Exhibit 4
GS MORTGAGE SECURITIES CORP.,
Depositor,
XXXXXX LOAN SERVICING LP,
Servicer,
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC,
Seller,
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
--------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 1, 2006
--------------------------------
GSAMP TRUST 2006-HE2
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2006-HE2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans
Section 2.02 Acceptance by the Trustee of the Mortgage Loans
Section 2.03 Repurchase or Substitution of Mortgage Loans by the Seller
Section 2.04 Representations and Warranties of the Seller and GSMC with Respect
to the Mortgage Loans
Section 2.05 Representations, Warranties and Covenants of the Servicer
Section 2.06 Representations and Warranties of the Seller
Section 2.07 Covenants of the Seller
Section 2.08 Execution and Delivery of Certificates
Section 2.09 REMIC Matters
Section 2.10 Representations and Warranties of the Depositor
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans
Section 3.02 Subservicing Agreements between the Servicer and Subservicers
Section 3.03 Successor Subservicers
Section 3.04 Liability of the Servicer
Section 3.05 No Contractual Relationship between Subservicers and the Trustee
Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee
Section 3.07 Collection of Certain Mortgage Loan Payments
Section 3.08 Subservicing Accounts Section 3.09 Collection of Taxes, Assessments
and Similar Items; Escrow Accounts
Section 3.10 Collection Account
Section 3.11 Withdrawals from the Collection Account
Section 3.12 Investment of Funds in the Collection Account, Escrow Accounts and
the Distribution Account
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions and
Fidelity Coverage
Section 3.14 Enforcement of Due-On-Sale Clauses; Assumption Agreements
Section 3.15 Realization upon Defaulted Mortgage Loans
Section 3.16 Release of Mortgage Files
Section 3.17 Title, Conservation and Disposition of REO Property
Section 3.18 Notification of Adjustments Section 3.19 Access to Certain
Documentation and Information Regarding the Mortgage Loans
Section 3.20 Documents, Records and Funds in Possession of the Servicer to Be
Held for the Trustee
Section 3.21 Servicing Compensation
Section 3.22 Annual Statement as to Compliance
Section 3.23 Assessment of Compliance with Servicing Criteria; Independent
Public Accountants' Attestation
Section 3.24 Trustee to Act as Servicer
Section 3.25 Compensating Interest
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act
Section 3.27 Optional Purchases of Mortgage Loans by Servicer
Section 3.28 Advance Facility
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances
Section 4.02 Priorities of Distribution
Section 4.03 Monthly Statements to Certificateholders
Section 4.04 Certain Matters Relating to the Determination of LIBOR
Section 4.05 Allocation of Applied Realized Loss Amounts
Section 4.06 Supplemental Interest Trust
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates
Section 5.02 Certificate Register; Registration of Transfer and Exchange of
Certificates
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates
Section 5.04 Persons Deemed Owners
Section 5.05 Access to List of Certificateholders' Names and Addresses
Section 5.06 Maintenance of Office or Agency
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the Servicer
Section 6.02 Merger or Consolidation of the Depositor or the Servicer
Section 6.03 Limitation on Liability of the Depositor, the Servicer and Others
Section 6.04 Limitation on Resignation of the Servicer
Section 6.05 Additional Indemnification by the Servicer and the Seller; Third
Party Claims
Section 6.06 Servicing Rights Pledge
ARTICLE VII
DEFAULT
Section 7.01 Events of Default
Section 7.02 Trustee to Act; Appointment of Successor
Section 7.03 Notification to Certificateholders
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee
Section 8.02 Certain Matters Affecting the Trustee
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans
Section 8.04 Trustee May Own Certificates
Section 8.05 Trustee's Fees and Expenses
Section 8.06 Eligibility Requirements for the Trustee
Section 8.07 Resignation and Removal of the Trustee Section 8.08 Successor
Trustee
Section 8.09 Merger or Consolidation of the Trustee
Section 8.10 Appointment of Co-Trustee or Separate Trustee
Section 8.11 Tax Matters
Section 8.12 Periodic Filings
Section 8.13 Tax Treatment of Basis Risk Carry Forward Amounts, the Supplemental
Interest Trust and the Interest Rate Swap Agreement
Section 8.14 Trustee May Enforce Claims Without Possession of Certificates
Section 8.15 Suits for Enforcement
Section 8.16 Waiver of Bond Requirement
Section 8.17 Waiver of Inventory, Accounting and Appraisal Requirement
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage Loans
Section 9.02 Final Distribution on the Certificates
Section 9.03 Additional Termination Requirements
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment
Section 10.02 Recordation of Agreement; Counterparts
Section 10.03 Governing Law
Section 10.04 Intention of Parties
Section 10.05 Notices
Section 10.06 Severability of Provisions
Section 10.07 Limitation on Rights of Certificateholders
Section 10.08 Inspection and Audit Rights
Section 10.09 Certificates Nonassessable and Fully Paid
Section 10.10 Rule of Construction
Section 10.11 Waiver of Jury Trial
Section 10.12 Rights of the Swap Provider
Section 10.13 Regulation AB Compliance; Intent of the Parties; Reasonableness
SCHEDULES
Schedule I Mortgage Loan Schedule
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificates
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R
Exhibit C-2 Form of Class R-X Certificates
Exhibit D Form of Class CE Certificate
Exhibit E Form of Initial Certification of Trustee
Exhibit F-1 Form of Initial Certification of Custodian
Exhibit F-2 Form of Certification
Exhibit G-1 Form of Class R Residual Transfer Affidavit
Exhibit G-2 Form of Class R-X Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I-1 Form of Rule 144A Letter
Exhibit I-2 Form of Non-Rule 144A Investment Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Trustee's Certification to be provided to Depositor
Exhibit N Servicing Criteria
Exhibit O Power of Attorney
Exhibit P-1 Seller Mortgage Loan Purchase Agreement
Exhibit P-2 GSMC Mortgage Loan Purchase Agreement
Exhibit Q Interest Rate Swap Agreement
Exhibit R Custodial Agreement
Exhibit S Form 8-K Disclosure
Exhibit T Form 10-D Disclosure
Exhibit U Form 10-K Disclosure
THIS POOLING AND SERVICING AGREEMENT, dated as of March 1, 2006,
among GS MORTGAGE SECURITIES CORP., a Delaware corporation, as depositor (the
"Depositor"), XXXXXX LOAN SERVICING LP, a Delaware limited partnership, as
servicer (the "Servicer"), CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC,
a Delaware limited liability company, as seller (the "Seller"), and U.S. BANK
NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Trustee").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that ten segregated asset pools within the
Trust Fund (exclusive of (i) the Prepayment Premiums, (ii) the Interest Rate
Swap Agreement, (iii) the Supplemental Interest Trust and the Supplemental
Interest Trust Account, (iv) the Excess Reserve Fund Account and (v) the right
of the Principal Certificates to receive Basis Risk Carry Forward Amounts and
the obligation to pay Class IO Shortfalls) be treated for federal income tax
purposes as comprising ten REMICs (each, a "Trust REMIC" or, in the alternative,
Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the Lower-Tier REMIC, the Upper-Tier
REMIC, the Class B-1 REMIC, the Class B-2 REMIC, the Class B-3 REMIC, the Class
B-4 REMIC, the Class B-5 REMIC and the Class XX XXXXX, respectively). The Class
CE Interest, Class IO Interest and each Class of Principal Certificates (other
than the right of each Class of Principal Certificates to receive Basis Risk
Carry Forward Amounts and the obligation to pay Class IO Shortfalls) represents
ownership of a regular interest in a REMIC for purposes of the REMIC Provisions.
The Class R Certificates represent ownership of the sole class of
residual interest in each of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the
Lower-Tier REMIC and the Upper-Tier REMIC for purposes of the REMIC Provisions.
The Class R-X Certificates represent ownership of the sole class of residual
interest in the Class B-1 REMIC, Class B-2 REMIC, the Class B-3 REMIC, the Class
B-4 REMIC, the Class B-5 REMIC and the Class XX XXXXX for purposes of the REMIC
Provisions. The Start-up Day for each Trust REMIC described herein is the
Closing Date. The latest possible maturity date for each regular interest is the
latest date referenced in Section 2.09.
The Class XX XXXXX shall hold as assets the Class UT-CE Interest and
the Class UT-IO Interest as set out below. The Upper-Tier REMIC shall hold as
assets the several classes of uncertificated Lower-Tier Regular Interests, set
out below. The Lower-Tier REMIC shall hold as assets the several classes of
uncertificated Pooling-Tier REMIC-2 Regular Interests set out below.
Pooling-Tier REMIC-2 shall hold as assets the several classes of uncertificated
Pooling-Tier REMIC-1 Regular Interests set out below. Pooling-Tier REMIC-1 shall
hold as assets the assets of the Trust Fund (exclusive of (i) the Prepayment
Premiums, (ii) the Interest Rate Swap Agreement, (iii) the Supplemental Interest
Trust and the Supplemental Interest Trust Account, (iv) the Excess Reserve Fund
Account and (v) the right of each Class of Principal Certificates to receive
Basis Risk Carry Forward Amounts and the obligation to pay Class IO Shortfalls).
The Class LT-A-1, Class LT-A-2, Class LT-A-3, Class LT-M-1, Class LT-M-2, Class
LT-M-3, Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2,
Class LT-B-3, Class LT-B-4 and Class LT-B-5 Interests are hereby designated the
LT-Accretion Directed Classes (the "LT-Accretion Directed Classes"). Each of the
LT-Accretion Directed Classes, the Class LT-Accrual Interest, the Class LT-FL
Interest, the Class LT-FX Interest and the Class LT-IO Interest is hereby
designated as a regular interest in the Lower-Tier REMIC.
The Class B-1 REMIC shall hold as an asset the Class B-1 Interest
issued by the Upper-Tier REMIC, the Class B-1 Certificates shall represent
ownership of the regular interest issued by the Class B-1 REMIC and the Class
B2-R Interest shall represent the sole class of residual interest in the Class
B-1 REMIC.
The Class B-2 REMIC shall hold as an asset the Class B-2 Interest
issued by the Upper-Tier REMIC, the Class B-2 Certificates shall represent
ownership of the regular interest issued by the Class B-2 REMIC and the Class
B2-R Interest shall represent the sole class of residual interest in the Class
B-2 REMIC.
The Class B-3 REMIC shall hold as an asset the Class B-3 Interest
issued by the Upper-Tier REMIC, the Class B-3 Certificates shall represent
ownership of the regular interest issued by the Class B-3 REMIC and the Class
B3-R Interest shall represent the sole class of residual interest in the Class
B-3 REMIC.
The Class B-4 REMIC shall hold as an asset the Class B-4 Interest
issued by the Upper-Tier REMIC, the Class B-4 Certificates shall represent
ownership of the regular interest issued by the Class B-4 REMIC and the Class
B4-R Interest shall represent the sole class of residual interest in the Class
B-4 REMIC.
The Class B-5 REMIC shall hold as an asset the Class B-5 Interest
issued by the Upper-Tier REMIC, the Class B-5 Certificates shall represent
ownership of the regular interest issued by the Class B-5 REMIC and the Class
B5-R Interest shall represent the sole class of residual interest in the Class
B-5 REMIC.
The Class XX XXXXX shall hold as an asset the Class UT-CE Interest
and the Class UT-IO Interest issued by the Upper-Tier REMIC, the Class CE
Interest and Class CE-IO Interest shall represent the regular interests issued
by the Class XX XXXXX and the Class CE-R Interest shall represent the sole class
residual interest in the Class XX XXXXX. The Class CE Certificates represent
beneficial ownership of the Class CE Interest, the Class IO Interest, the
Supplemental Interest Trust Account, the Excess Reserve Fund Account and the
right to receive Class IO Shortfalls.
For federal income tax purposes, each Class of Principal
Certificates represents a beneficial ownership of a regular interest in the
Upper-Tier REMIC and the right to receive Basis Risk Carry Forward Amounts,
subject to the obligation to pay Class IO Shortfalls, the Class CE Certificates
represent beneficial ownership of the Class CE Interest, the Class IO Interest,
the Interest Rate Swap Agreement, the Supplemental Interest Trust and the
Supplemental Interest Trust Account, the Excess Reserve Fund Account and the
right to receive Class IO Shortfalls, subject to the obligation to pay Basis
Risk Carry Forward Amounts, and the Class P Certificates represent beneficial
ownership of the Prepayment Premiums, which portions of the Trust Fund shall be
treated as a grantor trust.
Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest is hereby designated as a regular
interest in the Pooling-Tier REMIC-1. Pooling-Tier REMIC-1 shall also issue the
Class PTI-R Interest, which shall be represented by the Class R Certificates.
The Class PTI-R Interest is hereby designated as the sole class of residual
interest in Pooling-Tier REMIC-1. The Class R-X Certificates shall have a no
Class Certificate Balance and shall have no interest rate.
Initial
Pooling-Tier
Pooling-Tier REMIC-1 Pooling-Tier REMIC-1 REMIC-1 Principal
Interest Interest Rate Amount
------------------ -------------- --------------
Class PT1-1 (1) $49,999,615.10
Class PT1-2A (2) $ 5,129,967.50
Class PT1-2B (3) $ 5,129,967.50
Class PT1-3A (2) $ 6,069,264.50
Class PT1-3B (3) $ 6,069,264.50
Class PT1-4A (2) $ 6,991,734.00
Class PT1-4B (3) $ 6,991,734.00
Class PT1-5A (2) $ 7,888,665.00
Class PT1-5B (3) $ 7,888,665.00
Class PT1-6A (2) $ 8,751,968.50
Class PT1-6B (3) $ 8,751,968.50
Class PT1-7A (2) $ 9,572,733.50
Class PT1-7B (3) $ 9,572,733.50
Class PT1-8A (2) $10,341,854.00
Class PT1-8B (3) $10,341,854.00
Class PT1-9A (2) $11,051,310.50
Class PT1-9B (3) $11,051,310.50
Class PT1-10A (2) $11,498,062.00
Class PT1-10B (3) $11,498,062.00
Class PT1-11A (2) $11,031,181.00
Class PT1-11B (3) $11,031,181.00
Class PT1-12A (2) $10,571,064.00
Class PT1-12B (3) $10,571,064.00
Class PT1-13A (2) $10,071,175.00
Class PT1-13B (3) $10,071,175.00
Class PT1-14A (2) $ 9,595,076.50
Class PT1-14B (3) $ 9,595,076.50
Class PT1-15A (2) $ 9,141,631.50
Class PT1-15B (3) $ 9,141,631.50
Class PT1-16A (2) $ 8,709,754.50
Class PT1-16B (3) $ 8,709,754.50
Class PT1-17A (2) $ 8,298,255.50
Class PT1-17B (3) $ 8,298,255.50
Class PT1-18A (2) $ 7,906,487.50
Class PT1-18B (3) $ 7,906,487.50
Class PT1-19A (2) $ 7,533,339.50
Class PT1-19B (3) $ 7,533,339.50
Class PT1-20A (2) $ 7,185,360.50
Class PT1-20B (3) $ 7,185,360.50
Class PT1-21A (2) $ 6,845,165.50
Class PT1-21B (3) $ 6,845,165.50
Class PT1-22A (2) $ 8,954,842.00
Class PT1-22B (3) $ 8,954,842.00
Class PT1-23A (2) $18,279,605.00
Class PT1-23B (3) $18,279,605.00
Class PT1-24A (2) $15,306,370.50
Class PT1-24B (3) $15,306,370.50
Class PT1-25A (2) $12,370,427.50
Class PT1-25B (3) $12,370,427.50
Class PT1-26A (2) $ 5,203,445.50
Class PT1-26B (3) $ 5,203,445.50
Class PT1-27A (2) $ 4,776,585.00
Class PT1-27B (3) $ 4,776,585.00
Class PT1-28A (2) $ 2,711,446.00
Class PT1-28B (3) $ 2,711,446.00
Class PT1-33A (2) $ 1,599,284.50
Class PT1-33B (3) $ 1,599,284.50
Class PT1-34A (2) $ 2,384,655.50
Class PT1-34B (3) $ 2,384,655.50
Class PT1-35A (2) $ 2,253,139.50
Class PT1-35B (3) $ 2,253,139.50
Class PT1-36A (2) $ 2,129,094.00
Class PT1-36B (3) $ 2,129,094.00
Class PT1-37A (2) $ 2,011,785.00
Class PT1-37B (3) $ 2,011,785.00
Class PT1-38A (2) $ 1,901,443.00
Class PT1-38B (3) $ 1,901,443.00
Class PT1-39A (2) $ 1,797,344.50
Class PT1-39B (3) $ 1,797,344.50
Class PT1-40A (2) $ 1,699,037.50
Class PT1-40B (3) $ 1,699,037.50
Class PT1-41A (2) $ 1,606,331.00
Class PT1-41B (3) $ 1,606,331.00
Class PT1-42A (2) $ 1,518,894.00
Class PT1-42B (3) $ 1,518,894.00
Class PT1-43A (2) $ 1,436,337.00
Class PT1-43B (3) $ 1,436,337.00
Class PT1-44A (2) $ 1,358,459.00
Class PT1-44B (3) $ 1,358,459.00
Class PT1-45A (2) $ 1,284,951.50
Class PT1-45B (3) $ 1,284,951.50
Class PT1-46A (2) $ 1,215,560.50
Class PT1-46B (3) $ 1,215,560.50
Class PT1-47A (2) $ 1,150,035.50
Class PT1-47B (3) $ 1,150,035.50
Class PT1-48A (2) $ 1,088,186.50
Class PT1-48B (3) $ 1,088,186.50
Class PT1-49A (2) $ 1,029,785.00
Class PT1-49B (3) $ 1,029,785.00
Class PT1-50A (2) $ 974,635.50
Class PT1-50B (3) $ 974,635.50
Class PT1-51A (2) $ 922,551.50
Class PT1-51B (3) $ 922,551.50
Class PT1-52A (2) $ 873,357.50
Class PT1-52B (3) $ 873,357.50
Class PT1-53A (2) $ 826,888.00
Class PT1-53B (3) $ 826,888.00
Class PT1-54A (2) $ 782,989.50
Class PT1-54B (3) $ 782,989.50
Class PT1-55A (2) $ 741,514.00
Class PT1-55B (3) $ 741,514.00
Class PT1-56A (2) $ 702,324.50
Class PT1-56B (3) $ 702,324.50
Class PT1-57A (2) $ 665,291.50
Class PT1-57B (3) $ 665,291.50
Class PT1-58A (2) $ 630,355.00
Class PT1-58B (3) $ 630,355.00
Class PT1-59A (2) $ 598,196.00
Class PT1-59B (3) $ 598,196.00
Class PT1-60A (2) $ 566,843.00
Class PT1-60B (3) $ 566,843.00
Class PT1-61A (2) $10,820,556.00
Class PT1-61B (3) $10,820,556.00
Class PT1-62 (1) $ 2,209,805.00
Class PT1-R (4) $ 0.00
----------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1 WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period) this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of
(i) 2 and (ii) the Pooling-Tier REMIC-1 WAC Rate, subject to a maximum
rate of 10.2%.
