CWALT, INC., Depositor GSC CAPITAL CORP. MORTGAGE TRUST 2006-2, Issuing Entity GSC CAPITAL CORP. QRS DELAWARE LOAN HOLDINGS, INC., Seller GSC CAPITAL CORP. Sponsor COUNTRYWIDE HOME LOANS, INC., COUNTRYWIDE HOME LOANS SERVICING LP, Master Servicer and...
CWALT,
INC.,
Depositor
Issuing
Entity
GSC
CAPITAL CORP. QRS DELAWARE LOAN HOLDINGS, INC.,
Seller
GSC
CAPITAL CORP.
Sponsor
COUNTRYWIDE
HOME LOANS, INC.,
COUNTRYWIDE
HOME LOANS SERVICING LP,
Master
Servicer
and
THE
BANK
OF NEW YORK,
Indenture
Trustee
______________________________________
DATED
AS
OF JUNE 1, 2006
______________________________________
GSC
ALTERNATIVE LOAN TRUST NOTES, SERIES 2006-2
Table
of Contents
|
ARTICLE
I
DEFINITIONS
|
|
|
Section
1.01
|
Defined
Terms.
|
|
Section
1.02
|
Other
Definitional Provisions.
|
|
ARTICLE
II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND
WARRANTIES
|
|
|
Section
2.01
|
Conveyance
of Mortgage Loans.
|
|
Section
2.02
|
Acceptance
by Indenture Trustee of the Mortgage Loans.
|
|
Section
2.03
|
Representations,
Warranties and Covenants of the Master Servicer and the
Seller.
|
|
Section
2.04
|
Representations
and Warranties of the Depositor.
|
|
Section
2.05
|
Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases.
|
|
Section
2.06
|
Covenants
of the Master Servicer.
|
|
Section
2.07
|
Assignment
of Agreement.
|
|
ARTICLE
III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
|
|
|
Section
3.01
|
Master
Servicer to Service Mortgage Loans.
|
|
Section
3.02
|
Subservicing;
Enforcement of the Obligations of Master Servicer.
|
|
Section
3.03
|
Rights
of the Issuing Entity, the Depositor, the Seller, CHL and the Indenture
Trustee in Respect of the Master Servicer.
|
|
Section
3.04
|
Indenture
Trustee to Act as Master Servicer.
|
|
Section
3.05
|
Collection
of Mortgage Loan Payments; Collection Account; Payment
Account.
|
|
Section
3.06
|
Collection
of Taxes, Assessments and Similar Items; Escrow
Accounts.
|
|
Section
3.07
|
Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
|
|
Section
3.08
|
Permitted
Withdrawals from the Collection Account and the Payment
Account.
|
|
Section
3.09
|
Maintenance
of Hazard Insurance.
|
|
Section
3.10
|
Enforcement
of Due-On-Sale Clauses; Assumption Agreements.
|
|
Section
3.11
|
Realization
Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and
Realized Losses; Repurchase of Certain Mortgage Loans.
|
|
Section
3.12
|
Indenture
Trustee to Cooperate; Release of Mortgage Files.
|
|
Section
3.13
|
Documents,
Records and Funds in Possession of Master Servicer to be Held for
the
Indenture Trustee.
|
|
Section
3.14
|
Servicing
Compensation.
|
|
Section
3.15
|
Access
to Certain Documentation.
|
|
Section
3.16
|
Annual
Statement as to Compliance.
|
|
Section
3.17
|
[Reserved].
|
|
Section
3.18
|
[Reserved].
|
|
Section
3.19
|
Optional
Purchase of Mortgage Loans.
|
|
ARTICLE
IV
PAYMENTS AND ADVANCES BY THE MASTER SERVICER
|
|
|
Section
4.01
|
Advances;
Remittance Reports.
|
|
Section
4.02
|
Reduction
of Servicing Compensation in Connection with Prepayment Interest
Shortfalls.
|
|
ARTICLE
V
THE MASTER SERVICER AND THE SELLER
|
|
|
Section
5.01
|
Respective
Liabilities of the Master Servicer, CHL and the Seller.
|
|
Section
5.02
|
Merger
or Consolidation of the Master Servicer or the Seller.
|
|
Section
5.03
|
Limitation
on Liability of the Seller, the Master Servicer and
Others.
|
|
Section
5.04
|
Limitation
on Resignation of Master Servicer.
|
|
Section
5.05
|
Errors
and Omissions Insurance; Fidelity Bonds.
|
|
ARTICLE
VI
DEFAULT; TERMINATION OF MASTER SERVICER
|
|
|
Section
6.01
|
Events
of Default.
|
|
Section
6.02
|
Indenture
Trustee to Act; Appointment of Successor.
|
|
Section
6.03
|
Notification
to Noteholders.
|
|
ARTICLE
VII
CONCERNING THE INDENTURE TRUSTEE
|
|
|
Section
7.01
|
Duties
of Indenture Trustee.
|
|
Section
7.02
|
Indenture
Trustee Not Liable for Mortgage Loans .
|
|
Section
7.03
|
Master
Servicer to Pay Indenture Trustee’s and Owner Trustee’s
Expenses.
|
|
ARTICLE
VIII
MISCELLANEOUS PROVISIONS
|
|
|
Section
8.01
|
Amendment.
|
|
Section
8.02
|
Recordation
of Agreement; Counterparts.
|
|
Section
8.03
|
Governing
Law.
|
|
Section
8.04
|
Notices.
|
|
Section
8.05
|
Severability
of Provisions.
|
|
Section
8.06
|
Assignment.
|
|
Section
8.07
|
Inspection
and Audit Rights.
|
|
Section
8.08
|
[Reserved].
|
|
Section
8.09
|
No
Petition.
|
|
Section
8.10
|
No
Recourse.
|
|
ARTICLE
IX
TERMINATION
|
|
|
Section
9.01
|
Termination
upon Liquidation or Repurchase of all Mortgage Loans.
|
|
Section
9.02
|
Final
Distribution on the Notes.
|
|
Section
9.03
|
Additional
Termination Requirements Subject to any REMIC
Elections.
|
|
ARTICLE
X
Duties of the Master Servicer
|
|
|
Section
10.01
|
Administrative
Duties.
|
|
Section
10.02
|
Records.
|
|
Section
10.03
|
Additional
Information to be Furnished.
|
|
ARTICLE
XI
EXCHANGE ACT REPORTING
|
|
|
Section
11.01
|
Filing
Obligations.
|
|
Section
11.02
|
Form
10-D Filings.
|
|
Section
11.03
|
Form
8-K Filings.
|
|
Section
11.04
|
Form
10-K Filings.
|
|
Section
11.05
|
Xxxxxxxx-Xxxxx
Certification.
|
|
Section
11.06
|
Form
15 Filing.
|
|
Section
11.07
|
Report
on Assessment of Compliance and Attestation.
|
|
Section
11.08
|
Use
of Subservicers and Subcontractors.
|
|
Section
11.09
|
Amendments.
|
|
ARTICLE
XII
TMP TRIGGER EVENT
|
|
|
Section
12.01
|
Servicing
Provisions Upon a TMP Trigger
Event.
|
EXHIBITS
|
EXHIBIT
A-1
|
Mortgage
Loan Schedule
|
|
EXHIBIT
A-2
|
Mortgage
Loans for which All or a Portion of a Related Mortgage File is not
Delivered to the Indenture Trustee on or prior to the Closing
Date
|
|
EXHIBIT
B-1
|
Form
of Initial Certification of Indenture Trustee
|
|
EXHIBIT
B-2
|
Form
of Interim Certification of Indenture Trustee
|
|
EXHIBIT
B-3
|
Form
of Final Certification of Indenture Trustee
|
|
EXHIBIT
C
|
Request
for Release (for Indenture Trustee)
|
|
EXHIBIT
D
|
Request
for Release (for Mortgage Loans Paid in Full, Repurchased or
Replaced)
|
|
EXHIBIT
E
|
Form
of Mortgage Note and Mortgage
|
|
EXHIBIT
F
|
Officer’s
Certificate with respect to Prepayments
|
|
EXHIBIT
G
|
Schedule
of Document Delivery Deficiencies
|
|
EXHIBIT
H
|
List
of Foreclosure Restricted Loans
|
|
EXHIBIT
I
|
Standard
& Poor’s Glossary
|
|
EXHIBIT
J
|
Item
1119 Party Schedule
|
|
EXHIBIT
K-1
|
Form
of Certification to be Provided to the Master Servicer by any
Subservicer
|
|
EXHIBIT
K-2
|
Form
of Certification to be Provided to the Master Servicer by the Indenture
Trustee
|
|
EXHIBIT
L
|
Form
of Servicing Criteria to be Addressed in Assessment of Compliance
Statement
|
|
EXHIBIT
M
|
List
of Appraisal Firms
|
|
EXHIBIT
N
|
REO
Direction Letter
|
|
EXHIBIT
O
|
REO
Sale Notification Letter
|
|
SCHEDULE
I
|
Prepayment
Charge Schedule and Prepayment Charge
Summary
|
SALE
AND
SERVICING AGREEMENT, dated as of June 1, 2006, by and among CWALT, INC., a
Delaware corporation, as depositor (the “Depositor”),
GSC
CAPITAL CORP. MORTGAGE TRUST 2006-2, a Delaware statutory trust, as Issuing
Entity (the “Issuing
Entity”),
GSC
CAPITAL CORP. QRS DELAWARE LOAN HOLDINGS, INC, a Delaware corporation,
as
seller (the “Seller”),
GSC
CAPITAL CORP. as sponsor (the “Sponsor”),
solely with respect to its obligations under Section 2.03(c) and Section 2.02,
COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership, as master
servicer (the “Master
Servicer”),
THE
BANK OF NEW YORK, a New York banking corporation, as indenture trustee (the
“Indenture
Trustee”)
and
COUNTRYWIDE HOME LOANS, INC., a New York corporation (“CHL”).
PRELIMINARY
STATEMENT
On
the
Closing Date, the Depositor will acquire the Mortgage Loans from the Seller
pursuant to this Agreement. Immediately upon the conveyance of the Mortgage
Loans, the Depositor will sell to the Issuing Entity for benefit of the
Noteholders, without recourse, all right title and interest in the Mortgage
Loans.
ARTICLE
I
DEFINITIONS
| Section 1.01 |
Defined
Terms.
|
For
all
purposes of this Agreement, except as otherwise expressly provided herein or
unless the context otherwise requires, capitalized terms not otherwise defined
herein shall have the meanings assigned to such terms in the Definitions
contained in Appendix A to the Indenture which is incorporated by reference
herein. All other capitalized terms used herein shall have the meanings
specified herein.
| Section 1.02 |
Other
Definitional Provisions.
|
(a) All
terms
defined in this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto unless otherwise
defined therein.
(b) As
used
in this Agreement and in any certificate or other document made or delivered
pursuant hereto or thereto, accounting terms not defined in this Agreement
or in
any such certificate or other document, and accounting terms partly defined
in
this Agreement or in any such certificate or other document, to the extent
not
defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of accounting
terms in this Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any such
certificate or other document shall control.
(c) The
words
“hereof,” “herein,” “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement; Section and Exhibit references contained in this
Agreement are references to Sections and Exhibits in or to this Agreement unless
otherwise specified; and the term “including” shall mean “including without
limitation”.
(d) The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as the feminine
and neuter genders of such terms.
(e) Any
agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in connection herewith means such agreement,
instrument or statute as from time to time amended, modified or supplemented
and
includes (in the case of agreements or instruments) references to all
attachments thereto and instruments incorporated therein; references to a Person
are also to its permitted successors and assigns.
ARTICLE
II
CONVEYANCE
OF MORTGAGE LOANS;
REPRESENTATIONS
AND WARRANTIES
| Section 2.01 |
Conveyance
of Mortgage Loans.
|
(a) The
Seller hereby sells, transfers, assigns, sets over and otherwise conveys to
the
Depositor, without recourse, all the right, title and interest of the Seller
in
and to the Mortgage Loans, including all interest and principal received and
receivable by the Seller on or with respect to the Mortgage Loans after the
Cut-off Date (to the extent not applied in computing the Cut-off Date Principal
Balance thereof) or remitted to the Master Servicer for deposit into the
Collection Account as an Initial Collection Account Deposit as provided in
this
Agreement, other than principal due on the Mortgage Loans on or prior to the
Cut-off Date and interest accruing prior to the Cut-off Date.
Immediately
upon the conveyance of the Mortgage Loans referred to in the preceding
paragraph, the Depositor hereby sells, transfers, assigns, sets over and
otherwise conveys to the Issuing Entity for benefit of the Noteholders, without
recourse, all right title and interest in the Mortgage Loans.
It
is
intended that the sale of the Mortgage Loans by the Seller as provided hereby
be, and be construed as, an absolute sale of all of the Seller’s right, title,
and interest in, to and under the Mortgage Loans to the Depositor and, in
connection with such sale, an absolute assignment, transfer, and conveyance
by
the Seller of all of the Seller’s right, title, and interest in, to and under
the Mortgage Loans to the Depositor. Furthermore, it is not intended that any
such sale, assignment, transfer, and conveyance be deemed a pledge of such
Mortgage Loans by the Seller to the Depositor to secure a debt or other
obligation of the Seller.
It
is
agreed and understood by the parties hereto that it is not intended that any
mortgage loan be included in the Trust Estate that is either (i) a “High-Cost
Home Loan” as defined in the New Jersey Home Ownership Act effective November
27, 2003, (ii) a “High-Cost Home Loan” as defined in the New Mexico Home Loan
Protection Act effective January 1, 2004, (iii) a “High-Cost Home Loan” as
defined in the Massachusetts Predatory Home Loan Practices Act effective
November 7, 2004 or (iv) a “High Cost Home Loan” as defined in the Indiana Home
Loan Practices Act, effective January 1, 2005 (Ind. Code Xxx. Sections 24-9-1
through 24-9-9).
In
connection with the transfer and assignment of each Mortgage Loan, the Depositor
has delivered to, and deposited with, the Indenture Trustee, on behalf of the
Issuing Entity (or, in the case of the Delay Delivery Mortgage Loans, will
deliver to, and deposit with, the Indenture Trustee within the time periods
specified in the definition of Delay Delivery Mortgage Loans) (except as
provided in clause (vi) below) for the benefit of the Noteholders, the following
documents or instruments with respect to each such Mortgage Loan so assigned
(with respect to each Mortgage Loan, clause (i) through (vi) below, together,
the “Mortgage
File”
for
each such Mortgage Loan):
(i)the
original Mortgage Note, endorsed by manual or facsimile signature in blank
in
the following form: “Pay to the order of ________________ without recourse”,
with all intervening endorsements that show a complete chain of endorsement
from
the originator to the Person endorsing the Mortgage Note (each such endorsement
being 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,
if the original Mortgage Note has been lost or destroyed and not replaced,
an
original lost note affidavit, stating that the original Mortgage Note was lost
or destroyed, together with a copy of the related Mortgage Note and all such
intervening endorsements;
(ii)in
the
case of each Mortgage Loan that is not a MERS Mortgage Loan, the original
recorded Mortgage or a copy of such Mortgage, with recording information, and
in
the case of each MERS Mortgage Loan, the original Mortgage or a copy of such
Mortgage, with recording information, noting the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan
if
the Mortgage Loan is a MOM Loan, 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;
(iiii)in
the
case of each Mortgage Loan that is not a MERS Mortgage Loan, a duly executed
assignment of the Mortgage to “The Bank of New York, a New York banking
corporation, as indenture trustee for the holders of GSC Alternative Loan Trust
Notes, Series 2006-2, under the Sale and Servicing Agreement dated as of June
1,
2006, without recourse” or a copy of such assignment, with recording
information, (each such assignment, when duly and validly completed, to be
in
recordable form and sufficient to effect the assignment of and transfer to
the
assignee thereof, under the Mortgage to which such assignment
relates);
(iv)the
original recorded assignment or assignments of the Mortgage or a copy of such
assignments, with recording information, together with all interim recorded
assignments of such Mortgage or a copy of such assignments, with recording
information (in each case noting the presence of a MIN in the case of each
MERS
Mortgage Loan);
(v)the
original or copies of each assumption, modification, written assurance or
substitution agreement, if any; and
(vi)the
original or duplicate original lender’s title policy or a copy of lender’s title
policy or a printout of the electronic equivalent and all riders thereto or,
in
the event such original title policy has not been received from the insurer,
such original or duplicate original lender’s title policy and all riders thereto
shall be delivered within one year of the Closing Date.
All
other
documents contained in the Mortgage File and any original documents relating
to
the Mortgage Loans not contained in the Mortgage File or delivered to the
Indenture Trustee, if any, shall be held by the Master Servicer in trust as
agent for the Indenture Trustee on behalf of the Noteholders.
In
connection with the assignment of any MERS Mortgage Loan, the Depositor agrees
that it will cause the Master Servicer, at the Master Servicer’s own expense, to
cause the MERS® System to indicate (and provide evidence to the Indenture
Trustee that it has done so) that such Mortgage Loans have been assigned by
the
Seller to the Depositor, by the Depositor to the Issuing Entity and by the
Issuing Entity to the Indenture Trustee in accordance with this Agreement for
the benefit of the Noteholders by including (or deleting, in the case of
Mortgage Loans which are repurchased in accordance with this Agreement) in
such
computer files (a) the code “[IDENTIFY INDENTURE TRUSTEE SPECIFIC CODE]” in the
field “[IDENTIFY THE FIELD NAME FOR INDENTURE TRUSTEE]” which identifies the
Indenture Trustee and (b) the code “[IDENTIFY SERIES SPECIFIC CODE NUMBER]” in
the field “Pool Field” which identifies the series of the Notes issued in
connection with such Mortgage Loans. The Seller further agrees that it will
not,
and will not permit the Master Servicer to, and the Master Servicer agrees
that
it will not, alter the codes referenced in this paragraph with respect to any
Mortgage Loan during the term of this Agreement unless and until such Mortgage
Loan is repurchased in accordance with the terms of this Agreement.
In
the
event that in connection with any Mortgage Loan that is not a MERS Mortgage
Loan
the Seller cannot deliver the original recorded Mortgage or all interim recorded
assignments of the Mortgage satisfying the requirements of clause (ii), (iii)
or
(iv) concurrently with the execution and delivery hereof, the Depositor shall
cause the Seller to use its reasonable best efforts to obtain a true copy of
such Mortgage and of each such undelivered interim assignment of the Mortgage
each certified by the Seller, the applicable title company, escrow agent or
attorney, or the originator of such Mortgage, as the case may be, to be a true
and complete copy of the original Mortgage or assignment of Mortgage submitted
for recording. For any such Mortgage Loan that is not a MERS Mortgage Loan
the
Depositor shall cause the Seller to use its reasonable best efforts to obtain
such original Mortgage and such assignment or assignments with evidence of
recording indicated thereon upon receipt thereof from the public recording
official, or a copy thereof, certified, if appropriate, by the relevant
recording office. If the public recording office in which a Mortgage or interim
assignment thereof is recorded retains the original of such Mortgage or
assignment, a copy of the original Mortgage or assignment so retained, with
evidence of recording thereon, certified to be true and complete by such
recording office, shall satisfy the Seller’s obligations in Section 2.01. If any
document submitted for recording pursuant to this Agreement is (x) lost prior
to
recording or rejected by the applicable recording office, the Seller shall
immediately prepare or cause to be prepared a substitute and submit it for
recording or (y) lost after recording, the Seller to use its reasonable best
efforts to obtain a copy of such document certified by the applicable public
recording office to be a true and complete copy of the original recorded
document
With
respect to each Mortgage Loan other than a MERS Mortgage Loan as to which the
related Mortgaged Property and Mortgage File are located in any jurisdiction
under the laws of which the recordation of the assignment specified in clause
(iii) above is not necessary to protect the Indenture Trustee’s and the
Noteholders’ interest in the related Mortgage Loan, as evidenced by an Opinion
of Counsel delivered by CHL to the Indenture Trustee within 90 days of the
Closing Date in lieu of recording the assignment specified in clause (iii)
above, CHL may deliver an unrecorded assignment in blank, in form otherwise
suitable for recording to the Indenture Trustee; provided that, if the related
Mortgage has not been returned from the applicable public recording office,
such
assignment, or any copy thereof, of the Mortgage may exclude the information
to
be provided by the recording office. As to any Mortgage Loan other than a MERS
Mortgage Loan, the procedures of the preceding sentence shall be applicable
only
so long as the related Mortgage File is maintained in the possession of the
Indenture Trustee in the State or jurisdiction described in such sentence.
In
the event that with respect to Mortgage Loans other than MERS Mortgage Loans
(i)
any Seller, the Depositor, the Issuing Entity or the Master Servicer gives
written notice to the Indenture Trustee that recording is required to protect
the right, title and interest of the Indenture Trustee on behalf of the
Noteholders in and to any Mortgage Loan, (ii) a court recharacterizes any sale
of the Mortgage Loans as a financing, or (iii) as a result of any change in
or
amendment to the laws of the State or jurisdiction described in the first
sentence of this paragraph or any applicable political subdivision thereof,
or
any change in official position regarding application or interpretation of
such
laws, including a holding by a court of competent jurisdiction, such recording
is so required, the Indenture Trustee shall complete the assignment in the
manner specified in clause (iii) above and CHL shall submit or cause to be
submitted for recording as specified above or, should CHL fail to perform such
obligations, the Indenture Trustee shall cause the Master Servicer, at the
Master Servicer’s expense, to cause each such previously unrecorded assignment
to be submitted for recording as specified above. In the event a Mortgage File
is released to the Master Servicer as a result of the Master Servicer’s having
completed a Request for Document Release in the form of Exhibit D, the Indenture
Trustee shall complete the assignment of the related Mortgage in the manner
specified in clause (iii) above.
So
long
as the Indenture Trustee or its agent maintains an office in the State of
California, the Indenture Trustee or its agent shall maintain possession of
and
not remove or attempt to remove from the State of California any of the Mortgage
Notes as to which the related Mortgaged Property is located in such State.
The
Seller hereby appoints the Master Servicer (and any successor servicer
hereunder) as its attorney-in-fact with full power and authority acting in
its
stead for the purpose of such preparation, execution and filing.
In
the
case of Mortgage Loans that become the subject of a Principal Prepayment between
the Closing Date and the Cut-off Date, the Seller shall deposit or cause to
be
deposited in the Collection Account the amount required to be deposited therein
with respect to such payment pursuant to Section 3.05 hereof.
Notwithstanding
anything to the contrary in this Agreement, within thirty days after the Closing
Date, the Seller shall either (i) deliver to the Indenture Trustee the Mortgage
Note as required pursuant to this Section 2.01 for each Delay Delivery Mortgage
Loan or (ii) (A) repurchase the Delay Delivery Mortgage Loan or (B) substitute
the Delay Delivery Mortgage Loan for a Replacement Mortgage Loan, which
repurchase or substitution shall be accomplished in the manner and subject
to
the conditions set forth in Section 2.03, provided that if the Seller fails
to
deliver a Mortgage Note for any Delay Delivery Mortgage Loan within the period
provided in the prior sentence, the cure period provided for in Section 2.02
or
in Section 2.03 shall not apply to the initial delivery of the Mortgage Note
for
such Delay Delivery Mortgage Loan, but rather the Seller shall have five (5)
Business Days to cure such failure to deliver. The Seller shall promptly provide
each Rating Agency with written notice of any cure, repurchase or substitution
made pursuant to the proviso of the preceding sentence. On or before the
thirtieth (30th) day (or if such thirtieth day is not a Business Day, the
succeeding Business Day) after the Closing Date, the Indenture Trustee shall,
in
accordance with the provisions of Section 2.02, send a Delay Delivery
Certification substantially in the form annexed hereto as Exhibit B-3 (with
any
applicable exceptions noted thereon) for all Delay Delivery Mortgage Loans
delivered within thirty (30) days after such date. The Indenture Trustee will
promptly send a copy of such Delay Delivery Certification to each Rating
Agency.
The
document delivery requirements of Section 2.01 shall not apply with respect
to
those items specifically listed on the Schedule of Document Delivery
Deficiencies attached hereto as Exhibit G.
(b) CHL
agrees (x) to cause The Bank of New York to enter into the Swap Contract
Administration Agreement as Swap Contract Administrator and (y) to assign all
of
its right, title and interest in and to the interest rate corridor transaction
evidenced by the Confirmation, and to cause all of its obligations in respect
of
such transaction to be assumed by, the Swap Contract Administrator, on the
terms
and conditions set forth in the Swap Contract Assignment Agreement.
| Section 2.02 |
Acceptance
by Indenture Trustee of the Mortgage Loans.
|
The
Indenture Trustee acknowledges receipt, subject to the limitations contained
in,
and any exceptions noted in, the Initial Certification in the form annexed
hereto as Exhibit B-1 and in the list of exceptions attached thereto and the
Schedule of Document Delivery Deficiencies attached hereto as Exhibit G, of
the
Mortgage Note with respect to the Mortgage Loans and
declares that it holds and will hold the assets included in the Trust Estate,
in
trust for the exclusive use and benefit of all present and future
Noteholders.
The
Indenture Trustee agrees to execute and deliver on the Closing Date to the
Issuing Entity, the Depositor, the Master Servicer, CHL and the Seller an
Initial Certification substantially in the form annexed hereto as Exhibit B-1
to
the effect that, as to each 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 not covered by such certification), the
Mortgage Notes are in the Indenture Trustee’s possession, except with respect to
any document referred to in the Schedule of Document Delivery Deficiencies
attached hereto as Exhibit G, and based on its review and examination and only
as to the foregoing documents, such Mortgage Notes appear regular on their
face
and relate to such Mortgage Loan. The Indenture Trustee agrees to execute and
deliver within 30 days after the Closing Date to the Issuing Entity, the
Depositor, the Master Servicer, CHL and the Seller an Interim Certification
substantially in the form annexed hereto as Exhibit B-2 to the effect that,
as
to each 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 not covered by such certification) the Mortgage Notes are
in
its possession and based on its review and examination, such Mortgage Notes
appear regular on their face. On or before the thirtieth (30th) day after the
Closing Date (or if such thirtieth day is not a Business Day, the succeeding
Business Day), the Indenture Trustee shall deliver to the Issuing Entity,
Depositor, the Master Servicer, CHL and the Seller a Delay Delivery
Certification with respect to the Mortgage Loans substantially in the form
annexed hereto as Exhibit B-3, with any applicable exceptions noted thereon.
The
Indenture Trustee shall be under no duty or obligation to inspect, review or
examine such documents, instruments, certificates or other papers to determine
that the same are genuine, enforceable or appropriate for the represented
purpose or that they have actually been recorded in the real estate records
or
that they are other than what they purport to be on their face.
Not
later
than 180 days after the Closing Date, the Indenture Trustee shall deliver to
the
Issuing Entity, Depositor, the Master Servicer, CHL and the Seller (and to
any
Noteholder that so requests) a Final Certification with respect to the Mortgage
Loans substantially in the form annexed hereto as Exhibit C, with any applicable
exceptions noted thereon.
