles of equity, regardless of whether such enforceability is considered
in a proceeding in equity or in law;
(g) No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required
to be obtained or made by the Assignor in connection with the execution,
delivery or performance by the Assignor of this Assignment Agreement, or the
consummation by it of the transactions contemplated hereby; and
(h) The Assignor has paid the purchase price for the Mortgage
Loans and has satisfied any conditions to closing required of it under the
terms of the Purchase Agreement.
D-2
4. The Assignee warrants and represents to, and covenants with,
the Assignor and the Seller that:
(a) The Assignee is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite corporate power and authority to acquire,
own and purchase the Mortgage Loans;
(b) The Assignee has full corporate power and authority to
execute, deliver and perform under this Assignment Agreement, and to consummate
the transactions set forth herein. The consummation of the transactions
contemplated by this Assignment Agreement is in the ordinary course of the
Assignee's business and will not conflict with, or result in a breach of, any
of the terms, conditions or provisions of the Assignee's charter or by-laws, or
any legal restriction, or any material agreement or instrument to which the
Assignee is now a party or by which it is bound, or result in the violation of
any law, rule, regulation, order, judgment or decree to which the Assignee or
its property is subject. The execution, delivery and performance by the
Assignee of this Assignment Agreement, and the consummation by it of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action of the Assignee. This Assignment Agreement has been duly
executed and delivered by the Assignee and constitutes the valid and legally
binding obligation of the Assignee enforceable against the Assignee in
accordance with its respective terms except as enforceability thereof may be
limited by bankruptcy, insolvency, or reorganization or other similar laws now
or hereinafter in effect relating to creditor's rights generally and by general
principles of equity, regardless of whether such enforceability is considered
in a proceeding in equity or in law;
(c) No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required
to be obtained or made by the Assignee in connection with the execution,
delivery or performance by the Assignee of this Assignment Agreement, or the
consummation by it of the transactions contemplated hereby; and
(d) The Assignee agrees to be bound, as Purchaser, by all of the
terms, covenants and conditions of the Purchase Agreement and the Mortgage
Loans, and from and after the date hereof, the Assignee assumes for the benefit
of each of the Seller and the Assignor all of the Assignor's obligations as
Purchaser thereunder, with respect to the Mortgage Loans.
5. The Seller warrants and represents to, and covenants with,
the Assignor and the Assignee that:
(a) The Seller is not a natural person or a general partnership
and is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation, and has all requisite power and authority to
service the Mortgage Loans;
(b) The Seller has full power and authority to execute, deliver
and perform under this Assignment Agreement, and to consummate the transactions
set forth herein. The consummation of the transactions contemplated by this
Assignment Agreement is in the ordinary course of the Seller's business and
will not conflict with, or result in a breach of, any of the terms, conditions
or provisions of the Seller's charter or by-laws, or any legal restriction, or
any material agreement or instrument to which the Seller is now a party or by
which it is bound, or
D-3
result in the violation of any law, rule, regulation, order, judgment or decree
to which the Seller or its property is subject. The execution, delivery and
performance by the Seller of this Assignment Agreement, and the consummation by
it of the transactions contemplated hereby, have been duly authorized by all
necessary corporate action of the Seller. This Assignment Agreement has been
duly executed and delivered by the Seller and constitutes the valid and legally
binding obligation of the Seller enforceable against the Seller in accordance
with its respective terms except as enforceability thereof may be limited by
bankruptcy, insolvency, or reorganization or other similar laws now or
hereinafter in effect relating to creditors' rights generally and by general
principles of equity, regardless of whether such enforceability is considered
in a proceeding in equity or in law;
(d) No material consent, approval, order or authorization of, or
declaration, filing or registration with, any governmental entity is required
to be obtained or made by the Seller in connection with the execution, delivery
or performance by the Seller of this Assignment Agreement, or the consummation
by it of the transactions contemplated hereby;
(e) As of the date hereof, the Seller is not in default under the
Purchase Agreement; and
(f) No event has occurred or has failed to occur, during the
period commencing on date on which Assignor acquired the Mortgage Loans and
ending on the date hereof, inclusive, which would make the representations and
warranties set forth in Section 3.01 of the Purchase Agreement untrue if such
representations and warranties were made with respect to the Mortgage Loans
effective as of the date hereof.
6. From and after the date hereof, the Seller shall recognize
the Assignee as the owner of the Mortgage Loans, and shall look solely to the
Assignee for performance from and after the date hereof of the Assignor's
obligations with respect to the Mortgage Loans.