(3) For any Distribution Date (and the related Interest Accrual Period) this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 WAC
Rate over (B) 10.2%.
(4) The Class PT1-R Interest shall not bear interest.
On each Distribution Date, the Trustee shall first pay from the
Trust Fund and charge as an expense of Pooling-Tier REMIC-1 all expenses of the
Trust for such Distribution Date. Such expense, other than Servicing Fees, the
Custodian Fees and Trustee Fees, shall be allocated in the same manner as
Realized Losses.
On each Distribution Date, the interest distributable in respect of
the Mortgage Loans for such Distribution Date shall be deemed to be distributed
to the Pooling-Tier REMIC-1 Regular Interests at the rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Mortgage Loans shall be allocated
sequentially to the outstanding Pooling-Tier REMIC-1 Regular Interest with the
lowest numerical designation (other than the Class PT1-1 Interest) such that, at
all times, the aggregate Pooling-Tier Principal Amount of such Pooling-Tier
REMIC-1 Regular Interests (including the Class PT1-62 Interest) equals the
aggregate Class Certificate Balance of the then outstanding LIBOR Certificates
and finally to Class PT1-1 Interest until the Pooling-Tier REMIC-1 Principal
Amount of each such interest is reduced to zero; provided that, with respect to
Pooling-Tier REMIC-1 Regular Interests relating to certificates with the same
numerical designation, such Realized Losses, Subsequent Recoveries and payments
of principal shall be allocated pro rata between such Pooling-Tier REMIC-1
Regular Interests.
Pooling-Tier REMIC-2
Pooling-Tier REMIC-2 shall issue the following interests in
Pooling-Tier REMIC-2, and each such interest, other than the Class PT2-R
Interest, is hereby designated as a regular interest in Pooling-Tier REMIC-2.
The Class PT2-R Interest is hereby designated as the sole class of residual
interest in Pooling-Tier REMIC-2 and shall be represented by the Class R
Certificates.
Corresponding Corresponding Corresponding
Pooling-Tier Pooling-Tier Pooling-Tier Pooling-Tier Scheduled
Pooling-Tier REMIC-2 REMIC-2 Initial REMIC-2 REMIC-1 Crossover
REMIC-2 Interest Interest Rate Principal Amount IO Interest Regular Interest Distribution Date
---------------- ------------- ---------------- ----------- ---------------- -----------------
Class PT2-1 (1) $ 49,999,615.10 N/A N/A N/A
Class PT2-2A (2) $ 5,129,967.50 Class PT2-IO-2 N/A N/A
Class PT2-2B (3) $ 5,129,967.50 N/A N/A N/A
Class PT2-3A (2) $ 6,069,264.50 Class PT2-IO-3 N/A N/A
Class PT2-3B (3) $ 6,069,264.50 N/A N/A N/A
Class PT2-4A (2) $ 6,991,734.00 Class PT2-IO-4 N/A N/A
Class PT2-4B (3) $ 6,991,734.00 N/A N/A N/A
Class PT2-5A (2) $ 7,888,665.00 Class PT2-IO-5 N/A N/A
Class PT2-5B (3) $ 7,888,665.00 N/A N/A N/A
Class PT2-6A (2) $ 8,751,968.50 Class PT2-IO-6 N/A N/A
Class PT2-6B (3) $ 8,751,968.50 N/A N/A N/A
Class PT2-7A (2) $ 9,572,733.50 Class PT2-IO-7 N/A N/A
Class PT2-7B (3) $ 9,572,733.50 N/A N/A N/A
Class PT2-8A (2) $ 10,341,854.00 Class PT2-IO-8 N/A N/A
Class PT2-8B (3) $ 10,341,854.00 N/A N/A N/A
Class PT2-9A (2) $ 11,051,310.50 Class PT2-IO-9 N/A N/A
Class PT2-9B (3) $ 11,051,310.50 N/A N/A N/A
Class PT2-10A (2) $ 11,498,062.00 Class PT2-IO-10 N/A N/A
Class PT2-10B (3) $ 11,498,062.00 N/A N/A N/A
Class PT2-11A (2) $ 11,031,181.00 Class PT2-IO-11 N/A N/A
Class PT2-11B (3) $ 11,031,181.00 N/A N/A N/A
Class PT2-12A (2) $ 10,571,064.00 Class PT2-IO-12 N/A N/A
Class PT2-12B (3) $ 10,571,064.00 N/A N/A N/A
Class PT2-13A (2) $ 10,071,175.00 Class PT2-IO-13 N/A N/A
Class PT2-13B (3) $ 10,071,175.00 N/A N/A N/A
Class PT2-14A (2) $ 9,595,076.50 Class PT2-IO-14 N/A N/A
Class PT2-14B (3) $ 9,595,076.50 N/A N/A N/A
Class PT2-15A (2) $ 9,141,631.50 Class PT2-IO-15 N/A N/A
Class PT2-15B (3) $ 9,141,631.50 N/A N/A N/A
Class PT2-16A (2) $ 8,709,754.50 Class PT2-IO-16 N/A N/A
Class PT2-16B (3) $ 8,709,754.50 N/A N/A N/A
Class PT2-17A (2) $ 8,298,255.50 Class PT2-IO-17 N/A N/A
Class PT2-17B (3) $ 8,298,255.50 N/A N/A N/A
Class PT2-18A (2) $ 7,906,487.50 Class PT2-IO-18 N/A N/A
Class PT2-18B (3) $ 7,906,487.50 N/A N/A N/A
Class PT2-19A (2) $ 7,533,339.50 Class PT2-IO-19 N/A N/A
Class PT2-19B (3) $ 7,533,339.50 N/A N/A N/A
Class PT2-20A (2) $ 7,185,360.50 Class PT2-IO-20 N/A N/A
Class PT2-20B (3) $ 7,185,360.50 N/A N/A N/A
Class PT2-21A (2) $ 6,845,165.50 Class PT2-IO-21 N/A N/A
Class PT2-21B (3) $ 6,845,165.50 N/A N/A N/A
Class PT2-22A (2) $ 8,954,842.00 Class PT2-IO-22 N/A N/A
Class PT2-22B (3) $ 8,954,842.00 N/A N/A N/A
Class PT2-23A (2) $ 18,279,605.00 Class PT2-IO-23 N/A N/A
Class PT2-23B (3) $ 18,279,605.00 N/A N/A N/A
Class PT2-24A (2) $ 15,306,370.50 Class PT2-IO-24 N/A N/A
Class PT2-24B (3) $ 15,306,370.50 N/A N/A N/A
Class PT2-25A (2) $ 12,370,427.50 Class PT2-IO-25 N/A N/A
Class PT2-25B (3) $ 12,370,427.50 N/A N/A N/A
Class PT2-26A (2) $ 5,203,445.50 Class PT2-IO-26 N/A N/A
Class PT2-26B (3) $ 5,203,445.50 N/A N/A N/A
Class PT2-27A (2) $ 4,776,585.00 Class PT2-IO-27 N/A N/A
Class PT2-27B (3) $ 4,776,585.00 N/A N/A N/A
Class PT2-28A (2) $ 2,711,446.00 Class PT2-IO-28 N/A N/A
Class PT2-28B (3) $ 2,711,446.00 N/A N/A N/A
Class PT2-29A (2) $ - Class PT2-IO-29 N/A N/A
Class PT2-29B (3) $ - N/A N/A N/A
Class PT2-30A (2) $ - Class PT2-IO-30 N/A N/A
Class PT2-30B (3) $ - N/A N/A N/A
Class PT2-31A (2) $ - Class PT2-IO-31 N/A N/A
Class PT2-31B (3) $ - N/A N/A N/A
Class PT2-32A (2) $ - Class PT2-IO-32 N/A N/A
Class PT2-32B (3) $ - N/A N/A N/A
Class PT2-33A (2) $ 1,599,284.50 Class PT2-IO-33 N/A N/A
Class PT2-33B (3) $ 1,599,284.50 N/A N/A N/A
Class PT2-34A (2) $ 2,384,655.50 Class PT2-IO-34 N/A N/A
Class PT2-34B (3) $ 2,384,655.50 N/A N/A N/A
Class PT2-35A (2) $ 2,253,139.50 Class PT2-IO-35 N/A N/A
Class PT2-35B (3) $ 2,253,139.50 N/A N/A N/A
Class PT2-36A (2) $ 2,129,094.00 Class PT2-IO-36 N/A N/A
Class PT2-36B (3) $ 2,129,094.00 N/A N/A N/A
Class PT2-37A (2) $ 2,011,785.00 Class PT2-IO-37 N/A N/A
Class PT2-37B (3) $ 2,011,785.00 N/A N/A N/A
Class PT2-38A (2) $ 1,901,443.00 Class PT2-IO-38 N/A N/A
Class PT2-38B (3) $ 1,901,443.00 N/A N/A N/A
Class PT2-39A (2) $ 1,797,344.50 Class PT2-IO-39 N/A N/A
Class PT2-39B (3) $ 1,797,344.50 N/A N/A N/A
Class PT2-40A (2) $ 1,699,037.50 Class PT2-IO-40 N/A N/A
Class PT2-40B (3) $ 1,699,037.50 N/A N/A N/A
Class PT2-41A (2) $ 1,606,331.00 Class PT2-IO-41 N/A N/A
Class PT2-41B (3) $ 1,606,331.00 N/A N/A N/A
Class PT2-42A (2) $ 1,518,894.00 Class PT2-IO-42 N/A N/A
Class PT2-42B (3) $ 1,518,894.00 N/A N/A N/A
Class PT2-43A (2) $ 1,436,337.00 Class PT2-IO-43 N/A N/A
Class PT2-43B (3) $ 1,436,337.00 N/A N/A N/A
Class PT2-44A (2) $ 1,358,459.00 Class PT2-IO-44 N/A N/A
Class PT2-44B (3) $ 1,358,459.00 N/A N/A N/A
Class PT2-45A (2) $ 1,284,951.50 Class PT2-IO-45 N/A N/A
Class PT2-45B (3) $ 1,284,951.50 N/A N/A N/A
Class PT2-46A (2) $ 1,215,560.50 Class PT2-IO-46 N/A N/A
Class PT2-46B (3) $ 1,215,560.50 N/A N/A N/A
Class PT2-47A (2) $ 1,150,035.50 Class PT2-IO-47 N/A N/A
Class PT2-47B (3) $ 1,150,035.50 N/A N/A N/A
Class PT2-48A (2) $ 1,088,186.50 Class PT2-IO-48 N/A N/A
Class PT2-48B (3) $ 1,088,186.50 N/A N/A N/A
Class PT2-49A (2) $ 1,029,785.00 Class PT2-IO-49 N/A N/A
Class PT2-49B (3) $ 1,029,785.00 N/A N/A N/A
Class PT2-50A (2) $ 974,635.50 Class PT2-IO-50 N/A N/A
Class PT2-50B (3) $ 974,635.50 N/A N/A N/A
Class PT2-51A (2) $ 922,551.50 Class PT2-IO-51 N/A N/A
Class PT2-51B (3) $ 922,551.50 N/A N/A N/A
Class PT2-52A (2) $ 873,357.50 Class PT2-IO-52 N/A N/A
Class PT2-52B (3) $ 873,357.50 N/A N/A N/A
Class PT2-53A (2) $ 826,888.00 Class PT2-IO-53 N/A N/A
Class PT2-53B (3) $ 826,888.00 N/A N/A N/A
Class PT2-54A (2) $ 782,989.50 Class PT2-IO-54 N/A N/A
Class PT2-54B (3) $ 782,989.50 N/A N/A N/A
Class PT2-55A (2) $ 741,514.00 Class PT2-IO-55 N/A N/A
Class PT2-55B (3) $ 741,514.00 N/A N/A N/A
Class PT2-56A (2) $ 702,324.50 Class PT2-IO-56 N/A N/A
Class PT2-56B (3) $ 702,324.50 N/A N/A N/A
Class PT2-57A (2) $ 665,291.50 Class PT2-IO-57 N/A N/A
Class PT2-57B (3) $ 665,291.50 N/A N/A N/A
Class PT2-58A (2) $ 630,355.00 Class PT2-IO-58 N/A N/A
Class PT2-58B (3) $ 630,355.00 N/A N/A N/A
Class PT2-59A (2) $ 598,196.00 Class PT2-IO-59 N/A N/A
Class PT2-59B (3) $ 598,196.00 N/A N/A N/A
Class PT2-60A (2) $ 566,843.00 Class PT2-IO-60 N/A N/A
Class PT2-60B (3) $ 566,843.00 N/A N/A N/A
Class PT2-61A (2) $ 10,820,556.00 Class PT2-I-IO-61 N/A N/A
Class PT2-61B (3) $ 10,820,556.00 N/A N/A N/A
Class PT2-62 (1) $ 2,209,805.00 N/A N/A N/A
Class PT2-IO-2 (4) (4) N/A Class PT1-2A April 2006
Class PT2-IO-3 (4) (4) N/A Class PT1-3A May 2006
Class PT2-IO-4 (4) (4) N/A Class PT1-4A June 2006
Class PT2-IO-5 (4) (4) N/A Class PT1-5A July 2006
Class PT2-IO-6 (4) (4) N/A Class PT1-6A August 2006
Class PT2-IO-7 (4) (4) N/A Class PT1-7A September 2006
Class PT2-IO-8 (4) (4) N/A Class PT1-8A October 2006
Class PT2-IO-9 (4) (4) N/A Class PT1-9A November 2006
Class PT2-IO-10 (4) (4) N/A Class PT1-10A December 2006
Class PT2-IO-11 (4) (4) N/A Class PT1-11A January 2007
Class PT2-IO-12 (4) (4) N/A Class PT1-12A February 2007
Class PT2-IO-13 (4) (4) N/A Class PT1-13A March 2007
Class PT2-IO-14 (4) (4) N/A Class PT1-14A April 2007
Class PT2-IO-15 (4) (4) N/A Class PT1-15A May 2007
Class PT2-IO-16 (4) (4) N/A Class PT1-16A June 2007
Class PT2-IO-17 (4) (4) N/A Class PT1-17A July 2007
Class PT2-IO-18 (4) (4) N/A Class PT1-18A August 2007
Class PT2-IO-19 (4) (4) N/A Class PT1-19A September 2007
Class PT2-IO-20 (4) (4) N/A Class PT1-20A October 2007
Class PT2-IO-21 (4) (4) N/A Class PT1-21A November 2007
Class PT2-IO-22 (4) (4) N/A Class PT1-22A December 2007
Class PT2-IO-23 (4) (4) N/A Class PT1-23A January 2008
Class PT2-IO-24 (4) (4) N/A Class PT1-24A February 2008
Class PT2-IO-25 (4) (4) N/A Class PT1-25A March 2008
Class PT2-IO-26 (4) (4) N/A Class PT1-26A April 2008
Class PT2-IO-27 (4) (4) N/A Class PT1-27A May 2008
Class PT2-IO-28 (4) (4) N/A Class PT1-28A June 2008
Class PT2-IO-33 (4) (4) N/A Class PT1-33A November 2008
Class PT2-IO-34 (4) (4) N/A Class PT1-34A December 2008
Class PT2-IO-35 (4) (4) N/A Class PT1-35A January 2009
Class PT2-IO-36 (4) (4) N/A Class PT1-36A February 2009
Class PT2-IO-37 (4) (4) N/A Class PT1-37A March 2009
Class PT2-IO-38 (4) (4) N/A Class PT1-38A April 2009
Class PT2-IO-39 (4) (4) N/A Class PT1-39A May 2009
Class PT2-IO-40 (4) (4) N/A Class PT1-40A June 2009
Class PT2-IO-41 (4) (4) N/A Class PT1-41A July 2009
Class PT2-IO-42 (4) (4) N/A Class PT1-42A August 2009
Class PT2-IO-43 (4) (4) N/A Class PT1-43A September 2009
Class PT2-IO-44 (4) (4) N/A Class PT1-44A October 2009
Class PT2-IO-45 (4) (4) N/A Class PT1-45A November 2009
Class PT2-IO-46 (4) (4) N/A Class PT1-46A December 2009
Class PT2-IO-47 (4) (4) N/A Class PT1-47A January 2010
Class PT2-IO-48 (4) (4) N/A Class PT1-48A February 2010
Class PT2-IO-49 (4) (4) N/A Class PT1-49A March 2010
Class PT2-IO-50 (4) (4) N/A Class PT1-50A April 2010
Class PT2-IO-51 (4) (4) N/A Class PT1-51A May 2010
Class PT2-IO-52 (4) (4) N/A Class PT1-52A June 2010
Class PT2-IO-53 (4) (4) N/A Class PT1-53A July 2010
Class PT2-IO-54 (4) (4) N/A Class PT1-54A August 2010
Class PT2-IO-55 (4) (4) N/A Class PT1-55A September 2010
Class PT2-IO-56 (4) (4) N/A Class PT1-56A October 2010
Class PT2-IO-57 (4) (4) N/A Class PT1-57A November 2010
Class PT2-IO-58 (4) (4) N/A Class PT1-58A December 2010
Class PT2-IO-59 (4) (4) N/A Class PT1-59A January 2011
Class PT2-IO-60 (4) (4) N/A Class PT1-60A February 2011
Class PT2-IO-61 (4) (4) N/A Class PT1-61A March 2011
Class PT2-R (5) $0 N/A N/A N/A
--------------------
(1) For any Distribution Date (and the related Interest Accrual Period),
this Pooling-Tier REMIC-2 Regular Interest shall bear interest at a
per annum rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to
the Pooling-Tier REMIC-1 WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period),
this Pooling-Tier REMIC-2 Regular Interest shall bear interest at a
per annum rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to
the weighted average of the Pooling-Tier REMIC-1 Interest Rates on
the Pooling-Tier REMIC-1 Regular Interests and having an "A" in
their class designation, provided that, on each Distribution Date on
which interest is distributable on the Corresponding Pooling-Tier
REMIC-2 IO Interest, this Pooling-Tier REMIC-2 Regular Interest
shall bear interest at a per annum rate equal to Swap LIBOR subject
to a maximum rate equal to the weighted average of the Pooling-Tier
REMIC-1 Interest Rates on the Pooling-Tier REMIC-1 Regular Interests
and having an "A" in their class designation.
(3) For any Distribution Date (and the related Interest Accrual Period),
this Pooling-Tier REMIC-2 Regular Interest shall bear interest at a
per annum rate (its "Pooling-Tier REMIC-2 Interest Rate") equal to
the weighted average of the Pooling-Tier REMIC-1 Interest Rates on
the Pooling-Tier REMIC-1 Regular Interests and having a "B" in their
class designation.