In
connection with the Indenture Trustee’s completion and delivery of such Final
Certification, the Indenture Trustee shall review each Mortgage Note. If, in
the
course of such review, the Indenture Trustee finds any Mortgage Note missing
or
defective, the Indenture Trustee shall include such exceptions in such Final
Certification. The Seller shall promptly correct or cure such defect referred
to
above within 90 days from the date it was so notified of such defect if such
defect is not listed on Exhibit G hereto or if such defect is listed on Exhibit
G and such defect materially interferes with the Master Servicer’s ability to
foreclose on the related Mortgaged Property and, if the Seller does not correct
or cure such defect within such period, the Seller shall either (A) if the
time
to cure such defect expires prior to the end of the second anniversary of the
Closing Date, substitute for the related Mortgage Loan a Replacement Mortgage
Loan, which substitution shall be accomplished in the manner and subject to
the
conditions set forth in Section 2.03, or (B) purchase such Mortgage Loan from
the Trust Estate within 90 days from the date the Seller was notified of such
defect in writing at the Purchase Price of such Mortgage Loan; provided that
any
such substitution pursuant to (A) above or repurchase pursuant to (B) above
shall not be effected prior to the delivery to the Indenture Trustee of the
Opinion of Counsel required by Section 2.05 hereof and any substitution pursuant
to (A) above shall not be effected prior to the additional delivery to the
Indenture Trustee of a Request for Release substantially in the form of Exhibit
E. No substitution will be made in any calendar month after the Determination
Date for such month. The Purchase Price for any such Mortgage Loan shall be
remitted by Seller to the Master Servicer for deposit in the Collection Account
and, upon receipt of such deposit and certification with respect thereto in
the
form of Exhibit E hereto, the Indenture Trustee shall release the related
Mortgage File to the Seller and shall execute and deliver at the Seller’s
request such instruments of transfer or assignment as the Seller has prepared,
in each case without recourse, as shall be necessary to vest in the Seller,
or a
designee, the Indenture Trustee’s interest in any Mortgage Loan released
pursuant hereto. If pursuant to the foregoing provisions the Seller repurchases
a Mortgage Loan that is a MERS Mortgage Loan, the Master Servicer shall 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® System in accordance with MERS’ rules
and regulations. It is understood and agreed that the obligation of the Seller
to substitute for or to purchase any Mortgage Loan that does not meet the
requirements of this Section 2.02 above shall constitute the sole remedy
respecting such defect available to the Indenture Trustee, the Issuing Entity,
the Depositor and any Noteholder against the Seller. If there is a missing
or
defective Mortgage Note and the Seller fails to correct, cure, purchase or
substitute, then the Sponsor will (i) cure such breach in all material respects,
(ii) purchase the affected Mortgage Loan at the applicable Purchase Price or
(iii) if the 90-day cure period expires prior to the second anniversary of
the
Start-up Date, substitute a Replacement Mortgage Loan in exchange for such
Mortgage Loan. If there is a missing or defective Mortgage Note and both the
Seller and the Sponsor fail to correct, cure, purchase or substitute, then
CHL
will (i) cure such breach in all material respects, (ii) purchase the affected
Mortgage Loan at the applicable Purchase Price or (iii) if the 90-day cure
period expires prior to the second anniversary of the Start-up Date, substitute
a Replacement Mortgage Loan in exchange for such Mortgage Loan.
| Section 2.03 |
Representations,
Warranties and Covenants of the Master Servicer,
CHL and the Seller.
|
(a) The
Master Servicer hereby represents and warrants to the Issuing Entity, the
Depositor and the Indenture Trustee as follows, as of the date hereof with
respect to the Mortgage Loans:
(i) The
Master Servicer is duly organized as a Texas limited partnership and is validly
existing and in good standing under the laws of the State of Texas and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by the Master Servicer in any state in which a
Mortgaged Property is located or is otherwise not required under applicable
law
to effect such qualification and, in any event, is in compliance with the doing
business laws of any such state, to the extent necessary to ensure its ability
to enforce each Mortgage Loan, to service the Mortgage Loans in accordance
with
the terms of this Agreement and to perform any of its other obligations under
this Agreement in accordance with the terms hereof.
(ii) The
Master Servicer has the full partnership power and authority to sell and service
each Mortgage Loan, and to execute, deliver and perform, and to enter into
and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary corporate action on the part of the Master Servicer
the execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes a legal, valid and binding obligation of the Master
Servicer, enforceable against the Master Servicer in accordance with its terms,
except that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors’ rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(iii) The
execution and delivery of this Agreement by the Master Servicer, the servicing
of the Mortgage Loans by the Master Servicer under this Agreement, the
consummation of any other of the transactions contemplated by this Agreement,
and the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of the Master Servicer and will not (A) result in a material
breach of any term or provision of the certificate of limited partnership,
partnership agreement or other organizational document of the Master Servicer
or
(B) materially conflict with, result in a material breach, violation or
acceleration of, or result in a material default under, the terms of any other
material agreement or instrument to which the Master Servicer is a party or
by
which it may be bound, or (C) constitute a material violation of any statute,
order or regulation applicable to the Master Servicer of any court, regulatory
body, administrative agency or governmental body having jurisdiction over the
Master Servicer; and the Master Servicer is not in breach or violation of any
material indenture or other material agreement or instrument, or in violation
of
any statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Master Servicer’s ability to perform or meet
any of its obligations under this Agreement.
(iv) The
Master Servicer is an approved servicer of conventional mortgage loans for
Xxxxxx Xxx or Freddie Mac and is a mortgagee approved by the Secretary of
Housing and Urban Development pursuant to sections 203 and 211 of the National
Housing Act.
(v) No
litigation is pending or, to the best of the Master Servicer’s knowledge,
threatened, against the Master Servicer that would materially and adversely
affect the execution, delivery or enforceability of this Agreement or the
ability of the Master Servicer to service the Mortgage Loans or to perform
any
of its other obligations under this Agreement in accordance with the terms
hereof.
(vi) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for 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 hereby, or if any such consent,
approval, authorization or order is required, the Master Servicer has obtained
the same.
(vii) The
Master Servicer 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 Mortgage Loans for as long as such Mortgage Loans are
registered with MERS.
(b) CHL
hereby represents and warrants to the Issuing Entity, the Depositor and the
Indenture Trustee as of the Closing Date (or if otherwise specified below,
as of
the date so specified):
(i) CHL
is
duly organized as a New York corporation and is validly existing and in good
standing under the laws of the State of New York and is duly authorized and
qualified to transact any and all business contemplated by this Agreement to
be
conducted by CHL in any state in which a Mortgaged Property is located or is
otherwise not required under applicable law to effect such qualification and,
in
any event, is in compliance with the doing business laws of any such state,
to
the extent necessary to ensure its ability to enforce each Mortgage Loan, to
sell the Mortgage Loans in accordance with the terms of this Agreement and
to
perform any of its other obligations under this Agreement in accordance with
the
terms hereof.
(ii) CHL
has
the full corporate power and authority to sell each Mortgage Loan, and to
execute, deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
corporate action on the part of CHL the execution, delivery and performance
of
this Agreement; and this Agreement, assuming the due authorization, execution
and delivery hereof by the other parties hereto, constitutes a legal, valid
and
binding obligation of CHL, enforceable against CHL in accordance with its terms,
except that (a) the enforceability hereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors’ rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
(iii) The
execution and delivery of this Agreement by CHL, the consummation of any other
of the transactions contemplated by this Agreement, and the fulfillment of
or
compliance with the terms hereof and thereof are in the ordinary course of
business of CHL and will not (A) result in a material breach of any term or
provision of the charter or by-laws of CHL or (B) materially conflict with,
result in a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement or instrument
to which CHL is a party or by which it may be bound, or (C) constitute a
material violation of any statute, order or regulation applicable to CHL of
any
court, regulatory body, administrative agency or governmental body having
jurisdiction over CHL; and CHL is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair CHL’s ability to perform or meet any of its
obligations under this Agreement.
(iv) No
litigation is pending or, to the best of CHL’s knowledge, threatened, against
CHL that would materially and adversely affect the execution, delivery or
enforceability of this Sale and Servicing Agreement or to perform any of its
obligations under this Sale and Servicing Agreement in accordance with the
terms
thereof.
(v) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by CHL of, or
compliance by CHL with, this Sale and Servicing Agreement or the consummation
of
the transactions contemplated thereby, or if any such consent, approval,
authorization or order is required, CHL has obtained the same.
(c) The
Seller hereby represents and warrants to the Issuing Entity, the Depositor,
the
Issuing Entity and the Indenture Trustee as of the Closing Date (or if otherwise
specified below, as of the date so specified):
(i) The
Seller is duly incorporated as a Delaware corporation and is validly existing
and in good standing under the laws of the State of Delaware and is duly
authorized and qualified to transact any and all business contemplated by this
Sale and Servicing Agreement to be conducted by the Seller in any state in
which
a Mortgaged Property is located or is otherwise not required under applicable
law to effect such qualification and, in any event, is in compliance with the
doing business laws of any such state, to the extent necessary to perform any
of
its obligations under this Sale and Servicing Agreement in accordance with
the
terms thereof.
(ii) The
Seller has the full corporate power and authority to sell each Mortgage Loan,
and to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by this Sale and Servicing Agreement and has duly
authorized by all necessary corporate action on the part of the Seller the
execution, delivery and performance of this Sale and Servicing Agreement; and
this Sale and Servicing Agreement, assuming the due authorization, execution
and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of the Seller, enforceable against the Seller in accordance
with its terms, except that (a) the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors’ rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(iii) The
execution and delivery of this Sale and Servicing Agreement by the Seller,
the
sale of the Mortgage Loans by the Seller under this Sale and Servicing
Agreement, the consummation of any other of the transactions contemplated by
this Sale and Servicing Agreement, and the fulfillment of or compliance with
the
terms thereof are in the ordinary course of business of the Seller and will
not
(A) result in a material breach of any term or provision of the charter or
by-laws of the Seller or (B) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default under,
the
terms of any other material agreement or instrument to which the Seller is
a
party or by which it may be bound, or (C) constitute a material violation
of any statute, order or regulation applicable to the Seller of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over the Seller; and the Seller is not in breach or violation of any material
indenture or other material agreement or instrument, or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it which breach or
violation may materially impair the Seller’s ability to perform or meet any of
its obligations under this Sale and Servicing Agreement.
(iv) No
litigation is pending or, to the best of the Seller’s knowledge, threatened,
against the Seller that would materially and adversely affect the execution,
delivery or enforceability of this Sale and Servicing Agreement or the ability
of the Seller to sell the Mortgage Loans or to perform any of its other
obligations under this Sale and Servicing Agreement in accordance with the
terms
thereof.
(v) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Seller
of,
or compliance by the Seller with, this Sale and Servicing Agreement or the
consummation of the transactions contemplated thereby, or if any such consent,
approval, authorization or order is required, the Seller has obtained the
same.
(vi) The
Seller intends to treat the transfer of the Mortgage Loans to the Depositor
as a
sale of the Mortgage Loans for all of its accounting and regulatory
purposes.
(vii) The
information contained in the Mortgage Loan Schedule is complete, true and
correct in all material respects;
(viii)
All
payments due with respect to each Mortgage Loan prior to the Cut-off Date have
been made; and as of the Cut-off Date, no Mortgage Loan has been contractually
delinquent for 30 or more days more than once during the twelve months prior
to
the Cut-off Date.
(ix) No
Mortgage Loan had a Loan-to-Value Ratio at origination in excess of
100.00%.
(x) Each
Mortgage is a valid and enforceable first lien on the Mortgaged Property subject
only to (a) the lien of non delinquent current real property taxes and
assessments, (b) covenants, conditions and restrictions, rights of way,
easements and other matters of public record as of the date of recording of
such
Mortgage, such exceptions appearing of record being acceptable to mortgage
lending institutions generally or specifically reflected in the appraisal made
in connection with the origination of the related Mortgage Loan, and (c) other
matters to which like properties are commonly subject which do not materially
interfere with the benefits of the security intended to be provided by such
Mortgage.
(xi) There
is
no delinquent tax or assessment lien against any Mortgaged
Property.
(xii) There
is
no valid offset, defense or counterclaim to any Mortgage Note or Mortgage,
including the obligation of the Mortgagor to pay the unpaid principal of or
interest on such Mortgage Note.
(xiii) There
are
no mechanics’ liens or claims for work, labor or material affecting any
Mortgaged Property which are or may be a lien prior to, or equal with, the
lien
of such Mortgage, except those which are insured against by the title insurance
policy referred to in item (xvii) below.
(xiv) To
the
best of the Seller’s knowledge, each Mortgaged Property is free of material
damage and in good repair.
(xv) Each
Mortgage Loan at origination complied in all material respects with applicable
local, state and federal laws, including, without limitation, usury, equal
credit opportunity, predatory and abusive lending laws, real estate settlement
procedures, truth-in-lending and disclosure laws, and consummation of the
transactions contemplated hereby will not involve the violation of any such
laws.
(xvi) Neither
the Seller nor any prior holder of any Mortgage has modified the Mortgage in
any
material respect (except that a Mortgage Loan may have been modified by a
written instrument which has been recorded or submitted for recordation, if
necessary, to protect the interests of the Noteholders and the original or
a
copy of which has been delivered to the Indenture Trustee); satisfied, cancelled
or subordinated such Mortgage in whole or in part; released the related
Mortgaged Property in whole or in part from the lien of such Mortgage; or
executed any instrument of release, cancellation, modification or satisfaction
with respect thereto.
(xvii) A
lender’s policy of title insurance together with a condominium endorsement and
extended coverage endorsement, if applicable, in an amount at least equal to
the
Cut-off Date Stated Principal Balance of each such Mortgage Loan or a commitment
(binder) to issue the same was effective on the date of the origination of
each
Mortgage Loan, each such policy is valid and remains in full force and effect,
and each such policy was issued by a title insurer qualified to do business
in
the jurisdiction where the Mortgaged Property is located which policy insures
the Seller and successor owners of indebtedness secured by the insured Mortgage,
as to the first priority lien of the Mortgage subject to the exceptions set
forth in paragraph (x) above and against any loss by reason of the invalidity
or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment in the mortgage interest rate and/or monthly payment;
to the best of the Seller’s knowledge, no claims have been made under such
mortgage 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 mortgage title insurance policy.
(xviii) With
respect to each Mortgage Loan, all mortgage rate and payment adjustments, if
any, made on or prior to the Cut-off Date have been made in accordance with
the
terms of the related Mortgage Note or subsequent modifications, if any, and
applicable law.
(xix) Each
Mortgage Loan was originated (within the meaning of Section 3(a)(41) of the
Securities Exchange Act of 1934, as amended) by an entity that satisfied at
the
time of origination the requirements of Section 3(a)(41) of the Securities
Exchange Act of 1934, as amended.
(xx) To
the
best of the Seller’s knowledge, all of the improvements which were included for
the purpose of determining the Appraised Value of the Mortgaged Property lie
wholly within the boundaries and building restriction lines of such property,
and no improvements on adjoining properties encroach upon the Mortgaged
Property.
(xxi) To
the
best of the Seller’s knowledge, no improvement located on or being part of the
Mortgaged Property is in violation of any applicable zoning law or regulation.
To the best of the Seller’s knowledge, 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, unless the lack thereof would not have a material adverse effect
on
the value of such Mortgaged Property, and the Mortgaged Property is lawfully
occupied under applicable law.
(xxii) Each
Mortgage Note and the related Mortgage are genuine, and each is the legal,
valid
and binding obligation of the maker thereof, enforceable in accordance with
its
terms and under applicable law. To the best of the Seller’s knowledge, all
parties to the Mortgage Note and the Mortgage had legal capacity to execute
the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have been
duly and properly executed by such parties.
(xxiii) The
proceeds of the Mortgage Loans have been fully disbursed, 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 or recording the Mortgage Loans were
paid.
(xxiv) The
related Mortgage contains customary and enforceable provisions which render
the
rights and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee’s sale, and (ii)
otherwise by judicial foreclosure.
(xxv) With
respect to each Mortgage constituting a deed of trust, a trustee, duly qualified
under applicable law to serve as such, has been properly designated and
currently so serves and is named in such Mortgage, and no fees or expenses
are
or will become payable by the Noteholders to the trustee under the deed of
trust, except in connection with a trustee’s sale after default by the
Mortgagor.
(xxvi) Each
Mortgage Note and each Mortgage is in substantially one of the forms acceptable
to Xxxxxx Xxx or Freddie Mac.
(xxvii) There
exist no deficiencies with respect to escrow deposits and payments, if such
are
required, for which customary arrangements for repayment thereof have not been
made, and no escrow deposits or payments of other charges or payments due the
Seller have been capitalized under the Mortgage or the related Mortgage
Note.
(xxviii) The
origination, underwriting and collection practices used by the Seller with
respect to each Mortgage Loan have been in all respects legal, prudent and
customary in the mortgage lending and servicing business.
(xxix) There
is
no pledged account or other security other than real estate securing the
Mortgagor’s obligations in respect of any Mortgage Loan.
(xxx) No
Mortgage Loan has a shared appreciation feature, or other contingent interest
feature.
(xxxi) Each
Mortgage Loan contains a customary “due on sale” clause.
(xxxii) The
improvements upon each Mortgaged Property are covered by a valid and existing
hazard insurance policy with a generally acceptable carrier that provides for
fire and extended coverage and coverage for such other hazards as are customary
in the area where the Mortgaged Property is located in an amount which is at
least equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan or (ii) the greater of (a) the outstanding principal
balance of the Mortgage Loan and (b) an amount such that the proceeds of such
policy shall be sufficient to prevent the Mortgagor and/or the mortgagee from
becoming a co-insurer. If the Mortgaged Property is a condominium unit, it
is
included under the coverage afforded by a blanket policy for the condominium
unit. All such individual insurance policies and all flood policies referred
to
in item (xxxiii) below contain a standard mortgagee clause naming the Seller
or
the original mortgagee, and its successors in interest, as mortgagee, and the
Seller has received no notice that any premiums due and payable thereon have
not
been paid; the Mortgage obligates the Mortgagor thereunder to maintain all
such
insurance including flood insurance at the Mortgagor’s cost and expense, and
upon the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at the Mortgagor’s cost and expense and to
seek reimbursement therefor from the Mortgagor.
(xxxiii) If
the
Mortgaged Property is in an area identified in the Federal Register by the
Federal Emergency Management Agency as having special flood hazards, a flood
insurance policy in a form meeting the requirements of the current guidelines
of
the Flood Insurance Administration is in effect with respect to such Mortgaged
Property with a generally acceptable carrier in an amount representing coverage
not less than the least of (A) the original outstanding principal balance of
the
Mortgage Loan, (B) the minimum amount required to compensate for damage or
loss
on a replacement cost basis, or (C) the maximum amount of insurance that is
available under the Flood Disaster Protection Act of 1973, as
amended.
(xxxiv) To
the
best of the Seller’s knowledge, there is no proceeding occurring, pending or
threatened for the total or partial condemnation of the Mortgaged
Property.
(xxxv) There
is
no material monetary default existing under any Mortgage or the related Mortgage
Note and, to the best of the Seller’s knowledge, there is no material event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration under the Mortgage or the related Mortgage Note; and the Seller
has
not waived any default, breach, violation or event of acceleration.
(xxxvi) Each
Mortgaged Property is improved by a one- to four-family residential dwelling
including condominium units and dwelling units in PUDs, which, to the best
of
the Seller’s knowledge, does not include cooperatives or mobile homes and does
not constitute other than real property under state law.
(xxxvii) Each
Mortgage Loan is being master serviced by the Master Servicer.
(xxxviii) Any
future advances made prior to the Cut-off Date have been consolidated with
the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment
term
reflected on the Mortgage Loan Schedule. The consolidated principal amount
does
not exceed the original principal amount of the Mortgage Loan. The Mortgage
Note
does not permit or obligate the Master Servicer to make future advances to
the
Mortgagor at the option of the Mortgagor.
(xxxix) 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 pay for every such item which remains unpaid and which has been
assessed, but is not yet due and payable. Except for (A) payments in the nature
of escrow payments, and (B) interest accruing from the date of the Mortgage
Note
or date of disbursement of the Mortgage proceeds, whichever is later, to the
day
which precedes by one month the Due Date of the first installment of principal
and interest, including without limitation, taxes and insurance payments, the
Master Servicer 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 by the Mortgage.
(xl) None
of
the Mortgage Loans is a graduated payment mortgage loan or a growing equity
mortgage loan, and none of the Mortgage Loans is subject to a buydown or similar
arrangement.
(xli) Any
leasehold estate securing a Mortgage Loan has a term of not less than five
years
in excess of the term of the related Mortgage Loan.
(xlii) The
Mortgage Loans were selected from among the outstanding adjustable-rate one-
to
four-family mortgage loans in the portfolio of the Seller at the Closing Date
as
to which the representations and warranties made as to the Mortgage Loans set
forth in this Section 2.03(c) can be made. Such selection was not made in a
manner intended to adversely affect the interests of Noteholders.
(xliii) Each
Mortgage Loan has a payment date on or before the Due Date.
(xliv) With
respect to any Mortgage Loan as to which an affidavit has been delivered to
the
Indenture Trustee certifying that the original Mortgage Note is a Lost Mortgage
Note, if such Mortgage Loan is subsequently in default, the enforcement of
such
Mortgage Loan or of the related Mortgage by or on behalf of the Trustee will
not
be materially adversely affected by the absence of the original Mortgage Note.
A
“Lost
Mortgage Note”
is
a
Mortgage Note the original of which was permanently lost or destroyed and has
not been replaced.
(xlv) The
Mortgage Loans, individually and in the aggregate, conform in all material
respects to the descriptions thereof in the Prospectus Supplement.
(xlvi) No
proceeds from any Mortgage Loan underlying the certificates were used to finance
single-premium credit insurance policies.
(xlvii) The
Seller has furnished, in accordance with the Fair Credit Reporting Act and
its
implementing regulations, accurate and complete information on its borrower
credit files related to the mortgage loans to Equifax, Experian and Trans Union
Credit Information Company on a monthly basis.
(xlviii) No
Mortgage Loan originated between October 1, 2002 and March 7, 2003 is subject
to
the Georgia Fair Lending Act, as amended. No Mortgage Loan originated between
October 1, 2002 and March 7, 2003 is secured by a Mortgaged Property located
in
the state of Georgia, and there is no Mortgage Loan originated on or after
March
7, 2003 that is a “high cost home loan” as defined under the Georgia Fair
Lending Act.
(xlix) None
of
the Mortgage Loans are “high cost” loans as defined by applicable predatory and
abusive lending laws.
(l) None
of
the Mortgage Loans are covered by the Home Ownership and Equity Protection
Act
of 1994 (“HOEPA”).
(li) No
Mortgage Loan is a “High-Cost Home Loan” as defined in the New Jersey Home
Ownership Act effective November 27, 2003 (N.J.S.A. 46:10B-22 et
seq.).
(lii) No
Mortgage Loan is a “High-Cost Home Loan” as defined in the New Mexico Home Loan
Protection Act effective January 1, 2004 (N.M. Stat. Xxx. §§ 58-21a-1 et
seq.).
(liii) All
of
the Mortgage Loans were originated in compliance with all applicable laws,
including, but not limited to, all applicable anti-predatory and abusive lending
laws.
(liv) No
Mortgage Loan is a High Cost Loan or Covered Loan, as applicable, and with
respect to the foregoing, the terms “High Cost Loan” and “Covered Loan” have the
meaning assigned to them in the then current Standard & Poor’s LEVELS®
Version 5.6d Glossary Revised, Appendix E which is attached hereto as Exhibit
I
(the “Glossary”) where (x) a “High Cost Loan” is each loan identified in the
column “Category under applicable anti-predatory lending law” of the table
entitled “Standard & Poor's High Cost Loan Categorization” in the Glossary
as each such loan is defined in the applicable anti-predatory lending law of
the
State or jurisdiction specified in such table and (y) a “Covered Loan” is each
loan identified in the column “Category under applicable anti-predatory lending
law” of the table entitled “Standard & Poor’s Covered Loan Categorization”
in the Glossary as each such loan is defined in the applicable anti-predatory
lending law of the State or jurisdiction specified in such table.
(lv) No
Mortgage Loan originated on or after October 1, 2002 through March 6, 2003
is
governed by the Georgia Fair Lending Act.
(lvi) No
Mortgage Loan originated prior to October 1, 2002 will impose prepayment
penalties for a term in excess of five years after origination.
(lvii) Each
Mortgage Loan is a “qualified mortgage” under Section 860G(a)(3) of the
Code.
Upon
discovery by any of the parties hereto of a breach of a representation or
warranty set forth in Section 2.03(a), (b) or (c) that materially and adversely
affects the interests of the Noteholders in any Mortgage Loan, the party
discovering such breach shall give prompt notice thereof to the other parties
and the Swap Counterparty. Each of the Master Servicer, CHL, the Sponsor and
the
Seller (each, a “Representing
Party”)
hereby
covenants with respect to the representations and warranties set forth in
Sections 2.03(a), (b) and (c) that within 90 days of the earlier of the
discovery by such Representing Party or receipt of written notice by such
Representing Party from any party of a breach of any representation or warranty
set forth herein made that materially and adversely affects the interests of
the
Noteholders in any Mortgage Loan, it shall cure such breach in all material
respects and, if such breach is not so cured, shall, (i) if such 90-day period
expires prior to the second anniversary of the Start-up Date, remove such
Mortgage Loan (a “Deleted
Mortgage Loan”)
from
the Trust Estate and substitute in its place a Replacement Mortgage Loan, in
the
manner and subject to the conditions set forth in this Section; or (ii)
repurchase the affected Mortgage Loan or Mortgage Loans from the Issuing Entity
at the Purchase Price in the manner set forth below; provided that any such
substitution pursuant to clause (i) above or repurchase pursuant to clause
(ii)
above shall not be effected prior to the delivery to the Indenture Trustee
of
the Opinion of Counsel required by Section 2.05 hereof, if any, and any such
substitution pursuant to clause (i) above shall not be effected prior to the
additional delivery to the Indenture Trustee of a Request for Release
substantially in the form of Exhibit D. Any Representing Party liable for a
breach under this Section 2.03 shall promptly reimburse the Master Servicer
or
the Indenture Trustee for any expenses reasonably incurred by the Master
Servicer or the Indenture Trustee in respect of enforcing the remedies for
such
breach. To enable the Master Servicer to amend the Mortgage Loan Schedule,
any
Representing Party liable for a breach under this Section 2.03 shall, unless
it
cures such breach in a timely fashion pursuant to this Section 2.03, promptly
notify the Master Servicer whether such Representing Party intends either to
repurchase, or to substitute for, the Mortgage Loan affected by such breach.
With respect to the representations and warranties described in this Section
that are made to the best of the Representing Party’s knowledge, if it is
discovered by any of the Issuing Entity, the Depositor, the Master Servicer,
the
Seller, CHL or the Indenture Trustee that the substance of such representation
and warranty is inaccurate and such inaccuracy materially and adversely affects
the value of the related Mortgage Loan, notwithstanding the Representing Party’s
lack of knowledge with respect to the substance of such representation or
warranty, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.
If
there is a breach of a representation or warranty set forth in this Section
2.03(c) and the Seller fails to cure, purchase or substitute, then the Sponsor
will (i) cure such breach in all material respects, (ii) purchase the affected
Mortgage Loan at the applicable Purchase Price or (iii) if the 90-day cure
period expires prior to the second anniversary of the Start-up Date, substitute
a Replacement Mortgage Loan in exchange for such Mortgage Loan. If there is
a
breach of a representation or warranty set forth in this Section 2.03(c) and
both the Seller and the Sponsor fail to cure, purchase or substitute then CHL
will (i) cure such breach in all material respects, (ii) purchase the affected
Mortgage Loan at the applicable Purchase Price or (iii) if the 90-day cure
period expires prior to the second anniversary of the Start-up Date, substitute
a Replacement Mortgage Loan in exchange for such Mortgage Loan.
With
respect to any Replacement Mortgage Loan or Loans, the Representing Party
delivering such Replacement Mortgage Loan shall deliver to the Indenture Trustee
for the benefit of the Noteholders the related Mortgage Note, with the Mortgage
Note endorsed as set forth in Section 2.01. No substitution will be made in
any
calendar month after the Determination Date for such month. Scheduled Payments
due with respect to Replacement Mortgage Loans in the Due Period related to
the
Payment Date on which such proceeds are to be distributed shall not be part
of
the Trust Estate and will be retained by the Representing Party delivering
such
Replacement Loan on such Payment Date. For the month of substitution,
distributions to Noteholders will include the Scheduled Payment due on any
Deleted Mortgage Loan for the related Due Period and thereafter the Seller
shall
be entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master Servicer shall amend the Mortgage Loan Schedule for the benefit
of the Noteholders to reflect the removal of such Deleted Mortgage Loan and
the
substitution of the Replacement Mortgage Loan or Loans and the Master Servicer
shall deliver the amended Mortgage Loan Schedule to the Indenture Trustee.