7. Notice Addresses.
(a) The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement is:
___________________
___________________
___________________
Attention: ________________
(b) The Assignor's address for purposes for all notices and
correspondence related to the Mortgage Loans and this Assignment Agreement is:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
D-4
(c) The Seller's address for purposes of all notices and correspondence
related to the Mortgage Loans and this Assignment Agreement is:
Wachovia Mortgage Corporation
0000 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxx Xxxxxx
8. This Assignment Agreement shall be construed in accordance
with the substantive laws of the State of New York (without regard to conflict
of laws principles) and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, except to the
extent preempted by federal law.
9. This Assignment Agreement shall inure to the benefit of the
successors and assigns of the parties hereto. Any entity into which the Seller,
the Assignor or the Assignee may be merged or consolidated shall, without the
requirement for any further writing, be deemed the Seller, the Assignor or the
Assignee, respectively, hereunder.
10. No term or provision of this Assignment 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.
11. This Assignment Agreement shall survive the conveyance of the
Mortgage Loans and the assignment of the Purchase Agreement by the Assignor.
12. Notwithstanding the assignment of the Purchase Agreement by
either the Assignor or Assignee, this Assignment Agreement shall not be deemed
assigned by the Seller or the Assignor unless assigned by separate written
instrument.
13. For the purpose for facilitating the execution of this
Assignment Agreement as herein provided and for other purposes, this Assignment
Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall constitute and be one and the same instrument.
[signatures on following page]
D-5
IN WITNESS WHEREOF, the parties have caused this Assignment
Agreement to be executed by their duly authorized officers as of the date first
above written.
Xxxxxxx Sachs Mortgage Company
Assignor
By:_______________________________
Name:_____________________________
Title:____________________________
[________________________________]
Assignee
By:_______________________________
Name:_____________________________
Title:____________________________
Wachovia Mortgage Corporation
Seller
By:_______________________________
Name:_____________________________
Title:____________________________
D-6
EXHIBIT E
---------
Form of Assignment and Conveyance
On this ____ day of ________, 200_, Wachovia Mortgage Corporation ("Wachovia")
as the Seller under that certain Seller's Purchase, Warranties and Servicing
Agreement, dated as of April 1, 2006 (the "Agreement"), and that certain
Purchase Price and Terms Letter, dated as of [ ], 200 each by and between
Wachovia and Xxxxxxx Xxxxx Mortgage Company (the "Purchaser") does hereby sell,
transfer, assign, set over and convey to the Purchaser under the Agreement,
without recourse, but subject to the terms of the Agreement, all rights, title
and interest of Wachovia (excluding the right to service the Mortgage Loans) in
and to the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto
as Exhibit A, together with the Mortgage Files and all rights and obligations
arising under the documents contained therein. Pursuant to Section 2.07 of the
Agreement, Wachovia has delivered to the Purchaser the documents for each
Mortgage Loan to be purchased as set forth therein. The contents of each
Servicing File required to be retained by Wachovia to service the Mortgage
Loans pursuant to the Agreement and thus not delivered to the Purchaser are and
shall be held in trust by Wachovia, for the benefit of the Purchaser as the
owner thereof. Wachovia's possession of any portion of the 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 Wachovia shall be in a custodial capacity only. The ownership of
each Mortgage Note, 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 Wachovia shall immediately vest in the Purchaser and
shall be retained and maintained, in trust, by Wachovia at the will of the
Purchaser in such custodial capacity only.
E-A-1
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
WACHOVIA MORTGAGE
CORPORATION
By:_______________________________
Name:_____________________________
Title:____________________________
E-A-2
Exhibit A
---------
E-A-1
EXHIBIT F
---------
Request for Release of Documents and Receipt
RE: Mortgage Loan #___________________________________
BORROWER: __________________________________________________
PROPERTY: __________________________________________________
Pursuant to a Seller's Purchase, Warranties and Servicing Agreement (the
"Agreement") between the Seller and the Purchaser, the undersigned hereby
certifies that he or she is an officer of the Seller requesting release of the
documents for the reason specified below. The undersigned further certifies
that:
(Check one of the items below)
_____ On _________________, the above captioned mortgage loan was paid in
full or the Seller has been notified that payment in full has been
or will be escrowed. The Seller hereby certifies that all amounts
with respect to this loan which are required under the Agreement
have been or will be deposited in the Custodial Account as
required.
_____ The above captioned loan is being repurchased pursuant to the terms
of the Agreement. The Seller hereby certifies that the repurchase
price has been credited to the Custodial Account as required under
the Agreement.
_____ The above captioned loan is being placed in foreclosure and the
original documents are required to proceed with the foreclosure
action. The Seller hereby certifies that the documents will be
returned to the Purchaser in the event of reinstatement.
_____ Other (explain)
_______________________________________________________
_______________________________________________________
All capitalized terms used herein and not defined shall have the meanings
assigned to them in the Agreement.
F-1
Based on this certification and the indemnities provided for in the Agreement,
please release to the Seller all original mortgage documents in your possession
relating to this loan.