(4) Each Pooling-Tier REMIC-2 IO is an interest-only interest and does
not have a principal balance but has a notional balance
("Pooling-Tier REMIC-2 IO Notional Balance") equal to the
Pooling-Tier REMIC-2 Principal Amount of the Corresponding
Pooling-Tier REMIC-1 Regular Interest. From the Closing Date through
and including the Corresponding Scheduled Crossover Distribution
Date, each Pooling-Tier REMIC-2 IO Interest shall be entitled to
receive interest that accrues on the Corresponding Pooling-Tier
REMIC-1 Regular Interest at a rate equal to the excess, if any, of
(i) the Pooling-Tier REMIC-1 Interest Rate for the Corresponding
Pooling-Tier REMIC-1 Regular Interest over (ii) Swap LIBOR. After
the Corresponding Scheduled Crossover Distribution Date, the
Pooling-Tier REMIC-2 IO Interest shall not accrue interest.
(5) The Class PT2-R Interest shall not bear interest.
On each Distribution Date, the interest distributable in respect of
the Mortgage Loans for such Distribution Date shall be distributed to the
Pooling-Tier REMIC-2 Regular Interests at the Pooling-Tier REMIC-2 Interest
Rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Mortgage Loans shall be allocated
sequentially to the outstanding Pooling-Tier REMIC-2 Regular Interests (other
than the Pooling-Tier REMIC-2 IO Interests) with the lowest numerical
designation (other than the Class PT2-1 Interest) such that, at all times, the
aggregate Pooling-Tier Principal Amount of such Pooling-Tier REMIC-2 Regular
Interests (other than the Class PT2-62 Interest) equals the aggregate Class
Certificate Balance of the then outstanding LIBOR Certificates and finally to
the Class PT2-1 Interest until the Pooling-Tier REMIC-2 Principal Amount of each
such interest is reduced to zero; provided that, for Pooling-Tier REMIC-2
Regular Interests with the same numerical designation, such Realized Losses,
Subsequent Recoveries and payments of principal shall be allocated pro rata
between such Pooling-Tier REMIC-2 Regular Interests.
Lower-Tier REMIC
The Lower-Tier REMIC shall issue the following interests, and each
such interest, other than the Class LT-R Interest, is hereby designated as a
regular interest in the Lower-Tier REMIC. The Class LT-R Interest is hereby
designated as the sole class of residual interest in the Lower-Tier REMIC and
shall be represented by the Class R Certificates.
Corresponding
Upper-Tier
Lower-Tier Regular Lower-Tier Initial Lower-Tier Principal REMIC Regular
Interest Interest Rate Amount Interest
------------------ ------------- ------------------------------ -------------
Class LT-A-1 (1) 1/2 initial Class Certificate A-1
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-A-2 (1) 1/2 initial Class Certificate A-2
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-A-3 (1) 1/2 initial Class Certificate A-3
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-M-1 (1) 1/2 initial Class Certificate M-1
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-M-2 (1) 1/2 initial Class Certificate M-2
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-M-3 (1) 1/2 initial Class Certificate M-3
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-M-4 (1) 1/2 initial Class Certificate M-4
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-M-5 (1) 1/2 initial Class Certificate M-5
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-M-6 (1) 1/2 initial Class Certificate M-6
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-B-1 (1) 1/2 initial Class Certificate B-1
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-B-2 (1) 1/2 initial Class Certificate B-2
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-B-3 (1) 1/2 initial Class Certificate B-3
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-B-4 (1) 1/2 initial Class Certificate B-4
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-B-5 (1) 1/2 initial Class Certificate B-5
Balance of Corresponding
Upper-Tier REMIC Regular
Interest
Class LT-Accrual (1) 1/2 Pool Principal Balance N/A
plus 1/2 Overcollateralized
Amount, less the Initial
Lower-Tier Principal Amounts
of the Class LT-FX and
Class LT-FL Interests
Class LT-FL (2) 0.001% aggregate Class N/A
Certificate Balance of
Floating Rate Certificates(4)
Class LT-FX (3) 0.001% (aggregate Stated N/A
Principal Balance of
Mortgage Loans minus
aggregate Class Certificate
Balance of Floating Rate
Certificates)(4)
Class LT-IO (5) (5) N/A
Class LT-R (6) (6) N/A
----------
(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the weighted average of
the Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular Interests (other than the Pooling-Tier REMIC-2 IO Interests).
(2) The interest rate with respect to any Distribution Date for the Class
LT-FL Interest is a per annum variable rate (expressed as a percentage
rounded to eight decimal places) equal to the weighted average of the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2 Regular
Interests (other than the Class PT2-1 Interest and the Pooling-Tier
REMIC-2 IO Interests).
(3) The interest rate with respect to any Distribution Date for the Class
LT-FX Interest is a per annum variable rate (expressed as a percentage
rounded to eight decimal places) equal to the Pooling-Tier REMIC-2
Interest Rate of the Class PT2-1 Interest.
(4) For all Distribution Dates, the Lower-Tier Principal Amount of this
Lower-Tier Regular Interest shall be rounded to eight decimal places.
(5) This Lower-Tier Regular Interest is an interest-only interest and does not
have a Lower-Tier Principal Amount. On each Distribution Date, this
Lower-Tier Regular Interest shall be entitled to receive all interest
distributable on the Pooling-Tier REMIC-2 IO Interests.
(6) The Class LT-R Interest does not have a principal amount or an interest
rate.
Each Lower-Tier Regular Interest is hereby designated as a regular
interest in the Lower-Tier REMIC. The Class LT-A-1, Class LT-A-2, Class LT-A-3,
Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-M-5, Class
LT-M-6, Class LT-B-1, Class LT-B-2, Class LT-B-3, Class LT-B-4 and Class LT-B-5
Interests are hereby designated the LT-Accretion Directed Classes (the
"LT-Accretion Directed Classes").
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount shall be payable as a reduction of the Lower-Tier
Principal Amount of the LT-Accretion Directed Classes (each such Class will be
reduced by an amount equal to 50% of any increase in the Overcollateralized
Amount that is attributable to a reduction in the Class Certificate Balance of
its Corresponding Class) and shall be accrued and added to the Lower-Tier
Principal Amount of the Class LT-Accrual Interest. On each Distribution Date,
the increase in the Lower-Tier Principal Amount of the Class LT-Accrual Interest
shall not exceed interest accruals for such Distribution Date for the Class
LT-Accrual Interest. In the event that: (i) 50% of the increase in the
Overcollateralized Amount exceeds (ii) interest accruals on the Class LT-Accrual
Interest for such Distribution Date, the excess for such Distribution Date
(accumulated with all such excesses for all prior Distribution Dates) will be
added to any increase in the Overcollateralized Amount for purposes of
determining the amount of interest accrual on the Class LT-Accrual Interest
payable as principal on the LT-Accretion Directed Classes on the next
Distribution Date pursuant to the first sentence of this paragraph. All payments
of scheduled principal and prepayments of principal generated by the Mortgage
Loans and all Subsequent Recoveries allocable to principal shall be allocated
(i) 50% to the Class LT-Accrual Interest, Class LT-FL Interest and Class LT-FX
Interest (and further allocated among these Lower-Tier Regular Interests in the
manner described below), and (ii) 50% to the LT-Accretion Directed Classes (such
principal payments and Subsequent Recoveries shall be allocated among such
LT-Accretion Directed Classes in an amount equal to 50% of the principal amounts
and Subsequent Recoveries allocated to their respective Corresponding Classes),
until paid in full. Notwithstanding the above, principal payments allocated to
the Class CE Interest that result in the reduction in the Overcollateralized
Amount shall be allocated to the Class LT-Accrual Interest (until paid in full).
Realized Losses shall be applied so that after all distributions have been made
on each Distribution Date (i) the Lower-Tier Principal Amount of each of the
LT-Accretion Directed Classes is equal to 50% of the Class Certificate Balance
of their Corresponding Class, and (ii) the Class LT-Accrual Interest, Class
LT-FL Interest and Class LT-FX Interest (and further allocated among these
Lower-Tier Regular Interests in the manner described below) is equal to 50% of
the aggregate Stated Principal Balance of the Mortgage Loans plus 50% of the
Overcollateralized Amount. Any increase in the Class Certificate Balance of a
Class of Principal Certificates as a result of a Subsequent Recovery shall
increase the Lower-Tier Principal Amount of the Corresponding Lower-Tier Regular
Interest by 50% of such increase, and the remaining 50% of such increase shall
increase the Lower-Tier Principal Amount of the Class LT-Accrual Interest. As
among the Class LT-Accrual Interest, Class LT-FL Interest and the Class LT-FX
Interest, all payments of scheduled principal and prepayments of principal
generated by the Mortgage Loans, all Subsequent Recoveries and all Realized
Losses allocable to such Lower-Tier Regular Interests shall be allocated (i) to
the Class LT-FL Interest so that its Lower-Tier Principal Amount (computed to at
least eight decimal places) is equal to 0.001% aggregate Class Certificate
Balance of Floating Rate Certificates, (ii) to the Class LT-FX Interest so that
its Lower-Tier Principal Amount (computed to at least eight decimal places) is
equal to 0.001% of the aggregate Stated Principal Balance of Mortgage Loans
minus the aggregate Class Certificate Balance of Floating Rate Certificates and
(iii) the remainder to the Class LT-Accrual Interest.
Upper-Tier REMIC
The Upper-Tier REMIC shall issue the following interests, and each
such interest, other than the Class UT-R Interest, is hereby designated as a
regular interest in the Upper-Tier REMIC. The Class UT-R Interest is hereby
designated as the sole class of residual interests in the Upper-Tier REMIC and
shall be represented by the Class R Certificates.
Upper-Tier REMIC Upper-Tier Initial Principal Corresponding Class
Interest Interest Rate Upper-Tier Amount of Certificates
---------------- ------------- ----------------- -------------------
Class A-1 (1) $282,460,000 Class A-1
Class A-2 (1) $181,748,000 Class A-2
Class A-3 (1) $21,005,000 Class A-3
Class M-1 (1) $24,214,000 Class M-1
Class M-2 (1) $22,327,000 Class M-2
Class M-3 (1) $13,207,000 Class M-3
Class M-4 (1) $12,264,000 Class M-4
Class M-5 (1) $11,321,000 Class M-5
Class M-6 (1) $10,377,000 Class M-6
Class B-1 (1) $11,635,000 Class B-1
Class B-2 (1) $10,377,000 Class B-2
Class B-3 (1) $7,547,000 Class B-3
Class B-4 (1) $7,233,000 Class B-4
Class B-5 (1) $6,289,000 Class B-5
Class UT-IO (2) (2) N/A
Class UT-CE (3) (3) N/A
Class UT-R (4) (4) Class R
----------
(1) For any Distribution Date (and the related Interest Accrual Period), this
interest shall bear interest at the Pass-Through Rate for the
Corresponding Class of Certificates (without reduction in the WAC Cap, in
the case of the LIBOR Certificates, for Swap Termination Payments).
(2) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date, the Class UT-IO Interest shall be
entitled to receive all interest distributable on the Class LT-IO
Interest.
(3) The Class UT-CE Interest has an initial principal balance of $6,918,615
but will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class UT-CE
Interest shall have a notional principal balance equal to the aggregate of
the Lower-Tier Principal Amounts of the Lower-Tier Regular Interests
(other than the Class LT-IO, Class LT-FL and Class LT-FX Interest) as of
the first day of the related Interest Accrual Period. With respect to any
Interest Accrual Period, the Class UT-CE Interest shall bear interest at a
rate equal to the excess, if any, of the Lower-Tier Interest Rate for the
Class LT-Accrual Interest over the product of (i) 2 and (ii) the weighted
average of the Lower-Tier Interest Rates of the Lower-Tier REMIC Interests
(other than the Class LT-IO, Class LT-FL and Class LT-FX Interests), where
the Lower-Tier Interest Rate on the Class LT-Accrual Interest is subject
to a cap equal to zero and each LT Accretion Directed Class is subject to
a cap equal to the Upper-Tier Interest Rate on its Corresponding Class of
Upper-Tier Regular Interest. With respect to any Distribution Date,
interest that so accrues on the notional principal balance of the Class
UT-CE Interest shall be deferred in an amount equal to any increase in the
Overcollateralized Amount on such Distribution Date. Such deferred
interest shall not itself bear interest.
(4) The Class UT-R Interest does not have an interest rate or a principal
balance.
On each Distribution Date, interest distributable in respect of the
Lower-Tier Interests for such Distribution Date shall be deemed to be
distributed on the interests in the Upper-Tier REMIC at the rates shown above,
provided that the Class UT-IO Interest shall be entitled to receive interest
before any other interest in the Upper-Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the Upper-Tier
Interests until the outstanding principal balance of each such interest equals
the outstanding Class Certificate Balance of the Corresponding Class of
Certificates as of such Distribution Date.
Class B-1 REMIC
The Class B-1 REMIC shall issue the following classes of interests.
The Class B-1 Certificates shall represent the regular interest in the Class B-1
REMIC and the Class B1-R Interest shall represent the sole class of residual
interest in the Class B-1 REMIC.
Class B-1 REMIC Class B-1 REMIC
Designation Interest Rate Principal Amount
--------------- ------------- ----------------
Class B-1 REMIC (1) (1)
Regular Interest
Class B1-R (2) (2)
----------
(1) The Class B-1 REMIC shall issue one regular interest which shall be
represented by the Class B-1 Certificates and shall be entitled to 100% of
all amounts payable on the Class B-1 Interest issued by the Upper-Tier
REMIC.
(2) The Class B1-R Interest is the sole class of residual interest in the
Class B-1 REMIC and shall be represented by the Class R-X Certificates.
The Class B1-R Interest does not have an interest rate or a principal
balance.
Class B-2 REMIC
The Class B-2 REMIC shall issue the following classes of interests.
The Class B-2 Certificates shall represent the regular interest in the Class B-2
REMIC and the Class B2-R Interest shall represent the sole class of residual
interest in the Class B-2 REMIC.
Class B-2 REMIC Class B-2 REMIC
Designation Interest Rate Principal Amount
--------------- ------------- ----------------
Class B-2 REMIC (1) (1)
Regular Interest
Class B2-R (2) (2)
----------
(1) The Class B-2 REMIC shall issue one regular interest which shall be
represented by the Class B-2 Certificates and shall be entitled to 100% of
all amounts payable on the Class B-2 Interest issued by the Upper-Tier
REMIC.
(2) The Class B2-R Interest is the sole class of residual interest in the
Class B-2 REMIC and shall be represented by the Class R-X Certificates.
The Class B2-R Interest does not have an interest rate or a principal
balance.
Class B-3 REMIC
The Class B-3 REMIC shall issue the following classes of interests.
The Class B-3 Certificates shall represent the regular interest in the Class B-3
REMIC and the Class B3-R Interest shall represent the sole class of residual
interest in the Class B-3 REMIC.
Class B-3 REMIC Class B-3 REMIC
Designation Interest Rate Principal Amount
--------------- ------------- ----------------
Class B-3 REMIC (1) (1)
Regular Interest
Class B3-R (2) (2)
----------
(1) The Class B-3 REMIC shall issue one regular interest which shall be
represented by the Class B-3 Certificates and shall be entitled to 100% of
all amounts payable on the Class B-3 Interest issued by the Upper-Tier
REMIC.
(2) The Class B3-R Interest is the sole class of residual interest in the
Class B-3 REMIC and shall be represented by the Class R-X Certificates.
The Class B3-R Interest does not have an interest rate or a principal
balance.
Class B-4 REMIC
The Class B-4 REMIC shall issue the following classes of interests.
The Class B-4 Certificates shall represent the regular interest in the Class B-4
REMIC and the Class B4-R Interest shall represent the sole class of residual
interest in the Class B-4 REMIC.
Class B-4 REMIC Class B-4 REMIC
Designation Interest Rate Principal Amount
--------------- ------------- ----------------
Class B-4 REMIC (1) (1)
Regular Interest
Class B4-R (2) (2)
----------
(1) The Class B-4 REMIC shall issue one regular interest which shall be
represented by the Class B-4 Certificates and shall be entitled to 100% of
all amounts payable on the Class B-4 Interest issued by the Upper-Tier
REMIC.
(2) The Class B4-R Interest is the sole class of residual interest in the
Class B-4 REMIC and shall be represented by the Class R-X Certificates.
The Class B4-R Interest does not have an interest rate or a principal
balance.
Class B-5 REMIC
The Class B-5 REMIC shall issue the following classes of interests.
The Class B-5 Certificates shall represent the regular interest in the Class B-5
REMIC and the Class B5-R Interest shall represent the sole class of residual
interest in the Class B-5 REMIC.
Class B-5 REMIC Class B-5 REMIC
Designation Interest Rate Principal Amount
--------------- ------------- ----------------
Class B-5 REMIC (1) (1)
Regular Interest
Class B5-R (2) (2)
----------
(1) The Class B-5 REMIC shall issue one regular interest which shall be
represented by the Class B-5 Certificates and shall be entitled to 100% of
all amounts payable on the Class B-5 Interest issued by the Upper-Tier
REMIC.
(2) The Class B5-R Interest is the sole class of residual interest in the
Class B-5 REMIC and shall be represented by the Class R-X Certificates.
The Class B5-R Interest does not have an interest rate or a principal
balance.
Class XX XXXXX
The Class XX XXXXX shall issue the following classes of interests.
The Class CE Interest and the Class IO Interest shall each represent a regular
interest in the Class XX XXXXX and the Class R-X Certificates shall represent
the Class CE-R Interest, the sole class of residual interest in the Class XX
XXXXX.
Class XX XXXXX Class XX XXXXX
Designation Interest Rate Principal Amount
--------------- ------------- ----------------
Class XX XXXXX (1) (1)
Interest
Class IO Interest (2) (2)
Class CE-R Interest (3) (3)
----------
(1) The Class CE Interest has an initial principal balance equal to the
initial principal balance of the Class UT-CE Interest and is entitled to
100% of the interest and principal on the Class UT-CE Interest on each
Distribution Date.
(2) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date the Class IO Interest shall be entitled
to receive 100% of the interest distributable on the Class UT-IO Interest.
(3) The Class CE-R Interest does not have a principal balance or an interest
rate.
Certificates
Class Designation Class Pass-Through Rate Class Certificate Balance
----------------- ----------------------- -------------------------
Class A-1(3) (1) $282,460,000
Class A-2(3) (1) $181,748,000
Class A-3(3) (1) $21,005,000
Class M-1(3) (1) $24,214,000
Class M-2(3) (1) $22,327,000
Class M-3(3) (1) $13,207,000
Class M-4(3) (1) $12,264,000
Class M-5(3) (1) $11,321,000
Class M-6(3) (1) $10,377,000
Class B-1(3) (2) $11,635,000
Class B-2(3) (2) $10,377,000
Class B-3(3) (2) $7,547,000
Class B-4(3) (2) $7,233,000
Class B-5(3) (2) $6,289,000
Class CE (4) $0
Class R (5) $0
Class R-X (6) $0
----------
(1) Interest will accrue during each Interest Accrual Period at a per annum
rate equal to the lesser of (1) One-Month LIBOR plus the applicable
Pass-Through Margin, (2) the WAC Cap.