Upon
such substitution, the Replacement Mortgage Loan or Loans shall be subject
to
the terms of this Agreement in all respects, and the Representing Party
delivering such Replacement Mortgage Loan shall be deemed to have made with
respect to such Replacement Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Section 2.03(b)
or
(C), as applicable, with respect to such Mortgage Loan. Upon any such
substitution and the deposit to the Collection Account of the amount required
to
be deposited therein in connection with such substitution as described in the
following paragraph, the Indenture Trustee (i) shall release to the Representing
Party the Mortgage Note relating to such Deleted Mortgage Loan and held for
the
benefit of the Noteholders, (ii) cause the Master Servicer to release to the
Representing Party any remaining documents in the related Mortgage File which
are held by the Master Servicer and (ii) shall execute and deliver at the Master
Servicer’s direction such instruments of transfer or assignment as have been
prepared by the Master Servicer, in each case without recourse, as shall be
necessary to vest in the Seller, or its respective designee, title to the
Indenture Trustee’s interest in any Deleted Mortgage Loan substituted for
pursuant to this Section 2.03.
For
any
month in which a Representing Party substitutes one or more Replacement Mortgage
Loans for one or more Deleted Mortgage Loans, the Master Servicer will determine
the amount (if any) by which the aggregate principal balance of all such
Replacement Mortgage Loans as of the date of substitution is less than the
Stated Principal Balance (after application of the principal portion of the
Scheduled Payment due in the month of substitution) of all such Deleted Mortgage
Loans. An amount equal to the aggregate of the deficiencies described in the
preceding sentence (such amount, the “Substitution
Adjustment Amount”)
shall
be forwarded by the Representing Party to the Master Servicer and deposited
by
the Master Servicer into the Collection Account not later than the Determination
Date for the Payment Date relating to the Prepayment Period during which the
related Mortgage Loan became required to be purchased or replaced
hereunder.
In
the
event that a Representing Party shall have repurchased a Mortgage Loan, the
Purchase Price therefor shall be deposited in the Collection Account pursuant
to
Section 3.05 on the Determination Date for the Payment Date in the month
following the month during which such Representing Party became obligated to
repurchase or replace such Mortgage Loan and upon such deposit of the Purchase
Price, the delivery of the Opinion of Counsel required by Section 2.05, if
any,
and the receipt of a Request for Release in the form of Exhibit E hereto, the
Indenture Trustee shall (i) release the related Mortgage Note held for the
benefit of the Noteholders to such Representing Party, (ii) cause the Master
Servicer to release to such Representing Party any remaining documents in the
related Mortgage File which are held by the Master Servicer and (iii) execute
and deliver at such Person’s direction the related instruments of transfer or
assignment prepared by such Representing Party, in each case without recourse,
as shall be necessary to transfer title from the Indenture Trustee for the
benefit of the Noteholders and transfer the Indenture Trustee’s interest to such
Representing Party to any Mortgage Loan purchased pursuant to this Section
2.03.
It is understood and agreed that the obligation under this Agreement of the
Representing Party to cure, repurchase or replace any Mortgage Loan as to which
a breach has occurred and is continuing shall constitute the sole remedy against
the Representing Party respecting such breach available to Noteholders, the
Issuing Entity, the Depositor or the Indenture Trustee.
(d) The
representations and warranties set forth in Section 2.03 hereof shall survive
delivery of the respective Mortgage Notes to the Indenture Trustee for the
benefit of the Noteholders.
| Section 2.04 |
Representations
and Warranties of the Depositor.
|
The
Depositor hereby represents and warrants to the Master Servicer, the Issuing
Entity and the Indenture Trustee as follows, as of the date hereof:
(i) The
Depositor is duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has full power and
authority (corporate and other) necessary to own or hold its properties and
to
conduct its business as now conducted by it and to enter into and perform its
obligations under this Agreement.
(ii) The
Depositor has the full corporate 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 corporate action on its
part, the execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery hereof by
the
other parties hereto, constitutes a legal, valid and binding obligation of
the
Depositor, enforceable against the Depositor in accordance with its terms,
subject, as to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors’ rights generally and (ii)
general principles of equity, regardless of whether enforcement is sought in
a
proceeding in equity or at law.
(iii) The
execution and delivery of this Agreement by the Depositor, the consummation
of
the transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof and thereof are in the ordinary course of
business of the Depositor and will not (A) result in a material breach of any
term or provision of the charter or by-laws of the Depositor or (B) conflict
with, result in a breach, violation or acceleration of, or result in a default
under, the terms of any other material agreement or instrument to which the
Depositor is a party or by which it may be bound or (C) constitute a material
violation of any statute, order or regulation applicable to the Depositor of
any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Depositor; and the Depositor is not in breach or violation
of any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it which
breach or violation may materially impair the Depositor’s ability to perform or
meet any of its obligations under this Agreement.
(iv) No
litigation is pending, or, to the best of the Depositor’s knowledge, threatened,
against the Depositor that would materially and adversely affect the execution,
delivery or enforceability of this Agreement or the ability of the Depositor
to
perform its obligations under this Agreement in accordance with the terms
hereof.
(v) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Depositor
of, or compliance by the Depositor with, this Agreement or the consummation
of
the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Depositor has obtained the
same.
The
Depositor hereby represents and warrants to the Issuing Entity and the Indenture
Trustee with respect to each Mortgage Loan as of the Closing Date and following
the transfer of the Mortgage Loans to it by the Seller, the Depositor had good
title to the Mortgage Loans, and the related Mortgage Notes were subject to
no
offsets, claims, defenses or counterclaims.
It
is
understood and agreed that the representations and warranties set forth in
the
two immediately preceding paragraphs shall survive delivery of the Mortgage
Notes to the Indenture Trustee. Upon discovery by the Depositor, the Issuing
Entity or the Indenture Trustee of a breach of any of the foregoing
representations and warranties set forth in the immediately preceding paragraph
(referred to herein as a “breach”),
which
breach materially and adversely affects the interest of the Noteholders, the
party discovering such breach shall give prompt written notice to the others,
each Rating Agency and the Swap Counterparty. The Depositor hereby covenants
with respect to the representations and warranties made by it in this Section
2.04 that within 90 days of the earlier of the discovery it or receipt of
written notice by it from any party of a breach of any representation or
warranty set forth herein made that materially and adversely affects the
interests of the Noteholders in any Mortgage Loan, it shall cure such breach
in
all material respects and, if such breach is not so cured, shall repurchase
or
replace the affected Mortgage Loan or Loans in accordance with the procedure
set
forth in Section 2.03(d).
| Section 2.05 |
Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases.
|
(a) Subsequent
to any REMIC Elections and notwithstanding any contrary provision of this
Agreement, with respect to any Mortgage Loan that is not in default or as to
which default is not imminent, no repurchase or substitution pursuant to
Sections 2.02, 2.03 or 2.04 shall be made unless the Representing Party making
such repurchase or substitution delivers to the Indenture Trustee, an Opinion
of
Counsel, addressed to the Indenture Trustee, to the effect that such repurchase
or substitution would not (i) result in the imposition of the tax on “prohibited
transactions” of the Trust Estate or contributions after the REMIC Closing Date,
as defined in sections 860F(a)(2) and 860G(d) of the Code, respectively or
(ii) cause any REMIC to fail to qualify as a REMIC at any time that any
Notes or Certificates are outstanding. Any Mortgage Loan as to which repurchase
or substitution was delayed pursuant to this paragraph shall be repurchased
or
the substitution therefor shall occur (subject to compliance with Sections
2.02,
2.03 or 2.04) upon the earlier of (a) the occurrence of a default or imminent
default with respect to such loan and (b) receipt by the Indenture Trustee,
of
an Opinion of Counsel to the effect that such repurchase or substitution, as
applicable, will not result in the events described in clause (i) or clause
(ii)
of the preceding sentence.
(b) Upon
discovery by the Issuing Entity, the Depositor, the Seller, the Master Servicer,
CHL or the Indenture Trustee that any Mortgage Loan does not constitute a
“qualified mortgage” within the meaning of section 860G(a)(3) of the Code, the
party discovering such fact shall promptly (and in any event within 5 Business
Days of discovery) give written notice thereof to the other parties. In
connection therewith, the Indenture Trustee shall require CHL, at its option,
to
either (i) substitute, if the conditions in Section 2.03(d) with respect to
substitutions are satisfied, a Replacement Mortgage Loan for the affected
Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within 90 days
of
such discovery in the same manner as it would a Mortgage Loan for a breach
of
representation or warranty contained in Section 2.03. The Indenture Trustee
shall reconvey to the CHL the Mortgage Loan to be released pursuant hereto
in
the same manner, and on the same terms and conditions, as it would a Mortgage
Loan
repurchased for breach of a representation or warranty contained in Section
2.03.
| Section 2.06 |
Covenants
of the Master Servicer.
|
The
Master Servicer hereby covenants to the Issuing Entity, the Depositor and the
Indenture Trustee as follows:
(a) the
Master Servicer shall comply in the performance of its obligations under this
Agreement with all reasonable rules and requirements of the insurer under each
Required Insurance Policy; and
(b) no
written information, certificate of an officer, statement furnished in writing
or written report delivered to the Issuing Entity, the Depositor, any affiliate
of the Issuing Entity, the Depositor or the Indenture Trustee and prepared
by
the Master Servicer pursuant to this Agreement will contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
information, certificate, statement or report not misleading.
| Section 2.07 |
Assignment
of Agreement.
|
The
Seller, the Depositor, CHL and the Master Servicer hereby acknowledge and agree
that the Issuing Entity may assign its interest under this Agreement to the
Indenture Trustee, for the benefit of the Noteholders, as may be required to
effect the purposes of the Indenture, without further notice to, or consent
of,
the Seller, the Depositor, CHL or the Master Servicer, and the Indenture Trustee
shall succeed to such of the rights of the Issuing Entity hereunder as shall
be
so assigned. The Issuing Entity shall, pursuant to the Indenture, assign all
of
its right, title and interest in and to the Mortgage Loans and its right to
exercise the remedies created by Article II of this Agreement for breaches
of
the representations, warranties, agreements and covenants of the CHL and the
Seller contained in Section 2.03(b) and (c), respectively, of this Agreement,
to
the Indenture Trustee, for the benefit of the Noteholders. Each of the Seller
and CHL agree that, upon such assignment to the Indenture Trustee, such
representations, warranties, agreements and covenants will run to and be for
the
benefit of the Indenture Trustee and the Indenture Trustee may enforce, without
joinder of the Depositor or the Issuing Entity, the repurchase obligations
of
the Seller and CHL set forth herein with respect to breaches of such
representations, warranties, agreements and covenants.
ARTICLE
III
ADMINISTRATION
AND SERVICING
OF
MORTGAGE LOANS
| Section 3.01 |
Master
Servicer to Service Mortgage Loans.
|
For
and
on behalf of the Noteholders, the Master Servicer shall service and administer
the Mortgage Loans in accordance with customary and usual standards of practice
of prudent mortgage loan lenders in the respective states in which the Mortgaged
Properties are located. In connection with such servicing and administration,
the Master Servicer shall have full power and authority, acting alone and/or
through subservicers as provided in Section 3.02 hereof, subject to the terms
hereof (i) to execute and deliver, on behalf of the Noteholders, the Issuing
Entity and the Indenture Trustee, customary consents or waivers and other
instruments and documents, (ii) to consent to transfers of any Mortgaged
Property and assumptions of the Mortgage Notes and related Mortgages (but only
in the manner provided in this Agreement), (iii) to collect any Insurance
Proceeds and other Liquidation Proceeds and Subsequent Recoveries, and (iv)
subject to Section 3.11(a), to effectuate foreclosure or other conversion of
the
ownership of the Mortgaged Property securing any Mortgage Loan; provided that
the Master Servicer shall take no action that is inconsistent with or prejudices
the interests of the Issuing Entity, Indenture Trustee or the Noteholders in
any
Mortgage Loan or the rights and interests of the Issuing Entity, the Depositor
and the Indenture Trustee under this Agreement. Subsequent to any REMIC
Elections, the Master Servicer shall represent and protect the interest of
the
Indenture Trustee in the same manner as it currently protects its own interest
in mortgage loans in its own portfolio in any claim, proceeding or litigation
regarding a Mortgage Loan and shall not make or permit any modification, waiver
or amendment of any term of any Mortgage Loan which would (i) cause the Trust
Estate to fail to qualify as a REMIC or (ii) result in the imposition of any
tax
under section 860A or 860D of the Code, but in any case the Master Servicer
shall not act in any manner that is a lesser standard than that provided in
the
first sentence of this Section 3.01. Without limiting the generality of the
foregoing, the Master Servicer, in its own name or in the name of the Issuing
Entity and the Indenture Trustee, is hereby authorized and empowered by the
Issuing Entity, the Depositor and the Indenture Trustee, when the Master
Servicer believes it appropriate in its reasonable judgment, to execute and
deliver, on behalf of the Indenture Trustee, the Issuing Entity, the Noteholders
or any of them, any and all instruments of satisfaction or cancellation, or
of
partial or full release or discharge and all other comparable instruments,
with
respect to the Mortgage Loans, and with respect to the Mortgaged Properties
held
for the benefit of the Noteholders. The Master Servicer shall prepare and
deliver to the Issuing Entity and/or the Indenture Trustee such documents
requiring execution and delivery by any or all of them as are necessary or
appropriate to enable the Master Servicer to service and administer the Mortgage
Loans. Upon receipt of such documents, the Depositor and/or the Indenture
Trustee shall execute such documents and deliver them to the Master Servicer.
The Master Servicer further is authorized and empowered by the Indenture
Trustee, on behalf of the Noteholders, the Issuing Entity and the Indenture
Trustee, in its own name or in the name of the Subservicer, when the Master
Servicer or the Subservicer, as the case may be, believes it appropriate in
its
best judgment to register any Mortgage Loan on the MERS® System, or cause the
removal from the registration of any Mortgage Loan on the MERS® System, to
execute and deliver, on behalf of the Issuing Entity, the Indenture Trustee
and
the Noteholders or any of them, 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 Indenture Trustee and
its successors and assigns.
In
accordance with the standards of the preceding paragraph, the Master Servicer
shall advance or cause to be advanced funds as necessary for the purpose of
effecting the payment of taxes and assessments on the Mortgaged Properties,
which advances shall be reimbursable in the first instance from related
collections from the Mortgagors pursuant to Section 3.06, and further as
provided in Section 3.08. All costs incurred by the Master Servicer, if any,
in
effecting the timely payments of taxes and assessments on the Mortgaged
Properties and related insurance premiums shall not, for the purpose of
calculating monthly distributions to the Noteholders, be added to the Stated
Principal Balance under the related Mortgage Loans, notwithstanding that the
terms of such Mortgage Loans so permit.
The
Master Servicer shall deliver a list of Servicing Officers to the Indenture
Trustee by the Closing Date.
In
the
event that a shortfall in any collection on or liability with respect to any
Mortgage Loan results from or is attributable to adjustments to Mortgage Rates,
Monthly Payments or Stated Principal Balances that were made by the Master
Servicer in a manner not consistent with the terms of the related Mortgage
Note
and this Agreement, the Master Servicer, upon discovery or receipt of notice
thereof, immediately shall deliver to the Indenture Trustee for deposit in
the
Payment Account from its own funds the amount of any such shortfall and shall
indemnify and hold harmless the Trust Estate, the Indenture Trustee, the Issuing
Entity, the Depositor and any successor master servicer in respect of any such
liability. Such indemnities shall survive the termination or discharge of this
Agreement. Notwithstanding the foregoing, this Section 3.01 shall not limit
the
ability of the Master Servicer to seek recovery of any such amounts from the
related Mortgagor under the terms of the related Mortgage Note, as permitted
by
law and shall not be an expense of the Trust Estate.
| Section 3.02 |
Subservicing;
Enforcement of the Obligations of Master Servicer.
|
(a) The
Master Servicer may arrange for the subservicing of any Mortgage Loan by a
subservicer (each, a “Subservicer”)
pursuant to a subservicing agreement (each, a “Subservicing
Agreement”);
provided that (i) such subservicing arrangement and the terms of the related
subservicing agreement must provide for the servicing of such Mortgage Loans
in
a manner consistent with the servicing arrangements contemplated hereunder
and
(ii) that such subservicing agreements would not result in a withdrawal or
a downgrading by any Rating Agency of the ratings on any Class of Notes, as
evidenced by a letter to that effect delivered by each Rating Agency to the
Issuing Entity. The Master Servicer shall deliver to the Indenture Trustee
copies of all Sub-Servicing Agreements, and any amendments or modifications
thereof, promptly upon the Master Servicer’s execution and delivery of such
instruments. The Master Servicer shall be entitled to terminate any
Sub-Servicing Agreement and the rights and obligations of any Sub-Servicer
pursuant to any Sub-Servicing Agreement in accordance with the terms and
conditions of such Sub-Servicing Agreement. Notwithstanding the provisions
of
any subservicing agreement, any of the provisions of this Agreement relating
to
agreements or arrangements between the Master Servicer or a subservicer or
reference to actions taken through a Master Servicer or otherwise, the Master
Servicer shall remain obligated and liable to the Depositor, the Indenture
Trustee and the Noteholders for the servicing and administration of the Mortgage
Loans in accordance with the provisions of this Agreement without diminution
of
such obligation or liability by virtue of such subservicing agreements or
arrangements or by virtue of indemnification from the subservicer and to the
same extent and under the same terms and conditions as if the Master Servicer
alone were servicing and administering the Mortgage Loans. Every subservicing
agreement entered into by the Master Servicer shall contain a provision giving
the successor Master Servicer the option to terminate such agreement in the
event a successor Master Servicer is appointed. All actions of each subservicer
performed pursuant to the related subservicing agreement shall be performed
as
an agent of the Master Servicer with the same force and effect as if performed
directly by the Master Servicer.
(b) For
purposes of this Agreement, the Master Servicer shall be deemed to have received
any collections, recoveries or payments with respect to the Mortgage Loans
that
are received by a subservicer regardless of whether such payments are remitted
by the subservicer to the Master Servicer.
| Section 3.03 |
Rights
of the Issuing
Entity, the Depositor, the Seller, CHL and the Indenture Trustee in
Respect of the Master Servicer.
|
None
of
the Indenture Trustee, the Seller, the Issuing Entity, CHL or the Depositor
shall have any responsibility or liability for any action or failure to act
by
the Master Servicer, and none of them is obligated to supervise the performance
of the Master Servicer hereunder or otherwise.
The
Master Servicer shall afford (and any Subservicing Agreement shall provide
that
each Subservicer shall afford) the Depositor and the Indenture Trustee, upon
reasonable notice, during normal business hours, access to all records
maintained by the Master Servicer (and any such Subservicer) in respect of
the
Master Servicer’s rights and obligations hereunder and access to officers of the
Master Servicer (and those of any such Subservicer) responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Issuing
Entity, the Depositor and the Indenture Trustee its (and any such Subservicer’s)
most recent financial statements and such other information relating to the
Master Servicer’s capacity to perform its obligations under this Agreement that
it possesses. To the extent such information is not otherwise available to
the
public, the Issuing Entity, the Depositor and the Indenture Trustee shall not
disseminate any information obtained pursuant to the preceding two sentences
without the Masters Servicer’s (or any such Subservicer’s) written consent,
except as required pursuant to this Agreement or to the extent that it is
necessary to do so (i) in working with legal counsel, auditors, taxing
authorities or other governmental agencies, rating agencies or reinsurers or
(ii) pursuant to any law, rule, regulation, order, judgment, writ, injunction
or
decree of any court or governmental authority having jurisdiction over the
Issuing Entity, the Depositor, the Indenture Trustee or the Trust Estate, and
in
either case, the Issuing Entity, the Depositor or the Indenture Trustee, as
the
case may be, shall use its best efforts to assure the confidentiality of any
such disseminated non-public information. The Issuing Entity may, but is not
obligated to, enforce the obligations of the Master Servicer under this
Agreement and may, but is not obligated to, perform, or cause a designee to
perform, any defaulted obligation of the Master Servicer under this Agreement
or
exercise the rights of the Master Servicer under this Agreement; provided by
virtue of such performance by the Issuing Entity of its designee. The Issuing
Entity shall not have any responsibility or liability for any action or failure
to act by the Master Servicer and is not obligated to supervise the performance
of the Master Servicer under this Agreement or otherwise.
| Section 3.04 |
Indenture
Trustee to Act as Master Servicer.
|
In
the
event that the Master Servicer shall for any reason no longer be the Master
Servicer hereunder (including by reason of an Event of Default), the Indenture
Trustee or its designee shall thereupon assume all of the rights and obligations
of the Master Servicer hereunder arising thereafter (except that the Indenture
Trustee shall not be (i) liable for losses of the Master Servicer pursuant
to
Section 3.09 hereof or any acts or omissions of the predecessor Master Servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so
by
applicable law, (iii) obligated to effectuate repurchases or substitutions
of
Mortgage Loans hereunder, including pursuant to Section 2.02 or 2.03 hereof,
(iv) responsible for expenses of the Master Servicer pursuant to Section 2.03
or
(v) deemed to have made any representations and warranties hereunder, including
pursuant to Section 2.03 or the first paragraph of Section 5.02 hereof). If
the
Master Servicer shall for any reason no longer be the Master Servicer (including
by reason of any Event of Default), the Indenture Trustee (or any other
successor servicer) may, at its option, succeed to any rights and obligations
of
the Master Servicer under any subservicing agreement in accordance with the
terms thereof; provided that the Indenture Trustee (or any other successor
servicer) shall not incur any liability or have any obligations in its capacity
as servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Master Servicer thereunder; and the Master Servicer shall not thereby
be
relieved of any liability or obligations under the subservicing agreement
arising prior to the date of such succession.
The
Master Servicer shall, upon request of the Indenture Trustee, but at the expense
of the Master Servicer, deliver to the assuming party all documents and records
relating to each subservicing agreement and the Mortgage Loans then being
serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer
of
the subservicing agreement to the assuming party.
| Section 3.05 |
Collection
of Mortgage Loan Payments; Collection Account; Payment
Account.
|
(a) The
Master Servicer shall make reasonable efforts in accordance with customary
and
usual standards of practice of prudent mortgage lenders in the respective states
in which the Mortgaged Properties are located to collect all payments called
for
under the terms and provisions of the Mortgage Loans to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any related Required Insurance Policy. Consistent
with the foregoing, the Master Servicer may in its discretion (i) waive any
late
payment charge or, subject to Section 3.18, any Prepayment Charge or penalty
interest in connection with the prepayment of a Mortgage Loan and (ii) extend
the due dates for payments due on a Mortgage Note for a period not greater
than
270 days.
In the
event of any such arrangement, the Master Servicer shall make Advances on the
related Mortgage Loan during the scheduled period in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangements. The Master Servicer shall not be required to
institute or join in litigation with respect to collection of any payment
(whether under a Mortgage, Mortgage Note or otherwise or against any public
or
governmental authority with respect to a taking or condemnation) if it
reasonably believes that enforcing the provision of the Mortgage or other
instrument pursuant to which such payment is required is prohibited by
applicable law.
(b) The
Master Servicer shall establish and maintain a Collection Account into which
the
Master Servicer shall deposit or cause to be deposited on a daily basis within
two Business Days of receipt, except as otherwise specifically provided herein,
the following payments and collections remitted by Subservicers or received
by
it in respect of Mortgage Loans subsequent to the Cut-off Date (other than
in
respect of principal and interest due on the Mortgage Loans before the Cut-off
Date) and the following amounts required to be deposited hereunder:
(i) all
payments on account of principal, including Principal Prepayments, on the
Mortgage Loans;
(ii) all
payments on account of interest on the Mortgage Loans net of the related
Servicing Fee permitted under Section 3.14 to the extent not previously
paid to or withheld by the Master Servicer (other than interest accrued on
the
Mortgage Loans prior to the Cut-off Date), and the Initial Collection Account
Deposit;
(iii) all
Liquidation Proceeds, other than proceeds to be applied to the restoration
or
repair of the Mortgaged Property or released to the Mortgagor in accordance
with
the Master Servicer’s normal servicing procedures;
(iv) all
Compensating Interest;
(v) any
amount required to be deposited by the Master Servicer pursuant to Section
3.05(e) in connection with any losses on Permitted Investments;
(vi) any
amounts required to be deposited by the Master Servicer pursuant to Section
3.09
hereof;
(vii) the
Purchase Price and any Substitution Adjustment Amount;
(viii) all
Advances made by the Master Servicer pursuant to Section 4.01; and
(ix) any
other
amounts required to be deposited hereunder.
The
foregoing requirements for remittance by the Master Servicer into the Collection
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 or assumption fees, if collected, need not be remitted by the Master
Servicer. In the event that the Master Servicer shall remit any amount not
required to be remitted and not otherwise subject to withdrawal pursuant to
Section 3.08 hereof, it may at any time withdraw or direct the institution
maintaining the Collection Account, to withdraw such amount from the Collection
Account, any provision herein to the contrary notwithstanding. Such withdrawal
or direction may be accomplished by delivering written notice thereof to the
institution maintaining the Collection Account that describes the amounts
deposited in error in the Collection Account. The
Master Servicer shall maintain adequate records with respect to all withdrawals
made pursuant to this Section. All
funds
deposited in the Collection Account shall be held in trust for the Noteholders
until withdrawn in accordance with Section 3.08.
The
Collection Account shall be an Eligible Account and will initially be
established by the Master Servicer at Countrywide Bank, N.A., which is an
affiliate of the Master Servicer.
(c) The
Indenture Trustee shall establish and maintain, on behalf of the Noteholders,
the Payment Account. The Indenture Trustee shall, promptly upon receipt, deposit
in the Payment Account and retain therein the following:
(i) the
aggregate amount remitted by the Master Servicer pursuant to the second
paragraph of Section 3.08(a);
(ii) any
amount required to be deposited by the Master Servicer pursuant to Section
3.05(e) in connection with any losses on Permitted Investments; and
(iii) any
amount received from the Master Servicer or a Secured Party pursuant to Section
12.02.
The
foregoing requirements for remittance by the Master Servicer and deposit by
the
Indenture Trustee into the Payment Account shall be exclusive. In the event
that
the Master Servicer shall remit any amount not required to be remitted and
not
otherwise subject to withdrawal pursuant to Section 3.08 hereof, it may at
any
time direct the Indenture Trustee to withdraw such amount from the Payment
Account, any provision herein to the contrary notwithstanding. Such direction
may be accomplished by delivering a written notice to the Indenture Trustee
that
describes the amounts deposited in error in the Payment Account. All funds
deposited in the Payment Account shall be held by the Indenture Trustee in
trust
for the Noteholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 3.08. In no event shall the Indenture
Trustee incur liability for withdrawals from the Payment Account at the
direction of the Master Servicer.
(d) Each
institution that maintains the Collection Account and the Payment Account shall
invest the funds in each such account, as directed in writing by the Master
Servicer, in Permitted Investments, which shall mature not later than
(x) in the case of the Collection Account, the second Business Day next
preceding the related Payment Account Deposit Date (except that if such
Permitted Investment is an obligation of the institution that maintains such
Collection Account, then such Permitted Investment shall mature not later than
the Business Day next preceding such Payment Account Deposit Date) and
(y) in the case of the Payment Account, the Business Day immediately
preceding the first Payment Date that follows the date of such investment
(except that if such Permitted Investment is an obligation of the institution
that maintains such Payment Account, then such Permitted Investment shall mature
not later than such Payment Date) and, in each case, shall not be sold or
disposed of prior to maturity. All such Permitted Investments shall be made
in
the name of the Indenture Trustee, for the benefit of the Noteholders. In the
case of the Collection Account and the Payment Account, all income and gain
net
of any losses realized from any such investment shall be for the benefit of
the
Master Servicer as servicing compensation and shall be remitted to it monthly
as
provided herein. The amount of any losses incurred in the Collection Account
or
the Payment Account in respect of any such investments shall be deposited by
the
Master Servicer in the Collection Account or paid to the Indenture Trustee
for
deposit into the Payment Account out of the Master Servicer’s own funds
immediately as realized. The Indenture Trustee shall not be liable for the
amount of any loss incurred in respect of any investment or lack of investment
of funds held in the Collection Account or the Payment Account made in
accordance with this Section 3.05.