Dated:_________________ By:_____________________________________
Signature
___________________________________
Title
Send documents to: _____________________________________________
_____________________________________________
_____________________________________________
Acknowledgment:
Purchaser hereby acknowledges that all original documents previously released
on the above captioned mortgage loan have been returned and received by the
Purchaser.
Dated:________________ By:________________________________
Signature
Title:____________________________
F-2
EXHIBIT G
---------
Regulation AB Compliance Addendum
EXECUTION COPY
EXHIBIT G
REGULATION AB COMPLIANCE ADDENDUM
TO SELLER'S PURCHASE, WARRANTIES AND SERVICING AGREEMENT
(Servicing-retained)
This Regulation AB Compliance Addendum (this "Reg AB Addendum"), by
and between Xxxxxxx Sachs Mortgage Company (the "Purchaser") and Wachovia
Mortgage Corporation (the "Company"), to that certain Seller's Purchase,
Warranties and Servicing Agreement Agreement, dated as of April 1, 2006, by
and between the Company and the Purchaser (as amended, modified or
supplemented, the "Agreement").
ARTICLE I
DEFINED TERMS
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Agreement. The following terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:
Additional Servicer: A Subcontractor or Subservicer engaged by the
Company that is a "servicer" as defined in Item 1101(j) of Regulation AB.
Commission: The United States Securities and Exchange Commission.
Company Information: As defined in Section 2.07(a).
Depositor: With respect to any Securitization Transaction, the Person
identified in writing to the Company by the Purchaser as depositor for such
Securitization Transaction.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Qualified Correspondent: Any Person from which the Company purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Company
and such Person that contemplated that such Person would underwrite mortgage
loans from time to time, for sale to the Company, in accordance with
underwriting guidelines designated by the Company ("Designated Guidelines") or
guidelines that do not vary materially from such Designated Guidelines; (ii)
such Mortgage Loans were in fact underwritten as described in clause (i) above
and were acquired by the Company within 180 days after origination; (iii)
either (x) the Designated Guidelines were, at the time such Mortgage Loans
were originated, used by the Company in origination of mortgage loans of the
same type as the Mortgage Loans for the Company's own account or (y) the
Designated Guidelines were, at the time such Mortgage Loans were underwritten,
designated by the Company on a consistent basis for use by lenders in
originating mortgage loans to be purchased by the Company; and (iv) the
Company employed, at the time such Mortgage Loans were acquired by the
Company, pre-purchase or post-purchase quality assurance procedures
(which may involve, among other things, review of a sample 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 Company.
Reconstitution: Any Securitization Transaction or Whole Loan Transfer.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation
AB), 17 C.F.R. ss.ss.229.1100-229.1123, as 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.
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 by the Purchaser 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 Section 2.03(c).
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB for which the Company, any Subservicer or any
Subcontractor that is "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB is responsible in its capacity as
servicer as identified on a certification in the form of Schedule II hereto,
provided that such Schedule II may be amended from time to time to reflect
changes in Regulation AB.
Sponsor: With respect to any Securitization Transaction, the Person
identified in writing to the Company by the Purchaser as sponsor for such
Securitization Transaction.
Static Pool Information: Static pool information as described in Item
1l05(a)(l)-(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 l122(d) of
Regulation AB with respect to Mortgage Loans under the direction or authority
of the Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of the
Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion
of the material servicing functions identified in Item
1122(d) of Regulation AB that are required to be performed by the Company
under this Agreement or any Reconstitution Agreement.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Company.
Whole Loan Transfer: Any sale or transfer by the Purchaser or an
affiliate of some or all of the Mortgage Loans, other than a Securitization
Transaction.
ARTICLE II
COMPLIANCE WITH REGULATION AB
Section 2.01. Intent of the Parties; Reasonableness.
The Purchaser and the Company acknowledge and agree that the purpose
of Article II of this Reg AB Addendum is to facilitate compliance by the
Purchaser and any Depositor with the provisions of Regulation AB and related
rules and regulations of the Commission. Although Regulation AB is applicable
by its terms only to offerings of asset-backed securities that are registered
under the Securities Act, the Company acknowledges that investors in privately
offered securities may require that the Purchaser or any Depositor provide
comparable disclosure in unregistered offerings. References in this Reg AB
Addendum to compliance with Regulation AB include provision of comparable
disclosure in private offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure
comparable to that required under the Securities Act). The Company
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the asset-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
reasonable requests made by the Purchaser or any Depositor in good faith for
delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with any Securitization
Transaction, the Company shall cooperate with the Purchaser to deliver to the
Purchaser (including any of its assignees or designees) and any Depositor, any
and all statements, reports, certifications, records and any other information
necessary in the good faith determination of the Purchaser or any Depositor to
permit the Purchaser or such Depositor to comply with the provisions of
Regulation AB, together with such disclosures relating to the Company, any
Subservicer, any Third-Party Originator and the Mortgage Loans, or the
servicing of the Mortgage Loans, reasonably believed by the Purchaser or any
Depositor to be necessary in order to effect such compliance.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Company by providing timely notice of requests for
information under these provisions and by reasonably limiting such requests to
information required, in the Purchaser's reasonable judgment, to comply with
Regulation AB.