(2) Interest will accrue during each Interest Accrual Period at a per annum
rate equal to the lesser of (1) the applicable Pass-Through Margin and (2)
the WAC Cap.
(3) Each of these Certificates will represent not only the ownership of a
regular interest in the Corresponding REMIC but also the right to receive
payments from the Excess Reserve Fund Account and in the case of the LIBOR
Certificates, the Supplemental Interest Trust. Each of these Certificates
will also be subject to the obligation to pay Class IO Shortfalls as
described in Section 8.13. For federal income tax purposes, any amount
distributed on the Principal Certificates on any such Distribution Date in
excess of the amount distributable on the regular interest in the
Corresponding REMIC on such Distribution Date shall be treated as having
been paid from the Excess Reserve Fund Account or the Supplemental
Interest Trust, as applicable, and any amount distributable on such
regular interest on such Distribution Date in excess of the amount
distributable on the Principal Certificates on such Distribution Date
shall be treated as having been paid to the Supplemental Interest Trust,
all pursuant to, and as further provided in, Section 8.13. The Trustee
will treat a Principal Certificateholder's right to receive payments from
the Excess Reserve Fund Account and in the case of the LIBOR Certificates,
the Supplemental Interest Trust as payments made pursuant to an interest
rate cap contract written by the Class CE Certificateholders.
(4) The Class CE Certificates will represent beneficial ownership of (i) the
Class CE Interest, (ii) the Class IO Interest, (iii) the right to receive
Class IO Shortfalls, (iv) amounts in the Supplemental Interest Trust,
including the Interest Rate Swap Agreement subject to the obligation to
pay Net Swap Payments, to pay the LIBOR Certificates their respective
Basis Risk Carry Forward Amounts and (v) amounts in the Excess Reserve
Fund Account, subject to the obligation to make payments from the Excess
Reserve Fund Account to the Principal Certificates in respect of Basis
Risk Carry Forward Amounts. For federal income tax purposes, the Trustee
will treat a Class CE Certificateholder's obligation to make payments of
Basis Risk Carry Forward Amounts to the Principal Certificates from the
Excess Reserve Fund Account and, without duplication, to the LIBOR
Certificates from the Supplemental Interest Trust as payments made
pursuant to an interest rate cap contract written by the Class CE
Certificateholders in favor of each applicable Class of Principal
Certificates. Such rights of the Class CE Certificateholders and Principal
Certificateholders shall be treated as held in a portion of the Trust Fund
that is treated as a grantor trust under subpart E, Part I of subchapter J
of the Code.
(5) The Class R Certificates do not have an interest rate. The Class R
Certificates represent ownership of the Class PT1-R Interest, the Class
PT2-R Interest, the Class LT-R Lower-Tier Interest and the Class UT-R
Interest.
(6) The Class R-X Certificates do not have a principal balance or an interest
rate. The Class R-X Certificates represent the residual interest in the
Class B-1 REMIC, Class B-2 REMIC, Class B-3 REMIC, Class B-4 REMIC, Class
B-5 REMIC and Class XX XXXXX.
The minimum denomination for the Class A Certificates, will be
$25,000 with integral multiples of $1 in excess thereof and the minimum
denomination for the Class M and Class B Certificates, will be $100,000, except
that one Certificate in each Class may be issued in a different amount. The
minimum denomination for each of the Class P and Class CE Certificates will be a
1% Percentage Interest in such Class, the minimum denomination for the Class R
Certificates will be $100, and the minimum denomination for the Class R-X
Certificates shall be 100% Percentage Interest in such Class.
It is expected that each Class of Certificates will receive its
final distribution of principal and interest on or prior to the Rated Final
Distribution Date.
Set forth below are designations of Classes of Certificates to the
categories used herein:
Book-Entry Certificates ... All Classes of Certificates other than the
Physical Certificates.
Class A Certificates ...... Class A-1, Class A-2 and Class A-3 Certificates.
Class B Certificates ...... Class B-1, Class B-2, Class B-3, Class B-4 and
Class B-5 Certificates.
Class M Certificates ...... Class M-1, Class M-2, Class M-3, Class M-4, Class
M-5 and Class M-6 Certificates.
Class R Certificates ...... Class R and Class R-X Certificates
Delay Certificates ........ Fixed-Rate Certificates.
ERISA-Restricted
Certificates .............. The Class CE, Class P, Class R and Class R-X
Certificates; any certificate with a rating below
the lowest applicable permitted rating under the
Underwriters' Exemption.
Fixed-Rate Certificates ... Class B-1, Class B-2, Class B-3, Class B-4 and
Class B-5 Certificates.
LIBOR Certificates ........ Class A and Class M Certificates.
Non-Delay Certificates .... LIBOR Certificates.
Offered Certificates ...... All Classes of Certificates other than the Private
Certificates.
Physical Certificates ..... The Private Certificates and the Residual
Certificates.
Principal Certificates .... The Fixed-Rate and LIBOR Certificates.
Private Certificates ...... Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5, Class P, Class CE, Class R and Class R-X
Certificates.
Rating Agencies ........... Moody's and Standard & Poor's.
Regular Certificates ...... All Classes of Certificates other than the Class
R-X and Class R Certificates.
Residual Certificates ..... The Class R and Class R-X Certificates.
Subordinated
Certificates .............. Class M and Class B Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement or in the Preliminary Statement, the
following words and phrases, unless the context otherwise requires, shall have
the meanings specified in this Article. Unless otherwise specified, interest on
the LIBOR Certificates will be calculated on the basis of the actual number of
days in the related Interest Accrual Period and a 360-day year. Interest on the
Fixed Rate Certificates and the Class CE Certificates will be calculated on the
basis of a 360-day year consisting of twelve 30-day months:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Account, the Distribution Account,
any Escrow Account, the Supplemental Interest Trust Account and the Excess
Reserve Fund Account. Each Account shall be an Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
each Distribution Date and each Class of Certificates, an amount equal to the
interest accrued at the applicable Pass-Through Rate during the related Interest
Accrual Period on the Class Certificate Balance or Notional Amount of such Class
immediately prior to such Distribution Date, reduced by such Class's Interest
Percentage of Prepayment Interest Shortfalls and Relief Act Interest Shortfalls
for such Distribution Date allocated to such Certificates as provided in Section
4.02 hereof.
Adjustable Rate Mortgage Loan: A Mortgage Loan which has a rate at
which interest accrues that adjusts based on an Index plus a related Gross
Margin, as set forth on and subject to the limitations in the Mortgage Note.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the first
Due Date on which the related Mortgage Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Rate adjusts as
set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: As defined in Section 3.28 hereof.
Advance Facility Notice: As defined in Section 3.28 hereof.
Advance Financing Person: As defined in Section 3.28 hereof.
Advance Reimbursement Amounts: As defined in Section 3.28 hereof.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and
Subsequent Recoveries on the Mortgage Loans received after the end of the
related Prepayment Period and (ii) all Scheduled Payments on the Mortgage Loans
due after the end of the related Due Period.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
Principal Certificates after distributions of principal on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans, to the extent received by the Trustee (x) the sum of (i) all
scheduled installments of interest (net of the related Expense Fees) and
principal due on the Due Date on such Mortgage Loans in the related Due Period
and received by the Servicer on or prior to the related Determination Date,
together with any P&I Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds, Liquidation Proceeds and Subsequent Recoveries
received by the Servicer during the related Prepayment Period (in each case, net
of unreimbursed expenses incurred in connection with a liquidation or
foreclosure and unreimbursed Advances, if any); (iii) all partial or full
prepayments on the Mortgage Loans received by the Servicer during the related
Prepayment Period together with all Compensating Interest paid by the Servicer
in connection therewith (excluding any Prepayment Charges); (iv) all
Substitution Adjustment Amounts with respect to substitutions of Mortgage Loans
that occur on or prior to the related Determination Date; (v) all amounts
received with respect to such Distribution Date as the Repurchase Price in
respect of a Mortgage Loan repurchased by the Seller on or prior to the related
Determination Date; and (vi) the proceeds with respect to the termination of the
Trust Fund pursuant to clause (a) of Section 9.01; reduced by (y) amounts in
reimbursement for Advances previously made with respect to the Mortgage Loans
and other amounts as to which the Servicer, the Depositor or the Trustee are
entitled to be paid or reimbursed pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal (not including the payment due on its stated maturity
date) that are based on an amortization schedule that would be insufficient to
fully amortize the principal thereof by the stated maturity date of the Mortgage
Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Overcollateralized Amount, if any, for
such Distribution Date.
Basis Risk Carry Forward Amount: With respect to each Class of
Principal Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Principal Certificates
is based upon the WAC Cap, the excess of (i) the amount of interest such Class
of Certificates would otherwise be entitled to receive on such Distribution Date
had such rate not been based upon the WAC Cap for such Distribution Date, over
(ii) the amount of interest payable on such Class of Certificates at the WAC Cap
for such Distribution Date and (B) the portion of any such excess described in
clause (A) for such Class of Certificates from all previous Distribution Dates
not previously paid, together with interest thereon at a rate equal to the
Pass-Through Rate for such Class of Certificates (without limiting that rate by
the WAC Cap) for such Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk Carry Forward Amounts for such
Distribution Date and (ii) the Class CE Distributable Amount (prior to any
reduction for Basis Risk Payments from the Excess Reserve Fund Account or any
Defaulted Swap Termination Payment).
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the State of New
York, Texas or Delaware, (b) the State in which the Servicer's servicing
operations are located, or (c) any State in which the Trustee's Corporate Trust
Office is located, are authorized or obligated by law or executive order to be
closed.
Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class CE, Class P or Residual Certificates, on any date, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof minus all
distributions of principal previously made with respect thereto and in the case
of any Certificates, reduced by any Applied Realized Loss Amounts allocated to
such Class of Certificates pursuant to Section 4.05; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of the Subsequent
Recovery distributed on such Distribution Date (up to the amount of Applied
Realized Loss Amounts allocated to such Class or Classes). The Class CE, Class P
and Residual Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided, however,
that if any such Person (including the Depositor) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action hereunder. The Trustee is entitled to rely conclusively
on a certification of the Depositor or any affiliate of the Depositor in
determining which Certificates are registered in the name of an affiliate of the
Depositor.
Certification: As defined in Section 8.12(b).
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificates: As specified in the Preliminary Statement.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 54.30% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
Class A-2 Certificates: All Certificates bearing the class
designation of "Class A-2".
Class A-3 Certificates: All Certificates bearing the class
designation of "Class A-3".
Class B Certificates: As specified in the Preliminary Statement.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Interest: The Upper-Tier Regular Interest held by the
Class B-1 REMIC and described in the Preliminary Statement and related footnote
thereto.
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date) and (H) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 87.80% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over the Overcollateralization Floor.
Class B1-R Interest: The residual interest on the Class B-1 REMIC,
as described in the Preliminary Statement and the related footnote thereto,
evidenced by the Class R-X Certificates.
Class B1-REMIC: As described in the Preliminary Statement.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Interest: The Upper-Tier Regular Interest held by the
Class B-2 REMIC and described in the Preliminary Statement and related footnote
thereto.
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date) and (I) the Class Certificate Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 91.10% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class B2-R Interest: The residual interest on the Class B-2 REMIC,
as described in the Preliminary Statement and the related footnote thereto,
evidenced by the Class R-X Certificates.
Class B2 REMIC: As described in the Preliminary Statement.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Interest: The Upper-Tier Regular Interest held by the
Class B-3 REMIC and described in the Preliminary Statement and the related
footnote thereto.
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (I) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date) and (J) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 93.50% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over the Overcollateralization Floor.
Class B3-R Interest: The residual interest on the Class B-3 REMIC,
as described in the Preliminary Statement and the related footnote thereto,
evidenced by the Class R-X Certificates.
Class B3 REMIC: As described in the Preliminary Statement.
Class B-4 Certificates: All Certificates bearing the class
designation of "Class B-4".
Class B-4 Interest: The Upper-Tier Regular Interest held by the
Class B-4 REMIC and described in the Preliminary Statement and the related
footnote thereto.
Class B-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (I) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date), (J) the Class
Certificate Balance of the Class B-3 Certificates (after taking into account the
distribution of the Class B-3 Principal Distribution Amount for such
Distribution Date) and (K) the Class Certificate Balance of the Class B-4
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 95.80% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class B4-R Interest: The residual interest on the Class B-4 REMIC,
and described in the Preliminary Statement and the related footnote thereto,
evidenced by the Class R-X Certificates.
Class B4 REMIC: As described in the Preliminary Statement.
Class B-5 Certificates: All Certificates bearing the class
designation of "Class B-5".
Class B-5 Interest: The Upper-Tier Regular Interest held by the
Class B-5 REMIC and described in the Preliminary Statement and the related
footnote thereto.
Class B-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (I) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date), (J) the Class
Certificate Balance of the Class B-3 Certificates (after taking into account the
distribution of the Class B-3 Principal Distribution Amount for such
Distribution Date), (K) the Class Certificate Balance of the Class B-4
Certificates (after taking into account the distribution of the Class B-4
Principal Distribution Amount for such Distribution Date) and (L) the Class
Certificate Balance of the Class B-5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 97.80% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over the Overcollateralization Floor.
Class B5-R Interest: The residual interest on the Class B-5 REMIC,
as described in the Preliminary Statement and related footnote thereto,
evidenced by the Class R-X Certificates.
Class B5 REMIC: As described in the Preliminary Statement.
Class CE Certificates: All Certificates bearing the class
designation of "Class CE".
Class CE Distributable Amount: On any Distribution Date, the sum of
(i) as a distribution in respect of interest, the amount of interest that has
accrued on the Class CE Interest (as set forth in the Preliminary Statement) and
not applied as an Extra Principal Distribution Amount on such Distribution Date,
plus any such accrued interest remaining undistributed from prior Distribution
Dates, plus (without duplication) (ii) as a distribution in respect of
principal, any portion of the principal balance of the Class CE Interest which
is distributable as an Overcollateralization Reduction Amount, minus (iii) the
sum of (A) any amounts paid from the Excess Reserve Fund Account or from the
Supplemental Interest Trust Account to pay Basis Risk Carry Forward Amounts and,
without duplication and (B) any Defaulted Swap Termination Payment payable to
the Swap Provider.
Class CE Interest: An uncertificated regular interest in the Class
XX XXXXX held by the Trustee on behalf of the holders of the Class CE
Certificates.
Class CE-R Interest: The residual interest on the Class XX XXXXX, as
described in the Preliminary Statement and related footnote thereto, evidenced
by the Class R-X Certificates.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class IO Interest: An uncertificated regular interest in the Class
XX XXXXX held by the Trustee on behalf of the holders of the Class CE
Certificates.
Class IO Shortfalls: As defined in Section 8.13. For the avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall equal the
amount payable to the Class CE Certificates in respect of amounts due to the
Swap Provider on such Distribution Date (other than Defaulted Swap Termination
Payments) in excess of the amount payable on the Class CE Interest and Class IO
Interest on such Distribution Date, all as further provided in Section 8.13.
Class LT-R Interest: The sole class of "residual interest" in the
Lower-Tier REMIC evidenced by the Class R Certificates.
Class M Certificates: As specified in the Preliminary Statement.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 62.00%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 69.10% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
the Overcollateralization Floor.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 73.30% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over the Overcollateralization Floor.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date) and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 77.20% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), and (F) the Class
Certificate Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 80.80% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over the Overcollateralization Floor.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6".
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date) and (G) the Class Certificate Balance of the Class M-6
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 84.10% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class P Certificates: All Certificates bearing the class designation
of "Class P".
Class PT1-R Interest: The residual interest in Pooling-Tier REMIC-1
as described in the Preliminary Statement and the related footnote thereto.
Class PT2-R Interest: The residual interest in Pooling-Tier REMIC-2
as described in the Preliminary Statement and the related footnote thereto.
Class R Certificates: All Certificates bearing the class designation
of "Class R".
Class R-X Certificates: All certificates bearing the class
designator of "Class R-X."
Class UT-IO Interest: A regular interest in the Upper-Tier REMIC as
described in the Preliminary Statement and the related footnote thereto.
Class UT-CE Interest: A regular interest in the Upper-Tier REMIC as
described in the Preliminary Statement and the related footnote thereto.
Class UT-R Interest: The residual interest in the Upper-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
Closing Date: April 6, 2006.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan-to-Value Ratio or CLTV: As of any date and as to any
Second-Lien Mortgage Loan, the ratio (expressed as a percentage) of the (a) sum
of (i) the outstanding principal balance of the Second-Lien Mortgage Loan and
(ii) the outstanding principal balance as of such date of any mortgage loan or
mortgage loans that are senior or equal in priority to the Second-Lien Mortgage
Loan and which are secured by the same Mortgaged Property to (b) (i) in the case
of a purchase, the lesser of (A) the sale price of the Mortgaged Property and
(B) the lesser of (y) its appraised value at the time of sale or (z) the
appraised value determined by a review appraisal conducted by the Seller, or
(ii) in the case of a refinancing, the lesser of (A) the appraised value of the
Mortgaged property at the time of the refinancing or (B) the appraised value
determined by a review appraisal conducted by the Seller.
Commission: The United States Securities and Exchange Commission.
Compensating Interest: For any Distribution Date, the lesser of (a)
the amount of the Prepayment Interest Shortfall, if any, for such Distribution
Date, with respect to any voluntary Principal Prepayments in Full (excluding any
payments made upon liquidation of any Mortgage Loan), and (b) one-half of the
Servicing Fee payable to the Servicer for such Distribution Date.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Corporate Trust Office: The designated office of the Trustee at
which at any particular time its corporate trust business with respect to this
Agreement is administered, which office at the date of the execution of this
Agreement is located at 00 Xxxxxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000,
Attention: Corporate Trust Services - GSAMP 2006-HE2, and which is the address
to which notices to and correspondence with the Trustee should be directed.
Corresponding Class and Corresponding REMIC: The class of interests
in any Trust REMIC created under this Agreement that corresponds to the Class of
interests in another Trust REMIC or to a Class of Certificates or the Class CE
Interest in the manner set out below:
Corresponding
Corresponding Corresponding Class of
Lower-Tier REMIC Upper-Tier REMIC Certificates or Corresponding
Class Designation Regular Interest Interest REMIC
----------------- ---------------- --------------- ---------------
Class LT-A-1 Class A-1 Class A-1 Upper-Tier
Class LT-A-2 Class A-2 Class A-2 Upper-Tier
Class LT-A-3 Class A-3 Class A-3 Upper-Tier
Class LT-M-1 Class M-1 Class M-1 Upper-Tier
Class LT-M-2 Class M-2 Class M-2 Upper-Tier
Class LT-M-3 Class M-3 Class M-3 Upper-Tier
Class LT-M-4 Class M-4 Class M-4 Upper-Tier
Class LT-M-5 Class M-5 Class M-5 Upper-Tier
Class LT-M-6 Class M-6 Class M-6 Upper-Tier
Class LT-B-1 Class B-1 Class B-1 Class B-1 REMIC
Class LT-B-2 Class B-2 Class B-2 Class B-2 REMIC
Class LT-B-3 Class B-3 Class B-3 Class B-3 REMIC
Class LT-B-4 Class B-4 Class B-4 Class B-4 REMIC
Class LT-B-5 Class B-5 Class B-5 Class B-5 REMIC
N/A Class UT-CE Class CE Class XX XXXXX
Class LT-IO Class UT-IO Class CE Class XX XXXXX
Corresponding Pooling-Tier REMIC-2 IO Interests: As described in the
Preliminary Statement.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the Preliminary Statement
corresponding to a Pooling-Tier REMIC-2 IO Interest.