(e) The
Master Servicer shall give at least 30 days advance notice to the Indenture
Trustee, the Issuing Entity, the Seller, CHL, each Rating Agency and the
Depositor of any proposed change of location of the Collection Account prior
to
any change thereof. The Indenture Trustee shall give at least 30 days advance
notice to the Master Servicer, the Issuing Entity, the Seller, each Rating
Agency and the Depositor of any proposed change of the location of the Payment
Account prior to any change thereof.
(f) No
later
than 1:00 p.m. Pacific time on the Business Day prior to the Master Servicer
Advance Date in July 2006, CHL shall remit to the Master Servicer, and the
Master Servicer shall deposit in the Certificate Account, the Seller Shortfall
Interest Requirement (if any) for such Master Servicer Advance
Date.
| Section 3.06 |
Collection
of Taxes, Assessments and Similar Items; Escrow Accounts.
|
To
the
extent required by the related Mortgage Note, the Master Servicer shall
establish and maintain one or more accounts (each, an “Escrow
Account”)
and
deposit and retain therein all collections from the Mortgagors (or advances
by
the Master Servicer) for the payment of taxes, assessments, hazard insurance
premiums or comparable items for the account of the Mortgagors. Nothing herein
shall require the Master Servicer to compel a Mortgagor to establish an Escrow
Account in violation of applicable law.
Withdrawals
of amounts so collected from the Escrow Accounts may be made only to effect
timely payment of taxes, assessments, hazard insurance premiums, condominium
or
PUD association dues, or comparable items, to reimburse the Master Servicer
out
of related collections for any payments made pursuant to Sections 3.01 hereof
(with respect to taxes and assessments and insurance premiums) and 3.10 hereof
(with respect to hazard insurance), to refund to any Mortgagors any sums as
may
be determined to be overages, to pay interest, if required by law or the terms
of the related Mortgage or Mortgage Note, to Mortgagors on balances in the
Escrow Account or to clear and terminate the Escrow Account at the termination
of this Agreement in accordance with Section 9.01 hereof. The Escrow Accounts
shall not be a part of the Trust Estate.
| Section 3.07 |
Access
to Certain Documentation and Information Regarding the Mortgage
Loans.
|
The
Master Servicer shall afford the Issuing Entity, the Depositor and the Indenture
Trustee reasonable access to all records and documentation regarding the
Mortgage Loans and all accounts, insurance policies and other matters relating
to this Agreement, such access being afforded without charge, but only upon
reasonable request and during normal business hours at the offices of the Master
Servicer designated by it.
Upon
reasonable advance notice in writing if required by federal regulation, the
Master Servicer will provide to each Noteholder or Note Owner that is a savings
and loan association, bank or insurance company certain reports and reasonable
access to information and documentation regarding the Mortgage Loans sufficient
to permit such Noteholder or Note Owner to comply with applicable regulations
of
the OTS or other regulatory authorities with respect to investment in the Notes;
provided that the Master Servicer shall be entitled to be reimbursed by each
such Noteholder or Note Owner for actual expenses incurred by the Master
Servicer in providing such reports and access.
| Section 3.08 |
Permitted
Withdrawals from the Collection Account and the Payment
Account.
|
(a) The
Master Servicer may from time to time make withdrawals from the Collection
Account for the following purposes:
(i) [reserved];
(ii) to
pay to
the Master Servicer (to the extent not previously paid to or withheld by the
Master Servicer), as servicing compensation in accordance with Section 3.14,
that portion of any payment of interest that equals the Servicing Fee for the
period with respect to which such interest payment was made, and, as additional
servicing compensation to the Master Servicer, those other amounts set forth
in
Section 3.14, and to pay any fees with respect to any lender-paid primary
mortgage insurance policy;
(iii) to
reimburse the Master Servicer for Advances made by it with respect to the
Mortgage Loans, such right of reimbursement pursuant to this subclause (ii)
being limited to amounts received on particular Mortgage Loan(s) (including,
for
this purpose, Liquidation Proceeds) that represent late recoveries of payments
of principal and/or interest on such particular Mortgage Loan(s) in respect
of
which any such Advance was made;
(iv) to
reimburse the Master Servicer for any Nonrecoverable Advance previously made
after the Cut-off Date;
(v) to
reimburse the Master Servicer from Insurance Proceeds for Insured Expenses
covered by the related Insurance Policy;
(vi) to
pay
the Master Servicer any unpaid Servicing Fees and to reimburse it for any
unreimbursed Servicing Advances, the Master Servicer’s right to reimbursement of
Servicing Advances pursuant to this subclause (vi) with respect to any Mortgage
Loan being limited to amounts received on particular Mortgage Loan(s)
(including, for this purpose, Liquidation Proceeds and purchase and repurchase
proceeds) that represent late recoveries of the payments for which such advances
were made pursuant to Section 3.01 or Section 3.06;
(vii) to
pay to
the Seller, the Sponsor, the Issuing Entity, the Depositor, CHL or the Master
Servicer, as applicable, with respect to each Mortgage Loan or property acquired
in respect thereof that has been purchased pursuant to Section 2.02, 2.03 or
3.12, all amounts received thereon and not taken into account in determining
the
related Stated Principal Balance of such repurchased Mortgage Loan;
(viii) to
reimburse the Seller, the Master Servicer, the Issuing Entity, CHL or the
Depositor for expenses incurred by any of them in connection with the Mortgage
Loans or Notes and reimbursable pursuant to Section 5.03 hereof; provided that
such amount shall only be withdrawn following the withdrawal from the Collection
Account for deposit into the Payment Account pursuant to the following
paragraph;
(ix) to
withdraw pursuant to Section 3.05 any amount deposited in the Collection Account
and not required to be deposited therein; and
(x) to
clear
and terminate the Collection Account upon termination of this Agreement pursuant
to Section 9.01 hereof.
In
addition, no later than 1:00 p.m. Pacific time on the Payment Account Deposit
Date, the Master Servicer shall withdraw from the Collection Account and remit
to the Indenture Trustee the Available Funds relating to the Notes and the
Indenture Trustee shall deposit such amounts in the Payment
Account.
The
Master Servicer shall keep and maintain separate accounting, on a Mortgage
Loan
by Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Collection Account pursuant to subclauses (i), (ii), (iv), (v) and (vi) above.
Prior to making any withdrawal from the Collection Account pursuant to subclause
(iii), the Master Servicer shall deliver to the Indenture Trustee an Officer’s
Certificate of a Servicing Officer indicating the amount of any previous Advance
determined by the Master Servicer to be a Nonrecoverable Advance and identifying
the related Mortgage Loan(s), and their respective portions of such
Nonrecoverable Advance.
(b) The
Indenture Trustee shall withdraw funds from the Payment Account for distribution
to the Noteholders and remittance to the Swap Account in the manner specified
in
this Agreement (and to withhold from the amounts so withdrawn, the amount of
any
taxes that it is authorized to retain pursuant to the last paragraph of Section
8.08 of the Indenture). In addition, the Indenture Trustee may from time to
time
make withdrawals from the Payment Account for the following
purposes:
(i) to
pay
the Indenture Trustee the Trustee Fee on each Payment Date;
(ii) to
pay to
the Master Servicer, as additional servicing compensation, earnings on or
investment income with respect to funds in or credited to the Payment
Account;
(iii) to
withdraw pursuant to Section 3.05 any amount deposited in the Payment Account
and not required to be deposited therein;
(iv) to
pay
the Owner Trustee the Owner Trustee Fee as described in the Indenture;
and
(v) to
clear
and terminate the Payment Account upon termination of the Agreement pursuant
to
Section 9.01 hereof.
| Section 3.09 |
Maintenance
of Hazard Insurance.
|
The
Master Servicer shall cause to be maintained, for each Mortgage Loan, hazard
insurance with extended coverage in an amount that is at least 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 of such policy shall
be sufficient to prevent the related Mortgagor and/or mortgagee from becoming
a
co-insurer. Each such policy of standard hazard insurance shall contain, or
have
an accompanying endorsement that contains, a standard mortgagee clause. The
Master Servicer shall also cause flood insurance to be maintained on property
acquired upon foreclosure or deed in lieu of foreclosure of any Mortgage Loan,
to the extent described below. Pursuant to Section 3.05 hereof, any amounts
collected by the Master Servicer under any such policies (other than the amounts
to be applied to the restoration or repair of the related Mortgaged Property
or
property thus acquired or amounts released to the Mortgagor in accordance with
the Master Servicer’s normal servicing procedures) shall be deposited in the
Collection Account. Any cost incurred by the Master Servicer in maintaining
any
such insurance shall not, for the purpose of calculating monthly distributions
to the Noteholders or remittances to the Indenture Trustee for their benefit,
be
added to the principal balance of the Mortgage Loan, notwithstanding that the
terms of the Mortgage Loan so permit. Such costs shall be recoverable by the
Master Servicer out of late payments by the related Mortgagor or out of
Liquidation Proceeds to the extent permitted by Section 3.08 hereof. It is
understood and agreed that no earthquake or other additional insurance is to
be
required of any Mortgagor or maintained on property acquired in respect of
a
Mortgage other than pursuant to such applicable laws and regulations as shall
at
any time be in force and as shall require such additional insurance. If the
Mortgaged Property is located at the time of origination of the Mortgage Loan
in
a federally designated special flood hazard area and such area is participating
in the national flood insurance program, the Master Servicer shall cause flood
insurance to be maintained with respect to such Mortgage Loan. Such flood
insurance shall be in an amount equal to the lesser of (i) the original
principal balance of the related Mortgage Loan, (ii) the replacement value
of
the improvements that are part of such Mortgaged Property, or (iii) the maximum
amount of such insurance available for the related Mortgaged Property under
the
Flood Disaster Protection Act of 1973, as amended.
| Section 3.10 |
Enforcement
of Due-On-Sale Clauses; Assumption Agreements.
|
(a) Except
as
otherwise provided in this Section 3.10(a), when any property subject to a
Mortgage has been or is about to be conveyed by the Mortgagor, the Master
Servicer shall to the extent that it has knowledge of such conveyance, enforce
any due-on-sale clause contained in any Mortgage Note or Mortgage, to the extent
permitted under applicable law and governmental regulations, but only to the
extent that such enforcement will not adversely affect or jeopardize coverage
under any Required Insurance Policy. Notwithstanding the foregoing, the Master
Servicer is not required to exercise such rights with respect to a Mortgage
Loan
if the Person to whom the related Mortgaged Property has been conveyed or is
proposed to be conveyed satisfies the terms and conditions contained in the
Mortgage Note and Mortgage related thereto and the consent of the mortgagee
under such Mortgage Note or Mortgage is not otherwise so required under such
Mortgage Note or Mortgage as a condition to such transfer. In the event that
the
Master Servicer is prohibited by law from enforcing any such due-on-sale clause,
or if coverage under any Required Insurance Policy would be adversely affected,
or if nonenforcement is otherwise permitted hereunder, the Master Servicer
is
authorized, subject to Section 3.10(b), to take or enter into an assumption
and
modification agreement from or with the person to whom such property has been
or
is about to be conveyed, pursuant to which such person becomes liable under
the
Mortgage Note and, unless prohibited by applicable state law, the Mortgagor
remains liable thereon, provided that the Mortgage Loan shall continue to be
covered (if so covered before the Master Servicer enters such agreement) by
the
applicable Required Insurance Policies. The Master Servicer, subject to Section
3.10(b), is also authorized with the prior approval of the insurers under any
Required Insurance Policies to enter into a substitution of liability agreement
with such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as Xxxxxxxxx and becomes liable under
the Mortgage Note. The Master Servicer shall notify the Indenture Trustee that
any such substitution, modification or assumption agreement has been completed
by forwarding to the Indenture Trustee the executed original of such
substitution 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. Notwithstanding the foregoing, the Master Servicer
shall not be deemed to be in default under this Section 3.10(a) by reason of
any
transfer or assumption that the Master Servicer reasonably believes it is
restricted by law from preventing.
(b) Subject
to the Master Servicer’s duty to enforce any due-on-sale clause to the extent
set forth in Section 3.10(a) hereof, in any case in which a Mortgaged Property
has been conveyed to a Person by a Mortgagor, and such Person is to enter into
an assumption agreement or modification agreement or supplement to the Mortgage
Note or Mortgage that requires the signature of the Indenture Trustee, or if
an
instrument of release signed by the Indenture Trustee is required releasing
the
Mortgagor from liability on the Mortgage Loan, the Master Servicer shall prepare
and deliver or cause to be prepared and delivered to the Indenture Trustee
for
signature and shall direct, in writing, the Indenture Trustee to execute the
assumption agreement with the Person to whom the Mortgaged Property is to be
conveyed and such modification agreement or supplement to the Mortgage Note
or
Mortgage or other instruments as are reasonable or necessary to carry out the
terms of the Mortgage Note or Mortgage or otherwise to comply with any
applicable laws regarding assumptions or the transfer of the Mortgaged Property
to such Person. In connection with any such assumption, no material term of
the
Mortgage Note (including, but not limited to, the Mortgage Rate, the amount
of
the Scheduled Payment, the Maximum Mortgage Rate, the Minimum Mortgage Rate,
the
Gross Margin, the Periodic Rate Cap, the Adjustment Date and any other term
affecting the amount or timing of payment on the Mortgage Loan) may be changed.
In addition, the substitute Mortgagor and the Mortgaged Property must be
acceptable to the Master Servicer in accordance with its underwriting standards
as then in effect. The Master Servicer shall notify the Indenture Trustee that
any such substitution or assumption agreement has been completed by forwarding
to the Indenture Trustee the original of such substitution or assumption
agreement, which in the case of the original shall be added to the related
Mortgage File and shall, for all purposes, be considered a part of such Mortgage
File to the same extent as all other documents and instruments constituting
a
part thereof. Any fee collected by the Master Servicer for entering into an
assumption or substitution of liability agreement will be retained by the Master
Servicer as additional servicing compensation.
| Section 3.11 |
Realization
Upon Defaulted Mortgage Loans; Determination of Excess Proceeds and
Realized Losses; Repurchase of Certain Mortgage Loans.
|
(a) Subject
to Section 3.19 hereof, the Master Servicer shall use reasonable efforts 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. In connection with such foreclosure or other conversion, the Master
Servicer shall follow such practices and procedures as it shall deem necessary
or advisable and as shall be normal and usual in its general mortgage servicing
activities and the requirements of the insurer under any Required Insurance
Policy; provided that the Master Servicer shall not be required to expend its
own funds in connection with any foreclosure or towards the restoration of
any
property unless it shall determine (i) that such restoration and/or foreclosure
will increase the proceeds of liquidation of the Mortgage Loan after
reimbursement to itself of such expenses and (ii) that such expenses will be
recoverable to it through Liquidation Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Collection Account pursuant to
Section 3.08 hereof). The Master Servicer shall be responsible for all other
costs and expenses incurred by it in any such proceedings; provided that it
shall be entitled to reimbursement thereof from the proceeds of liquidation
of
the related Mortgaged Property, as contemplated in Section 3.08 hereof. If
the
Master Servicer has knowledge that a Mortgaged Property that the Master Servicer
is contemplating acquiring in foreclosure or by deed-in-lieu of foreclosure
is
located within a one-mile radius of any site with environmental or hazardous
waste risks known to the Master Servicer, the Master Servicer will, prior to
acquiring the Mortgaged Property, consider such risks and only take action
in
accordance with its established environmental review procedures.
With
respect to any REO Property, the deed or certificate of sale shall be taken
in
the name of the Indenture Trustee for the benefit of the Noteholders (or the
Indenture Trustee’s nominee on behalf of the Noteholders). The Indenture
Trustee’s name shall be placed on the title to such REO Property solely as the
Indenture Trustee hereunder and not in its individual capacity. The Master
Servicer shall ensure that the title to such REO Property references this
Agreement and the Indenture Trustee’s capacity thereunder. Pursuant to its
efforts to sell such REO Property, the Master Servicer shall either itself
or
through an agent selected by the Master Servicer protect and conserve such
REO
Property in the same manner and to such extent as is customary in the locality
where such REO Property is located and may, incident to its conservation and
protection of the interests of the Noteholders, rent the same, or any part
thereof, as the Master Servicer deems to be in the best interest of the Master
Servicer and the Noteholders for the period prior to the sale of such REO
Property. The Master Servicer shall prepare for and deliver to the Indenture
Trustee a statement with respect to each REO Property that has been rented
showing the aggregate rental income received and all expenses incurred in
connection with the management and maintenance of such REO Property at such
times as is necessary to enable the Indenture Trustee to comply with the
reporting requirements of the REMIC Provisions. The net monthly rental income,
if any, from such REO Property shall be deposited in the Collection Account
no
later than the close of business on each Determination Date. The Master Servicer
shall perform the tax reporting and withholding related to foreclosures,
abandonments and cancellation of indebtedness income as specified by sections
1445, 6050J and 6050P of the Code by preparing and filing such tax and
information returns, as may be required.
In
the
event that the Indenture Trustee for the benefit of the Noteholders acquires
any
Mortgaged Property as aforesaid or otherwise in connection with a default or
imminent default on a Mortgage Loan, the Master Servicer shall dispose of such
Mortgaged Property as soon as practicable in a manner that maximizes the
Liquidation Proceeds, but if a REMIC Conversion has occurred in no event later
than three years after its acquisition by the Indenture Trustee for the benefit
of the Noteholders or, at the expense of the Trust Estate, the Master Servicer
shall request, more than 60 days prior to the day on which such three-year
period would otherwise expire, an extension of the three-year grace period.
In
the event that a REMIC Conversion has occurred and the Indenture Trustee shall
have been supplied with an Opinion of Counsel (such opinion not to be an expense
of the Indenture Trustee) to the effect that the holding by the Indenture
Trustee for the benefit of the Noteholders of such Mortgaged Property subsequent
to such three-year period will not result in the imposition of taxes on
“prohibited transactions,” as defined in section 860F of the Code, of any Trust
REMIC or cause any Trust REMIC to fail to qualify as a REMIC at any time that
any Notes or Certificates are outstanding, the Indenture Trustee for the benefit
of the Noteholders may continue to hold such Mortgaged Property (subject to
any
conditions contained in such Opinion of Counsel) after the expiration of such
three-year period. Notwithstanding any other provision of this Agreement, if
a
REMIC Conversion has occurred, no Mortgaged Property acquired by the Indenture
Trustee for the benefit of the Noteholders shall be rented (or allowed to
continue to be rented) or otherwise used for the production of income by or
on
behalf of the Indenture Trustee for the benefit of the Noteholders in such
a
manner or pursuant to any terms that would (i) cause such Mortgaged Property
to
fail to qualify as “foreclosure property” within the meaning of section 856(e)
of the Code or (ii) subject any Trust REMIC to the imposition of any federal,
state or local income taxes on the income earned from such Mortgaged Property
unless the Master Servicer has agreed to indemnify and hold harmless the Trust
REMIC with respect to the imposition of any such taxes.
The
decision of the Master Servicer to foreclose on a defaulted Mortgage Loan shall
be subject to a determination by the Master Servicer that the proceeds of such
foreclosure would exceed the costs and expenses of bringing such a proceeding.
The income earned from the management of any Mortgaged Properties acquired
through foreclosure or other judicial proceeding, net of reimbursement to the
Master Servicer for expenses incurred (including any property or other taxes)
in
connection with such management and net of unreimbursed Servicing Fees,
Advances, Servicing Advances and any management fee paid or to be paid with
respect to the management of such Mortgaged Property, shall be applied to the
payment of principal of, and interest on, the related defaulted Mortgage Loans
(with interest accruing as though such Mortgage Loans were still current) and
all such income shall be deemed, for all purposes in this Agreement, to be
payments on account of principal and interest on the related Mortgage Notes
and
shall be deposited into the Collection Account. To the extent the income
received during a Prepayment Period is in excess of the amount attributable
to
amortizing principal and accrued interest at the related Mortgage Rate on the
related Mortgage Loan, such excess shall be considered to be a partial Principal
Prepayment for all purposes hereof.
The
Liquidation Proceeds from any liquidation of a Mortgage Loan, net of any payment
to the Master Servicer as provided above, shall be deposited in the Collection
Account on the next succeeding Determination Date following receipt thereof
for
distribution on the related Payment Date, except that any Excess Proceeds shall
be retained by the Master Servicer as additional servicing
compensation.
The
proceeds of any Liquidated Loan, as well as any recovery resulting from a
partial collection of Liquidation Proceeds or any income from an REO Property,
will be applied in the following order of priority: first, to reimburse the
Master Servicer for any related unreimbursed Servicing Advances and Servicing
Fees, pursuant to Section 3.08(a)(vi) or this Section 3.11; second, to reimburse
the Master Servicer for any unreimbursed Advances, pursuant to Section
3.08(a)(ii) or this Section 3.11; third, to accrued and unpaid interest (to
the
extent no Advance has been made for such amount) on the Mortgage Loan or related
REO Property, at the Net Mortgage Rate (less Deferred Interest, if any) to
the
Due Date occurring in the month in which such amounts are required to be
distributed; and fourth, as a recovery of principal of the Mortgage
Loan.
(b) The
Master Servicer in its sole discretion, shall have the right to elect (by
written notice sent to the Indenture Trustee) to purchase for its own account
from the Trust Estate any Mortgage Loan that is 150 days or more delinquent
at a
price equal to the Purchase Price; provided, however, that the Master Servicer
may only exercise this right on or before the last day of the calendar month
in
which such Mortgage Loan became 150 days delinquent (such month, the
“Eligible
Repurchase Month”);
provided further, that any such Mortgage Loan which becomes current but
thereafter becomes delinquent may be purchased by the Master Servicer pursuant
to this Section in any ensuing Eligible Repurchase Month. The Purchase Price
for
any Mortgage Loan purchased hereunder shall be deposited in the Collection
Account, and the Indenture Trustee, upon receipt of certification from the
Master Servicer of such deposit and a Request for Release from the Master
Servicer in the form of Exhibit E hereto, (i) shall release or cause to be
released to the purchaser of such Mortgage Loan the related Mortgage Note,
(ii)
shall cause the remaining documents in the related Mortgage File to be released
to the purchaser and (iii) shall execute and deliver such instruments of
transfer or assignment prepared by the purchaser of such Mortgage Loan, in
each
case without recourse, as shall be necessary to vest in the purchaser of such
Mortgage Loan any Mortgage Loan released pursuant hereto and the purchaser
of
such Mortgage Loan shall succeed to all the Indenture Trustee’s right, title and
interest in and to such Mortgage Loan and all security and documents related
thereto. Such assignment shall be an assignment outright and not for security.
The purchaser of such Mortgage Loan shall thereupon own such Mortgage Loan,
and
all security and documents, free of any further obligation to the Indenture
Trustee or the Noteholders with respect thereto.
(c) Notwithstanding
anything in this Agreement to the contrary:
(i) The
Master Servicer shall not commence either (a) foreclosure proceedings with
respect to a Mortgage Loan or (b) sell defaulted Mortgage Loans from the Trust
Estate unless (i) no later than five Business Days prior to such action, it
notifies the holder of the Owner Trust Certificates of its intention to do
so,
and (ii) the holder of the Owner Trust Certificates, does not, within such
period, affirmatively object to such action.
(ii) If
the
holder of the Owner Trust Certificates timely and affirmatively objects to
such
action, then the Master Servicer shall hire, at the holder of the Owner Trust
Certificates’ sole cost and expense, three appraisal firms, selected by the
Master Servicer in its sole and absolute discretion from the list of appraisal
firms attached as Exhibit M, to compute the fair value of the Mortgaged Property
relating to the related Mortgage Loan utilizing the Xxxxxx Xxx Form 2055
Exterior-Only Inspection Residential Appraisal Report (each such appraisal-firm
computation, a “Fair
Value Price”),
in
each case no later than 30 days from the date of the holder of the Owner Trust
Certificates’ objection. If the Master Servicer shall have received three Fair
Value Prices by the end of such 30-day period, then the holder of the Owner
Trust Certificates shall, no later than 5 days after the expiration of such
30-day period, purchase such Mortgage Loan and the related Mortgaged Property
at
an amount equal to the sum of (i) accrued and unpaid interest on such Mortgage
Loan as of such purchase date (“Accrued
Interest”)
and
(ii) the average of such three Fair Value Prices respectively determined by
such
appraisal firms, and shall promptly deliver such amount to the Master Servicer
for deposit into the Certificate Account. All costs relating to the computation
of the related Fair Value Prices shall be for the account of the holder of
the
Owner Trust Certificates and shall be paid by the holder of the Owner Trust at
the time such Mortgage Loan and the related Mortgaged Property are purchased
by
the holder of the Owner Trust. Any objection to such action shall be irrevocable
by the holder of the Owner Trust Certificate, and the holder of the Owner Trust
Certificate will purchase the related mortgage loan regardless of the Fair
Value
Price determined.
(iii) In
the
event that the Master Servicer has not commenced foreclosure proceedings with
respect to a Mortgage Loan that is 180 days’ or more delinquent (provided that
the mortgage loan is not in bankruptcy, is not subject to a court-ordered
injunction with respect to the mortgage loan or the related mortgaged property,
or is not subject to federal, state or local law restriction on foreclosure)
the
Master Servicer must promptly provide the holder of the Owner Trust Certificates
with notice of such event (a “Delinquency
Notice”)
and a
description of such other action as it intends to take with respect to such
mortgage loan. The Master Servicer is not permitted to proceed with any such
action unless the holder of the Owner Trust Certificates, does not, within
five
Business Days following such notice, affirmatively object to the Master Servicer
taking such action.
(iv) If
the
holder of the Owner Trust Certificates timely and affirmatively objects to
the
Master Servicer’s contemplated action, then the holder of the Owner Trust
Certificates shall have the right to direct the Master Servicer to commence
foreclosure proceedings in accordance with prudent servicing standards.
Notwithstanding the foregoing, the Master Servicer shall not be obligated to
foreclose on any mortgage loan if the Master Servicer has notified the holder
of
the Owner Trust Certificates in the Delinquency Notice that either (i) the
related mortgaged property is located in a county designated as an individual
assistance disaster area by FEMA and foreclosure is not permitted under the
Master Servicer’s servicing policies with respect to mortgage loans contained in
such area or (ii) such mortgage is the subject of a lis
pendens
notice
and foreclosure is not permitted under the Master Servicer’s servicing policies
with respect to mortgage loans subject to such legal proceedings. In such event,
the Master Servicer will hire the three appraisal firms identified in Exhibit
M
to compute the fair value of the mortgaged property relating to the related
mortgage loan utilizing the Xxxxxx Xxx Form 2055 Exterior Only Inspection
Residential Appraisal Report, in each case no later than 30 days from the date
of the holder of the Owner Trust Certificate’s objection and the holder of the
Owner Trust Certificates will, no later than 5 days after the expiration of
such
30 day period, purchase such mortgage loan and the related mortgaged property
at
an amount equal to the sum of (i) Accrued Interest and (ii) the average of
such
three Fair Value Prices respectively determined by such appraisal firms, and
shall promptly deliver such amount to the Master Servicer for deposit into
the
Certificate Account. All costs relating to the computation of the related Fair
Value Prices shall be for the account of the holder of the Owner Trust
Certificates and shall be paid by the holder of the Owner Trust at the time
such
Mortgage Loan and the related Mortgaged Property are purchased by the holder
of
the Owner Trust. The holder of the Owner Trust Certificates will purchase the
mortgage loan regardless of the Fair Value Price determined. Pursuant to a
side
agreement, the seller, so long as it is the holder of the Owner Trust
Certificate, will indemnify and defend the Master Servicer in connection with
the decision to foreclose.