The Purchaser and the Company also acknowledge and agree Section
2.02(a)(i)-(v), Section 2.03(c), (e) and (f), Section 2.04, Section 2.05 and
Section 2.06 of this Reg AB Addendum shall only be applicable with respect to
any Mortgage Loan if the Company (or Subservicer, if any) services such
Mortgage Loan for a period following the closing date of a related
Securitization Transaction. The Purchaser and the Company also acknowledge and
agree that this Reg AB Addendum is intended to supplement the terms of the
Agreement and, to the extent inconsistent, the rights and obligations under
the Agreement shall continue to apply with respect to any Reconstitution (as
defined in the Agreement) that is not covered by the definition of
"Securitization Transfer" in this Reg AB Addendum; provided, however, that
beginning in March 2007 the requirement to provide an accountants' report
pursuant to Section 6.05 of the Agreement shall be deemed satisfied with
respect to any Reconstitution that occurs prior to, on or following the date
hereof by providing an accountants' attestation that satisfies the
requirements of Section 2.05(a)(ii) of this Reg AB Addendum.
For purposes of this Reg AB Addendum, the term "Purchaser" shall
refer to Xxxxxxx Xxxxx Mortgage Company and its successors in interest and
assigns. In addition, any notice or request that must be "in writing" or
"written" may be made by electronic mail.
Section 2.02. Additional Representations and Warranties of
the Company.
(a) The Company shall be deemed to represent to the Purchaser and to
any Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Section 2.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) the Company
is not aware and has not received notice that any default, early amortization
or other performance triggering event has occurred as to any other
securitization due to any act or failure to act of the Company; (ii) the
Company has not been terminated as servicer in a residential mortgage loan
securitization, either due to a servicing default or to application of a
servicing performance test or trigger; (iii) no material noncompliance with
the applicable servicing criteria with respect to other securitizations of
residential mortgage loans involving the Company as servicer has been
disclosed or reported by the Company; (iv) no material changes to the
Company's policies or procedures with respect to the servicing function it
will perform under this Agreement and any Reconstitution Agreement for
mortgage loans of a type similar to the Mortgage Loans have occurred during
the three-year period immediately preceding the related Securitization
Transaction; (v) there are no aspects of the Company's financial condition for
which there is a material risk that such aspects could have a material adverse
effect on the performance by the Company of its servicing obligations under
this Agreement or any Reconstitution Agreement; (vi) there are no legal or
governmental proceedings pending (or known to be contemplated) against the
Company, any Subservicer or any Third-Party Originator that would be material
to securityholders; and (vii) there are no affiliations, relationships or
transactions relating to the Company, any Subservicer or any Third-Party
Originator with respect to any Securitization Transaction and any party
thereto identified in writing to the Company by the related Depositor of a
type described in Item 1119 of Regulation AB.
(b) If so requested in writing by the Purchaser or any Depositor on
any date following the date on which information is first provided to the
Purchaser or any Depositor under Section 2.03, the Company shall use its
reasonable best efforts within five (5) Business Days, but in no
event later than ten (10) Business Days, following such request, confirm in
writing the accuracy of the representations and warranties set forth in
paragraph (a) of this Section 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.
Section 2.03. Information to Be Provided by the Company.
In connection with any Securitization Transaction, the Company shall
(i) within five (5) Business Days, but in no event later than ten (10)
Business Days, following written 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 (f) of this Section, and (ii) as promptly as practicable following notice
to or discovery by the Company, provide to the Purchaser and any Depositor (in
writing and in form and substance reasonably satisfactory to the Purchaser and
such Depositor) the information specified in paragraph (d) of this Section.