Cumulative Loss Event: With respect to any Distribution Date, a
Cumulative Loss Event occurs if the Cumulative Loss Percentage exceeds the
applicable percentage set forth below with respect to such Distribution Date:
Distribution Date Occurring In Loss Percentage
-------------------------------- --------------------------------------------
April 2009 through March 2010 4.60% of the Cut-off Date Pool Principal
Balance
April 2010 through March 2011 7.15% of the Cut-off Date Pool Principal
Balance
April 2011 through March 2012 8.25% of the Cut-off Date Pool Principal
Balance
April 2012 and thereafter 9.00% of the Cut-off Date Pool Principal
Balance
Cumulative Loss Percentage: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
calendar month preceding the month in which such Distribution Date occurs and
the denominator of which is the Cut-off Date Pool Principal Balance of the
Mortgage Loans.
Cumulative Loss Trigger Event: If, with respect to any Distribution
Date, the quotient (expressed as a percentage) of (x) the aggregate amount of
Realized Losses incurred since the Cut-off Date through the last day of the
related Prepayment Period, divided by (y) the Cut-off Date Pool Principal
Balance, exceeds the applicable Cumulative Loss Percentages set forth below with
respect to such Distribution Date:
Distribution Date Occurring In Loss Percentage
-------------------------------- --------------------------------------------
April 2008 through March 2009 1.35% for the first month, plus an
additional 1/12th of 1.70% for each
month thereafter
April 2009 through March 2010 3.05% for the first month, plus an
additional 1/12th of 1.70% for each
month thereafter
April 2010 through March 2011 4.75% for the first month, plus an
additional 1/12th of 0.75% for each
month thereafter
April 2011 through March 2012 5.50% for the first month, plus an
additional 1/12th of 0.50% for each
month thereafter
April 2012 and thereafter 6.00%
Custodial Agreement: The Custodial Agreement, dated as of March 1,
2006, among the Trustee, the Servicer and the Custodian, as the same may be
amended or supplemented pursuant to the terms thereof.
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee or the Custodian consisting of items in Section
2.01(a)(i)-(vi).
Custodian: The Bank of New York, a New York banking corporation, or
any successor custodian appointed pursuant to the terms of the Custodial
Agreement.
Cut-off Date: March 1, 2006.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of theCut-off Date.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date.
Data Tape Information: With respect to each Mortgage Loan, the
following information as of the Cut-off Date provided by the Seller to the
Depositor pursuant to the Purchase Agreement: (1) the Seller's Mortgage Loan
identifying number; (2) the Mortgagor's name; (3) the street address of the
Mortgaged Property including the city, state and zip code; (4) a code indicating
whether the Mortgagor is self-employed; (5) as to each Mortgage Loan, the Stated
Principal Balance as of the Cut-off Date; (6) the Index; (7) a code indicating
whether the Mortgaged Property is owner-occupied; (8) the number and type of
residential units constituting the Mortgaged Property; (9) the original stated
months to maturity; (10) the original amortization months to maturity; (11) the
stated maturity date; (12) the amount of the Scheduled Payment as of the Cut-off
Date; (13) the first date on which the Scheduled Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date; (14) the "paid through date" based on payments received from the
related Mortgagor; (15) the original principal amount of the Mortgage Loan; (16)
with respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate;
(17) with respect to each Adjustable Rate Mortgage Loan, the Maximum Mortgage
Rate; (18) with respect to each Adjustable Rate Mortgage Loan, the initial
Periodic Mortgage Rate Cap; (19) with respect to each Adjustable Rate Mortgage
Loan, the subsequent Periodic Mortgage Rate Cap; (20) with respect to each
Adjustable Rate Mortgage Loan, the first payment Adjustment Date immediately
following the Cut-off Date; (21) with respect to each Adjustable Rate Mortgage
Loan, the first Interest Rate Adjustment Date immediately following the Cut-off
Date; (22) with respect to each Adjustable Rate Mortgage Loan, the Gross Margin;
(23) with respect to each Adjustable Rate Mortgage Loan, the Mortgage Rate
adjustment period; (24) the type of Mortgage Loan (i.e., Fixed Rate or
Adjustable Rate Mortgage Loan); (25) lien position (i.e., First-Lien or
Second-Lien Mortgage Loan); (26) a code indicating the purpose of the loan
(i.e., purchase, rate and term refinance, equity take-out refinance); (27) a
code indicating the documentation style (i.e., full, asset verification, income
verification and no documentation); (28) the credit risk score (FICO score);
(29) the loan credit grade classification (as described in the underwriting
guidelines); (30) the Mortgage Rate at origination; (31) the Mortgage Rate as of
the Cut-off Date; (32) the value of the Mortgaged Property; (33) a code
indicating the term and amount of Prepayment Charges applicable to such Mortgage
Loan (including any prepayment penalty term), if any; (34) with respect to each
First-Lien Mortgage Loan, the Loan-to-Value Ratio at origination, and with
respect to each Second-Lien Mortgage Loan, the Combined Loan-to-Value Ratio at
origination; (35) a code indicating the documentation style, as required by
Standard & Poor's criteria; (36) asset verification (Y/N); (37) the date of
origination; (38) a code indicating whether the Mortgage Loan is a Balloon Loan;
(39) the Due Date for the first Scheduled Payment; (40) the original Scheduled
Payment due; (41) the debt-to-income ratio with respect to the Mortgage Loan;
(42) the Mortgage Rate calculation method (i.e., 30/360, simple interest,
other); (43) a code indicating whether the Mortgage Loan is a Home Loan; (44)
appraisal verification (Y/N); (45) type of appraisal verification, if any; and
(46) with respect to Second-Lien Mortgage Loans, the outstanding principal
balance of the superior lien at origination. With respect to the Mortgage Loans
in the aggregate, the Data Tape Information shall set forth the following
information, as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Trust to the Swap Provider pursuant to the Interest
Rate Swap Agreement as a result of an Event of Default (as defined in the
Interest Rate Swap Agreement) with respect to which the Swap Provider is the
defaulting party or a Termination Event (as defined in the Interest Rate Swap
Agreement) (other than Illegality or a Tax Event that is not a Tax Event Upon
Merger (each as defined in the Interest Rate Swap Agreement )) with respect to
which the Swap Provider is the sole Affected Party (as defined in the Interest
Rate Swap Agreement).
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquent: With respect to any Mortgage Loan, means any monthly
payment that is due on a Due Date that is not made by the close of business on
the next scheduled Due Date for that Mortgage Loan.
Delinquency Trigger Event: With respect to any Distribution Date,
the circumstances in which the quotient (expressed as a percentage) of (x) the
rolling three month average of the Stated Principal Balances of 60+ Day
Delinquent Mortgage Loans, divided by (y) the aggregate Stated Principal Balance
of the Mortgage Loans, as of the last day of the related Due Period, equals or
exceeds 41.60% of the prior period's Senior Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: GS Mortgage Securities Corp., a Delaware corporation, and
its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust company,
including the Trustee, that (a) is incorporated under the laws of the United
States of America or any State thereof, (b) is subject to supervision and
examination by federal or state banking authorities and (c) has outstanding
unsecured commercial paper or other short-term unsecured debt obligations that
are rated P-1 by Moody's, F1+ by Fitch, A-1 by Standard & Poor's and R-1 by DBRS
(to the extent rated by DBRS).
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Remittance Date, the 18th
day (or if such day is not a Business Day, the immediately preceding Business
Day) in the calendar month in which such Remittance Date occurs.
Disqualified Non-U.S. Person: With respect to a Residual
Certificate, (i) any Non-U.S. Person or agent thereof other than a Non-U.S.
Person that holds the Residual Certificate in connection with the conduct of a
trade or business within the United States and has furnished the transferor and
the Trustee with an effective IRS Form W-8ECI or (ii) any domestic entity
classified as a partnership under the Code if any of its direct or indirect
partners (other than through a U.S. corporation) are Disqualified Non-U.S.
Persons, unless such Person described in clause (i) or (ii) above has delivered
to both the transferor and the Trustee an opinion of a nationally recognized tax
counsel to the effect that the transfer of the Residual Certificate to it is in
accordance with the requirements of the Code and the regulations promulgated
thereunder and that such transfer of the Residual Certificate will not be
disregarded for federal income tax purposes.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name of the Trustee
for the benefit of the Certificateholders and designated "U.S. Bank National
Association in trust for registered holders of GSAMP Trust 2006-HE2
Mortgage-Pass Through Certificates, Series 2006-HE2". Funds in the Distribution
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
Distribution Date: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such day is not a Business Day, the
next succeeding Business Day, commencing in April 2006.
Distribution Information: The items calculated and reported by the
Trustee pursuant to Section 4.03(a) (i)-(iv), (vi) (with respect to the
Trustee's Fee), (vii), (xii), (xiv)-(xvi), (xviii)-(xxv), (xiii) (only with
respect to the Excess Reserve Fund), (xxviii) with respect to the pool factor
and any other information included in the Monthly Statement aggregated or
calculated by the Trustee from (a) information contained in the Servicer
Remittance Report or (b) other information furnished to the Trustee by the
Servicer pursuant to Section 4.03.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal or
state-chartered depository institution or trust company that complies with the
definition of Eligible Institution, (ii) an account maintained with the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity or (iii) any other account acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the Trustee.
Each Eligible Account shall be a separate account.
Eligible Institution: A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt obligations,
or other short-term deposits of which are rated "A-1+" by Standard & Poor's if
the amounts on deposit are to be held in the account for no more than 365 days
(or at least "A-2" by Standard & Poor's if the amounts on deposit are to be held
in the account for no more than 30 days), or the long-term unsecured debt
obligations of which are rated at least "AA-" by Standard & Poor's if the
amounts on deposit are to be held in the account for no more than 365 days, and
the commercial paper, short-term debt obligations or other short-term deposits
of which are rated at least "P-1" by Moody's and "F1+" by Fitch (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Servicer and the Trustee) (in each case, to the extent they are
designated as Rating Agencies in the Preliminary Statement).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c) in the
name of the Trustee for the benefit of the Regular Certificateholders and
designated "U.S. Bank National Association in trust for registered holders of
GSAMP Trust 2006-HE2 Mortgage-Pass Through Certificates, Series 2006-HE2". Funds
in the Excess Reserve Fund Account shall be held in trust for the Regular
Certificateholders for the uses and purposes set forth in this Agreement.
Amounts on deposit in the Excess Reserve Fund Account shall not be invested.
Excess Overcollateralized Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralized Amount on such
Distribution Date over (b) the Specified Overcollateralized Amount for such
Distribution Date.
Exchange Act: As defined in Section 8.12(a).
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal
to the sum of the Servicing Fee Rate and the Trustee Fee Rate.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing Fee
and the Trustee Fee.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Overcollateralization Deficiency for such Distribution
Date.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Mae Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Mae
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by the Seller as contemplated by this Agreement), a determination made by the
Servicer that all Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds and other payments or recoveries which the Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered. The Servicer shall maintain records, prepared by a Servicing
Officer, of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date occurring in March
2046.
First-Lien Mortgage Loan: A Mortgage Loan secured by a first-lien
Mortgage on the related Mortgaged Property.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
40-Year Trigger Event: If on the 241st Distribution Date or any
Distribution Date thereafter, (i) the aggregate Stated Principal Balance of the
mortgage loans with a 40-year term to maturity, exceeds (ii) the actual
Overcollateralization Amount for such Distribution Date.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
GSMC: Xxxxxxx Xxxxx Mortgage Company.
GSMC Mortgage Loan Purchase Agreement: The mortgage loan purchase
agreement, dated as of April 6, 2006, between the Seller and Xxxxxxx Sachs
Mortgage Company, together with that certain assignment, assumption and
recognition agreement, dated as of April 6, 2006, among the Seller, as assignee,
the Depositor, as assignor and GSMC, as the company.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," "high risk home," or "predatory" loan under any other
applicable federal, state or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees) or (c) a Mortgage Loan categorized as High Cost
pursuant to Appendix E of Standard & Poor's Glossary.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
Index: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note.
Initial Certification: As defined in Section 2.02.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to any Distribution Date and
(i) with respect to the LIBOR Certificates, the period from the preceding
Distribution Date to the day prior to the current Distribution Date (or, in the
case of the first Distribution Date, the period from the Closing Date through
April 24, 2006) and calculations of interest will be made on the basis of the
actual number of days in the Interest Accrual Period and on a 360-day year, and
(ii) with respect to the Fixed Rate Certificates, the Class CE Interest, the
Class IO Interest, the Class P Certificates and the Class CE Certificates, the
calendar month immediately preceding the month in which such Distribution Date
occurs, and calculations of interest will be made on the basis of a 360-day year
assumed to consist of twelve 30-day months.
Interest Percentage: With respect to any Class of Certificates and
the Class CE Regular Interest and any Distribution Date, the ratio (expressed as
a decimal carried to six places) of the Accrued Certificate Interest for such
Class to the sum of the Accrued Certificate Interest for all Classes, in each
case with respect to such Distribution Date.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of April 6, 2006, and the related confirmation, dated April 6, 2006,
between the Swap Provider and the Trustee, on behalf of the Trust or any other
cap agreement or swap agreement (including any related schedules) entered into.
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans, that portion of Available Funds attributable to interest
relating to Mortgage Loans for such Distribution Date, net of any Net Swap
Payments with respect to such Distribution Date. For purposes of this Agreement,
any Net Swap Payments or Net Swap Receipts shall be allocated by the Trustee
based on the respective aggregate Stated Principal Balance of the Mortgage
Loans.
Investment Account: As defined in Section 3.12(a).
IRS: The Internal Revenue Service.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date immediately following
such Due Period, whether as late payments of Scheduled Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds, Subsequent Recoveries or
otherwise, which represent late payments or collections of principal and/or
interest due (without regard to any acceleration of payments under the related
Mortgage and Mortgage Note) but delinquent for such Due Period and not
previously recovered.
LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided, that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee shall request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations (rounded upwards if necessary to the nearest
whole multiple of 1/16%). If fewer than two quotations are provided as
requested, the rate for that date will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Trustee (after
consultation with the Depositor), at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loans to leading European banks.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding the
commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified to the Trustee that it has received all amounts it
expects to receive in connection with the liquidation of such Mortgage Loan
including the final disposition of an REO Property.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise.
Loan-to-Value Ratio or LTV: As of any date and as to any First-Lien
Mortgage Loan, the ratio (expressed as a percentage) of the outstanding
principal balance of the First-Lien Mortgage Loan to (a) in the case of a
purchase, the lesser of (i) the sale price of the Mortgaged Property and (ii)
the lesser of (y) its appraised value at the time of sale or (z) the appraised
value determined by a review appraisal conducted by the Seller, or (b) in the
case of a refinancing, the lesser of (i) the appraised value of the Mortgaged
Property at the time of the refinancing or (ii) the appraised value determined
by a review appraisal conducted by the Seller.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower-Tier Interest Rate: As described in the Preliminary Statement.
Lower-Tier Principal Amount: The principal balance of each
Lower-Tier REMIC Regular Interest, determined as set forth in the Preliminary
Statement. The Lower-Tier REMIC Principal Amount shall be computed to at least
eight (8) decimal places.
Lower-Tier Regular Interest: Each of the Class LT-A-1, Class LT-A-2,
Class LT-A-3, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class
LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2, Class LT-B-3, Class LT-B-4,
Class LT-B-5, Class LT-IO, Class LT-FL, Class LT-FX and Class LT-Accrual
Interests as described in the Preliminary Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc. If Xxxxx'x is designated as
a Rating Agency in the Preliminary Statement, for purposes of Section 10.05(c)
the address for notices to Moody's shall be Xxxxx'x Investors Service, Inc., 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage
Pass-Through Group, or such other address as Moody's may hereafter furnish to
the Depositor and the Servicer.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan that is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Subsequent Recoveries, Condemnation Proceeds,
Insurance Proceeds, REO Disposition proceeds, Prepayment Charges, and all other
rights, benefits, proceeds and obligations arising from or in connection with
such Mortgage Loan, excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered to
the Trustee and referred to as Schedule I, such schedule setting forth the Data
Tape Information with respect to each Mortgage Loan.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage Note,
which shall be adjusted from time to time in the case of an Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) identified on the Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date, the amount
remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls for such
Distribution Date exceeds Compensating Interest payments made with respect to
such Distribution Date.
Net Swap Payment: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) made by the Trust to the Swap
Provider on the related Fixed Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
Net Swap Receipt: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) made by the Swap Provider to the
Trust on the related Floating Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement), or any amount withdrawn from the reserve account
referred to in the first full paragraph of Section 4.06 that is required under
that paragraph to be treated as a Net Swap Receipt for purposes of determining
the distributions from the Supplemental Interest Trust.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed P&I Advance, would not be ultimately recoverable from related Late
Collections on such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in accordance with Accepted Servicing Practices, will not or, in the case
of a proposed Servicing Advance, would not be ultimately recoverable from
related Late Collections.
Non-U.S. Person: A person that is not a U.S. Person.
Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of the
Servicer or Subservicer with responsibility for the servicing of the Mortgage
Loans whose name is listed on a list delivered to the Trustee pursuant to this
Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or any Subservicer, reasonably acceptable to
the Trustee; provided, that any Opinion of Counsel relating to (a) qualification
of any Trust REMIC or (b) compliance with the REMIC Provisions, must be (unless
otherwise stated in such Opinion of Counsel) an opinion of counsel who (i) is in
fact independent of the Servicer of the Mortgage Loans, (ii) does not have any
material direct or indirect financial interest in the Servicer of the Mortgage
Loans or in an affiliate of the Servicer and (iii) is not connected with the
Servicer of the Mortgage Loans as an officer, employee, director or person
performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 10% or less of the Cut-off Date Pool
Principal Balance.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered to
the Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Trustee pursuant to
this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Overcollateralized Amount: As of any Distribution Date, the excess,
if any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over (b) the aggregate of the Class Certificate Balances
of the Principal Certificates as of such Distribution Date (after giving effect
to the payment of the Principal Remittance Amount on such Certificates on such
Distribution Date).
Overcollateralization Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Overcollateralized Amount
applicable to such Distribution Date over (b) the Overcollateralized Amount
applicable to such Distribution Date.