(v) If
the
Master Servicer shall not have received three Fair Value Prices at the end
of
the 30-day period set forth in (b) and (d) above, then:
| (i) |
The
Master Servicer shall obtain such three Fair Value Prices no later
than 15
days after the end of such 30-day period.
|
| (ii) |
If
the Master Servicer shall have only received two Fair Value Prices
at the
end of such 15-day extension period, then the Master Servicer will
determine, in its sole and absolute discretion, the fair value of the
Mortgaged Property relating to such Mortgage Loan, related Insurance
Proceeds and the current delinquency status of such Mortgage Loan (such
fair value, the “Master
Servicer Fair Value Price”),
and the holder of the Owner Trust Certificates shall, no later than
5 days
after the expiration of such 15-day extension period, purchase (and
deliver to the Servicer the purchase price for) such Mortgage Loan
and the
related Mortgaged Property at an amount equal to the sum of (A) Accrued
Interest thereon and (B) the highest of such two Fair Value Prices
determined by such appraisal firms.
|
| (iii) |
If
the Master Servicer shall have received only one Fair Value Price at
the
end of such 15-day extension period, then the Master Servicer will
determine, in its sole and absolute discretion, the Master Servicer
Fair
Value Price of the Mortgaged Property related to such Mortgage Loan,
and:
|
| (A) |
if
such Master Servicer Fair Value Price is equal to or greater than the
unpaid principal balance of the related Mortgage Loan as of such date
(the
“Unpaid
Principal Balance”),
then the holder of the Owner Trust Certificates shall, no later than
5
days after the expiration of such 15-day extension period, purchase
(and
deliver to the Master Servicer the purchase price for) such Mortgage
Loan
and the related Mortgaged Property at an amount equal to the sum of
(1)
Accrued Interest thereon and (2) the Unpaid Principal Balance of that
Mortgage Loan; and
|
| (B) |
if
such Master Servicer Fair Value Price is less than the related Unpaid
Principal Balance, then the holder of Owner Trust Certificates shall,
no
later than 5 days after the expiration of such 15-day extension period,
purchase (and deliver to the Master Servicer the purchase price for)
such
Mortgage Loan and the related Mortgaged Property at an amount equal
to the
sum of (1) Accrued Interest thereon and (2) the related Unpaid Principal
Balance (such sum, the “Preliminary
Purchase Price”);
provided, that the provisions of clause (d)(iv) shall thereafter apply.
|
| (iv) |
Following
the payment by the holder of Owner Trust Certificates of the Preliminary
Purchase Price, the Master Servicer shall continue to hire appraisal
firms
at the holder of Owner Trust Certificates’ sole cost and expense to
compute the Fair Value Price of the Mortgaged Property related to such
Mortgage Loan, and at such time as two such Fair Value Prices shall
have
been obtained:
|
| (A) |
if
such Master Servicer Fair Value Price is equal to or greater than the
Unpaid Principal Balance, then the holder of Owner Trust Certificates
shall, no later than 5 days after the expiration of such 15-day extension
period, purchase (and deliver to the Master Servicer the purchase price
for) such Mortgage Loan and the related Mortgaged Property at an amount
equal to the sum of (1) Accrued Interest thereon and (2) the Unpaid
Principal Balance of such Mortgage Loan;
and
|
| (B) |
if
the sum of (1) Accrued Interest on the related Mortgage Loan and (2)
the
higher of (x) the highest of such two Fair Value Prices determined
by such
appraisal firms and (y) the Master Servicer’s Fair Value Price of the
Mortgaged Property related to such Mortgage Loan (such sum, the
“Revised
Fair Value Price”)
is greater than such Preliminary Purchase Price, then the Master Servicer
shall promptly notify the holder of Owner Trust Certificates of such
calculation, and the holder of Owner Trust Certificates shall, no later
than 5 days after such notice, remit to the Master Servicer, for deposit
into the Certificate Account, the difference between such Revised Fair
Value Price and such Preliminary Purchase Price;
and
|
| (C) |
if
such Preliminary Purchase Price is greater than such Revised Fair Value
Price, then the Master Servicer shall promptly notify the holder of
Owner
Trust Certificates of such calculation, and the Servicer shall, no
later
than 5 days after such notice, remit to the holder of Owner Trust
Certificates, from funds then on deposit in the Certificate Account,
the
difference between such Preliminary Purchase Price and such Revised
Fair
Value Price.
|
(vi) Notwithstanding
anything herein to the contrary, the holder of the Owner Trust Certificate
shall
not be entitled to any of its rights set forth herein with respect to a Mortgage
Loan following its failure to purchase such Mortgage Loan and the related
Mortgaged Property (at the average of the three Fair Value Prices respectively
determined by such appraisal firms as set forth above) during the time frame
set
forth above following its objection to the Master Servicer action.
(vii) Any
notice, confirmation, instruction or objection pursuant to paragraphs (a),
(b),
(c), (d) and (e) above may be delivered via facsimile or other written or
electronic communication as the parties hereto and the holder of Owner Trust
Certificates may agree to from time to time.
(viii) For
the
avoidance of doubt, the holder of Owner Trust Certificates’ rights set forth in
this Section 3.11 are intended to provide the holder of Owner Trust
Certificates, for so long as it has not forfeited its right under this Section
3.11 as set forth in clause (f) above, with the unilateral right to control
foreclosure decisions in respect of delinquent and defaulted Mortgage Loans,
and
certain exclusive purchase rights so as to maximize the recovery value on
delinquent and defaulted Mortgage Loans.
To
the
extent that the holder of the Owner Trust Certificate purchases any Mortgage
Loan pursuant to this Section 3.11, the servicing of such Mortgage Loan pursuant
to this Agreement will terminate and the servicing of the related Mortgage
Loan will be transferred to a successor servicer at the direction of, and the
expense of, the holder of the Owner Trust Certificate.
The
Master Servicer, may also, in its discretion, as alternative to foreclosure,
sell defaulted Mortgage Loans at fair market value to third parties, if the
Master Servicer reasonably believes that such sale would maximize proceeds
to
the trust in the aggregate (on a present value basis) with respect to that
mortgage loan.
| Section 3.12 |
Indenture
Trustee to Cooperate; Release of Mortgage Files.
|
Upon
the
payment in full of any Mortgage Loan, or the receipt by the Master Servicer
of a
notification that payment in full will be escrowed in a manner customary for
such purposes, the Master Servicer will promptly notify the Indenture Trustee
by
delivering a Request for Release substantially in the form of Exhibit E. Upon
receipt of such request, the Indenture Trustee shall promptly release the
related Mortgage Note to the Master Servicer, and the Indenture Trustee shall
at
the Master Servicer’s direction execute and deliver to the Master Servicer the
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage in each case
provided by the Master Servicer, together with the Mortgage Note with written
evidence of cancellation thereon. The Master Servicer is authorized to cause
the
removal from the registration on the MERS® System of such Mortgage and to
execute and deliver, on behalf of the Trust Estate and the Noteholders or any
of
them, any and all instruments of satisfaction or cancellation or of partial
or
full release. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account, the Payment Account or the related subservicing account. From time
to
time and as shall be appropriate for the servicing or foreclosure of any
Mortgage Loan, including for such purpose, collection under any policy of flood
insurance any fidelity bond or errors or omissions policy, or for the purposes
of effecting a partial release of any Mortgaged Property from the lien of the
Mortgage or the making of any corrections to the Mortgage Note or the Mortgage
or any of the other documents included in the Mortgage File, the Indenture
Trustee shall, upon delivery to the Indenture Trustee of a Request for Release
in the form of Exhibit D signed by a Servicing Officer, release the Mortgage
Note to the Master Servicer. Subject to the further limitations set forth below,
the Master Servicer shall cause the Mortgage Note or documents so released
to be
returned to the Indenture Trustee when the need therefor by the Master Servicer
no longer exists, unless the Mortgage Loan is liquidated and the proceeds
thereof are deposited in the Collection Account, in which case the Indenture
Trustee shall deliver the Request for Release to the Master
Servicer.
If
the
Master Servicer at any time seeks to initiate a foreclosure proceeding in
respect of any Mortgaged Property as authorized by this Agreement, the Master
Servicer shall deliver or cause to be delivered to the Indenture Trustee, for
signature, as appropriate, any court pleadings, requests for trustee’s sale or
other documents necessary to effectuate such foreclosure or any legal action
brought to obtain judgment against the Mortgagor on the Mortgage Note or the
Mortgage or to obtain a deficiency judgment or to enforce any other remedies
or
rights provided by the Mortgage Note or the Mortgage or otherwise available
at
law or in equity. Notwithstanding the foregoing, the Master Servicer shall
cause
possession of any Mortgage Note or of any of the documents in the Mortgage
File
that shall have been released by the Indenture Trustee to be returned to the
Indenture Trustee within 21 calendar days after possession thereof shall have
been released by the Indenture Trustee unless (i) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have
been
deposited in the Collection Account, and the Master Servicer shall have
delivered to the Indenture Trustee a Request for Release in the form of Exhibit
E or (ii) the Mortgage Note or document shall have been delivered to an attorney
or to a public trustee or other public official as required by law for purposes
of initiating or pursuing legal action or other proceedings for the foreclosure
of the Mortgaged Property and the Master Servicer shall have delivered to the
Indenture Trustee an Officer’s Certificate of a Servicing Officer certifying as
to the name and address of the Person to which the Mortgage Notes or other
documents in the Mortgage File were delivered and the purpose or purposes of
such delivery.
| Section 3.13 |
Documents,
Records and Funds in Possession of Master Servicer to be Held for the
Indenture Trustee.
|
Notwithstanding
any other provisions of this Agreement, the Master Servicer shall transmit
to
the Indenture Trustee as required by this Agreement all documents and
instruments in respect of a Mortgage Loan coming into the possession of the
Master Servicer from time to time and shall account fully to the Indenture
Trustee for any funds received by the Master Servicer or that otherwise are
collected by the Master Servicer as Liquidation Proceeds or Insurance Proceeds
in respect of any Mortgage Loan. All Mortgage Files and funds collected or
held
by, or under the control of, the Master Servicer in respect of any Mortgage
Loans, whether from the collection of principal and interest payments or from
Liquidation Proceeds, including but not limited to, any funds on deposit in
the
Collection Account, shall be held by the Master Servicer for and on behalf
of
the Trust Estate and shall be and remain the sole and exclusive property of
the
Trust Estate, subject to the applicable provisions of this Agreement. The Master
Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in the Collection Account, the Payment
Account or in any Escrow Account (as defined in Section 3.06), or any funds
that
otherwise are or may become due or payable to the Indenture Trustee for the
benefit of the Noteholders, to any claim, lien, security interest, judgment,
levy, writ of attachment or other encumbrance, or assert by legal action or
otherwise any claim or right of set off against any Mortgage File or any funds
collected on, or in connection with, a Mortgage Loan, except, however, that
the
Master Servicer shall be entitled to set off against and deduct from any such
funds any amounts that are properly due and payable to the Master Servicer
under
this Agreement.
| Section 3.14 |
Servicing
Compensation.
|
As
compensation for its activities hereunder, the Master Servicer shall be entitled
to retain or withdraw from the Collection Account (i) out of each payment of
interest on a Mortgage Loan included in the Trust Estate an amount equal to
interest at the applicable Servicing Fee Rate on the Stated Principal Balance
of
the related Mortgage Loan for the period covered by such interest
payment.
Additional
servicing compensation in the form of any Excess Proceeds, assumption fees,
late
payment charges, any Prepayment Charges, Prepayment Interest Excess, and all
income and gain net of any losses realized from Permitted Investments shall
be
retained by the Master Servicer to the extent not required to be deposited
in
the Collection Account pursuant to Section 3.05 or 3.11(a) hereof. The Master
Servicer shall be required to pay all expenses incurred by it in connection
with
its servicing activities hereunder (including payment of any premiums for hazard
insurance, as required by Section 3.09 hereof and maintenance of the other
forms
of insurance coverage required by Section 3.09 hereof) and shall not be entitled
to reimbursement therefor except as specifically provided in Sections 3.08
and
3.11 hereof.
| Section 3.15 |
Access
to Certain Documentation.
|
The
Master Servicer shall provide to the OTS and the FDIC and to comparable
regulatory authorities supervising Holders of the Notes or Note Owners and
the
examiners and supervisory agents of the OTS, the FDIC and such other
authorities, access to the documentation regarding the Mortgage Loans required
by applicable regulations of the OTS and the FDIC. Such access shall be afforded
without charge, but only upon reasonable and prior written request and during
normal business hours at the offices of the Master Servicer designated by it.
Nothing in this Section shall limit the obligation of the Master Servicer to
observe any applicable law prohibiting disclosure of information regarding
the
Mortgagors and the failure of the Master Servicer to provide access as provided
in this Section as a result of such obligation shall not constitute a breach
of
this Section.
| Section 3.16 |
Annual
Statement as to Compliance.
|
The
Master Servicer shall, and shall cause each Subservicer to, deliver to the
Depositor and the Indenture Trustee on or before the 80th
day
after the end of the Master Servicer’s fiscal year, commencing with its 2006
fiscal year, an Officer’s Certificate stating, as to the signer thereof, that
(i) a review of the activities of such Person during the preceding calendar
year
(or applicable portion thereof) and of the performance of such Person under
this
Agreement , or in the case of a Subservicer the applicable Subservicing
Agreement or primary agreement, has been made under such officer’s supervision
and (ii) to the best of such officer’s knowledge, based on such review, such
Person has fulfilled all its obligations under this Agreement, or in the case
of
a Subservicer the applicable Subservicing Agreement or primary servicing
agreement, in all material respects throughout such year (or applicable portion
thereof), or, if there has been a failure to fulfill any such obligation in
any
material respect, specifying each such default known to such officer and the
nature and status thereof. The Indenture Trustee shall forward a copy of each
such statement to each Rating Agency. Copies of such statement shall be provided
by the Indenture Trustee to any Noteholder upon request at the Master Servicer’s
expense, provided such statement is delivered by the Master Servicer or
Subservicer to the Indenture Trustee.
| Section 3.17 |
[Reserved].
|
| Section 3.18 |
[Reserved].
|
| Section 3.19 |
Optional
Purchase of Mortgage Loans.
|
(a) The
Master Servicer shall give written notice to the Holder of the Trust
Certificates with respect to any Mortgage Loan which is delinquent in payment
by
90 days or more or is an REO Property. The Holder of the Trust Certificates
shall, within 3 Business Days of receipt of such notice, direct the Master
Servicer to (1) foreclose on such Mortgage Loan or REO Property in accordance
with the procedures set forth in Section 3.11 hereof or (2) sell such Mortgage
Loan or REO Property to a third-party at a price equal to fair market value;
provided, however, that if the Master Servicer is directed pursuant to clause
(2) above, then the Holder of the Trust Certificates will first have the option
to purchase such Mortgage Loan or REO Property at a price equal to fair market
value. If the Holder of the Trust Certificates does not direct the Master
Servicer to take action in accordance with (1) or (2) above within 3 Business
Days of receipt, then the Master Servicer foreclose, purchase or sell such
Mortgage Loan or REO Property in accordance with this Agreement.
(b) The
Seller will have the option at any time to purchase any of the Mortgage Loans
from the Indenture Trustee at the Purchase Price, up to a maximum of five
Mortgage Loans not to exceed 1% of the aggregate Stated Principal Balance of
the
Mortgage Loans at the time of such purchase. In the event that this option
is
exercised as to any five Mortgage Loans, this option will thereupon terminate.
This option is not revocable by the Master Servicer.
(c) If
at any
time the Master Servicer remits to the Indenture Trustee a payment for deposit
in the Payment Account covering the amount of the Purchase Price for a Mortgage
Loan in accordance with Section 3.19(a) or Section 3.19(b) above, and the Master
Servicer provides to the Indenture Trustee a certification signed by a Servicing
Officer stating that the amount of such payment has been deposited in the
Payment Account, then the Indenture Trustee shall execute the assignment of
such
Mortgage Loan to the Master Servicer, without recourse, representation or
warranty and the Master Servicer shall succeed to all of the Indenture Trustee’s
right, title and interest in and to such Mortgage Loan, and all security and
documents relative thereto. Such assignment shall be an assignment outright
and
not for security. The Master Servicer will thereupon own such Mortgage, and
all
such security and documents, free of any further obligation to the Issuing
Entity, the Indenture Trustee or the Noteholders with respect
thereto.
ARTICLE
IV
PAYMENTS
AND
ADVANCES
BY THE MASTER SERVICER
| Section 4.01 |
Advances;
Remittance Reports.
|
(a) Subject
to the conditions of this Article IV, the Master Servicer, as required below,
shall make an Advance and deposit such Advance in the Collection Account. Each
such Advance shall be remitted to the Collection Account no later than 1:00
p.m.
Pacific time on the Master Servicer Advance Date in immediately available funds.
The Master Servicer shall be obligated to make any such Advance only to the
extent that such advance would not be a Nonrecoverable Advance; provided
however, with respect to each Balloon Mortgage Loan delinquent in respect of
its
Balloon Payment as of the close of business on the related Determination Date,
the Master Servicer shall make an Advance only up to an amount equal to the
excess, if any, of interest on the unpaid principal balance thereof (with each
interest portion thereof adjusted to a per annum rate equal to the Net Mortgage
Rate), over any payments of interest (with each interest portion thereof
adjusted to a per annum rate equal to the Net Mortgage Rate) received from
the
related Mortgagor as of the close of business on the related Determination
Date
and allocable to the Due Date during the related Due Period for each month
until
such Balloon Mortgage Loan is finally liquidated. If the Master Servicer shall
have determined that it has made a Nonrecoverable Advance or that a proposed
Advance or a lesser portion of such Advance would constitute a Nonrecoverable
Advance, the Master Servicer shall deliver (i) to the Indenture Trustee for
the
benefit of the Noteholders funds constituting the remaining portion of such
Advance, if applicable, and (ii) to the Issuing Entity, each Rating Agency
and
the Indenture Trustee an Officer’s Certificate setting forth the basis for such
determination.
(b) In
lieu
of making all or a portion of such Advance from its own funds, the Master
Servicer may (i) cause to be made an appropriate entry in its records relating
to the Collection Account that any Amount Held for Future Distributions has
been
used by the Master Servicer in discharge of its obligation to make any such
Advance and (ii) transfer such funds from the Collection Account to the Payment
Account. Any funds so applied and transferred shall be replaced by the Master
Servicer by deposit in the Collection Account no later than the close of
business on the Business Day immediately preceding the Payment Date on which
such funds are required to be distributed pursuant to this Agreement. The Master
Servicer shall be entitled to be reimbursed from the Collection Account for
all
Advances of its own funds made pursuant to this Section as provided in Section
3.08. The obligation to make Advances with respect to any Mortgage Loan shall
continue until such Mortgage Loan is paid in full or the related Mortgaged
Property or related REO Property has been liquidated or until the purchase
or
repurchase thereof (or substitution therefor) from the Indenture Trustee
pursuant to any applicable provision of this Agreement, except as otherwise
provided in this Section 4.01.
(c) On
or
before 5:00 p.m. Pacific time on the fifth Business Day following each
Determination Date (but in no event later than 5:00 p.m. Pacific time on the
third Business Day before the related Payment Date), the Master Servicer shall
deliver a report to the Indenture Trustee and the Sponsor (in the form of a
computer readable magnetic tape or by such other means as the Master Servicer
and the Indenture Trustee may agree from time to time) containing such data
and
information as agreed to by the Master Servicer and the Indenture Trustee such
as to permit the Indenture Trustee to prepare the Monthly Statement and make
the
required distributions for the related Payment Date (the “Remittance
Report”).
The
Indenture Trustee shall not be responsible to recompute, recalculate or verify
information provided to it by the Master Servicer and shall be permitted to
conclusively rely on any information provided to it by the Master
Servicer.
| Section 4.02 |
Reduction
of Servicing Compensation in Connection with Prepayment Interest
Shortfalls.
|
In
the
event that any Mortgage Loan is the subject of a Prepayment Interest Shortfall,
the Master Servicer shall, to the extent of one-half of the Servicing Fee for
such Payment Date, deposit into the Collection Account, as a reduction of the
Servicing Fee (but not in excess of one-half thereof) for such Payment Date,
no
later than the close of business on the Business Day immediately preceding
such
Payment Date, an amount equal to the Prepayment Interest Shortfall; and in
case
of such deposit, the Master Servicer shall not be entitled to any recovery
or
reimbursement from the Issuing Entity, the Indenture Trustee, the Seller, CHL
the Trust Estate or the Noteholders.
ARTICLE
V
THE
MASTER SERVICER AND THE SELLER
| Section 5.01 |
Respective
Liabilities of the Master Servicer, CHL and the Seller.
|
The
Master Servicer, CHL and the Seller shall each be liable in accordance herewith
only to the extent of the obligations specifically and respectively imposed
upon
and undertaken by them herein.
| Section 5.02 |
Merger
or Consolidation of the Master Servicer or the Seller.
|
The
Seller will keep in full effect its existence, rights and franchises as a
corporation 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 duties under this Agreement. The Master Servicer will keep in effect its
existence, rights and franchises as a limited partnership under the laws of
the
United States or under the laws of one of the states thereof and will obtain
and
preserve its qualification or registration to do business as a foreign
partnership in each jurisdiction in which such qualification or registration
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 Master Servicer or the Seller may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Master Servicer or the Seller shall be a party, or any person succeeding
to
the business of the Master Servicer or the Seller, shall be the successor of
the
Master Servicer or the Seller, as the case may be, hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided that
the successor or surviving Person to the Master Servicer shall be qualified
to
service mortgage loans on behalf of, Xxxxxx Xxx or Freddie Mac.
As
a
condition to the effectiveness of any merger or consolidation, at least 15
calendar days prior to the effective date of any merger or consolidation of
the
Master Servicer or the Seller, such Person shall provide (x) written notice
to
the Depositor, or in the case of a merger or consolidation of the Seller written
notice to the Depositor and the Master Servicer, of any successor pursuant
to
this Section and (y) 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 obligations under Item 6.02
of
Form 8-K.
| Section 5.03 |
Limitation
on Liability of the Seller, the Master Servicer,
the Sponsor and Others.
|
None
of
the Seller, CHL, the
Sponsor or
the
Master Servicer or any of the directors, officers, employees or agents of the
Seller, CHL, the Sponsor or the Master Servicer shall be under any liability
to
the Issuing Entity, the Indenture Trustee (except as provided in Section 7.03),
the Trust Estate or the Noteholders for any action taken or for refraining
from
the taking of any action in good faith pursuant to this Agreement, or for errors
in judgment; provided that this provision shall not protect the Seller, CHL,
the
Sponsor, the Master Servicer or any such Person against any breach of
representations or warranties made by it herein or protect the Seller, CHL,
the
Sponsor, the Master Servicer or any such Person from any liability that 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 Seller, the Master Servicer, the Sponsor,
CHL and any director, officer, employee or agent of the Seller, CHL, the Sponsor
or the Master Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Seller, the Master Servicer, CHL and any director,
officer, employee or agent of the Seller, CHL or the Master Servicer shall
be
indemnified by the Trust Estate 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 Notes or Certificates, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and 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. None of the Seller, CHL or the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal action that is not
incidental to its respective duties hereunder and that in its opinion may
involve it in any expense or liability; provided that any of the Seller, CHL
or
the Master Servicer may, in its discretion undertake any such action that it
may
deem necessary or desirable in respect of this Agreement and the rights and
duties of the parties hereto and interests of the Indenture Trustee and the
Noteholders hereunder. In such event, the legal expenses and costs of such
action and any liability resulting therefrom shall be, expenses, costs and
liabilities of the Trust Estate, and the Seller, CHL and the Master Servicer
shall be entitled to be reimbursed therefor out of the Collection Account as
provided by Section 3.08 hereof.
| Section 5.04 |
Limitation
on Resignation of Master Servicer.
|
The
Master Servicer shall not resign from the obligations and duties hereby imposed
on it except (i) upon determination that its duties hereunder are no longer
permissible under applicable law or (ii) with the written confirmation from
each Rating Agency (which confirmation shall be furnished to the Issuing Entity
and the Indenture Trustee) that such resignation will not cause such Rating
Agency to reduce the then current rating of the Notes. Any such determination
pursuant to clause (i) of the preceding sentence permitting the resignation
of the Master Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Indenture Trustee. No resignation of the Master Servicer
shall become effective until the Indenture Trustee or a successor servicer
appointed by the Indenture Trustee shall have assumed the Master Servicer’s
responsibilities, duties, liabilities (other than those liabilities arising
prior to the appointment of such successor) and obligations under this Agreement
and the Depositor shall have received the information described in the following
sentence. As a condition to the effectiveness of any such resignation, at least
15 calendar days prior to the effective date of such resignation, the Master
Servicer shall provide (x) written notice to the Depositor of any successor
pursuant to this Section and (y) 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 obligations under Item 6.02
of
Form 8-K with respect to a successor Master Servicer.
| Section 5.05 |
Errors
and Omissions Insurance; Fidelity Bonds.
|
The
Master Servicer shall, for so long as it acts as servicer under this Agreement,
obtain and maintain in force (a) a policy or policies of insurance covering
errors and omissions in the performance of its obligations as servicer
hereunder, and (b) a fidelity bond in respect of its officers, employees and
agents. Each such policy or policies and bond shall, together, comply with
the
requirements from time to time of Xxxxxx Xxx or Freddie Mac for persons
performing servicing for mortgage loans purchased by Xxxxxx Xxx or Freddie
Mac.
In the event that any such policy or bond ceases to be in effect, the Master
Servicer shall use its reasonable best efforts to obtain a comparable
replacement policy or bond from an insurer or issuer, meeting the requirements
set forth above as of the date of such replacement.
The
Master Servicer shall provide the Indenture Trustee (upon such party’s
reasonable request) with copies of any such insurance policies and fidelity
bond. The Master Servicer shall be deemed to have complied with this provision
if an Affiliate of the Master Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Master
Servicer.
ARTICLE
VI
DEFAULT;
TERMINATION OF MASTER SERVICER
| Section 6.01 |
Events
of Default.
|
“Event
of Default,”
wherever used herein, means any one of the following events:
(i) any
failure by the Master Servicer to deposit in the Collection Account or remit
to
the Indenture Trustee any payment (excluding a payment required to be made
under
Section 4.01 hereof) required to be made under the terms of this Agreement,
which failure shall continue unremedied for five calendar days and, with respect
to a payment required to be made under Section 4.01 hereof, for one calendar
day, after the date on which written notice of such failure shall have been
given to the Master Servicer by the Indenture Trustee or the Issuing Entity,
or
to the Indenture Trustee and the Master Servicer by the Holders of Notes
evidencing not less than 25% of the Note Principal Balance evidenced by the
Offered Notes; provided that the sixty-day cure period shall not apply to the
initial delivery of the Mortgage Note for Delay Delivery Mortgage Loans nor
the
failure to repurchase or substitute in lieu thereof; or
(ii) any
failure by the Master Servicer to observe or perform in any material respect
any
other of the covenants or agreements on the part of the Master Servicer
contained in this Agreement (including any obligation to cause any Subservicer
or Reporting Subcontractor (except as specified below) to take any action
specified in Article XI) or any representation or warranty shall prove to be
untrue, which failure or breach shall continue unremedied for a period of 60
days after the date on which written notice of such failure shall have been
given to the Master Servicer by the Indenture Trustee or the Issuing Entity,
or
to the Indenture Trustee by the Holders of Notes evidencing not less than 25%
of
the Note Principal Balance evidenced by the Offered Notes; provided that the
60
day cure period shall not apply to the failure to comply with the requirements
set forth in Section 3.16, Section 5.02 (with respect to notice to the
Depositor), Section 5.04 (with respect to notice to the Depositor) or Article
XI, for which the grace period shall not exceed the lesser of 10 calendar days
or such period in which the applicable Exchange Act Reports can be filed timely
(without taking into account any extentions); or
(iii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
in
the premises for the appointment of a receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the Master Servicer and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 consecutive days;
or
(iv) the
Master Servicer shall consent to the appointment of a receiver or liquidator
in
any insolvency, readjustment of debt, marshalling of assets and liabilities
or
similar proceedings of or relating to the Master Servicer or all or
substantially all of the property of the Master Servicer;
(v) the
Master Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of, or commence a
voluntary case under, any applicable insolvency or reorganization statute,
make
an assignment for the benefit of its creditors, or voluntarily suspend payment
of its obligations; or
(vi) any
failure by the Master Servicer to observe or perform in any material respect
its
obligations in Section 3.11 or Section 3.19(a).