(a) If so requested in writing by the Purchaser or any Depositor, the
Company shall provide such information regarding (i) the Company, 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)(l), 1110, 1117 and 1119 of Regulation AB. Such information
shall include, at a minimum (to the extent as required by Regulation AB):
(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) a description of any legal or governmental proceedings pending
(or known to be contemplated) against the Company, each
Third-Party Originator and each Subservicer that would be material
to securityholders; and
(D) a description of any affiliation or relationship between the
Company, each Third-Party Originator, each Subservicer and any of
the following parties to a Securitization Transaction, as such
parties are identified to the Company by the Purchaser or any
Depositor in writing in advance of 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 in writing by the Purchaser or any Depositor, the
Company shall provide (or, as applicable, cause each Third-Party Originator to
provide) vintage origination year Static Pool Information with respect to
mortgage loans of a similar type as the Mortgage Loans (as reasonably
identified by the Purchaser as provided below) originated by (i) the Company,
if the Company is an originator of Mortgage Loans (including as an acquirer of
Mortgage Loans from a Qualified Correspondent), and/or (ii) each Third-Party
Originator, but in each case only to the extent that (x) such mortgage loans
were originated after July 2004 and (y) (A) the Company has not sold such
mortgage loans on a servicing-released basis or (B) such information relates
to "original characteristics" as described in Item 1105(a)(3)(iii) of
Regulation AB. Notwithstanding the preceding sentence, the Company shall not
be required to provide Static Pool Information regarding cumulative losses
with respect to any mortgage loans originated prior to January 1, 2006. Such
Static Pool Information shall be prepared by the Company (or Third-Party
Originator) on the basis of its reasonable, good faith interpretation of the
requirements of Item 1105(a)(2)-(3) of Regulation AB. To the extent that there
is reasonably available to the Company (or Third-Party Originator) Static Pool
Information with respect to more than one mortgage loan type, the Purchaser or
any Depositor shall be entitled to specify whether some or all of such
information shall be provided pursuant to this paragraph. The content of such
Static Pool Information may be in the form customarily provided by the
Company, and need not be customized for the Purchaser or any Depositor. Such
Static Pool Information for each vintage origination year shall be presented
in increments no less frequently than quarterly over the life of the mortgage
loans included in the vintage origination year. The most recent periodic
increment must be as of a date no later than 135 days prior to the date of the
prospectus or other offering document in which the Static Pool Information is
to be included or incorporated by reference. The Static Pool Information shall
be provided in an electronic format that provides a permanent record of the
information provided, such as a portable document format (pdf) file, or other
such electronic format reasonably required by the Purchaser or the Depositor,
as applicable.
Promptly following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph) during the applicable offering period for the
securities, the Company shall provide corrected Static Pool Information to the
Purchaser or any Depositor, as applicable, in the same format in which Static
Pool Information was previously provided to such party by the Company.
If so requested in writing by the Purchaser or any Depositor, the
Company shall provide (or, as applicable, cause each Third-Party Originator to
provide), at the expense of the requesting party (to the extent of any
additional incremental expense associated with delivery pursuant to this Reg
AB Addendum), 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 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 in writing by the Purchaser or any Depositor with
respect to any Securitization Transaction for which 20% or more of the pool
assets (measured by cut-off date principal balance) are serviced by the Company
and any Additional Servicer, the Company shall provide such information
regarding the Company, as servicer of the Mortgage Loans, and each Subservicer
(each of the Company and each Subservicer or Additional Servicer, for purposes
of this paragraph, a "Servicer"), as is requested for the purpose of compliance
with Item 1108 of Regulation AB. Such information shall include, at a minimum
(to the extent required by Regulation AB):
(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 the
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;
(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 the Agreement and
any Reconstitution Agreements for mortgage loans of a type similar
to the Mortgage Loans;
(D) information regarding the Servicer's financial condition, to
the extent that there is a material risk that an adverse financial
event or circumstance involving the Servicer could have a material
adverse effect on the performance by the Company of its servicing
obligations under the 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; and
(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.
(d) If so requested in writing by the Purchaser or any Depositor for
the purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Company shall (or shall
cause each Subservicer and Third-Party Originator to) (i) notify the Purchaser
and any Depositor in writing of (A) any litigation or governmental proceedings
pending against the Company, any Subservicer or any Third-Party Originator
that would be material to securityholders and (B) any affiliations or
relationships that develop following the closing date of a Securitization
Transaction between the Company, any Subservicer or any Third-Party Originator
and any of the parties specified in 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, but only to the extent that
such affiliations or
relationships do not include the Purchaser, Depositor or any of their
respective affiliates as a party, 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 Company or any Subservicer
as servicer or subservicer under the Agreement or any Reconstitution Agreement
by any Person (i) into which the Company or such Subservicer may be merged or
consolidated, or (ii) which may be appointed as a successor to the Company or
any Subservicer, the Company shall provide to the Purchaser 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 in writing 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 Company, as servicer, is
obligated to provide pursuant to other provisions of the Agreement, if so
requested in writing by the Purchaser or any Depositor, the Company shall
provide such information to the Company 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.
Section 2.04. Servicer Compliance Statement.
On or before March 15 of each calendar year, commencing in 2007, the
Company shall deliver to the Purchaser and any Depositor a statement of
compliance addressed to the Purchaser and such Depositor and signed by an
authorized officer of the Company, to the effect that (i) a review of the
Company's activities during the immediately preceding calendar year (or
applicable portion thereof) and of its performance under the 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 Company has fulfilled all of its obligations under
the 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.
Section 2.05. Report on Assessment of Compliance and Attestation.