Overcollateralization Floor: With respect to any Distribution Date,
0.50% of the aggregate Stated Principal Balance of the Mortgage Loan as of the
Cut-off Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Net Monthly Excess Cash Flow.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the Servicer in respect of any Remittance Date representing the
aggregate of all payments of principal and interest, net of the Servicing Fee,
that were due during the related Due Period on the Mortgage Loans and that were
delinquent on the related Determination Date, plus certain amounts representing
assumed payments not covered by any current net income on the Mortgaged
Properties acquired by foreclosure or deed in lieu of foreclosure as determined
pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Regular
Certificates, the following percentages: Class A-1 Certificates, 0.060%; Class
A-2 Certificates, 0.180%; Class A-3 Certificates, 0.260%; Class M-1
Certificates, 0.320%; Class M-2 Certificates, 0.330%; Class M-3 Certificates,
0.350%; Class M-4 Certificates, 0.440%; Class M-5 Certificates, 0.460%; Class
M-6 Certificates, 0.540%; Class B-1 Certificates, 0.650%; Class B-2
Certificates, 6.500%; Class B-3 Certificates, 6.500%; Class B-4 Certificates,
6.500%; and Class B-5 Certificates, 6.500%. On the first Distribution Date after
the Optional Termination Date, the Pass-Through Margins shall increase to: Class
A-1 Certificates, 0.120%; Class A-2 Certificates, 0.360%; Class A-3
Certificates, 0.520%; Class M-1 Certificates, 0.480%; Class M-2 Certificates,
0.495%; Class M-3 Certificates, 0.525%; Class M-4 Certificates, 0.660%; Class
M-5 Certificates, 0.690%; Class M-6 Certificates, 0.810%; Class B-1
Certificates, 7.000%; Class B-2 Certificates, 7.000%; Class B-3 Certificates,
7.000%; Class B-4 Certificates, 7.000%; and Class B-5 Certificates, 7.000%.
Pass-Through Rate: For each Class of Certificates, each Class of
Upper-Tier Regular Interest and each Class of Lower-Tier Regular Interest, the
per annum rate set forth or calculated in the manner described in the
Preliminary Statement.
PCAOB: The Public Company Accounting Oversight Board.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by the Servicer, the Trustee or any of their respective
Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed by
the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by, any Depository Institution and rated F1+ by Fitch, A-1+ by S&P
and P-1 by Moody's;
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Depository Institution (acting as
principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United States
of America or any state thereof and that are rated by S&P and Moody's (in
each case, to the extent they are designated as Rating Agencies in the
Preliminary Statement), and by each other Rating Agency that rates such
securities in its highest long-term unsecured rating categories at the
time of such investment or contractual commitment providing for such
investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than 30 days after the date of acquisition
thereof) that is rated by S&P and Moody's (in each case, to the extent
they are designated as Rating Agencies in the Preliminary Statement), and
by each other Agency that rates such securities in its highest short-term
unsecured debt rating available at the time of such investment;
(vi) units of money market funds, including money market funds
managed or advised by the Depositor or the Trustee or an Affiliate
thereof, that have been rated "Aaa" by Moody's, "AAAm" or "AAAm-G" by
Standard & Poor's and, if rated by Fitch, at least "AAA" by Fitch; and
(vii) if previously confirmed in writing to the Trustee, any other
demand, money market or time deposit, or any other obligation, security or
investment, as may be acceptable to each of the Rating Agencies as a
permitted investment of funds backing "Aaa" or "AAA" rated securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is a
Disqualified Non-U.S. Person or a U.S. Person with respect to whom income from a
Residual Certificate is attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other U.S. Person, (vi) an "electing large partnership" within the
meaning of Section 775 of the Code and (vii) any other Person so designated by
the Depositor based upon an Opinion of Counsel that the Transfer of an Ownership
Interest in a Residual Certificate to such Person may cause any Trust REMIC to
fail to qualify as a REMIC at any time that the Certificates are outstanding.
The terms "United States", "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions. A
corporation will not be treated as an instrumentality of the United States or of
any State or political subdivision thereof for these purposes if all of its
activities are subject to tax and, with the exception of Xxxxxxx Mac, a majority
of its board of directors is not selected by such government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Pooling-Tier Interest Rate: As specified in the Preliminary
Statement.
Pooling-Tier REMIC-1: As described in the Preliminary Statement.
Pooling-Tier REMIC-1 Interest Rate: As described in the Preliminary
Statement.
Pooling-Tier REMIC-1 Loan WAC Rate: As of any Distribution Date, a
per annum rate equal to (a) the weighted average of the Mortgage Interest Rates
for each Mortgage Loan (in each case, less than the applicable Expense Fee Rate)
then in effect on the beginning of the related Due Period on such Mortgage
Loans, multiplied by (b) 30 divided by the actual number of days in the related
Interest Accrual Period.
Pooling-Tier REMIC-1 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Regular Interest: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2: As described in the Preliminary Statement.
Pooling-Tier REMIC-2 Interest Rate: As described in the Preliminary
Statement.
Pooling-Tier REMIC-2 IO Interest: Any of the Pooling-Tier REMIC-2
Regular Interests with the designation "IO" in its name.
Pooling-Tier REMIC-2 IO Notional Balance: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Regular Interest: As described in the
Preliminary Statement.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by the Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any Principal Prepayment pursuant to the terms of the related
Mortgage Note.
Prepayment Interest Excess: With respect to any Remittance Date, for
each Mortgage Loan that was the subject of a Principal Prepayment in Full during
the portion of the related Prepayment Period occurring between the first day of
the calendar month in which such Remittance Date occurs and the last day of the
related Prepayment Period, an amount equal to interest (to the extent received)
at the applicable net mortgage interest rate on the amount of such Principal
Prepayment for the number of days commencing on the first day of the calendar
month in which such Remittance Date occurs and ending on the date on which such
Principal Prepayment is so applied.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was, during the portion of the
related Prepayment Period from the first day of such Prepayment Period through
the last day of the month preceding the month in which such Distribution Date
occurs, the subject of a Principal Prepayment which is not accompanied by an
amount equal to one month of interest that would have been due on such Mortgage
Loan on the Due Date that occurs during such Prepayment Period and which was
applied by the Servicer to reduce the outstanding principal balance of such
Mortgage Loan on a date preceding such Due Date, an amount equal to the product
of (a) the Mortgage Rate net of the Servicing Fee Rate for such Mortgage Loan,
(b) the amount of the Principal Prepayment for such Mortgage Loan, (c) 1/360 and
(d) the number of days commencing on the date on which such Principal Prepayment
was applied and ending on the last day of the calendar month in which the
related Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date and any
Principal Prepayments the 16th day of the month preceding the month in which
such Distribution Date occurs (or, in the case of the first Distribution Date,
from and including the Cut-off Date) to and including the 15th day of the month
in which such Distribution Date occurs.
Principal Certificates: As specified in the Preliminary Statement.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received in advance of its scheduled Due Date, excluding any Prepayment
Charge thereon and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period: (i) each scheduled payment of principal on a
Mortgage Loan due during such Due Period and received by the Servicer on or
prior to the related Determination Date or advanced by the Servicer for the
related Remittance Date, (ii) all Principal Prepayments received during the
related Prepayment Period; (iii) all net Liquidation Proceeds, Condemnation
Proceeds and Insurance Proceeds on the Mortgage Loans allocable to principal,
and all Subsequent Recoveries, actually collected by the Servicer during the
related Prepayment Period; (iv) the portion of the Repurchase Price allocable to
principal with respect to each Mortgage Loan repurchased by the Seller or the
Depositor that was repurchased on or prior to the related Determination Date;
and (v) all Substitution Adjustment Amounts allocable to principal with respect
to the substitutions of Mortgage Loans that occur on or prior to the related
Determination Date; (vi) the allocable portion of the proceeds received with
respect to the termination of the Trust Fund pursuant to clause (a) of Section
9.01 (to the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated April 3,
2006, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
PUD: A planned unit development.
Rated Final Distribution Date: For each Class of Certificates the
Distribution Date occurring in March 2036.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating or rating category of a Rating Agency shall mean such
rating category without giving effect to any modifiers. For purposes of Section
10.05(c), the addresses for notices to each Rating Agency shall be the address
specified therefor in the definition corresponding to the name of such Rating
Agency, or such other address as either such Rating Agency may hereafter furnish
to the Depositor and the Servicer.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the Servicer in connection with the liquidation of
such Liquidated Mortgage Loan and net of the amount of unreimbursed Servicing
Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date for (i) the LIBOR
Certificates, the close of business on the Business Day immediately preceding
such Distribution Date; provided, however, that, for any Certificate issued in
definitive form, the Record Date shall be the close of business on the last
Business Day of the month preceding the month in which such applicable
Distribution Date occurs and (ii) the Fixed-Rate Certificates, the last Business
Day of the month preceding the month in which such applicable Distribution Date
occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act or any similar state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, no later
than 12:30 p.m. Central Standard Time on the Business Day immediately preceding
such Distribution Date.
REO Disposition: The final sale by the Servicer of any REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the Servicer in the name of the Trustee
on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Reportable Event: As defined in Section 8.12(g).
Repurchase Price: With respect to any Mortgage Loan or REO Property,
an amount equal to the sum of (i) the unpaid principal balance of such Mortgage
Loan as of the date of repurchase, or, with respect to any REO Property, its
fair market value determined in good faith by the Servicer, (ii) interest on
such unpaid principal balance of such Mortgage Loan at the Mortgage Rate from
the last date through which interest has been paid to the date of repurchase,
(iii) all unreimbursed Servicing Advances and (iv) all expenses incurred by the
Trustee arising out of the Trustee's enforcement of the Seller's repurchase
obligation hereunder.
Request for Release: The Request for Release submitted by the
Servicer to the Trustee or the Custodian, substantially in the form of Exhibit
J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, any vice
president, any assistant vice president, any assistant secretary, any assistant
treasurer, any associate, or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also to whom, with respect to a particular matter, such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject, and in each case who shall have direct responsibility for
the administration of this Agreement.
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(b).
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Second-Lien Mortgage Loan: A Mortgage Loan secured by a second-lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Seller: Credit-Based Asset Servicing and Securitization LLC, a
Delaware limited liability company, and its successors in interest.
Seller Mortgage Loan Purchase Agreement: The mortgage loan purchase
agreement, dated as of March 1, 2006, between the Seller and the Depositor.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the
Overcollateralized Amount (in each case after taking into account the
distributions of the Principal Distribution Amount for such Distribution Date)
by (y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 45.70%.
Servicer: Xxxxxx Loan Servicing LP, a Delaware limited partnership,
and its successors in interest, and if a successor servicer is appointed
hereunder, such successor.
Servicer Remittance Report: As defined in Section 4.03(d).
Servicing Advances: The customary, reasonable "out-of-pocket" costs
and expenses (including legal fees) incurred by the Servicer in the performance
of its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration, inspection and protection of a Mortgaged Property,
(ii) any enforcement or judicial proceedings, including foreclosures and
litigation, in respect of a particular Mortgage Loan, (iii) the management
(including reasonable fees in connection therewith) and liquidation of any REO
Property and (iv) the performance of its obligations under Sections 3.01, 3.09,
3.13 and 3.15. The Servicing Advances shall also include any reasonable
"out-of-pocket" costs and expenses (including legal fees) incurred by the
Servicer in connection with executing and recording instruments of satisfaction,
deeds of reconveyance or Assignments of Mortgage in connection with any
satisfaction or foreclosure in respect of any Mortgage Loan to the extent not
recovered from the Mortgagor or otherwise payable under this Agreement. The
Servicer shall not be required to make any Nonrecoverable Servicing Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time a form of
which as of the Closing Date is listed on Exhibit N.
Servicing Fee: With respect to each Mortgage Loan and for any
calendar month, an amount equal to one month's interest (or in the event of any
payment of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the applicable Stated
Principal Balance of such Mortgage Loan as of the first day of such calendar
month. Such fee shall be payable monthly, and shall be prorated for any portion
of a month during which the Mortgage Loan is serviced by the Servicer under this
Agreement. The Servicing Fee is payable solely from the interest portion
(including recoveries with respect to interest from Liquidation Proceeds,
Subsequent Recoveries, Insurance Proceeds, Condemnation Proceeds and proceeds
received with respect to REO Properties) of such Scheduled Payment collected by
the Servicer, or as otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum with respect to each Distribution Date.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in
the Mortgage File which are not delivered to the Trustee or the Custodian in the
Custodial File and copies of the Mortgage Loan Documents set forth in Exhibit K
hereto.
Servicing Officer: Any employee or officer of the Servicer involved
in, or responsible for, the administration and servicing of the Mortgage Loans
whose name appears on a list of servicing officers furnished to the Trustee by
the Servicer on the Closing Date pursuant to this Agreement, as such list may
from time to time be amended.
Servicing Rights Pledgee: One or more lenders, selected by the
Servicer, to which the Servicer may pledge and assign all of its right, title
and interest in, to and under this Agreement pursuant to and as provided in
Section 6.06.
Servicing Transfer Date: With respect to each Servicing Transfer
Loan, April 1, 2006, or such other date on which servicing of the Mortgage Loans
was transferred to Xxxxxx.
Servicing Transfer Loan: Each Mortgage Loan sold by GSMC to the
Seller, the servicing of which shall be transferred to Xxxxxx on the Servicing
Transfer Date, as identified in the Mortgage Loan Schedule.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: With respect to any date of
determination, each Mortgage Loan with respect to which any portion of a
Scheduled Payment is, as of the last day of the prior Due Period, two months or
more past due, each Mortgage Loan in foreclosure, all REO Properties and each
Mortgage Loan for which the Mortgagor has filed for bankruptcy after the Closing
Date.
Specified Overcollateralized Amount: Prior to the Stepdown Date, an
amount equal to 1.10% of the Cut-off Date Pool Principal Balance. On and after
the Stepdown Date, an amount equal to 2.20% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of Principal Certificates has been
reduced to zero, to a minimum amount equal to the Overcollateralization Floor;
provided, however, that if, on any Distribution Date, a Trigger Event has
occurred, the Specified Overcollateralized Amount shall not be reduced to the
applicable percentage of the then current aggregate Stated Principal Balance of
the Mortgage Loans until the Distribution Date on which a Trigger Event is no
longer occurring; provided, further, that when the Class Certificate Balance of
each Class of Principal Certif icates has been reduced to zero, the Specified
Overcollateralized Amount will thereafter equal zero.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 10.05(c) the
address for notices to Standard & Poor's shall be Standard & Poor's, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential Mortgage Surveillance
Group - GSAMP Trust 2006-HE2, or such other address as Standard & Poor's may
hereafter furnish to the Depositor and the Servicer.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, in effect as of the Closing Date.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date (whether or not received), minus (ii) all amounts previously remitted to
the Trustee with respect to the related Mortgage Loan representing payments or
recoveries of principal including advances in respect of scheduled payments of
principal. For purposes of any Distribution Date, the Stated Principal Balance
of any Mortgage Loan will give effect to any scheduled payments of principal
received by the Servicer on or prior to the related Determination Date or
advanced by the Servicer for the related Remittance Date and any unscheduled
principal payments and other unscheduled principal collections received during
the related Prepayment Period, and the Stated Principal Balance of any Mortgage
Loan that has prepaid in full or has been liquidated during the related
Prepayment Period shall be zero.
Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in April 2009 and (b) the Distribution Date following the
Distribution Date on which the aggregate Class Certificate Balances of the Class
A Certificates have been reduced to zero and (ii) the first Distribution Date on
which the Senior Enhancement Percentage (calculated for this purpose only after
taking into account payments of principal on the Mortgage Loans applied to
reduce the Stated Principal Balance of the Mortgage Loans for the applicable
Distribution Date but prior to any applications of Principal Distribution Amount
to the Certificates on such Distribution Date) is greater than or equal to the
Senior Specified Enhancement Percentage.
Subcontractor: Any third-party or Affiliated vendor, subcontractor
or other Person utilized by a Servicer, a Subservicer, the Trustee or the
Custodian, as applicable, that is not responsible for the overall servicing (as
"servicing" is commonly understood by participants in the mortgage-backed
securities market) of Mortgage Loans but performs one or more discrete functions
identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan or Mortgaged
Property is allocated to reduce the Class Certificate Balance of any Class of
Subordinated Certificates. Any Subsequent Recovery that is received during a
Prepayment Period will be included as part of the Principal Remittance Amount
for the related Distribution Date.
Subservicer: Any Person that services Mortgage Loans on behalf of a
Servicer or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by a Servicer under
this Agreement, with respect to some or all of the Mortgage Loans, that are
identified in Item 1122(d) of Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan substituted by the Seller
for a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit J, (i)
have a Stated Principal Balance, after deduction of all Scheduled Payments due
in the month of substitution, not in excess of the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) be accruing interest at a rate not lower than
and not more than 1% higher than that of the Deleted Mortgage Loan; (iii) have a
remaining term to maturity not greater than (and not more than one year less
than) that of the Deleted Mortgage Loan; (iv) be of the same type as the Deleted
Mortgage Loan; and (v) comply with each representation and warranty set forth in
Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Supplemental Interest Trust: The corpus of a trust created pursuant
to Section 4.06 of this Agreement, consisting of the Interest Rate Swap
Agreement, the Class IO Interest and the right to receive Class IO Shortfalls,
subject to the obligation to pay amounts specified in Section 4.06.
Supplemental Interest Trust Account: The account of that name
created pursuant to Section 4.06 of this Agreement.
Swap LIBOR: With respect to any Distribution Date (and the related
Interest Accrual Period), the product of (i) USD-LIBOR-BBA (as used in the
Interest Rate Swap Agreement), (ii) two, and (iii) the quotient of (a) the
actual number of days in the Interest Accrual Period for the LIBOR Certificates
divided by (b) 30.
Swap Provider: Barclays Bank PLC and its successors in interest, and
any successor swap provider under any replacement Interest Rate Swap Agreement.
Swap Termination Payment: Any payment payable by the Trust or the
Swap Provider upon termination of the Interest Rate Swap Agreement as a result
of an Event of Default (as defined in the Interest Rate Swap Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement).
Tax Matters Person: The Holder of the Class R or Class R-X
Certificates designated as "tax matters person" of each related Trust REMIC, in
the manner provided under Treasury Regulations Section 1.860F-4(d) and Treasury
Regulations Section 301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Termination Price: As defined in Section 9.01.
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess, if any, of (i) the interest on the Mortgage Loans (other
than Prepayment Interest Excesses) received by the Servicer on or prior to the
related Determination Date or advanced by the Servicer for the related
Remittance Date (net of Expense Fees) and less Net Swap Payments or Swap
Termination Payments (other than Defaulted Swap Termination Payments), if any,
for such Distribution Date over (ii) the sum of the amounts payable to the
Certificates pursuant to Section 4.02(a)(i).
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal with respect thereto
received on or after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or prior to the related Cut-off Date; (ii) the
Collection Account, Excess Reserve Fund Account, the Distribution Account and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the Interest Rate
Swap Agreement; (v) the Supplemental Interest Trust; (vi) the Supplemental
Interest Trust Account; and (vii) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing.