If
an
Event of Default shall occur, then, and in each and every such case, so long
as
such Event of Default shall not have been remedied, the Indenture Trustee shall,
but only at the direction of the Holders of Notes evidencing not less than
25%
of the Note Principal Balance evidenced by the Offered Notes, by notice in
writing to the Master Servicer and the Depositor (with a copy to each Rating
Agency), terminate all of the rights and obligations of the Master Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof,
other than its rights as a Noteholder hereunder, provided, however, that in
the
case of an Event of Default pursuant to Section 6.01(vi) above, the Indenture
Trustee shall terminate the Master Servicer without the direction of the Holders
of Notes evidencing not less than 25% of the Note Principal Balance evidenced
by
the Offered Notes and in the case of an Event of Default related to the
obligations set forth in Section 3.16, Section 5.02 (with respect to notice
to
the Depositor), Section 5.04 (with respect to the notice to the Depositor)
and
Article XI, the Master Servicer may only be terminated at the direction of
the
Depositor. On or after the receipt by the Master Servicer of such written
notice, all authority and power of the Master Servicer hereunder, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in
the
Indenture Trustee. The Indenture Trustee shall thereupon make any Advance
described in Section 4.01 hereof subject to Section 3.04 hereof. The Indenture
Trustee is hereby authorized and empowered to execute and deliver, on behalf
of
the Master Servicer, as attorney-in-fact or otherwise, any and all documents
and
other instruments, and to do or accomplish all other acts or things necessary
or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of the Master Servicer
to pay amounts owed pursuant to Article VII. The Master Servicer agrees to
cooperate with the Indenture Trustee in effecting the termination of the Master
Servicer’s responsibilities and rights hereunder, including, without limitation,
the transfer to the Indenture Trustee of all cash amounts which shall at the
time be credited to the Collection Account, or thereafter be received with
respect to the Mortgage Loans. The Indenture Trustee shall promptly notify
the
Rating Agencies of the occurrence of an Event of Default.
Notwithstanding
any termination of the activities of a Master Servicer hereunder, such Master
Servicer shall be entitled to receive, out of any late collection of a Scheduled
Payment on a Mortgage Loan that was due prior to the notice terminating such
Master Servicer’s rights and obligations as Master Servicer hereunder and
received after such notice, that portion thereof to which such Master Servicer
would have been entitled pursuant to Sections 3.08(a)(i) through (vii) and
(ix),
and any other amounts payable to such Master Servicer hereunder the entitlement
to which arose prior to the termination of its activities
hereunder.
The
Depositor shall not be entitled to terminate the rights and obligations of
the
Master Servicer pursuant to subparagraph (2) if a failure of the 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.
| Section 6.02 |
Indenture
Trustee to Act; Appointment of Successor.
|
On
and
after the time the Master Servicer receives a notice of termination pursuant
to
Section 6.01 hereof, the Indenture Trustee shall, to the extent provided in
Section 3.04, be the successor to the Master Servicer in its capacity as
servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Master Servicer by the terms and provisions
hereof and applicable law including the obligation to make advances pursuant
to
Section 4.01. As compensation therefor, the Indenture Trustee shall be entitled
to all fees, costs and expenses relating to the Mortgage Loans that the Master
Servicer would have been entitled to if the Master Servicer had continued to
act
hereunder. Notwithstanding the foregoing, if the Indenture Trustee has become
the successor to the Master Servicer in accordance with Section 6.01 hereof,
the
Indenture Trustee may, if it shall be unwilling to so act, or shall, if it
is
prohibited by applicable law from making Advances pursuant to Section 4.01
hereof or if it is otherwise unable to so act, appoint, or petition a court
of
competent jurisdiction to appoint, any established mortgage loan servicing
institution the appointment of which does not adversely affect the then current
rating of the Notes by each Rating Agency as the successor to the Master
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Master Servicer hereunder. Any successor Master
Servicer shall be an institution that is a Xxxxxx Xxx and Freddie Mac approved
seller/servicer in good standing, that has a net worth of at least $15,000,000
and that is willing to service the Mortgage Loans and executes and delivers
to
the Issuing Entity and the Indenture Trustee an agreement accepting such
delegation and assignment, that contains an assumption by such Person of the
rights, powers, duties, responsibilities, obligations and liabilities of the
Master Servicer (other than liabilities and indemnities of the Master Servicer
under Section 5.03 hereof incurred prior to termination of the Master Servicer
under Section 6.01), with like effect as if originally named as a party to
this
Agreement; and provided further that each Rating Agency acknowledges that its
rating of the Notes in effect immediately prior to such assignment and
delegation will not be qualified or reduced as a result of such assignment
and
delegation. No appointment of a successor to the Master Servicer hereunder
shall
be effective until the Indenture Trustee shall have consented thereto, and
written notice of such proposed appointment shall have been provided by the
Indenture Trustee to each Noteholder. The Indenture Trustee shall not resign
as
servicer until a successor servicer has been appointed and has accepted such
appointment. Pending appointment of a successor to the Master Servicer
hereunder, the Indenture Trustee, unless the Indenture Trustee is prohibited
by
law from so acting, shall, subject to Section 3.04 hereof, act in such capacity
as hereinabove provided. At least 15 calendar days prior to the effective date
of any such appointment, (x) the Indenture Trustee shall provide written notice
to the Depositor of such successor pursuant to this Section 6.02 and (y) such
successor master servicer shall provide 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 successor master
servicer. In the event that the Indenture Trustee assumes the duties of the
Master Servicer as set forth herein, the Indenture Trustee shall 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 connection with such appointment and assumption,
the Indenture 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 that no such compensation shall be in excess of that permitted
the Master Servicer hereunder. The Indenture Trustee and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Neither the Indenture Trustee nor any other
successor servicer shall be deemed to be in default hereunder by reason of
any
failure to make, or any delay in making, any distribution hereunder or any
portion thereof or any failure to perform, or any delay in performing, any
duties or responsibilities hereunder, in either case caused by the failure
of
the Master Servicer to deliver or provide, or any delay in delivering or
providing, any cash, information, documents or records to it.
Any
successor to the Master Servicer as servicer shall give notice to the Mortgagors
of such change of servicer and shall, during the term of its service as servicer
maintain in force the policy or policies that the Master Servicer is required
to
maintain pursuant to Section 5.05.
In
connection with the termination or resignation of the Master Servicer hereunder,
either (i) the successor Master Servicer, including the Indenture Trustee if
the
Indenture Trustee is acting as successor Master 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 predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to execute and deliver an assignment of Mortgage in
recordable form to transfer the Mortgage from MERS to the Indenture Trustee
and
to execute and deliver such other notices, documents and other instruments
as
may be necessary or desirable to effect a transfer of such Mortgage Loan or
servicing of such Mortgage Loan on the MERS® System to the successor Master
Servicer. The predecessor Master Servicer shall file or cause to be filed any
such assignment in the appropriate recording office. The successor Master
Servicer shall cause such assignment to be delivered to the Indenture Trustee
promptly upon receipt of the original with evidence of recording thereon or
a
copy certified by the public recording office in which such assignment was
recorded.
| Section 6.03 |
Notification
to Noteholders.
|
(a) Upon
any
termination of or appointment of a successor to the Master Servicer, the
Indenture Trustee shall give prompt written notice thereof to Noteholders and
to
each Rating Agency.
(b) Within
60
days after the occurrence of any Event of Default, the Indenture Trustee shall
transmit by mail to all Noteholders notice of each such Event of Default
hereunder known to the Indenture Trustee, unless such Event of Default shall
have been cured or waived.
ARTICLE
VII
CONCERNING
THE INDENTURE TRUSTEE
| Section 7.01 |
Duties
of Indenture Trustee.
|
The
Indenture Trustee, prior to the occurrence of an Event of Default and after
the
curing of all 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 an Event of Default has occurred and remains uncured, the
Indenture 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
Indenture Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Indenture Trustee that are specifically required to be furnished pursuant to
any
provision of this Agreement shall examine them to determine whether they conform
to the requirements of this Agreement, to the extent provided in this Agreement.
If any such instrument is found not to conform to the requirements of this
Agreement in a material manner, the Indenture Trustee shall take action as
it
deems appropriate to have the instrument corrected.
No
provision of this Agreement shall be construed to relieve the Indenture Trustee
from liability for its own grossly negligent action, its own gross negligent
failure to act or its own misconduct, its grossly negligent failure to perform
its obligations in compliance with this Agreement, or any liability that would
be imposed by reason of its willful misfeasance or bad faith; provided
that:
(i) prior
to
the occurrence of an Event of Default, and after the curing of all such Events
of Default that may have occurred, the duties and obligations of the Indenture
Trustee shall be determined solely by the express provisions of this Agreement,
the Indenture Trustee shall not be liable, individually or as Indenture Trustee,
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 Indenture Trustee and the Indenture 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
Indenture Trustee and conforming to the requirements of this Agreement that
it
reasonably believed in good faith to be genuine and to have been duly executed
by the proper authorities respecting any matters arising hereunder;
(ii) the
Indenture Trustee shall not be liable, individually or as Indenture Trustee,
for
an error of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Indenture Trustee, unless the Indenture Trustee was grossly
negligent or acted in bad faith or with willful misfeasance.
| Section 7.02 |
Indenture
Trustee Not Liable for Mortgage Loans .
|
The
recitals contained herein shall be taken as the statements of the Issuing
Entity, the Depositor or the Master Servicer, as the case may be, and the
Indenture Trustee assumes no responsibility for their correctness. The Indenture
Trustee makes no representations as to the validity or sufficiency of this
Agreement or of any Mortgage Loan or related document or of MERS or the MERS®
System other than with respect to the Indenture Trustee’s execution and
authentication of the Notes. The Indenture Trustee shall not be accountable
for
the use or application by the Issuing Entity, the Depositor or the Master
Servicer of any funds paid to the Issuing Entity or the Master Servicer in
respect of the Mortgage Loans or deposited in or withdrawn from the Collection
Account by the Issuing Entity or the Master Servicer.
| Section 7.03 |
Master
Servicer to Pay Indenture Trustee’s and Owner Trustee’s
Expenses.
|
The
Master Servicer covenants and agrees to pay or reimburse the Indenture Trustee
and Owner Trustee, upon its request, for all reasonable expenses, disbursements
and advances incurred or made by the Indenture Trustee or Owner Trustee on
behalf of the Trust Estate in accordance with any of the provisions of this
Agreement (including, without limitation: (A) the reasonable compensation and
the expenses and disbursements of its counsel, but only for representation
of
the Indenture Trustee acting in its capacity as Indenture Trustee hereunder
and
(B) to the extent that the Indenture Trustee must engage persons not regularly
in its employ to perform acts or services on behalf of the Trust Estate, which
acts or services are not in the ordinary course of the duties of a trustee,
paying agent or certificate registrar, in the absence of a breach or default
by
any party hereto, the reasonable compensation, expenses and disbursements of
such persons, except any such expense, disbursement or advance as may arise
from
its negligence, bad faith or willful misconduct). The Indenture Trustee and
the
Owner Trustee and any director, officer, employee or agent of the Indenture
Trustee and the Owner Trustee shall be indemnified by the Master Servicer and
held harmless against any loss, liability or expense (i) incurred in connection
with any legal action relating to this Agreement, the Basic Documents or the
Notes, or in connection with the performance of any of the Indenture Trustee’s
duties hereunder, other than any loss, liability or expense incurred by reason
of willful misfeasance, bad faith or negligence in the performance of any of
the
Indenture Trustee’s or the Owner Trustee’s duties hereunder or by reason of
reckless disregard of the Indenture Trustee’s or the Owner Trustee’s obligations
and duties hereunder or (ii) resulting from any error in any tax or information
return prepared by the Master Servicer. Such indemnity shall survive the
termination of this Agreement or the resignation or removal of the Indenture
Trustee or the Owner Trustee hereunder.
Section
7.04 Limitation
on Suits.
No
Holder of any Note shall have any right to institute any Proceeding, judicial
or
otherwise, with respect to this Sale and Servicing Agreement, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(i) such
Holder has previously given written notice to the Indenture Trustee of a
continuing Event of Default;
(ii) the
Holders of not less than 25% of the aggregate Note Principal Balances of the
Offered Notes have made a written request to the Indenture Trustee to institute
such Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(iii) such
Holder or Holders have offered to the Indenture Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in complying with
such request;
(iv) the
Indenture Trustee for 60 days after its receipt of such notice of request and
offer of indemnity has failed to institute such Proceedings; and
(v) no
direction inconsistent with such written request has been given to the Indenture
Trustee during such 60-day period by the Holders of a majority of the Note
Principal Balances of the Offered Notes.
It
is
understood and intended that no one or more Holders of Notes shall have any
right in any manner whatever by virtue of, or by availing of, any provision
of
this Indenture to affect, disturb or prejudice the rights of any other Holders
of Notes or to obtain or to seek to obtain priority or preference over any
other
Holders or to enforce any right under this Sale and Servicing Agreement, except
in the manner herein provided. No Holder of any Note shall have any right to
institute any Proceeding, judicial or otherwise, with respect to a TMP Trigger
Event, with respect to the meeting of the conditions to a REMIC Conversion
or
with respect to a REMIC Conversion.
In
the
event the Indenture Trustee shall receive conflicting or inconsistent requests
and indemnity from two or more groups of Holders of Notes, each representing
less than a majority of the Note Principal Balances of the Offered Notes, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Sale and Servicing
Agreement.
ARTICLE
VIII
MISCELLANEOUS
PROVISIONS
| Section 8.01 |
Amendment.
|
This
Agreement may be amended from time to time by the Issuing Entity, the Depositor,
the Master Servicer, the Seller, CHL and the Indenture Trustee, without the
consent of any of the Noteholders to cure any ambiguity, to correct or
supplement any provisions herein, or to make such other provisions with respect
to matters or questions arising under this Agreement, as shall not be
inconsistent with any other provisions herein if such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the
interests of any Noteholder; provided that any such amendment shall be deemed
not to adversely affect in any material respect the interests of the Noteholders
and no such Opinion of Counsel shall be required if the Person requesting such
amendment obtains a letter from each Rating Agency stating that such amendment
would not result in the downgrading or withdrawal of the respective ratings
then
assigned to the Notes, 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. Notwithstanding the foregoing, no amendment that
significantly changes the permitted activities of the Trust may be made without
the consent of Noteholders representing not less than 51% of the Note Principal
Balance of each Class of Notes affected by such amendment.
Subject
to any REMIC Elections, (i) the Indenture Trustee, the Issuing Entity, the
Depositor, the Master Servicer, CHL and the Seller may also at any time and
from
time to time amend this Agreement, without the consent of the Noteholders,
to
modify, eliminate or add to any of its provisions to such extent as shall be
necessary or appropriate to maintain the qualification of the Trust Estate
as a
REMIC under the Code or (ii) to avoid or minimize the risk of the imposition
of
any tax on the Trust Estate pursuant to the Code that would be a claim against
the Trust Estate at any time prior to the final redemption of the Notes,
provided that the Indenture Trustee 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 Indenture Trustee, to the effect that
such action is necessary or appropriate to maintain such qualification or to
avoid or minimize the risk of the imposition of such a tax.
This
Agreement may also be amended from time to time by the Issuing Entity, the
Depositor, the Master Servicer, the Seller, CHL and the Indenture Trustee and
the Holders of each Class of Offered Notes affected thereby evidencing not
less
than 51% of the Note Principal Balance of such Class 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
Notes; provided that no such amendment shall (i) reduce in any manner the amount
of, or delay the timing of, payments required to be distributed on any Note
without the consent of the Holder of such Note, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Notes in a manner
other than as described in (i), without the consent of the Holders of Offered
Notes of such Class evidencing 66% or more of the Note Principal Balance of
such
Class, or (iii) reduce the aforesaid percentages of Notes the Holders of which
are required to consent to any such amendment without the consent of the Holders
of all such Notes then outstanding.
Subject
to any REMIC Elections, notwithstanding any contrary provision of this
Agreement, the Indenture Trustee shall not consent to any amendment to this
Agreement unless it shall have first received an Opinion of Counsel, which
opinion shall be an expense of the party requesting such amendment but in any
case shall not be an expense of the Indenture Trustee, to the effect that such
amendment will not cause the imposition of any tax on the Trust Estate or the
Noteholders or cause the Trust Estate to fail to qualify as a REMIC at any
time
that any Notes are outstanding.
Notwithstanding
any contrary provision of this Agreement, no amendment shall adversely affect
in
any material respect the Swap Counterparty without at least ten Business Days’
prior notice to the Swap Counterparty and without the prior written consent
of
the Swap Counterparty, which consent shall not be unreasonably withheld. The
Depositor shall provide the Swap Counterparty with prior written notice of
any
proposed material amendment of this Agreement.
Promptly
after the execution of any amendment to this Agreement requiring the consent
of
Noteholders, the Indenture Trustee shall furnish written notification of the
substance of such amendment to each Noteholder and each Rating
Agency.
It
shall
not be necessary for the consent of Noteholders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization of the execution thereof by
Noteholders shall be subject to such reasonable regulations as the Indenture
Trustee may prescribe.
Nothing
in this Agreement shall require the Indenture Trustee to enter into an amendment
without receiving an Opinion of Counsel, satisfactory to the Indenture Trustee
that (i) such amendment is permitted and is not prohibited by this Agreement
and
that all requirements for amending this Agreement have been complied with;
and
(ii) either (A) the amendment does not adversely affect in any material respect
the interests of any Noteholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to
this
Section 10.01.
| Section 8.02 |
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 to
be
effected by the Master Servicer at its expense.
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 8.03 |
Governing
Law.
|
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW)
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 NOTEHOLDERS
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
| Section 8.04 |
Notices.
|
(a) All
directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when sent by facsimile transmission, first class
mail or delivered to (i) in the case of the Depositor, CWALT, Inc., 0000 Xxxx
Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, facsimile number: (000) 000-0000,
Attention: [Xxxxx X. Xxxxxxx], or such other address as may be hereafter
furnished to the Seller, the Master Servicer and the Indenture Trustee by the
Depositor in writing; (ii) in the case of the Issuing Entity, to GSC Capital
Corp. Mortgage Trust 2006-2 c/o Wilmington Trust Company, Xxxxxx Square North,
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate
Trust
Administration, or such other address as may hereafter be furnished to the
other
parties hereto in writing; (iii) in the case of the Owner Trustee, to Wilmington
Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Trust Administration, or such other address
as may hereafter be furnished to the other parties hereto in writing; (iv)
in
the case of the CHL, Countrywide Home Loans, Inc., 0000 Xxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000, facsimile number (000) 000-0000, Attention: Xxxxx X. Xxxxxxx,
or such other address as may be hereafter furnished to the Depositor, the Master
Servicer and the Indenture Trustee by the Seller in writing; (v) in the case
of
the Master Servicer, Countrywide Home Loans Servicing LP, 000 Xxxxxxxxxxx Xxx,
Xxxx Xxxxxx, Xxxxxxxxxx, facsimile number (000) 000-0000, Attention: Xxxx Xxxx
or such other address as may be hereafter furnished to the Depositor, the Seller
and the Indenture Trustee by the Master Servicer in writing; (vi) in the case
of
the Indenture Trustee, The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx
Xxxx 00000, Attention: Corporate Trust MBS Administration, GSC Capital Corp.
Mortgage Trust, Series 2006-2, or such other address as the Indenture Trustee
may hereafter furnish to the Depositor or the Master Servicer; (vii) in the
case
of the Seller, GSC Capital Corp. QRS Delaware Loan Holdings, Inc., 00 Xxxx
00xx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000; (viii) in the case of the Rating
Agencies, (a) Xxxxx’x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, (b) Standard & Poor’s, a division of The XxXxxx-Xxxx Companies,
Inc., Attention: Mortgage Surveillance Group, 00 Xxxxxxxx, 00xx Xxxxx, Xxx
Xxxx,
Xxx Xxxx 00000, and (c) Fitch,
Inc., Xxx Xxxxx Xxxxxx Xxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000;
and
(ix) in the case of the Swap Counterparty, [Xxxxxx
Brothers Special Financing Inc., c/x Xxxxxx Brothers Inc., Transaction
Management Group, Corporate Advisory Division, 000 Xxxxxxx Xxxxxx, Xxx Xxxx,
XX
00000, Attention: Documentation Manager, facsimile number (000)
000-0000].
Notices
to Noteholders shall be deemed given when mailed, first postage prepaid, to
their respective addresses appearing in the Note Register.
| Section 8.05 |
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 Notes or the rights of the Holders thereof.
| Section 8.06 |
Assignment.
|
Notwithstanding
anything to the contrary contained herein, except as provided pursuant to
Section 5.02, this Agreement may not be assigned by the Master Servicer without
the prior written consent of the Indenture Trustee and the Issuing
Entity.
| Section 8.07 |
Inspection
and Audit Rights.
|
The
Master Servicer agrees that, on reasonable prior notice, it will permit any
representative of the Issuing Entity, the Depositor, the Seller, CHL or the
Indenture Trustee during the Master Servicer’s normal business hours, to examine
all the books of account, records, reports and other papers of the Master
Servicer relating to the Mortgage Loans, to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants
selected by the Issuing Entity, the Depositor, the Seller or the Indenture
Trustee and to discuss its affairs, finances and accounts relating to the
Mortgage Loans with its officers, employees and independent public accountants
(and by this provision the Master Servicer hereby authorizes such accountants
to
discuss with such representative such affairs, finances and accounts), all
at
such reasonable times and as often as may be reasonably requested. Any
out-of-pocket expense incident to the exercise by the Issuing Entity, the
Depositor, the Seller or the Indenture Trustee of any right under this Section
8.07 shall be borne by the party requesting such inspection; all other such
expenses shall be borne by the Master Servicer.
| Section 8.08 |
[Reserved].
|
| Section 8.09 |
No
Petition.
|
The
Master Servicer, by entering into this Agreement, hereby covenants and agrees
that it will not at any time institute against the Issuing Entity, or join
in
any institution against the Issuing Entity, any bankruptcy proceedings under
any
United States federal or state bankruptcy or similar law in connection with
any
obligations of the Issuing Entity. This section shall survive the termination
of
this Agreement by one year.
| Section 8.10 |
No
Recourse.
|
The
Master Servicer acknowledges that no recourse may be had against the Issuing
Entity, except as may be expressly set forth in this Agreement.
ARTICLE
IX
TERMINATION
| Section 9.01 |
Termination
upon Liquidation or Repurchase of all Mortgage Loans.
|
(a) Subject
to Section 9.03, the Trust Estate shall terminate and the obligations and
responsibilities of the Issuing Entity, Depositor, the Master Servicer, the
Seller, CHL and the Indenture Trustee created hereby and under the Indenture
shall terminate upon the earlier of (a) the purchase on a Payment Date by the
Seller of all of the Mortgage Loans (and REO Properties) remaining in the Trust
Estate pursuant to Section 8.07 of the Indenture at the price equal to the
sum
of (i) 100% of the Stated Principal Balance of each Mortgage Loan in the Trust
Estate (other than in respect of an REO Property) and (ii) accrued interest
thereon at the applicable Mortgage Rate (or, if such repurchase is effected
by
the Master Servicer, at the applicable Net Mortgage Rate) 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 Estate and the disposition of
all
REO Property and (ii) the distribution to Noteholders of all amounts required
to
be distributed to them pursuant to this Agreement and Section 8.07 of the
Indenture, as applicable. In no event shall the trusts created hereby continue
beyond the earlier of (i) the expiration of 21 years from the death of the
last
survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the
United States to the Court of St. Xxxxx, living on the date hereof and (ii)
the
Latest Possible Maturity Date.
The
right
to purchase all Mortgage Loans, REO Properties by the Seller pursuant to clause
(a) above shall be conditioned upon the Stated Principal Balance of the Mortgage
Loans, at the time of any such repurchase, aggregating ten percent (10%) or
less
of the sum of the Stated Principal Balance of the Mortgage Loans as of the
Cut-off Date.
| Section 9.02 |
Final
Distribution on the Notes.
|
(a) If
on any
Determination Date, (i) the Master Servicer determines that there are no
Outstanding Mortgage Loans and no other funds or assets other than the funds
in
the Note Account, the Master Servicer shall direct the Indenture Trustee to
send
a final distribution notice promptly to each related Noteholder or (ii) the
Indenture Trustee determines that a Class of Notes shall be retired after a
final distribution on such Class, the Indenture Trustee shall notify the related
Noteholders within five (5) Business Days after such Determination Date that
the
final distribution in retirement of such Class of Notes is scheduled to be
made
on the immediately following Payment Date. Any final distribution made pursuant
to the immediately preceding sentence will be made only upon presentation and
surrender of the related Notes at the Corporate Trust Office of the Indenture
Trustee. If the Master Servicer elects to terminate pursuant to clause (a)
of
Section 9.01, at least 20 days prior to the date notice is to be mailed to
the
affected Noteholders, such electing party shall notify the Depositor and the
Indenture Trustee of the date such electing party intends to terminate and
of
the applicable repurchase price of the related Mortgage Loans, REO
Properties.
(b) Notice
of
any termination, specifying the Payment Date on which related Noteholders may
surrender their Notes for payment of the final distribution and cancellation,
shall be given promptly by the Indenture Trustee by letter to related
Noteholders mailed not earlier than the 10th day and no later than the 15th
day
of the month immediately preceding the month of such final distribution. Any
such notice shall specify (a) the Payment Date upon which final distribution
on
related Notes will be made upon presentation and surrender of such Notes 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 Payment
Date
is not applicable, distributions being made only upon presentation and surrender
of such Notes at the office therein specified. The Master Servicer will give
such notice to each Rating Agency at the time such notice is given to the
affected Noteholders.
(c) In
the
event such notice is given, the Master Servicer shall cause all funds in the
Note Account to be remitted to the Indenture Trustee for deposit in the Payment
Account on the Business Day prior to the applicable Payment Date in an amount
equal to the final distribution in respect of the Notes. Upon such final deposit
and the receipt by the Indenture Trustee of a Request for Release therefor,
the
Indenture Trustee shall promptly release to the Master Servicer the Mortgage
Note and other documents in the Mortgage File held by the Indenture Trustee
for
the related Mortgage Loans.
(d) Upon
presentation and surrender of the Notes, the Indenture Trustee shall cause
to be
distributed to Noteholders of each affected Class the amounts allocable to
such
Notes held in the Payment Account in the order and priority set forth in Section
4.02 of the Indenture on the final Payment Date and in proportion to their
respective Percentage Interests.
(e) In
the
event that any affected Noteholders shall not surrender related Notes for
cancellation within six months after the date specified in the above mentioned
written notice, the Indenture Trustee shall give a second written notice to
the
remaining Noteholders to surrender their related Notes for cancellation and
receive the final distribution with respect thereto. If within six months after
the second notice all the applicable Notes shall not have been surrendered
for
cancellation, the Indenture Trustee may take appropriate steps, or may appoint
an agent to take appropriate steps, to contact the remaining Noteholders
concerning surrender of their Notes, and the cost thereof shall be paid out
of
the funds and other assets that remain in the Trust Estate. If within one year
after the second notice all related Notes shall not have been surrendered for
cancellation, the Owner Trust Certificates shall be entitled to all unclaimed
funds and other assets of the Trust Estate that relate to such Class of Notes
and remain subject hereto.
| Section 9.03 |
Additional
Termination Requirements Subject to any REMIC Elections.
|
(a) In
the
event the Seller exercises its purchase option, the Trust Estate shall be
terminated in accordance with the following additional requirements, unless
the
Indenture Trustee has been supplied with an Opinion of Counsel, at the expense
of the Master Servicer, to the effect that the failure of the Trust Estate
to
comply with the requirements of this Section 9.03 will not (i) result in the
imposition of taxes on “prohibited transactions” of a REMIC, or (ii) cause any
REMIC created hereunder to fail to qualify as a REMIC at any time that any
Notes
are outstanding:
(i) The
Master Servicer shall establish a 90-day liquidation period and notify the
Indenture Trustee thereof, which shall in turn specify the first day of such
period in a statement attached to the Trust Estate’s final Tax Return pursuant
to Treasury Regulation section 1.860F-1. The Master Servicer shall prepare
a
plan of complete liquidation and shall otherwise satisfy all the requirements
of
a qualified liquidation under section 860F of the Code and any regulations
thereunder, as evidenced by an Opinion of Counsel delivered to the Indenture
Trustee and the Depositor obtained at the expense of the Master
Servicer;
(ii) During
such 90-day liquidation period, and at or prior to the time of making the final
payment on the Notes, the Master Servicer as agent of the Indenture Trustee
shall sell all of the assets of the Trust Estate to the Master Servicer for
cash; and
(iii) At
the
time of the making of the final payment on the Notes, the Indenture Trustee
shall distribute or credit, or cause to be distributed or credited, to the
Class
R Certificateholders all cash on hand (other than cash retained to meet claims)
related to such Class of Notes, and the Trust Estate shall terminate at that
time.