(a) On or before March 15 of each calendar year, commencing in 2007,
the Company shall:
(i) deliver to the Purchaser and any Depositor a report regarding
the Company's assessment of compliance with the Servicing Criteria
during the immediately preceding calendar year, as required under
Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be addressed to the Purchaser and
such Depositor and signed by an authorized officer of the Company,
and shall address each of the Servicing Criteria specified on a
certification substantially in the form of Schedule II hereto
delivered to the Purchaser concurrently with the execution of this
Reg AB Addendum;
(ii) deliver to the Purchaser and any Depositor a report of a
registered public accounting firm that attests to, and reports on,
the assessment of compliance made by the Company and delivered
pursuant to the preceding paragraph. Such attestation shall be in
accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X
under the Securities Act and the Exchange Act;
(iii) cause each Subservicer, and each Subcontractor determined by
the Company pursuant to Section 2.06(b) to be "participating in
the servicing function" within the meaning of Item 1122 of
Regulation AB, to deliver to the Purchaser and any Depositor an
assessment of compliance and accountants' attestation as and when
provided in paragraphs (a) and (b) of this Section; and
(iv) 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
Xxxxxxxx-Xxxxx Act of 2002) on behalf of an asset-backed issuer
with respect to a Securitization Transaction a certification in
the form attached hereto as Schedule I.
The Company acknowledges that the parties identified in clause (a)(iv) above
may rely on the certification provided by the Company pursuant to such clause
in signing a Sarbanes Certification and filing such with the Commission.
Neither the Purchaser nor any Depositor will request delivery of a
certification under clause (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 Section 2.05(a)(iii) shall address each of the Servicing Criteria specified
on a certification substantially in the form of Schedule II hereto delivered to
the Purchaser concurrently with the execution of this Reg AB Addendum or, in
the case of a Subservicer subsequently appointed as such, on or prior to the
date of such appointment. An assessment of compliance provided by a
Subcontractor pursuant to Section 2.05(a)(iii) need not address any elements
of the Servicing Criteria other than those specified by the Company pursuant
to Section 2.06.
Section 2.06. Use of Subservicers and Subcontractors.
The Company shall not hire or otherwise utilize the services of any
Subservicer to fulfill any of the obligations of the Company as servicer under
the Agreement or any Reconstitution Agreement unless the Company complies with
the provisions of paragraph (a) of this Section. The Company shall not hire or
otherwise utilize the services of any Subcontractor, and shall not permit any
Subservicer to hire or otherwise utilize the services of any Subcontractor, to
fulfill any of the obligations of the Company as servicer under the Agreement
or any Reconstitution Agreement unless the Company complies with the
provisions of paragraph (b) of this Section.
(a) It shall not be necessary for the Company to seek the consent of
the Purchaser or any Depositor to the utilization of any Subservicer. The
Company shall cause any Subservicer used by the Company (or by any Subservicer)
for the benefit of the Purchaser and any Depositor to comply with the
provisions of this Section and with Sections 2.02, 2.03(c) and (e), 2.04, 2.05
and 2.07 of this Reg AB Addendum to the same extent as if such Subservicer were
the Company, and to provide the information required with respect to such
Subservicer under Section 2.03( d) of this Reg AB Addendum. The Company shall
be responsible for obtaining from each Subservicer and delivering to the
Purchaser and any Depositor any servicer compliance statement required to be
delivered by such Subservicer under Section 2.04, any assessment of compliance
and attestation required to be delivered by such Subservicer under Section
2.05 and any certification required to be delivered to the Person that will be
responsible for signing the Sarbanes Certification under Section 2.05 as and
when required to be delivered.
(b) It shall not be necessary for the Company to seek the consent of
the Purchaser or any Depositor to the utilization of any Subcontractor. The
Company shall promptly upon written request provide to the Purchaser and any
Depositor (or any designee of the Depositor, such as a master servicer or
administrator) a written description (in form and substance reasonably
satisfactory to the Purchaser and such Depositor) of the role and function of
each Subcontractor utilized by the Company or any Subservicer, specifying (i)
the identity of each such Subcontractor that is "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB and (ii)
which elements of the Servicing Criteria will be addressed in assessments of
compliance provided by each Subcontractor identified pursuant to clause (i) of
this paragraph.
As a condition to the utilization of any Subcontractor determined to
be "participating in the servicing function" within the meaning of Item 1122
of Regulation AB, the Company shall cause any such Subcontractor used by the
Company (or by any Subservicer) for the benefit of the Purchaser and any
Depositor to comply with the provisions of Sections 2.05 and 2.07 of this Reg
AB Addendum to the same extent as if such Subcontractor were the Company. The
Company shall be responsible for obtaining from each Subcontractor and
delivering to the Purchaser and any Depositor any assessment of compliance and
attestation required to be delivered by such Subcontractor under Section 2.05,
in each case as and when required to be delivered.