Trust REMIC: Any of the Pooling-Tier REMIC 1, Pooling-Tier REMIC-2,
the Lower-Tier REMIC, the Upper-Tier REMIC, the Class B-1 REMIC , the Class B-2
REMIC, the Class B-3 REMIC, the Class B-4 REMIC, the Class B-5 REMIC or the
Class XX XXXXX, as applicable.
Trustee: U.S. Bank National Association, and its successors in
interest and, if a successor trustee is appointed hereunder, such successor.
Trustee Fee: As to any Distribution Date, an amount equal to the
product of (a) one-twelfth of the Trustee Fee Rate and (b) the aggregate Stated
Principal Balance of the Mortgage Loans as of the preceding Distribution Date.
Trustee Fee Rate: With respect to each Mortgage Loan, 0.0040% per
annum.
Underwriters' Exemption: Any exemption listed under footnote 1 of,
and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any successor exemption.
Unpaid Interest Amount: As of any Distribution Date and any Class of
Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates prior to the current Distribution
Date remaining unpaid immediately prior to the current Distribution Date and (b)
interest on the amount in clause (a) above at the applicable Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
Applied Realized Loss Amounts with respect to such Class over (ii) the sum of
(a) all distributions in reduction of such Applied Realized Loss Amounts on all
previous Distribution Dates, and (b) the amount by which the Class Certificate
Balance of such Class has been increased due to the distribution of any
Subsequent Recovery on all previous Distribution Dates. Any amounts distributed
to a Class of Subordinated Certificates in respect of any Unpaid Realized Loss
Amount will not be applied to reduce the Class Certificate Balance of such
Class.
Upper-Tier Interest Rate: As described in the Preliminary Statement.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Upper-Tier REMIC Rate: As described in the Preliminary Statement.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) a trust, if a court within the United States is able to
exercise primary supervision over the administration of the trust and one or
more U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class CE
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), and (b) the remaining Voting Rights shall be allocated among Holders
of the remaining Classes of Certificates in proportion to the Certificate
Balances of their respective Certificates on such date.
WAC Cap: A per annum rate equal to the product of (i) with respect
to the LIBOR Certificates, 30 divided by the actual number of days in the
applicable Interest Accrual Period, and with respect to the Fixed Rate
Certificates, 1, and (ii)(A) the weighted average of the interest rates on the
Mortgage Loans (in each case, less the Expense Fee Rate) in effect at the
beginning of the related Due Period on the mortgage loans, and minus (B) solely
for the purposes of calculating the WAC Cap for the LIBOR Certificates, Net Swap
Payments, if any, for that Distribution Date, and Swap Termination Payments
(other than Defaulted Swap Termination Payments) owed to the Swap Provider, if
any, for that Distribution Date, divided by the Class Certificate Balance of the
LIBOR Certificates at the beginning of the related Due Period, multiplied by 12.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf of the Trust,
hereby accepts the Trust Fund.
In connection with such transfer and assignment, the Seller, on
behalf of the Depositor, does hereby deliver or cause to be delivered to, and
deposit with the Trustee, or its designated agent, the Custodian, the following
documents or instruments with respect to each Mortgage Loan (a "Mortgage File")
so transferred and assigned:
(i) the original Mortgage Note, endorsed either (A) in blank or (B)
in the following form: "Pay to the order of U.S. Bank National
Association, as Trustee for the GSAMP Trust 2006-HE2 Mortgage Pass-Through
Certificates, Series 2006-HE2, without recourse," or with respect to any
lost Mortgage Note, an original Lost Note Affidavit, together with a copy
of the related Mortgage Note;
(ii) the original Mortgage with evidence of recording thereon, and
the original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon or, if
such Mortgage or power of attorney has been submitted for recording but
has not been returned from the applicable public recording office, has
been lost or is not otherwise available, a copy of such Mortgage or power
of attorney, as the case may be, certified to be a true and complete copy
of the original submitted for recording;
(iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned either (A) in
blank or (B) to "U.S. Bank National Association, as Trustee for the GSAMP
Trust 2006-HE2 Mortgage Pass-Through Certificates, Series 2006-HE2,
without recourse";
(iv) an original or a certified copy of any intervening assignment
of Mortgage showing a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
If any of the documents referred to in Section 2.01(b)(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Seller to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee or the Custodian no
later than the Closing Date, of a copy of each such document certified by the
Seller in the case of (x) above or the applicable public recording office in the
case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Seller,
delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. The
Seller shall deliver or cause to be delivered to the Trustee or the Custodian
promptly upon receipt thereof any other documents constituting a part of a
Mortgage File received with respect to any Mortgage Loan, including, but not
limited to, any original documents evidencing an assumption or modification of
any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days (180 days with respect to each Mortgage Loan sold by GSMC to
the Seller) to cure such defect or 150 days following the Closing Date (270 days
with respect to each Mortgage Loan sold by GSMC to the Seller), in the case of
missing Mortgages or Assignments or deliver such missing document to the Trustee
or the Custodian. If the Seller does not cure such defect or deliver such
missing document within such time period, and the failure to cure or deliver a
missing document has a material adverse effect on the certificateholders, the
Seller (or GSMC with respect to each Mortgage Loan sold by GSMC to the Seller)
shall either repurchase or substitute for such Mortgage Loan in accordance with
Section 2.03.
The Servicer shall cause the Assignments of Mortgage which were
delivered in blank to be completed and shall cause all Assignments referred to
in Section 2.01(a)(iii) hereof and, to the extent necessary, in Section
2.01(a)(iv) hereof to be recorded. The Servicer shall be required to deliver
such assignments for recording within 30 days of the Closing Date. The Servicer
shall furnish the Trustee, or its designated agent, with a copy of each
Assignment of Mortgage submitted for recording. In the event that any such
Assignment is lost or returned unrecorded because of a defect therein, the
Servicer shall promptly have a substitute Assignment prepared or have such
defect cured, as the case may be, and thereafter cause each such Assignment to
be duly recorded.
In the event that any Assignments of Mortgage are not recorded or
are improperly recorded, neither the Trustee nor the Servicer shall have any
liability for its failure to receive or act on notices not received related to
such Assignment of Mortgage.
In the event that any Mortgage Note is endorsed in blank as of the
Closing Date, promptly following the Closing Date the Servicer shall cause to be
completed such endorsements in the following form: "Pay to the order of U.S.
Bank National Association, as Trustee for the GSAMP Trust 2006-HE2 Mortgage
Pass-Through Certificates, Series 2006-HE2, without recourse."
The Depositor herewith delivers to the Trustee executed copies of
the Seller Mortgage Loan Purchase Agreement and the GSMC Mortgage Loan Purchase
Agreement.
The parties hereto understand and agree that it is not intended that
any Mortgage Loan be included in the Trust that is a "High Cost Home Loan" as
defined by the Homeownership and Equity Protection Act of 1994 or any other
applicable predatory or abusive lending laws.
(b) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "GSAMP Trust 2006-HE2" and
U.S. Bank National Association is hereby appointed as Trustee in accordance with
the provisions of this Agreement. The Trust's fiscal year is the calendar year.
(c) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans and the Interest Rate Swap
Agreement) pursuant to Section 2.01(a). The Trustee is hereby directed to
execute, deliver and perform its obligations under the Interest Rate Swap
Agreement, on behalf of the Trust and the Class A, Class M and Class B
Certificateholders, in the forms presented to it by the Depositor. The Seller,
the Servicer and the Depositor agree that (i) the Trustee shall execute, deliver
and perform its obligations under the Interest Rate Swap Agreement and shall do
so solely in its capacity as Trustee of the Trust and not in its individual
capacity, and (ii) the Trustee shall have no responsibility for the contents of
such Interest Rate Swap Agreement, including, without limitation, the
representations and warranties contained therein. Any funds payable by the Trust
or Trustee under the Swap Agreement at closing shall be paid by the Depositor.
Notwithstanding anything to the contrary contained herein or in the Interest
Rate Swap Agreement, the Trustee shall not be required to make any payments to
the Swap Provider. The parties hereby acknowledge and agree that the execution
and delivery of the Interest Rate Swap Agreement by the Trustee on behalf of the
Trust were authorized and are hereby ratified and confirmed.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Trustee acknowledges the receipt by it or the Custodian of, subject to the
provisions of Section 2.01 and subject to the review described below and any
exceptions noted on the exception report described in the next paragraph below,
the documents referred to in Section 2.01 above and all other assets included in
the definition of "Trust Fund" and declares that it or the Custodian on its
behalf holds and will hold such documents and the other documents delivered to
it constituting a Mortgage File, and that it or the Custodian on its behalf
holds or will hold all such assets and such other assets included in the
definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Trustee agrees to execute and deliver (or cause the Custodian to
execute and deliver) to the Depositor on or prior to the Closing Date an
acknowledgment of receipt of the original Mortgage Note (with any exceptions
noted), substantially in the form attached as Exhibit E hereto.
The Trustee agrees, for the benefit of the Certificateholders, to
review (or cause the Custodian to review) each Mortgage File within 60 days
after the Closing Date (or, with respect to any document delivered after the
Startup Day, within 60 days of receipt and with respect to any Qualified
Substitute Mortgage, within 60 days after the assignment thereof) and to certify
(or cause the Custodian to certify) in substantially the form attached hereto as
Exhibit F-1 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 the exception report annexed thereto as not being covered by such
certification), (i) all documents required to be delivered to it pursuant to
Section 2.01 of this Agreement are in its possession, (ii) such documents have
been reviewed by it and have not been mutilated, damaged or torn and relate to
such Mortgage Loan, (iii) based on its examination and only as to the foregoing,
the information set forth in the Data Tape Information that corresponds to items
(1), (2), (3), (9), (31) and (33) (but only as to whether the Mortgage Loan has
a Prepayment Charge) of the Mortgage Loan Schedule accurately reflects
information set forth in the Mortgage File, (iv) all Assignments of Mortgage or
intervening assignments of mortgage, as applicable, have been submitted for
recording and (v) each Mortgage Note has been endorsed as provided in Section
2.01(a)(i) of this Agreement and each Mortgage has been assigned in accordance
with Section 2.01(a)(iii) of this Agreement. It is herein acknowledged that, in
conducting such review, the Trustee (or the Custodian, as applicable) is under
no duty or obligation to inspect, review or examine any such documents,
instruments, certificates or other papers to determine that they are genuine,
enforceable, or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.
Prior to the first anniversary date of this Agreement the Trustee
shall deliver (or cause the Custodian to deliver) to the Depositor and the
Servicer a final certification in the form annexed hereto as Exhibit F-2
evidencing the completeness of the Mortgage Files, with any applicable
exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the Trustee
(or the Custodian, as applicable) finds any document or documents constituting a
part of a Mortgage File to be missing or defective in any material respect, at
the conclusion of its review the Trustee, upon its notification by the
Custodian, if applicable, shall so notify the Seller, the Depositor and the
Servicer. In addition, upon the discovery by the Seller, Depositor, the Trustee
or the Servicer (or upon receipt by the Trustee of written notification of such
breach) of a breach of any of the representations and warranties made by the
Seller or GSMC, as applicable, in the related Seller Mortgage Loan Purchase
Agreement or GSMC Mortgage Loan Purchase Agreement, as applicable, in respect of
any Mortgage Loan which materially adversely affects such Mortgage Loan or the
interests of the related Certificateholders in such Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties.
The Depositor and the Trustee intend that the assignment and
transfer herein contemplated constitute a sale of the Mortgage Loans and the
Related Documents, conveying good title thereto free and clear of any liens and
encumbrances, from the Depositor to the Trustee and that such property not be
part of the Depositor's estate or property of the Depositor in the event of any
insolvency by the Depositor. In the event that such conveyance is deemed to be,
or to be made as security for, a loan, the parties intend that the Depositor
shall be deemed to have granted and does hereby grant to the Trustee, on behalf
of the Trust, a first priority perfected security interest in all of the
Depositor's right, title and interest in and to the Mortgage Loans and the
Related Documents, and that this Agreement shall constitute a security agreement
under applicable law.
Section 2.03 Repurchase or Substitution of Mortgage Loans by the
Seller. (a) Upon discovery or receipt of written notice of any materially
defective document in, or that a document is missing from, a Mortgage File or of
the breach by the Seller, or with respect to each Mortgage Loan sold by GSMC to
the Seller, GSMC, of any representation, warranty or covenant under the Seller
Mortgage Loan Purchase Agreement or the GSMC Mortgage Loan Purchase Agreement,
as applicable, or in Section 2.04 in respect of any Mortgage Loan which
materially adversely affects the value of such Mortgage Loan or the interest
therein of the Certificateholders, the Trustee (or the Custodian, as applicable)
shall promptly notify the Seller or GSMC, as applicable and the Servicer of such
defect, missing document or breach and request that the Seller or GSMC, as
applicable, deliver such missing document or cure such defect or breach within
120 days or 150 days following the Closing Date, in the case of missing
Mortgages or Assignments from the date the Seller or GSMC, as applicable, was
notified of such missing document, defect or breach, and if the Seller or GSMC,
as applicable, does not deliver such missing document or cure such defect or
breach in all material respects during such period, and such breach or defect
materially and adversely affects the interests of the certificateholders, the
Trustee shall enforce the Seller's or GSMC's as applicable, obligation under the
Seller Mortgage Loan Purchase Agreement or the GSMC Mortgage Loan Purchase
Agreement, as applicable, and inform the Seller or GSMC, as applicable, of its
obligation to repurchase such Mortgage Loan from the Trust Fund at the
Repurchase Price on or prior to the Determination Date following the expiration
of such 120 day period (subject to Section 2.03(e)); provided that, in
connection with any such breach that could not reasonably have been cured within
such 120 day or 150 day period, if the Seller or GSMC, as applicable, shall have
commenced to cure such breach within such 120 day or 150 day period, the Seller
or GSMC, as applicable, shall be permitted to proceed thereafter diligently and
expeditiously to cure the same within the additional period provided under the
Seller Mortgage Loan Purchase Agreement or the GSMC Mortgage Loan Purchase
Agreement, as applicable. The Repurchase Price for the repurchased Mortgage Loan
shall be deposited in the Collection Account, and the Trustee, upon receipt of
written certification from the Servicer of such deposit, shall release to the
Seller or GSMC, as applicable, the related Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as the Seller or GSMC, as applicable,
shall furnish to it and as shall be necessary to vest in the Seller or GSMC, as
applicable, any Mortgage Loan released pursuant hereto and the Trustee shall
have no further responsibility with regard to such Mortgage File. In lieu of
repurchasing any such Mortgage Loan as provided above, the Seller or GSMC, as
applicable, may cause such Mortgage Loan to be removed from the Trust Fund (in
which case it shall become a Defective Mortgage Loan) and substitute one or more
Eligible Substitute Mortgage Loans in the manner and subject to the limitations
set forth in Section 2.03(d). It is understood and agreed that the obligation of
the Seller or GSMC, as applicable, to cure or to repurchase (or to substitute
for) any Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy against the Seller or GSMC, as
applicable, respecting such omission, defect or breach available to the Trustee
on behalf of the Certificateholders.
(b) [Reserved].
(c) Within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of any representation, warranty
or covenant of the Servicer set forth in Section 2.05 which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the Servicer shall cure such breach in all material respects.
(d) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the last Business Day that is within two years after the Closing Date. As to
any Defective Mortgage Loan for which the Seller or GSMC, as applicable,
substitutes an Eligible Substitute Mortgage Loan or Loans, such substitution
shall be effected by the Seller or GSMC, as applicable, delivering to the
Trustee, for such Eligible Substitute Mortgage Loan or Loans, the Mortgage Note,
the Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, as are required by Section
2.01(b), together with an Officers' Certificate providing that each such
Eligible Substitute Mortgage Loan satisfies the definition thereof and
specifying the Substitution Adjustment Amount (as described below), if any, in
connection with such substitution. The Trustee shall acknowledge receipt for
such Eligible Substitute Mortgage Loan or Loans and, within ten Business Days
thereafter, shall review such documents as specified in Section 2.02 and deliver
(or cause the Custodian to deliver) to the Servicer, with respect to such
Eligible Substitute Mortgage Loan or Loans, a certification substantially in the
form attached hereto as Exhibit F-1, with any applicable exceptions noted
thereon. Within one year of the date of substitution, the Trustee shall deliver
(or cause the custodian to deliver) to the Servicer a certification
substantially in the form of Exhibit F-2 with respect to such Eligible
Substitute Mortgage Loan(s), with any applicable exceptions noted thereon.
Monthly Payments due with respect to Eligible Substitute Mortgage Loans in the
month of substitution are not part of the Trust Fund and will be retained by the
Seller or GSMC, as applicable. For the month of substitution, distributions to
Certificateholders will reflect the collections and recoveries in respect of
such Defective Mortgage Loan in the Collection Period preceding the month of
substitution and the Depositor or the Seller, as the case may be, shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Defective Mortgage Loan. The Seller or GSMC, as applicable, shall give or
cause to be given written notice to the Certificateholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect
the removal of such Defective Mortgage Loan from the terms of this Agreement and
the substitution of the Eligible Substitute Mortgage Loan or Loans and shall
deliver a copy of such amended Mortgage Loan Schedule to the Trustee and the
Custodian. Upon such substitution, such Eligible Substitute Mortgage Loan or
Loans shall constitute part of the Mortgage Pool and shall be subject in all
respects to the terms of this Agreement and, in the case of a substitution
effected by the Seller or GSMC, as applicable, the Seller Mortgage Loan Purchase
Agreement or the GSMC Mortgage Loan Purchase Agreement, as applicable,
including, in the case of a substitution effected by the Seller or GSMC, as
applicable, all applicable representations and warranties thereof included in
the Seller Mortgage Loan Purchase Agreement or the GSMC Mortgage Loan Purchase
Agreement, as applicable, and all applicable representations and warranties
thereof set forth in Section 2.04, in each case as of the date of substitution.
For any month in which the Seller or GSMC, as applicable,
substitutes one or more Eligible Substitute Mortgage Loans for one or more
Defective Mortgage Loans, the Servicer will determine the amount (the
"Substitution Adjustment Amount"), if any, by which the aggregate Purchase Price
of all such Defective Mortgage Loans exceeds the aggregate, as to each such
Eligible Substitute Mortgage Loan, of the principal balance thereof as of the
date of substitution, together with one month's interest on such principal
balance at the applicable Net Mortgage Interest Rate. On the date of such
substitution, the Seller or GSMC, as applicable, will deliver or cause to be
delivered to the Servicer for deposit in the Collection Account an amount equal
to the Substitution Adjustment Amount, if any, and the Trustee, upon receipt by
it or the Custodian of the related Eligible Substitute Mortgage Loan or Loans
and certification by the Servicer of such deposit, shall release to the Seller
or GSMC, as applicable, the related Mortgage File or Files and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as the Seller or GSMC, as applicable,
shall deliver to it and as shall be necessary to vest therein any Defective
Mortgage Loan released pursuant hereto.