(b) By
their
acceptance of the Notes, the Holders thereof hereby authorize the Master
Servicer to specify the 90-day liquidation period for the Trust Estate, which
authorization shall be binding upon all successor Noteholders.
(c) The
Indenture Trustee as agent for each REMIC created hereunder xxxxxx agrees to
adopt and sign such a plan of complete liquidation upon the written request
of
the Master Servicer, and the receipt of the Opinion of Counsel referred to
in
Section 9.03(a)(1), and together with the Holders of the Class R Certificates
agree to take such other action in connection therewith as may be reasonably
requested by the Master Servicer.
ARTICLE
X
DUTIES
OF
THE MASTER SERVICER
| Section 10.01 |
Administrative
Duties.
|
(a) Duties
with Respect to the Indenture.
The
Master Servicer shall perform all its duties and the duties of the Issuing
Entity under the Indenture. In addition, the Master Servicer shall consult
with
the Owner Trustee as the Master Servicer deems appropriate regarding the duties
of the Issuing Entity under the Indenture. The Master Servicer shall monitor
the
performance of the Issuing Entity and shall advise the Owner Trustee when action
is necessary to comply with the Issuing Entity’s duties under the Indenture. The
Master Servicer shall prepare for execution by the Issuing Entity or shall
cause
the preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of
the
Issuing Entity to prepare, file or deliver pursuant to the Indenture. In
furtherance of the foregoing, the Master Servicer shall take all necessary
action that is the duty of the Issuing Entity to take pursuant to the
Indenture.
(b) Duties
with Respect to the Issuing Entity.
In
addition to the duties of the Master Servicer set forth in this Agreement or
any
of the Basic Documents, the Master Servicer shall perform such calculations
and
shall prepare for execution by the Issuing Entity or the Owner Trustee or shall
cause the preparation by other appropriate Persons of all such documents,
reports, filings, instruments, certificates and opinions as it shall be the
duty
of the Issuing Entity or the Owner Trustee to prepare, file or deliver pursuant
to this Sale and Servicing Agreement or any of the Basic Documents or under
state and federal tax and securities laws, and at the request of the Owner
Trustee or the Indenture Trustee shall take all appropriate action that it
is
the duty of the Issuing Entity to take pursuant to this Sale and Servicing
Agreement or any of the Basic Documents. In accordance with the directions
of
the Issuing Entity or the Owner Trustee, the Master Servicer shall administer,
perform or supervise the performance of such other activities in connection
with
the Bonds (including the Basic Documents) as are not covered by any of the
foregoing provisions and as are expressly requested by the Issuing Entity,
the
Indenture Trustee or the Owner Trustee.
(i) Notwithstanding
anything in this Sale and Servicing Agreement or any of the Basic Documents
to
the contrary, the Master Servicer shall be responsible for promptly notifying
the Owner Trustee (with a copy to the Indenture Trustee) in the event that
any
withholding tax is imposed on the Issuing Entity’s payments (or allocations of
income) to an Owner (as defined in the Trust Agreement) as contemplated in
Section 5.03 of the Trust Agreement. Any such notice shall be in writing and
specify the amount of any withholding tax required to be withheld by the Owner
Trustee pursuant to such provision.
(ii) In
carrying out the foregoing duties or any of its other obligations under this
Sale and Servicing Agreement, the Master Servicer may enter into transactions
with or otherwise deal with any of its Affiliates; provided,
however,
that
the terms of any such transactions or dealings shall be in accordance with
any
directions received from the Issuing Entity and shall be, in the Master
Servicer’s opinion, no less favorable to the Issuing Entity in any material
respect than with terms made available to unrelated third parties.
(c) Tax
Matters.
The
Master Servicer shall prepare, on behalf of the Owner Trustee, financial
statements and such annual or other reports of the Issuing Entity as are
necessary for the preparation by the Indenture Trustee of tax returns and
information reports as provided in Section 5.03 of the Trust Agreement,
including, without limitation, Form 1099.
(d) Non-Ministerial
Matters.
With
respect to matters that in the reasonable judgment of the Master Servicer are
non-ministerial, the Master Servicer shall not take any action pursuant to
this
Article IX unless within a reasonable time before the taking of such action,
the
Master Servicer shall have notified the Owner Trustee and the Indenture Trustee
of the proposed action and the Owner Trustee and, with respect to items (i),
(ii), (iii) and (iv) below, the Indenture Trustee shall not have withheld
consent or provided an alternative direction. For the purpose of the preceding
sentence, “non-ministerial matters” shall include:
(i) the
amendment of or any supplement to the Indenture;
(ii) the
initiation of any claim or lawsuit by the Issuing Entity and the compromise
of
any action, claim or lawsuit brought by or against the Issuing Entity (other
than in connection with the collection of the Mortgage Loans);
(iii) the
amendment, change or modification of this Sale and Servicing Agreement or any
of
the Basic Documents;
(iv) the
appointment of successor Note Paying Agents and successor Indenture Trustees
pursuant to the Indenture or the appointment of successor Servicers or the
consent to the assignment by the Note Registrar, Paying Agent or Indenture
Trustee of its obligations under the Indenture; and
(v) the
removal of the Indenture Trustee.
| Section 10.02 |
Records.
|
The
Master Servicer shall maintain appropriate books of account and records relating
to services performed under this Sale and Servicing Agreement, which books
of
account and records shall be accessible for inspection by the Issuing Entity,
the Indenture Trustee at any time during normal business hours.
| Section 10.03 |
Additional
Information to be Furnished.
|
The
Master Servicer shall furnish to the Issuing Entity and the Indenture Trustee
from time to time such additional information regarding the Mortgage Loans
and
the Notes as the Issuing Entity and the Indenture Trustee shall reasonably
request.
ARTICLE
XI
EXCHANGE
ACT REPORTING
| Section 11.01 |
Filing
Obligations.
|
The
Master Servicer, the Indenture Trustee, the Owner Trustee, the Sponsor and
the
Seller shall reasonably cooperate with the Depositor in connection with the
satisfaction of the Depositor’s reporting requirements under the Exchange Act
with respect to the Trust Estate. In addition to the information specified
below, if so requested by the Depositor for the purpose of satisfying its
reporting obligation under the Exchange Act, the Master Servicer, the Indenture
Trustee, the Owner Trustee, the Sponsor and the Seller shall (and the Master
Servicer shall cause each 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.
| Section 11.02 |
Form
10-D Filings.
|
(a) In
accordance with the Exchange Act, the Indenture Trustee shall prepare for filing
and file within 15 days after each Payment Date (subject to permitted extensions
under the Exchange Act) with the Commission with respect to the Trust Estate,
a
Form 10-D with copies of the Monthly Statement and, to the extent delivered
to
the Indenture Trustee, no later than 10 days following the Payment Date, such
other information identified by the Master Servicer, the Seller, the Sponsor,
the Owner Trustee and the Indenture Trustee as a Form 10-D Disclosure Item
applicable to it. If the Master Servicer, the Seller, the Sponsor, the Owner
Trustee or the Indenture Trustee directs that any Form 10-D Disclosure Item
applicable to it is to be filed with any Form 10-D, the Master Servicer, the
Seller, the Sponsor, the Owner Trustee and the Indenture Trustee, as the case
may be, shall specify the Item on Form 10-D to which such information is
responsive and, with respect to any Exhibit to be filed on Form 10-D, the
Exhibit number. Any information to be filed on Form 10-D shall be delivered
to
the Indenture Trustee in XXXXX-compatible form or as otherwise agreed upon
by
the Indenture Trustee and the Depositor, the Seller or the Master Servicer,
as
the case may be, at the Depositor’s expense, and any necessary conversion to
XXXXX-compatible format will be at the Depositor’s expense. At the reasonable
request of, and in accordance with the reasonable directions of, the Depositor,
the Seller or the Master Servicer, subject to the two preceding sentences,
the
Indenture Trustee shall prepare for filing and file an amendment to any Form
10-D previously filed with the Commission with respect to the Trust Estate.
The
Master Servicer shall sign the Form 10-D filed on behalf of the Issuing
Entity.
(b) No
later
than each Payment Date, each of the Master Servicer, the Seller, the Sponsor,
the Owner Trustee and the Indenture Trustee shall notify (and the Master
Servicer shall cause any Subservicer to notify) the Depositor and the Master
Servicer of any Form 10-D Disclosure Item applicable to it, together with a
description of any Form 10-D Disclosure Item applicable to it, in form and
substance reasonably acceptable to the Depositor. In addition to such
information as the Master Servicer and the Indenture Trustee are obligated
to
provide pursuant to other provisions of this Agreement, if so requested by
the
Depositor, each of the Master Servicer and the Indenture Trustee shall provide
such information which is available to the Master Servicer and the Indenture
Trustee, as applicable, without unreasonable effort or expense regarding the
performance or servicing of the Mortgage Loans (in the case of the Indenture
Trustee, based on the information provided by the Master Servicer) 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 Remittance Reports in the case of the Master Servicer
and
the reports to the noteholders in the case of the Indenture Trustee, commencing
with the first such report due not less than five Business Days following such
request.
(c) The
Indenture Trustee shall not have any responsibility to file any items (other
than those generated by it) that have not been received in a format suitable
(or
readily convertible into a format suitable) for electronic filing via the XXXXX
system and shall not have any responsibility to convert any such items to such
format (other than those items generated by it or that are readily convertible
to such format). The Indenture Trustee shall have no liability to the
Noteholders, the Trust Estate, the Master Servicer or the Depositor with respect
to any failure to properly prepare or file any of Form 10-D to the extent that
such failure is not the result of any negligence, bad faith or willful
misconduct on its part.
| Section 11.03 |
Form
8-K Filings.
|
The
Master Servicer shall prepare and file on behalf of the Trust Estate any Form
8-K required by the Exchange Act. Each Form 8-K must be signed by the Depositor.
Each of the Master Servicer (and the Master Servicer shall cause any Subservicer
to promptly notify), the Seller, the Sponsor and the Indenture Trustee shall
promptly notify the Depositor and the Master Servicer (if the notifying party
is
not the Master Servicer), but in no event later than one (1) Business Day after
its occurrence, of any Reportable Event of which it has actual knowledge. Each
Person shall be deemed to have actual knowledge of any such event to the extent
that it relates to such Person or any action or failure to act by such
Person.
| Section 11.04 |
Form
10-K Filings.
|
Prior
to
March 30th of each year, commencing in 2007 (or such earlier date as may be
required by the Exchange Act), the Depositor shall prepare and file on behalf
of
the Trust Estate a Form 10-K, in form and substance as required by the Exchange
Act. A senior officer in charge of the servicing function of the Master Servicer
shall sign each Form 10-K filed on behalf of the Issuing Entity. Such Form
10-K
shall include as exhibits each (i) annual compliance statement described under
Section 3.16, (ii) annual report on assessments of compliance with servicing
criteria described under Section 11.07 and (iii) accountant’s report described
under Section 11.07. Each Form 10-K shall also include any Xxxxxxxx-Xxxxx
Certification required to be included therewith, as described in Section 11.05.
No
later
than March 15th
of each
year, each of the Master Servicer, the Seller, the Sponsor, the Owner Trustee
and the Indenture Trustee shall notify (and the Master Servicer shall cause
any
Subservicer to notify) the Depositor and the Master Servicer of any Form 10-K
Disclosure Item applicable to it, together with a description of any Form 10-K
Disclosure Item applicable to it, in form and substance reasonably acceptable
to
the Depositor.
If
the
Item 1119 Parties listed on Exhibit J have changed since the Closing Date or
if
the information required pursuant to Item 1119 has changed since the Closing
Date, no later than March 1 of each year, the Seller and the Depositor shall
provide each of the Master Servicer (and the Master Servicer shall provide
any
Subservicer), the Owner Trustee and the Indenture Trustee with an updated
Exhibit J setting forth the Item 1119 Parties or the change, from the Closing
Date, in the information required pursuant to Item 1119. Additionally, each
of
the Master Servicer and the Indenture Trustee shall provide, and shall cause
each Reporting Subcontractor retained by the Master Servicer or the Indenture
Trustee, as applicable, and in the case of the Master Servicer shall cause
each
Subservicer to provide, the following information no later than March 15 of
each
year in which a Form 10-K is required to be filed on behalf of the Trust Estate:
(i) if such Person’s report on assessment of compliance with servicing criteria
described under Section 11.07 or related registered public accounting firm
attestation report described under Section 11.07 identifies any material
instance of noncompliance, notification of such instance of noncompliance and
(ii) if any such Person’s report on assessment of compliance with servicing
criteria or related registered public accounting firm attestation report is
not
provided to be filed as an exhibit to such Form 10-K, information detailing
the
explanation why such report is not included.
| Section 11.05 |
Xxxxxxxx-Xxxxx
Certification.
|
Each
Form
10-K shall include a certification (the “Xxxxxxxx-Xxxxx
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 and the rules and regulations
of
the Commission promulgated thereunder (including any interpretations thereof
by
the Commission’s staff)). No later than March 15 of each year, beginning in
2007, the Master Servicer and the Indenture Trustee shall (unless such person
is
the Certifying Person), and the Master Servicer shall cause each related
Subservicer to, provide to the Person who signs the Xxxxxxxx-Xxxxx Certification
(the “Certifying
Person”)
a
certification (each, a “Performance
Certification”),
in
the form attached hereto as Exhibit K-1 (in the case of any Subservicer) and
Exhibit K-2 (in the case of the Indenture Trustee), on 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 senior officer in charge of the servicing function of
the
Master Servicer shall serve as the Certifying Person on behalf of the Trust
Estate. Neither the Master Servicer nor the Depositor will request delivery
of a
certification under this clause unless the Depositor is required under the
Exchange Act to file an annual report on Form 10-K with respect to the Trust
Estate. In the event that prior to the filing date of the Form 10-K in March
of
each year the Indenture Trustee or the Depositor has actual knowledge of
information material to the Xxxxxxxx-Xxxxx Certification, the Indenture Trustee
or the Depositor, as the case may be, shall promptly notify the Master Servicer
and 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
Estate.
| Section 11.06 |
Form
15 Filing.
|
Prior
to
January 30 of the first year in which the Depositor is able to do so under
applicable law, the Depositor shall file a Form 15 relating to the automatic
suspension of reporting in respect of the Trust Estate under the Exchange
Act.
| Section 11.07 |
Report
on Assessment of Compliance and Attestation.
|
(a) On
or
before March 15 of each calendar year, commencing in 2007:
(A) Each
of
the Master Servicer and the Indenture Trustee shall deliver to the Depositor
and
the Master Servicer a report (in form and substance reasonably satisfactory
to
the Depositor) regarding the Master Servicer’s or the Indenture Trustee’s, as
applicable, 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 signed
by an authorized officer of such Person and shall address each of the Servicing
Criteria specified on Exhibit L hereto delivered to the Depositor concurrently
with the execution of this Agreement. 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 are
backed by the same asset type backing the Notes, such report shall include
such
a statement to that effect. The Depositor and the Master Servicer, and each
of
their respective officers and directors shall be entitled to rely on upon each
such servicing criteria assessment.
(B) Each
of
the Master Servicer and the Indenture Trustee shall deliver to the Depositor
and
the Master Servicer a report of a registered public accounting firm reasonably
acceptable to the Depositor that attests to, and reports on, the assessment
of
compliance made by Master Servicer or the Indenture Trustee, 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 are backed by the same asset
type backing the Notes, such report shall include such a statement to that
effect.
(C) The
Master Servicer shall cause each Subservicer and each 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
11.07.
(D) The
Indenture Trustee shall cause each Reporting Subcontractor 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.
(E) The
Master Servicer and the Indenture Trustee shall execute (and the Master Servicer
shall cause each Subservicer to execute, and the Master Servicer and the
Indenture Trustee shall cause each Reporting Subcontractor to execute) a
reasonable reliance certificate to enable the Certification Parties to rely
upon
each (i) annual compliance statement provided pursuant to Section 3.16, (ii)
annual report on assessments of compliance with servicing criteria provided
pursuant to this Section 11.07 and (iii) accountant’s report provided pursuant
to this Section 11.07 and shall include a certification that each such annual
compliance statement or report discloses any deficiencies or defaults described
to the registered public accountants of such Person to enable such accountants
to render the Notes provided for in this Section 11.07. In the event the Master
Servicer, any Subservicer or Reporting Subcontractor is terminated or resigns
during the term of this Agreement, such Person shall provide a certification
to
the Certifying Person pursuant to this Section 11.07 with respect to the period
of time it was subject to this Agreement or provided services with respect
to
the Trust Estate, the Notes or the Mortgage Loans.
(b) Each
assessment of compliance provided by a Subservicer pursuant to Section
11.07(a)(3) shall address each of the Servicing Criteria specified on Exhibit
L
hereto delivered to the Depositor 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. To the extent any of the Servicing
Criteria are not applicable to such Subservicer, with respect to asset-backed
securities transactions taken as a whole involving such Subservicer and that
are
backed by the same asset type backing the Notes, such report shall include
such
a statement to that effect. An assessment of compliance provided by a
Subcontractor pursuant to Section 11.07(a)(3) or (4) need not address any
elements of the Servicing Criteria other than those specified by the Master
Servicer or the Indenture Trustee, as applicable, pursuant to Section
11.07(a)(1).
| Section 11.08 |
Use
of Subservicers and Subcontractors.
|
(a) The
Master Servicer shall cause any Subservicer used by the Master Servicer for
the
benefit of the Depositor to comply with the provisions of Section 3.16 and
this
Article XI to the same extent as if such 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 Subservicer and delivering
to the Depositor any servicer compliance statement required to be delivered
by
such Subservicer under Section 3.16, any assessment of compliance and
attestation required to be delivered by such Subservicer under Section 11.07
and
any certification required to be delivered to the Certifying Person under
Section 11.05 as and when required to be delivered. As a condition to the
succession to any Subservicer as subservicer under this Agreement by any Person
(i) into which such Subservicer may be merged or consolidated, or (ii) which
may
be appointed as a successor to any Subservicer, the Master Servicer shall
provide to the Depositor, at least 15 calendar days prior to the effective
date
of such succession or appointment, (x) written notice to the Depositor of such
succession or appointment and (y) 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.
(b) It
shall
not be necessary for the Master Servicer, any Subservicer or the Indenture
Trustee to seek the consent of the Depositor or any other party hereto to the
utilization of any Subcontractor. The Master Servicer or the Indenture Trustee,
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 Subservicer), specifying (i) the identity of each
such Subcontractor, (ii) which (if any) of such Subcontractors are
“participating in the servicing function” within the meaning of Item 1122 of
Regulation AB, and (iii) which elements of the Servicing Criteria will be
addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.
As
a
condition to the utilization of any Subcontractor determined to be a Reporting
Subcontractor, the Master Servicer or the Indenture Trustee, as applicable,
shall cause any such Subcontractor used by such Person (or in the case of the
Master Servicer, any Subservicer) for the benefit of the Depositor to comply
with the provisions of Sections 11.07 and 11.09 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 Indenture Trustee, as
applicable. The Master Servicer or the Indenture Trustee, 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 11.07, in each
case
as and when required to be delivered.
| Section 11.09 |
Amendments.
|
In
the
event the parties to this Agreement desire to further clarify or amend any
provision of this Article XI, this Agreement shall be amended to reflect the
new
agreement between the parties covering matters in this Article XI pursuant
to
Section 10.03, which amendment shall not require any Opinion of Counsel or
Rating Agency confirmations or the consent of any Noteholder.
| Section 11.10 |
Reconciliation
of Accounts
|
Any
reconciliation of Accounts performed by any party hereto, or any Subservicer
or
Subcontractor shall be prepared no later than 45 calendar days after the bank
statement cutoff date.
Section
11.11 Indemnification
for Reporting Obligations
The
Master Servicer, the Seller, the Sponsor, the Issuing Entity and the Indenture
Trustee each shall indemnify and hold harmless the Depositor and its officers,
directors and Affiliates from and against any losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments
and other costs and expenses arising out of or based upon (i) a breach of its
obligations under this Article XI or (ii) any material misstatement or omission
contained in any information provided by it pursuant to this Article XI. If
the
indemnification provided for herein is unavailable or insufficient to hold
harmless the Depositor, then the Master Servicer, the Seller, the Sponsor,
the
Issuing Entity or the Indenture Trustee, as applicable, in connection with
(i) a
breach of its obligations under this Article XI or (ii) any material
misstatement or omission contained in any information provided by it pursuant
to
this Article XI, agrees that it shall contribute to the amount paid or payable
by the Depositor as a result of the losses, claims, damages or liabilities
of
the Depositor in such proportion as is appropriate to reflect the relative
fault
of the Depositor on the one hand and the Master Servicer, the Seller, the
Sponsor, the Issuing Entity or the Indenture Trustee, as applicable, on the
other. This indemnification shall survive the termination of this Agreement
or
the termination of any party to this Agreement.
ARTICLE
XII
TMP
TRIGGER EVENT
| Section 12.01 |
Servicing
Provisions Upon a TMP Trigger Event.
|
The
Master Servicer will comply with the following provisions upon receiving notice
provided by the party specified in the Indenture that a TMP Trigger Event will
occur and REMIC Elections will be made with respect to the Trust.
Prior
to
any REMIC Elections being made with respect to the Trust Estate and upon receipt
of notice from the Trustee, the Master Servicer will have purchased any REO
Properties from the trust at their fair market value.
Subject
to any REMIC Elections, with respect to any Mortgage Loans that are 60 or more
days Delinquent as of the Start-up Day (each such Mortgage Loan, a “Foreclosure
Restricted Loan”),
the
following restrictions on foreclosure shall apply: In connection with the
servicing of any Mortgage Loan, the Master Servicer shall not acquire any
Mortgaged Property on behalf of any REMIC created hereunder in connection with
a
default or imminent default on a Foreclosure Restricted Loan, if acquiring
title
to the Mortgaged Property underlying the loan would cause the adjusted basis,
for federal income tax purposes, of these Mortgaged Properties owned by the
related REMIC after foreclosure, along with any other assets owned by the
related REMIC other than “qualified mortgages” and “permitted investments”
within the meaning of Section 860G of the Code, to exceed 0.75% of the
adjusted basis of the assets of the related REMIC. If the adjusted basis of
such
Mortgaged Properties in foreclosure, along with any other assets owned by the
related REMIC, other than “qualified mortgages” and “permitted investments” with
the meaning of Section 860G of the Code, exceed 1.0% of the adjusted basis
of the assets of the related REMIC immediately after the distribution of
principal and interest on any Payment Date, the Master Servicer will dispose
of
enough of such Mortgaged Properties in foreclosure, for cash or otherwise,
so
that the adjusted basis of such Mortgaged Properties in foreclosure, along
with
any other assets owned by the related REMIC, other than “qualified mortgages”
and “permitted investments” within the meaning of Section 860G of the Code,
will be less than 1.0% of the adjusted basis of the assets of the related REMIC.
In either event, the Servicer is permitted to acquire (for its own account
and
not on behalf of the Trust Estate) the Mortgaged Property at the foreclosure
sale for an amount not less than the greater of: (i) the highest amount bid
by
any other person at the foreclosure sale, or (ii) the estimated fair value
of
the Mortgaged Property, as determined by the Master Servicer in good
faith.
| Section 12.02 |
Sale
of REO Properties upon a TMP Trigger
Event
|
Within
one (1) Business Days of the Indenture Trustee’s receipt of a notice in the Form
of Exhibit N to the Trust Agreement, the Indenture Trustee shall execute and
deliver to the Master Servicer a letter in the form Exhibit N hereto. Upon
Receipt of a letter in the form Exhibit N hereto, the Master Servicer shall,
within one (1) Business days of such receipt, purchase all REO Properties from
the Issuing Entity at their fair market value and shall (i) deliver a letter
in
the form of Exhibit O to the Indenture Trustee and (ii) remit the purchase
price
for such REO Properties to the Indenture Trustee for deposit in the Payment
Account, provided, however, that to the extent that the purchase price of the
sale of such REO Properties would result in the allocation of a Realized Loss
to
any class of Offered Notes, the Secured Party causing the TMP Trigger Event
shall remit an amount equal to such Realized Losses to the Indenture Trustee
for
deposit in the Payment Account.
*
*
*
IN
WITNESS WHEREOF, the Issuing Entity, the Depositor, the Master Servicer, the
Seller, CHL and the Indenture Trustee have caused their names to be signed
hereto by their respective officers thereunto duly authorized as of the day
and
year first above written.
|
CWALT,
INC.,
as
Depositor
|
||
|
By:
|
||
|
Name:
|
Xxxxxxx
Xxxxxxxxxxxx
|
|
|
Title:
|
Vice
President
|
|
|
as
Issuing Entity
By:
Wilmington Trust Company, not in its individual capacity, but solely
as
Owner Trustee
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
COUNTRYWIDE
HOME LOANS, INC.
|
||
|
By:
|
||
|
Name:
|
Xxxxxxx
Xxxxxxxxxxxx
|
|
|
Title:
|
Senior
Vice President
|
|
|
COUNTRYWIDE
HOME LOANS SERVICING LP,
as
Master Servicer
By:
COUNTRYWIDE GP, INC.
|
||
|
By:
|
||
|
Name:
|
Xxxxxxx
Xxxxxxxxxxxx
|
|
|
Title:
|
Senior
Vice President
|
|
|
THE
BANK OF NEW YORK,
not
in its individual capacity,
but
solely as Indenture Trustee
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
GSC
CAPITAL CORP. QRS DELAWARE LOAN HOLDINGS, INC.,
as
Seller
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
Acknowledged
solely with respect to its obligations under Section 2.03(c), Section
2.02
and Article XI
GSC
CAPITAL CORP.,
as
Sponsor
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
|
STATE
OF CALIFORNIA
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF LOS ANGELES
|
)
|
On
this
____ day of June 2006, before me, a notary public in and for said State,
appeared [Xxxxxxx Xxxxxxxxxxxx], personally known to me on the basis of
satisfactory evidence to be the Vice President of CWALT, Inc., one of the
corporations that executed the within instrument, and also known to me to be
the
person who executed it on behalf of such corporation and acknowledged to me
that
such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF CALIFORNIA
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF LOS ANGELES
|
)
|
On
this
____ day of June 2006, before me, a notary public in and for said State,
appeared Xxxxxxx Xxxxxxxxxxxx, personally known to me on the basis of
satisfactory evidence to be the Senior Vice President of Countrywide GP, Inc.,
the parent company of Countrywide Home Loans Servicing LP, one of the
organizations that executed the within instrument, and also known to me to
be
the person who executed it on behalf of such limited partnership and
acknowledged to me that such limited partnership executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF CALIFORNIA
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF LOS ANGELES
|
)
|
On
this
____ day of June 2006, before me, a notary public in and for said State,
appeared Xxxxxxx Xxxxxxxxxxxx, personally known to me on the basis of
satisfactory evidence to be the Senior Vice President of Countrywide Home Loans,
Inc., one of the corporations that executed the within instrument, and also
known to me to be the person who executed it on behalf of such corporation
and
acknowledged to me that such corporation executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF___________
|
)
|
On
this
___ day of June 2006, before me, a notary public in and for said State, appeared
____________________, personally known to me on the basis of satisfactory
evidence to be a ______________ of GSC Capital Corp. QRS Delaware Loan Holdings,
Inc., a ____________ that executed the within instrument, and also known to
me
to be the person who executed it on behalf of such corporation, and acknowledged
to me that such ____________ executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF___________
|
)
|
On
this
___ day of June 2006, before me, a notary public in and for said State, appeared
____________________, personally known to me on the basis of satisfactory
evidence to be a ______________ of GSC Capital Corp., a ____________ that
executed the within instrument, and also known to me to be the person who
executed it on behalf of such corporation, and acknowledged to me that such
____________ executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF DELAWARE
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF NEW CASTLE
|
)
|
On
this
____day of June 2006, before me, a notary public in and for said State, appeared
________________________, personally known to me on the basis of satisfactory
evidence to be a _____________________ of Wilmington Trust Company, the entity
that executed the within instrument, and also known to me to be the person
who
executed it on behalf of such entity, and acknowledged to me that such entity
executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF NEW YORK
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF NEW YORK
|
)
|
On
this
____ day of June 2006, before me, a notary public in and for said State,
appeared ____________________, personally known to me on the basis of
satisfactory evidence to be a ______________ of The Bank of New York, a New
York
banking corporation that executed the within instrument, and also known to
me to
be the person who executed it on behalf of such corporation, and acknowledged
to
me that such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
Exhibit
A-1
and
A-2
Exhibits
A-1 and A-2 are the Mortgage Loan Schedule
Exhibit
A-1 is the schedule of Mortgage Loans
Exhibit
A-2 are the Mortgage Loans for which All or a Portion of a Related Mortgage
File
is not Delivered to the Indenture Trustee on or prior to the Closing
Date
[Delivered
to Indenture Trustee at closing and on file with the Indenture
Trustee.]