Section 2.07. Indemnification; Remedies.
(a) The Company shall indemnify the Purchaser, each affiliate of the
Purchaser, and each of the following parties participating in a Securitization
Transaction: each Sponsor; 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; 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 and agents of each of the foregoing
and of the Depositor, and shall hold each of them harmless from and against
any losses, damages, penalties, fines, forfeitures, legal fees and expenses
and related costs, judgments, and any other costs, fees and expenses that any
of them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report, certification,
accountants' letter or other material in written or electronic
form provided under this Article II by or on behalf of the
Company, or provided under this Article II by or on behalf of any
Subservicer, Subcontractor or Third-Party Originator
(collectively, the "Company Information"), or (B) the omission or
alleged omission to state in the Company Information a material
fact required to be stated in the Company Information or necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
by way of clarification, that clause (B) of this paragraph shall be
construed solely by reference to the Company Information and not to
any other information communicated in connection with a sale or
purchase of securities, without regard to whether the Company
Information or any portion thereof is presented together with or
separately from such other information;
(ii) any failure by the Company, any Subservicer, any
Subcontractor or any Third-Party Originator to deliver any
information, report, certification, accountants' letter or other
material when and as required under this Article II, including
(except as provided below) any failure by the Company to identify
pursuant to Section 2.06(b) any Subcontractor "participating in
the servicing function" within the meaning of Item 1122 of
Regulation AB; or
(iii) any breach by the Company of a representation or warranty
set forth in Section 2.02(a) or in a writing furnished pursuant to
Section 2.02(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
Company of a representation or warranty in a writing furnished
pursuant to Section 2.02(b) to the extent made as of a date
subsequent to such closing date.
In the case of any failure of performance described in clause (a)(ii)
of this Section, the Company shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with
respect to such Securitization Transaction, for all costs reasonably incurred
by each such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the
Company, any Subservicer, any Subcontractor or any Third-Party Originator.
(b) (i) Any failure by the Company, any Subservicer, any Subcontractor
or any Third-Party Originator to deliver any information, report,
certification, accountants' letter or other material when and as required under
this Article II, or any breach by the Company of a representation or warranty
set forth in Section 2.02(a) or in a writing furnished pursuant to Section
2.02(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 Company of a representation or warranty in a
writing furnished pursuant to Section 2.02(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 Company under the Agreement
and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or Depositor, as
applicable, in its sole discretion to terminate the rights and obligations of
the Company as servicer under the Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in this
Agreement or any applicable Reconstitution Agreement to the contrary) of any
compensation to the Company; provided that to the extent that any provision of
the Agreement and/or any applicable Reconstitution Agreement expressly
provides for the survival of certain rights or obligations following
termination of the Company as servicer, such provision shall be given effect.
(ii) Any failure by the Company, any Subservicer or any
Subcontractor to deliver any information, report, certification or
accountants' letter when and as required under Section 2.04 or
2.05, including any failure by the Company to identify pursuant to
Section 2.06(b) any Subcontractor "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB, which
continues unremedied for ten calendar days after the date on which
such information, report, certification or accountants' letter was
required to be delivered shall constitute an Event of Default with
respect to the Company under the Agreement and any applicable
Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate the
rights and obligations of the Company as servicer under the
Agreement and/or any applicable Reconstitution Agreement without
payment (notwithstanding anything in this Agreement to the
contrary) of any compensation to the Company; provided that to the
extent that any provision of the Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of
certain rights or obligations following termination of the Company
as servicer, such provision shall be given effect.
Neither the Purchaser nor any Depositor shall be entitled to
terminate the rights and obligations of the Company pursuant to
this subparagraph (b)(ii) if a failure of the Company to identify
a Subcontractor "participating in the servicing function" within
the meaning of Item 1122 of Regulation AB was attributable solely
to the role or functions of such Subcontractor with respect to
mortgage loans other than the Mortgage Loans.
(iii) The Company shall promptly reimburse the Purchaser
(or any designee of the Purchaser, 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 Company as
servicer and the transfer of servicing of the Mortgage Loans to a
successor servicer. The provisions of this paragraph shall not
limit whatever rights the Purchaser or any Depositor may have
under other provisions of the 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.
SCHEDULE I
FORM OF ANNUAL CERTIFICATION
Re: The [ ] agreement dated as of [ ], 200[ ]
(the "Agreement"), among [IDENTIFY PARTIES]
I, ________________________________, the _____________________ of
Wachovia Mortgage Corporation, 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
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB and identified as the responsibility of the Company
(the "Servicing Criteria"), provided in accordance with Rules 13a-18
and 15d-18 under Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Item 1122 of Regulation AB (the "Servicing
Assessment"), the registered public accounting firm's attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the
Exchange Act and Section 1122(b) of Regulation AB (the "Attestation
Report"), and all servicing reports, officer's certificates and other
information relating to the servicing of the Mortgage Loans by the
Company during 200[ ] that were delivered by the Company to the
[Depositor] [Master Servicer] [Securities Administrator] [Trustee]
pursuant to the Agreement (collectively, the "Company Servicing
Information");
(2) Based on my knowledge, the Company Servicing
Information, taken as a whole, does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make
the statements made, in the light of the circumstances under which
such statements were made, not misleading with respect to the period
of time covered by the Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the
Agreement has been provided to the [Depositor] [Master Servicer]
[Securities Administrator] [Trustee];
(4) I am responsible for reviewing the activities performed
by the Company as servicer under the Agreement, and based on my
knowledge and the compliance review conducted in preparing the
Compliance Statement and except as disclosed in the Compliance
Statement, the Servicing Assessment or the Attestation Report, the
Company has fulfilled its obligations under the Agreement in all
material respects; and
(5) The Compliance Statement required to be delivered by the
Company pursuant to the Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Company and by any
Subservicer or Subcontractor pursuant to the Agreement, have been
provided to the [Depositor] [Master Servicer]. Any material instances
of noncompliance described in such reports have been disclosed to the
A-1
[Depositor] [Master Servicer]. Any material instance of noncompliance
with the Servicing Criteria has been disclosed in such reports.
Date:
------------------------------
By:
------------------------------
Name:
Title:
A-2
SCHEDULE II
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by [the Company] [Name
of Subservicer] shall address, at a minimum, the criteria identified as below
as "Applicable Servicing Criteria";
----------------------------------------------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
General Servicing Considerations
----------------------------------------------------------------------------------------------------------------------
Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
1122(d)(1)(i) accordance with the transaction agreements.
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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.
----------------------------------------------------------------------------------------------------------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans are
maintained.
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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.
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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.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
personnel.
----------------------------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------------------------
B-1
----------------------------------------------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized
access.
----------------------------------------------------------------------------------------------------------------------
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. These reconciling
items are resolved within 90 calendar days of their
original identification, or such other number of days
specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
Investor Remittances and Reporting
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with
the Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are
prepared in accordance with timeframes and other terms
set forth in the transaction agreements; (B) provide
information calculated in accordance with the terms
specified in the transaction agreements; (C) are filed
with the Commission as required by its rules and
regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal
balance and number of mortgage loans serviced by the
Servicer.
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or
such other number of days specified in the transaction
agreements.
----------------------------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------------------------
B-2
----------------------------------------------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans
agree with the Servicer's records with respect to an
obligor's unpaid principal balance.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an
obligor's mortgage loans (e.g., loan modifications or
re-agings) are made, reviewed and approved by
authorized personnel in accordance with the transaction
agreements and related pool asset documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with
the timeframes or other requirements established by the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such
records are maintained on at least a monthly basis, or
such other period specified in the transaction
agreements, and describe the entity's activities in
monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
----------------------------------------------------------------------------------------------------------------------
B-3
----------------------------------------------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
----------------------------------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based
on the related mortgage loan documents.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such
as escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's mortgage loan documents,
on at least an annual basis, or such other period
specified in the transaction agreements; (B) interest
on such funds is paid, or credited, to obligors in
accordance with applicable mortgage loan documents and
state laws; and (C) such funds are returned to the
obligor within 30 calendar days of full repayment of
the related mortgage loans, or such other number of
days specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments,
provided that such support has been received by the
servicer at least 30 calendar days prior to these
dates, or such other number of days specified in the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xii) Any late payment penalties in connection with any
payment to be made on behalf of an obligor are paid
from the servicer's funds and not charged to the
obligor, unless the late payment was due to the
obligor's error or omission.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other number of
days specified in the transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts
are recognized and recorded in accordance with the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
1122(d)(4)(xv) Any external enhancement or other support, identified
in Item 1114(a)(1) through (3) or Item 1115 of
Regulation AB, is maintained as set forth in the
transaction agreements.
----------------------------------------------------------------------------------------------------------------------
B-4
[WACHOVIA MORTGAGE CORPORATION]
[NAME OF SUBSERVICER]
Date: ________________________________________
By: ________________________________________
Name:
Title:
B-5
EXHIBIT AA
Amended and Restated Mortgage Loan Flow Purchase, Sale & Servicing
Agreement, dated as of December 1, 2005, between Xxxxxxx Xxxxx Mortgage
Company and PHH Mortgage Corporation (formerly known as Cendant Mortgage
Corporation) and Xxxxxx'x Gate Residential
Mortgage Trust (formerly known as Cendant Residential Mortgage Trust)
[See Exhibit 99.5 to Form 8-K/A filed with the Commission on
February 14, 2006, Accession No. 0000905148-06-001326]
AA-1