EXHIBIT
B-1
FORM
OF
INITIAL CERTIFICATION OF INDENTURE TRUSTEE
[Date]
[Depositor]
[CHL]
[Seller]
[Master
Servicer]
Re:
Sale
and
Servicing Agreement, dated as of June 1, 2006 among GSC Capital Corp. Mortgage
Trust 2006-2, as Issuing Entity, CWALT, Inc., as Depositor, GSC Capital Corp.
QRS Delaware Loan Holdings, Inc., as Seller, Countrywide Home Loans Servicing
LP, as Master Servicer The Bank of New York, as Indenture Trustee, and
Countrywide Home Loans,Inc.,
relating to the GSC Alternative Loan Trust Notes, Series 2006-2
Gentlemen:
In
accordance with Section 2.02 of the above-captioned Sale and Servicing
Agreement, the undersigned, as Indenture Trustee, hereby certifies that, as
to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed in the attached list of exceptions) the Indenture
Trustee has the original Mortgage Note endorsed by manual or facsimile signature
in blank in the following form: “Pay to the order of _______________ without
recourse”, with all intervening endorsements that show a complete chain of
endorsement from the originator to the person endorsing the Mortgage Note,
or,
if the original Mortgage Note has been lost or destroyed and not replaced,
an
original lost note affidavit, stating that the original Mortgage Note was lost
or destroyed, together with a copy of the related Mortgage Note.
Based
on
its review and examination and only as to the foregoing documents, such Mortgage
Notes appear regular on their face.
The
Indenture Trustee has made no independent examination of the Mortgage Note.
The
Indenture Trustee makes no representations as to: (i) the validity, legality,
sufficiency, enforceability or genuineness of any of the documents contained
in
each Mortgage Note of any of the Mortgage Loans identified on the Mortgage
Loan
Schedule or (ii) the collectibility, insurability, effectiveness or suitability
of any such Mortgage Loan.
Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the above-captioned Sale and Servicing Agreement.
|
THE
BANK OF NEW YORK,
as
Indenture Trustee
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
EXHIBIT
B-2
FORM
OF
INTERIM CERTIFICATION OF INDENTURE TRUSTEE
[Date]
[Depositor]
[CHL]
[Seller]
[Master
Servicer]
Re:
Sale
and
Servicing Agreement, dated as of June 1, 2006 among GSC Capital Corp. Mortgage
Trust 2006-2, as Issuing Entity, CWALT, Inc., as Depositor, GSC Capital Corp.
QRS Delaware Loan Holdings, Inc., as Seller, Countrywide Home Loans Servicing
LP, as Master Servicer The Bank of New York, as Indenture Trustee, and
Countrywide Home Loans, Inc., relating to the GSC Alternative Loan Trust
Notes,
Series 2006-2
Gentlemen:
In
accordance with Section 2.02 of the above-captioned Sale and Servicing
Agreement, the undersigned, as Indenture Trustee, hereby certifies that, except
as listed in the following paragraph, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed
on
the attached list of exceptions) the Indenture Trustee has received the original
Mortgage Note endorsed by manual or facsimile signature in blank in the
following form: “Pay to the order of _______________ without recourse”, with all
intervening endorsements that show a complete chain of endorsement from the
originator to the person endorsing the Mortgage Note, or, if the original
Mortgage Note has been lost or destroyed and not replaced, an original lost
note
affidavit, stating that the original Mortgage Note was lost or destroyed,
together with a copy of the related Mortgage Note.
Based
on
its review and examination and only as to the foregoing documents, (i) such
Mortgage Notes appear regular on their face.
The
Indenture Trustee has made no independent examination of any Mortgage Note
beyond the review specifically required in the above-referenced Sale and
Servicing Agreement. The Indenture Trustee makes no representations as to:
(i)
the validity, legality, sufficiency, enforceability or genuineness of any of
the
Mortgage Note of any of the Mortgage Loans identified on the Mortgage Loan
Schedule or (ii) the collectibility, insurability, effectiveness or suitability
of any such Mortgage Loan.
Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the above-captioned Sale and Servicing Agreement.
|
THE
BANK OF NEW YORK,
as
Indenture Trustee
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
EXHIBIT
B-3
FORM
OF
FINAL CERTIFICATION OF INDENTURE TRUSTEE
[Date]
[Depositor]
[CHL]
[Seller]
[Master
Servicer]
Re:
Sale
and
Servicing Agreement, dated as of June 1, 2006 among GSC Capital Corp. Mortgage
Trust 2006-2, as Issuing Entity, CWALT, Inc., as Depositor, GSC Capital Corp.
QRS Delaware Loan Holdings, Inc., as Seller, Countrywide Home Loans Servicing
LP, as Master Servicer The Bank of New York, as Indenture Trustee, and
Countrywide Home Loans, Inc., relating to the GSC Alternative Loan Trust
Notes,
Series 2006-2
Gentlemen:
In
accordance with Section 2.02 of the above-captioned Sale and Servicing
Agreement, the undersigned, as Indenture Trustee, hereby certifies that as
to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attached Document Exception Report) the
Indenture Trustee has received the original Mortgage Note endorsed by manual
or
facsimile signature in blank in the following form: “Pay to the order of
_______________ without recourse”, with all intervening endorsements that show a
complete chain of endorsement from the originator to the person endorsing the
Mortgage Note, or, if the original Mortgage Note has been lost or destroyed
and
not replaced, an original lost note affidavit, stating that the original
Mortgage Note was lost or destroyed, together with a copy of the related
Mortgage Note.
Based
on
its review and examination and only as to the foregoing documents, (i) such
documents appear regular on their.
The
Indenture Trustee has made no independent examination of any documents contained
in each Mortgage File beyond the review specifically required in the
above-referenced Sale and Servicing Agreement. The Indenture Trustee makes
no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the Mortgage Notes of any of the Mortgage Loans
identified on the Mortgage Loan Schedule or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage
Loan.
Capitalized
words and phrases used herein shall have the respective meanings assigned to
them in the above-captioned Sale and Servicing Agreement.
|
THE
BANK OF NEW YORK,
as
Indenture Trustee
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
EXHIBIT
C
REQUEST
FOR RELEASE
(FOR
INDENTURE TRUSTEE)
|
Loan
Information
|
|
|
Name
of Mortgagor:
|
|
|
Master
Servicer
Loan
No.:
|
|
|
Indenture
Trustee
|
|
|
Name:
|
|
|
Address:
|
|
|
|
|
|
Indenture
Trustee
Mortgage
File No.:
|
The
undersigned Master Servicer hereby acknowledges that it has received from
_______________________________________, as Indenture Trustee for the Holders
of
GSC Alternative Loan Trust Notes, Series 2006-2, the documents referred to
below
(the “Documents”).
All
capitalized terms not otherwise defined in this Request for Release shall have
the meanings given them in the Sale and Servicing Agreement, dated as of June
1,
2006 (the “Sale
and Servicing Agreement”),
among
GSC Capital Corp. Mortgage Trust 2006-2, as Issuing Entity, CWALT, Inc., as
Depositor, GSC Capital Corp. QRS Delaware Loan Holdings, Inc., as Seller,
Countrywide Home Loans Servicing LP, as Master Servicer, and the Indenture
Trustee.
|
(
)
|
Mortgage
Note dated ___________, ____, in the original principal sum of $________,
made by __________________, payable to, or endorsed to the order
of, the
Indenture Trustee.
|
|
(
)
|
Mortgage
recorded on _________________ as instrument no. ________________
in the
County Recorder’s Office of the County of ________________, State of
_______________ in book/reel/docket _______________ of official records
at
page/image _____________.
|
|
(
)
|
Deed
of Trust recorded on _________________ as instrument no. ________________
in the County Recorder’s Office of the County of ________________, State
of _______________ in book/reel/docket _______________ of official
records
at page/image _____________.
|
|
(
)
|
Assignment
of Mortgage or Deed of Trust to the Indenture Trustee, recorded on
_________________ as instrument no. __________ in the County Recorder’s
Office of the County of __________, State of _______________ in
book/reel/docket _______________ of official records at page/image
_____________.
|
|
(
)
|
Other
documents, including any amendments, assignments or other assumptions
of
the Mortgage Note or Mortgage.
|
|
(
)
|
______________________________________________
|
|
(
)
|
______________________________________________
|
|
(
)
|
______________________________________________
|
|
(
)
|
______________________________________________
|
The
undersigned Master Servicer hereby acknowledges and agrees as
follows:
(1) The
Master Servicer shall hold and retain possession of the Documents in trust
for
the benefit of the Trust Estate, solely for the purposes provided in the Sale
and Servicing Agreement.
(2) The
Master Servicer shall not cause or knowingly permit the Documents to become
subject to, or encumbered by, any claim, liens, security interest, charges,
writs of attachment or other impositions nor shall the Master Servicer assert
or
seek to assert any claims or rights of setoff to or against the Documents or
any
proceeds thereof.
(3) The
Master Servicer shall return each and every Document previously requested from
the Mortgage File to the Indenture Trustee when the need therefor no longer
exists, unless the Mortgage Loan relating to the Documents has been liquidated
and the proceeds thereof have been remitted to the Collection Account and except
as expressly provided in the Sale and Servicing Agreement.
(4) The
Documents and any proceeds thereof, including any proceeds of proceeds, coming
into the possession or control of the Master Servicer shall at all times be
earmarked for the account of the Trust Estate, and the Master Servicer shall
keep the Documents and any proceeds separate and distinct from all other
property in the Master Servicer’s possession, custody or control.
|
[Master
Servicer]
|
||
|
By:
|
||
|
Its:
|
||
Date:
_________________, ____
EXHIBIT
D
REQUEST
FOR RELEASE
[MORTGAGE
LOANS PAID IN FULL, REPURCHASED OR REPLACED]
OFFICER’S
CERTIFICATE AND TRUST RECEIPT
GSC
ALTERNATIVE LOAN TRUST NOTES,
SERIES
2006-2
__________________________________________
HEREBY CERTIFIES THAT HE/SHE IS AN OFFICER OF THE MASTER SERVICER, HOLDING
THE
OFFICE SET FORTH BENEATH HIS/HER SIGNATURE, AND HEREBY FURTHER CERTIFIES AS
FOLLOWS:
WITH
RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE SALE AND SERVICING
AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:
[ALL
PAYMENTS OF PRINCIPAL AND INTEREST HAVE BEEN MADE.] [THE [PURCHASE PRICE]
[MORTGAGE LOAN REPURCHASE PRICE] FOR SUCH MORTGAGE LOANS HAS BEEN PAID.] [THE
MORTGAGE LOANS HAVE BEEN LIQUIDATED AND THE RELATED [INSURANCE PROCEEDS]
[LIQUIDATION PROCEEDS] HAVE BEEN DEPOSITED PURSUANT TO SECTION 3.12 OF THE
SALE
AND SERVICING AGREEMENT.] [A REPLACEMENT MORTGAGE LOAN HAS BEEN DELIVERED TO
THE
INDENTURE TRUSTEE IN THE MANNER AND OTHERWISE IN ACCORDANCE WITH THE CONDITIONS
SET FORTH IN SECTIONS 2.02 AND 2.03 OF THE SALE AND SERVICING
AGREEMENT.]
LOAN
NUMBER:_______________ XXXXXXXX’S
NAME:_____________
COUNTY:____________________
[For
Substitution or Repurchase Only: The Master Servicer certifies that [an] [no]
opinion is required by Section 2.05 [and is attached hereto].]
I
HEREBY
CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS THAT ARE
REQUIRED TO BE DEPOSITED IN THE COLLECTION ACCOUNT PURSUANT TO SECTION 3.05
OF
THE SALE AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.
|
____________
|
_____________________
|
|
DATED:____________
|
|
|
/
/
|
VICE
PRESIDENT
|
|
/
/
|
ASSISTANT
VICE PRESIDENT
|
EXHIBIT
E
FORM
OF
MORTGAGE NOTE AND MORTGAGE
(PROVIDED
UPON REQUEST)
EXHIBIT
F
OFFICER’S
CERTIFICATE WITH RESPECT TO PREPAYMENTS
(PROVIDED
UPON REQUEST)
EXHIBIT
G
SCHEDULE
OF DOCUMENT DELIVERY DEFICIENCIES
(PROVIDED
UPON REQUEST)
EXHIBIT
H
LIST
OF
FORECLOSURE RESTRICTED LOANS
(PROVIDED
UPON REQUEST)
EXHIBIT
I
REVISED
January 1, 2006
APPENDIX
E - STANDARD & POOR’S PREDATORY LENDING CATEGORIES
Standard
& Poor’s has categorized loans governed by anti-predatory lending laws in
the Jurisdictions listed below into three categories based upon a combination
of
factors that include (a) the risk exposure associated with the assignee
liability and (b) the tests and thresholds set forth in those laws. Note that
certain loans classified by the relevant statute as Covered are included in
Standard & Poor’s High Cost Loan Category because they included thresholds
and tests that are typical of what is generally considered High Cost by the
industry.
STANDARD
& POOR’S HIGH COST LOAN CATEGORIZATION
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Arkansas
|
Arkansas
Home Loan Protection Act, Ark. Code Xxx. §§ 00-00-000 et
seq.
Effective
July 16, 2003
|
High
Cost Home Loan
|
|
Cleveland
Heights, OH
|
Ordinance
No. 72-2003 (PSH), Mun. Code §§ 757.01 et
seq.
Effective
June 2, 2003
|
Covered
Loan
|
|
Colorado
|
Consumer
Equity Protection, Colo. Stat. Xxx. §§ 5-3.5-101 et
seq.
Effective
for covered loans offered or entered into on or after January 1,
2003.
Other provisions of the Act took effect on June 7, 2002
|
Covered
Loan
|
|
Connecticut
|
Connecticut
Abusive Home Loan Lending Practices Act, Conn. Gen. Stat. §§ 36a-746
et
seq.
Effective
October 1, 2001
|
High
Cost Home Loan
|
|
District
of Columbia
|
Home
Loan Protection Act, D.C. Code §§ 26-1151.01 et
seq.
Effective
for loans closed on or after January 28, 2003
|
Covered
Loan
|
|
Florida
|
Fair
Lending Act, Fla. Stat. Xxx. §§ 494.0078 et
seq.
Effective
October 2, 2002
|
High
Cost Home Loan
|
|
Georgia
(Oct. 1, 2002 - Mar. 6, 2003)
|
Georgia
Fair Lending Act, Ga. Code Xxx. §§ 7-6A-1 et
seq.
|
High
Cost Home Loan
|
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Effective
October 1, 2002 - March 6, 2003
|
||
|
Georgia
as amended (Mar. 7, 2003 - current)
|
Georgia
Fair Lending Act, Ga. Code Xxx. §§ 7-6A-1 et
seq.
Effective
for loans closed on or after March 7, 2003
|
High
Cost Home Loan
|
|
HOEPA
Section 32
|
Home
Ownership and Equity Protection Act of 1994, 15 U.S.C. § 1639, 12 C.F.R.
§§ 226.32 and 226.34
Effective
October 1, 1995, amendments October 1, 2002
|
High
Cost Loan
|
|
Illinois
|
High
Risk Home Loan Act, Ill. Comp. Stat. tit. 815, §§ 137/5 et
seq.
Effective
January 1, 2004 (prior to this date, regulations under Residential
Mortgage License Act effective from May 14, 2001)
|
High
Risk Home Loan
|
|
Kansas
|
Consumer
Credit Code, Kan. Stat. Xxx. §§ 16a-1-101 et
seq.
Sections
16a-1-301 and 16a-3-207 became effective April 14, 1999; Section
16a-3-308a became effective July 1, 1999
|
High
Loan to Value Consumer Loan (id.§
16a-3-207) and;
|
|
High
APR Consumer Loan (id.§
16a-3-308a)
|
||
|
Kentucky
|
2003
KY H.B. 287 - High Cost Home Loan Act, Ky. Rev. Stat. §§ 360.100
et
seq.
Effective
June 24, 2003
|
High
Cost Home Loan
|
|
Maine
|
Truth
in Lending, Me. Rev. Stat. tit. 9-A, §§ 8-101 et
seq.
Effective
September 29, 1995 and as amended from time to time
|
High
Rate High Fee Mortgage
|
|
Massachusetts
|
Part
40 and Part 32, 209 C.M.R. §§ 32.00 et
seq.
and 209 C.M.R. §§ 40.01 et
seq.
|
High
Cost Home Loan
|
Standard
& Poor’s High Cost Loan Categorization
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Effective
March 22, 2001 and amended from time to time
|
||
|
Nevada
|
Assembly
Bill No. 284, Nev. Rev. Stat. §§ 598D.010 et
seq.
Effective
October 1, 2003
|
Home
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22
et
seq.
Effective
for loans closed on or after November 27, 2003
|
High
Cost Home Loan
|
|
New
Mexico
|
Home
Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et
seq.
Effective
as of January 1, 2004; Revised as of February 26, 2004
|
High
Cost Home Loan
|
|
New
York
|
N.Y.
Banking Law Article 6-l
Effective
for applications made on or after April 1, 2003
|
High
Cost Home Loan
|
|
North
Carolina
|
Restrictions
and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E
et
seq.
Effective
July 1, 2000; amended October 1, 2003 (adding open-end lines of credit)
|
High
Cost Home Loan
|
|
Ohio
|
H.B.
386 (codified in various sections of the Ohio Code), Ohio Rev. Code
Xxx.
§§ 1349.25 et
seq.
Effective
May 24, 2002
|
Covered
Loan
|
|
Oklahoma
|
Consumer
Credit Code (codified in various sections of Title 14A)
Effective
July 1, 2000; amended effective January 1, 2004
|
Subsection
10 Mortgage
|
|
South
Carolina
|
South
Carolina High Cost and Consumer Home Loans Act, S.C. Code
|
High
Cost Home Loan
|
Standard
& Poor’s High Cost Loan Categorization
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Xxx.
§§ 37-23-10 et
seq.
Effective
for loans taken on or after January 1, 2004
|
||
|
West
Virginia
|
West
Virginia Residential Mortgage Lender, Broker and Servicer Act, W.
Va. Code
Xxx. §§ 31-17-1 et
seq.
Effective
June 5, 2002
|
West
Virginia Mortgage Loan Act Loan
|
STANDARD
& POOR’S COVERED LOAN CATEGORIZATION
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Georgia
(Oct. 1, 2002 - Mar. 6, 2003)
|
Georgia
Fair Lending Act, Ga. Code Xxx. §§ 7-6A-1 et
seq.
Effective
October 1, 2002 - March 6, 2003
|
Covered
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22
et
seq.
Effective
November 27, 2003 - July 5, 2004
|
Covered
Home Loan
|
STANDARD
& POOR’S HOME LOAN CATEGORIZATION
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
Georgia
(Oct. 1, 2002 - Mar. 6, 2003)
|
Georgia
Fair Lending Act, Ga. Code Xxx. §§ 7-6A-1 et
seq.
Effective
October 1, 2002 - March 6, 2003
|
Home
Loan
|
|
New
Jersey
|
New
Jersey Home Ownership Security Act of 2002, N.J. Rev. Stat. §§ 46:10B-22
et
seq.
Effective
for loans closed on or after November 27, 2003
|
Home
Loan
|
STANDARD
& POOR’S HOME LOAN CATEGORIZATION
|
State/Jurisdiction
|
Name
of Anti-Predatory Lending Law/Effective Date
|
Category
under Applicable Anti-Predatory Lending Law
|
|
New
Mexico
|
Home
Loan Protection Act, N.M. Rev. Stat. §§ 58-21A-1 et
seq.
Effective
as of January 1, 2004; Revised as of February 26, 2004
|
Home
Loan
|
|
North
Carolina
|
Restrictions
and Limitations on High Cost Home Loans, N.C. Gen. Stat. §§ 24-1.1E
et
seq.
Effective
July 1, 2000; amended October 1, 2003 (adding open-end lines of credit)
|
Consumer
Home Loan
|
|
South
Carolina
|
South
Carolina High Cost and Consumer Home Loans Act, S.C. Code Xxx. §§ 37-23-10
et
seq.
Effective
for loans taken on or after January 1, 2004
|
Consumer
Home Loan
|
EXHIBIT
J
ITEM
1119
PARTIES
GSC
ALTERNATIVE LOAN TRUST NOTES,
Series
2006-2
June
__,
2006
|
Party
|
Contact
Information
|
|
CWALT,
Inc.
|
|
|
GSC
Capital Corp. QRS Delaware Loan Holdings, Inc.
|
|
|
Countrywide
Home Loans Servicing LP
|
|
|
|
|
|
The
Bank of New York
|
|
|
Wilmington
Trust Company
|
|
|
American
Home Mortgage Company
|
|
|
GreenPoint
Mortgage Funding Incorporated
|
|
|
Countrywide
Home Loans, Inc.
|
|
|
Decision
One Mortgage Company
|
|
|
[Swap
Counterparty]
|
EXHIBIT
K-1
FORM
OF
PERFORMANCE CERTIFICATION
(Subservicer)
[On
file
with the Indenture Trustee]
EXHIBIT
K-2
FORM
OF
PERFORMANCE CERTIFICATION
(Indenture
Trustee)
[On
file
with the Indenture Trustee]
EXHIBIT
L
SERVICING
CRITERIA TO BE ADDRESSED IN
ASSESSMENT
OF COMPLIANCE STATEMENT
The
assessment of compliance to be delivered by [the Master Servicer] [Indenture
Trustee] [Name of Subservicer] shall address, at a minimum, the criteria
identified as below as “Applicable
Servicing Criteria”:
|
Servicing
Criteria
|
Applicable
Servicing Criteria
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Master
Servicer/
Subservicer
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Indenture
Trustee
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Reference
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Criteria
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General
Servicing Considerations
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1122(d)(1)(i)
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Policies
and procedures are instituted to monitor any performance or other
triggers
and events of default in accordance with the transaction
agreements.
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X
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1122(d)(1)(ii)
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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.
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X
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X
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1122(d)(1)(iii)
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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)
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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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X
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X
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Cash
Collection and Administration
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1122(d)(2)(i)
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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.
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X
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X
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1122(d)(2)(ii)
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Disbursements
made via wire transfer on behalf of an obligor or to an investor
are made
only by authorized personnel.
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X
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X
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1122(d)(2)(iii)
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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.
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X
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X
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1122(d)(2)(iv)
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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.
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X
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X
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1122(d)(2)(v)
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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.
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X
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X
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1122(d)(2)(vi)
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Unissued
checks are safeguarded so as to prevent unauthorized
access.
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X
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X
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1122(d)(2)(vii)
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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.
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X
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X
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Investor
Remittances and Reporting
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1122(d)(3)(i)
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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 Trust Administrator’s records as to the total unpaid
principal balance and number of mortgage loans serviced by the
Servicer.
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X
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1122(d)(3)(ii)
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Amounts
due to investors are allocated and remitted in accordance with timeframes,
distribution priority and other terms set forth in the transaction
agreements.
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X
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1122(d)(3)(iii)
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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.
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X
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1122(d)(3)(iv)
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Amounts
remitted to investors per the investor reports agree with cancelled
checks, or other form of payment, or custodial bank
statements.
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X
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Pool
Asset Administration
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1122(d)(4)(i)
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Collateral
or security on mortgage loans is maintained as required by the transaction
agreements or related mortgage loan documents.
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X
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X
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1122(d)(4)(ii)
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Mortgage
loan and related documents are safeguarded as required by the transaction
agreements.
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X
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X
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1122(d)(4)(iii)
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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.
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X
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X
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1122(d)(4)(iv)
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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.
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X
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1122(d)(4)(v)
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The
Servicer’s records regarding the mortgage loans agree with the Servicer’s
records with respect to an obligor’s unpaid principal
balance.
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X
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1122(d)(4)(vi)
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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.
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X
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1122(d)(4)(vii)
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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.
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X
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1122(d)(4)(viii)
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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).
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X
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1122(d)(4)(ix)
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Adjustments
to interest rates or rates of return for mortgage loans with variable
rates are computed based on the related mortgage loan
documents.
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X
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1122(d)(4)(x)
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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.
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X
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1122(d)(4)(xi)
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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.
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X
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1122(d)(4)(xii)
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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.
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X
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1122(d)(4)(xiii)
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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.
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X
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1122(d)(4)(xiv)
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Delinquencies,
charge-offs and uncollectible accounts are recognized and recorded
in
accordance with the transaction agreements.
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X
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1122(d)(4)(xv)
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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.
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X
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[NAME
OF MASTER SERVICER] [NAME OF INDENTURE TRUSTEE] [NAME OF
SUBSERVICER]
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Date:
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By:
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Name:
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Title:
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EXHIBIT
M
LIST
OF
APPRAISAL FIRMS
EXHIBIT
N
REO
DIRECTION LETTER
[Date]
[Master
Servicer]
RE:
GSC
Capital Corp. Mortgage Trust, Series 2006-2
Sale
of
REO Property
To
Whom
It May Concern:
This
letter serves as notice to you that you are hereby irrevocably authorized and
directed, as Master Servicer, to purchase any REO Property held in the Issuing
Entity, on behalf of the Issuing Entity, at its fair market value, as soon
as is
practicable. Please provide the Indenture Trustee with the outstanding principal
balance of the REO Properties and the proceeds collected from such sale. Upon
the sale of the final REO Property from the Issuing Entity, please notify the
Indenture Trustee (in a manner similar to Exhibit O of the Sale and Servicing
Agreement) within one business day. All proceeds from the sale of the REO
Properties shall be remitted to the Indenture Trustee within [ ] business days
of such sale. Capitalized terms not defined herein have the meanings assigned
to
them in the Indenture, dated as of June __, 2006, between The Bank of New York,
as indenture trustee, and GSC Capital Corp. Mortgage Trust 2006-2, as issuing
entity.
Sincerely,
[Indenture
Trustee]
By:
Name:
Title:
EXHIBIT
O
REO
SALE
NOTIFICATION LETTER
[Date]
[Indenture
Trustee]
RE: GSC
Capital Corp. Mortgage Trust Series 2006-2
Sale
of
REO Property
To
Whom
It May Concern:
This
letter serves as notice to you that all REO Property has been sold out of the
Issuing Entity. The aggregate outstanding principal balance of all REO Property
in the trust was [$_______]. The total proceeds collected with respect to the
sale of such REO Property is [$________].Capitalized terms not defined herein
have the meanings assigned to them in the Indenture, dated as of June __, 2006,
between The Bank of New York, as indenture trustee, and GSC Capital Corp.
Mortgage Trust 2006-2, as issuing entity.
Sincerely,
[Master
Servicer]
By:
Name:
Title:
SCHEDULE
I
PREPAYMENT
CHARGE SCHEDULE AND PREPAYMENT CHARGE SUMMARY
(PROVIDED
UPON REQUEST)