In addition, the Seller or GSMC, as applicable, shall obtain at its
own expense and deliver to the Trustee an Opinion of Counsel to the effect that
such substitution will not cause (a) any federal tax to be imposed on the Trust
Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(l) of the Code or on "contributions after
the startup date" under Section 860G(d)(l) of the Code, or (b) any REMIC to fail
to qualify as a REMIC at any time that any Certificate is outstanding. If such
Opinion of Counsel can not be delivered, then such substitution may only be
effected at such time as the required Opinion of Counsel can be given.
(e) Upon discovery by the Seller or GSMC, as applicable, the
Servicer or the Trustee that any Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the party
discovering such fact shall within two Business Days give written notice thereof
to the other parties. In connection therewith, the Seller or GSMC, as
applicable, shall repurchase or, subject to the limitations set forth in Section
2.03(d), substitute one or more Eligible Substitute Mortgage Loans for the
affected Mortgage Loan within 90 days of the earlier of discovery or receipt of
such notice with respect to such affected Mortgage Loan. In addition, upon
discovery that a Mortgage Loan is defective in a manner that would cause it to
be a "defective obligation" within the meaning of Treasury regulations relating
to REMICs, the Seller or GSMC, as applicable, shall cure the defect or make the
required purchase or substitution no later than 90 days after the discovery of
the defect. Any such repurchase or substitution shall be made in the same manner
as set forth in Section 2.03(a), if made by the Seller or GSMC, as applicable,.
The Trustee shall reconvey to the Seller or GSMC, as applicable, 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.
Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge that the functions of the Trustee with respect to the
custody, acceptance, inspection and release of the Mortgage Files pursuant to
Sections 2.01, 2.02 and 2.03 and preparation and delivery of the certifications
in the form of Exhibit E and Exhibits F-1 and F-2 shall be performed by the
Custodian pursuant to the terms and conditions of the Custodial Agreement. The
fees and expenses of the Custodian shall be paid by the Servicer.
Section 2.04 Representations and Warranties of the Seller and GSMC
with Respect to the Mortgage Loans. The Seller, and with respect to each
Mortgage Loan sold by GSMC to the Seller, GSMC, hereby represents and warrants
to the Trustee for the benefit of the Certificateholders and the Depositor that
as of the Closing Date or as of such other date specifically provided herein:
(a) The representations and warranties made by the Seller pursuant
to Section 3.01 of the Seller Mortgage Loan Purchase Agreement are hereby being
made to the Trustee and are true and correct as of the Closing Date.
(b) The representations and warranties made by GSMC pursuant to
Section 9.01 of the GSMC Mortgage Loan Purchase Agreement are hereby being made
to the Trustee and are true and correct as of the Closing Date.
(c) Any written agreement between the Mortgagor in respect of a
Mortgage Loan and the Servicer modifying such Mortgagor's obligation to make
payments under the Mortgage Loan (such modified Mortgage Loan, a "Modified
Mortgage Loan") involved some assessment of the Mortgagor's ability to repay the
Modified Mortgage Loan.
With respect to the representations and warranties set forth in this
Section 2.04 that are made to the best of the Seller's knowledge or GSMC's
knowledge, as applicable, or as to which the Seller or GSMC, as applicable, has
no knowledge, if it is discovered by the Depositor, the Seller or GSMC, as
applicable, the Servicer, the Trustee or the Custodian that the substance of
such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan or the interest
therein of the Certificateholders then, notwithstanding the Seller's or GSMC's,
as applicable, lack of knowledge with respect to the substance of such
representation and warranty being inaccurate at the time the representation or
warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.
Upon discovery by the Depositor, the Seller or GSMC, as applicable,
the Servicer, the Trustee or the Custodian of a breach of any of the
representations and warranties contained in this Section that materially and
adversely affects the value of any Mortgage Loan or the interest therein of the
Certificateholders, the party discovering the breach shall give prompt written
notice to the others and in no event later than two Business Days from the date
of such discovery. Within ninety days of its discovery or its receipt of notice
of any such missing or materially defective documentation or any such breach of
a representation or warranty, the Seller or GSMC, as applicable, shall promptly
deliver such missing document or cure such defect or breach in all material
respects, or in the event such defect or breach cannot be cured, the Seller or
GSMC, as applicable, shall repurchase the affected Mortgage Loan or cause the
removal of such Mortgage Loan from the Trust Fund and substitute for it one or
more Eligible Substitute Mortgage Loans, in either case, in accordance with
Section 2.03.
It is understood and agreed that the representations and warranties
set forth in this Section 2.04 shall survive delivery of the Mortgage Files to
the Trustee and shall inure to the benefit of the Certificateholders and the
Depositor notwithstanding any restrictive or qualified endorsement or
assignment. It is understood and agreed that the obligations of the Seller or
GSMC, as applicable, set forth in Section 2.03(a) to cure, substitute for or
repurchase a Mortgage Loan pursuant to the Seller Mortgage Loan Purchase
Agreement or the GSMC Mortgage Loan Purchase Agreement, as applicable,
constitute the sole remedies available to the Depositor and to the
Certificateholders or to the Trustee on their behalf respecting a breach of the
representations and warranties contained in this Section 2.04.
Section 2.05 Representations, Warranties and Covenants of the
Servicer. The Servicer hereby represents, warrants and covenants to the Trustee,
for the benefit of the Certificateholders and to the Depositor that as of the
Closing Date or as of such date specifically provided herein:
(i) The Servicer is duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its formation and has all
licenses necessary to carry on its business as now being conducted, except
for such licenses, certificates and permits the absence of which,
individually or in the aggregate, would not have a material adverse effect
on the ability of the Servicer to conduct its business as it is presently
conducted, and is licensed, qualified and in good standing in the states
where the Mortgaged Property is located if the laws of such state require
licensing or qualification in order to conduct business of the type
conducted by the Servicer or to ensure the enforceability or validity of
each Mortgage Loan; the Servicer has the power and authority to execute
and deliver this Agreement and to perform in accordance herewith; the
execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Servicer and the consummation of the transactions contemplated hereby have
been duly and validly authorized; this Agreement evidences the valid,
binding and enforceable obligation of the Servicer, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally; and all
requisite corporate action has been taken by the Servicer to make this
Agreement valid and binding upon the Servicer in accordance with its
terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer and will
not result in the breach of any term or provision of the certificate of
formation or the limited partnership agreement of the Servicer or result
in the breach of any term or provision of, or conflict with or constitute
a default under or result in the acceleration of any obligation under, any
agreement, indenture or loan or credit agreement or other instrument to
which the Servicer or its property is subject, or result in the violation
of any law, rule, regulation, order, judgment or decree to which the
Servicer or its property is subject;
(iii) The Servicer is an approved seller/servicer of conventional
mortgage loans for Xxxxxx Xxx, and is an FHA Approved Mortgagee in good
standing to service mortgages and has not been suspended as a mortgagee or
servicer by the FHA and has the facilities, procedures and experienced
personnel necessary for the sound servicing of mortgage loans of the same
type as the Mortgage Loans. The Servicer is, and shall remain for as long
as it is servicing the Mortgage Loans hereunder, in good standing as an
FHA Approved Mortgagee and servicer of mortgage loans for HUD, Xxxxxx Mae
or Xxxxxxx Mac, and no event has occurred, including but not limited to a
change in insurance coverage, which would make the Servicer unable to
comply with HUD, Xxxxxx Mae, Xxxxxxx Mac or FHA eligibility requirements
or which would require notification to any of HUD, Xxxxxx Mae, Xxxxxxx Mac
or FHA;
(iv) This Agreement, and all documents and instruments contemplated
hereby which are executed and delivered by the Servicer, constitute and
will constitute valid, legal and binding obligations of the Servicer,
enforceable in accordance with their respective terms, except as the
enforcement thereof may be limited by applicable bankruptcy laws and
general principles of equity;
(v) The Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained
in this Agreement;
(vi) There is no action, suit, proceeding or investigation pending
or, to its knowledge, threatened against the Servicer that, either
individually or in the aggregate, may result in any material adverse
change in the business, operations, financial condition, properties or
assets of the Servicer, or in any material impairment of the right or
ability of the Servicer to carry on its business substantially as now
conducted, or in any material liability on the part of the Servicer, or
that would draw into question the validity or enforceability of this
Agreement or of any action taken or to be taken in connection with the
obligations of the Servicer contemplated herein, or that would be likely
to impair materially the ability of the Servicer to perform under the
terms of this Agreement;
(vii) No consent, approval or order of any court or governmental
agency or body is required for the execution, delivery and performance by
the Servicer of or compliance by the Servicer with this Agreement or the
consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations and orders, if any, that have
been obtained;
(viii) Neither this Agreement nor any information, certificate of an
officer, statement furnished in writing or report delivered to the Trustee
by the Servicer in connection with the transactions contemplated hereby
contains or will contain any untrue statement of a material fact or omits
or will omit to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which
they were made, not misleading; and
(ix) The Servicer has accurately and fully reported, and will
continue to accurately and fully report, its borrower credit files to each
of the credit repositories in a timely manner.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.05 shall survive delivery of the Mortgage
Files to the Trustee and shall inure to the benefit of the Trustee, the
Depositor and the Certificateholders. Upon discovery by any of the Depositor,
the Servicer, the Seller or the Trustee of a breach of any of the foregoing
representations, warranties and covenants which materially and adversely affects
the value of any Mortgage Loan or the interests therein of the
Certificateholders, the party discovering such breach shall give prompt written
notice (but in no event later than two Business Days following such discovery)
to the other parties hereto.
Section 2.06 Representations and Warranties of the Seller. The
Seller hereby represents and warrants to the Trust and the Trustee on behalf of
the Certificateholders that as of the Closing Date or as of such date
specifically provided herein:
(i) The Seller is duly organized, validly existing and in good
standing as a limited liability company under the laws of the State of
Delaware and has the power and authority to own its assets and to transact
the business in which it is currently engaged. The Seller is duly
qualified to do business and is in good standing in each jurisdiction in
which the character of the business transacted by it or properties owned
or leased by it requires such qualification and in which the failure to so
qualify would have a material adverse effect on (a) its business,
properties, assets or condition (financial or other), (b) the performance
of its obligations under this Agreement, (c) the value or marketability of
the Mortgage Loans, or (d) its ability to foreclose on the related
Mortgaged Properties.
(ii) The Seller has the power and authority to make, execute,
deliver and perform this Agreement and to consummate all of the
transactions contemplated hereunder and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the Seller's legal,
valid and binding obligations enforceable in accordance with its terms,
except as enforcement of such terms may be limited by (1) bankruptcy,
insolvency, reorganization, receivership, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies, (2) general equity principles
(regardless of whether such enforcement is considered in a proceeding in
equity or at law) or (3) public policy considerations underlying the
securities laws, to the extent that such policy considerations limit the
enforceability of the provisions of this Agreement which purport to
provide indemnification from securities laws liabilities.
(iii) The Seller holds all necessary licenses, certificates and
permits from all governmental authorities necessary for conducting its
business as it is presently conducted, except for such licenses,
certificates and permits the absence of which, individually or in the
aggregate, would not have a material adverse effect on the ability of the
Seller to conduct its business as it is presently conducted. It is not
required to obtain the consent of any other party or any consent, license,
approval or authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the execution,
delivery, performance, validity or enforceability of this Agreement,
except for such consents, licenses, approvals or authorizations, or
registrations or declarations as shall have been obtained or filed, as the
case may be, prior to the Closing Date.
(iv) The execution, delivery and performance of this Agreement by
the Seller will not conflict with or result in a breach of, or constitute
a default under, any provision of any existing law or regulation or any
order or decree of any court applicable to the Seller or any of its
properties or any provision of its Limited Liability Company Agreement, or
constitute a material breach of, or result in the creation or imposition
of any lien, charge or encumbrance upon any of its properties pursuant to
any mortgage, indenture, contract or other agreement to which it is a
party or by which it may be bound.
(v) No certificate of an officer, written statement or report
delivered pursuant to the terms hereof by the Seller contains any untrue
statement of a material fact or omits to state any material fact necessary
to make the certificate, statement or report not misleading.
(vi) The transactions contemplated by this Agreement are in the
ordinary course of the Seller's business.
(vii) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the Mortgage Loans to the Depositor, nor is
the Seller aware of any pending insolvency.
(viii) The Seller is not in violation of, and the execution and
delivery of this Agreement by it and its performance and compliance with
the terms of this Agreement will not constitute a violation with respect
to any order or decree of any court, or any order or regulation of any
federal, state, municipal or governmental agency having jurisdiction,
which violation would materially and adversely affect the Seller's
condition (financial or otherwise) or operations or any of the Seller's
properties, or materially and adversely affect the performance of any of
its duties hereunder.
(ix) There are no actions or proceedings against, or investigations
of, the Seller pending or, to its knowledge, threatened, before any court,
administrative agency or other tribunal (i) that, if determined adversely,
would prohibit the Seller from entering into this Agreement, (ii) seeking
to prevent the consummation of any of the transactions contemplated by
this Agreement or (iii) that, if determined adversely, would prohibit or
materially and adversely affect the Seller's performance of any of its
respective obligations under, or the validity or enforceability of, this
Agreement.
(x) The Seller did not transfer the Mortgage Loans to the Depositor
with any intent to hinder, delay or defraud any of its creditors.
(xi) The Seller acquired title to the Mortgage Loans in good faith,
without notice of any adverse claims.
(xii) The transfer, assignment and conveyance of the Mortgage Notes
and the Mortgages by the Seller to the Depositor are not subject to the
bulk transfer laws or any similar statutory provisions in effect in any
applicable jurisdiction.
Section 2.07 Covenants of the Seller. (a) The Seller hereby
covenants that except for the transfer hereunder, the Seller will not sell,
pledge, assign or transfer to any other Person, or grant, create, incur, assume
or suffer to exist any lien on any Mortgage Loan, or any interest therein; the
Seller will notify the Trustee, as assignee of the Depositor, of the existence
of any lien on any Mortgage Loan immediately upon discovery thereof, and the
Seller will defend the right, title and interest of the Trust, as assignee of
the Depositor, in, to and under the Mortgage Loans, against all claims of third
parties claiming through or under the Seller; provided, however, that nothing in
this Section 2.07 shall prevent or be deemed to prohibit the Seller from
suffering to exist upon any of the Mortgage Properties any liens for municipal
or other local taxes and other governmental charges if such taxes or
governmental charges shall not at the time be due and payable or if the Seller
shall currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.
(b) The Seller hereby covenants that neither it nor any Affiliate of
the Seller will directly solicit any Mortgagor hereunder to refinance the
related Mortgage Loan. Notwithstanding the foregoing, the Seller and its
Affiliates will be permitted to solicit a Mortgagor if the Seller or such
Affiliate has received a request for verification of mortgage, a request for
demand for payoff, a Mortgagor initiated written or verbal communication
indicating a desire to prepay or refinance the related Mortgage Loan, or the
Mortgagor initiates a title search and neither the Servicer nor its Affiliate
will be deemed to directly solicit a Mortgagor if the Mortgagor receives
marketing materials which are generally disseminated.
Section 2.08 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, has executed and delivered to or
upon the order of the Depositor, the Certificates in authorized denominations
evidencing directly or indirectly the entire ownership of the Trust Fund. The
Trustee agrees to hold the Trust Fund and exercise the rights referred to above
for the benefit of all present and future Holders of the Certificates.
Section 2.09 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" for purposes of the REMIC Provisions for each Trust REMIC
shall be the Closing Date. The "latest possible maturity date" for each regular
interest is the Distribution Date occurring in March 2036, which is the
Distribution Date in the month following the month in which the latest Mortgage
Loan maturity date occurs. Amounts distributable to the Class CE Certificates
(prior to any reduction for any Basis Risk Payment or Swap Termination Payment),
exclusive of any amounts received from the Swap Provider, shall be deemed paid
from the Upper-Tier REMIC to the Class XX XXXXX in respect of the Class UT-CE
Interest and the Class UT-IO Interest and then from the Class XX XXXXX in
respect of the Class CE Interest and the Class IO Interest to the Holders of the
Class CE Certificates prior to distribution of any Basis Risk Payments to the
Principal Certificates or Net Swap Payments or Swap Termination Payments to the
Swap Provider.
Amounts payable to the Class B-1 Certificates (other than any Basis
Risk Carry Forward Amounts) shall be deemed paid from the Upper-Tier REMIC in
respect of the Class B-1 Interest to the Class B-1 REMIC as holder of the Class
B-1 Interest. Amounts payable to the Class B-2 Certificates (other than any
Basis Risk Carry Forward Amounts) shall be deemed paid from the Upper-Tier REMIC
in respect of the Class B-2 Interest to the Class B-2 REMIC as holder of the
Class B-2 Interest. Amounts payable to the Class B-3 Certificates (other than
any Basis Risk Carry Forward Amounts) shall be deemed paid from the Upper-Tier
REMIC in respect of the Class B-3 Interest to the Class B-3 REMIC as holder of
the Class B-3 Interest. Amounts payable to the Class B-4 Certificates (other
than any Basis Risk Carry Forward Amounts) shall be deemed paid from the
Upper-Tier REMIC in respect of the Class B-4 Interest to the Class B-4 REMIC as
holder of the Class B-4 Interest. Amounts payable to the Class B-5 Certificates
(other than any Basis Risk Carry Forward Amounts) shall be deemed paid from the
Upper-Tier REMIC in respect of the Class B-5 Interest to the Class B-5 REMIC as
holder of the Class B-5 Interest.
For federal income tax purposes, any amount distributed on the
Principal Certificates on any Distribution Date in excess of the amount
distributable on their Corresponding Class of Upper-Tier Regular Interest on
such Distribution Date shall be treated as having been paid from the Excess
Reserve Fund Account or, in the case of the LIBOR Certificates, from the
Supplemental Interest Trust Account, as applicable, and any amount distributable
on a Class of Upper-Tier Regular Interest on such Distribution Date in excess of
the amount distributable on the Corresponding Class of Principal Certificates on
such Distribution Date shall be treated as having been paid to the Supplemental
Interest Trust, all pursuant to and as further provided in Section 8.13.
Section 2.10 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee and the
Servicer that as of the date of this Agreement or as of such date specifically
provided herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of each Mortgage Note and each
Mortgage as and in the manner contemplated by this Agreement is sufficient
either (i) fully to transfer to the Trustee, for the benefit of the
Certificateholders, all right, title, and interest of the Depositor thereto as
note holder and mortgagee or (ii) to grant to the Trustee, for the benefit of
the Certificateholders, the security interest referred to in Section 10.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.10 shall survive delivery of the
respective Mortgage Files to the Trustee or the Custodian, as the case may be,
and shall inure to the benefit of the Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicer to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, the Servicer shall service and administer the
Mortgage Loans (other than the Servicing Transfer Mortgage Loans prior to the
Servicing Transfer Date) in accordance with the terms of this Agreement and the
respective Mortgage Loans and, to the extent consistent with such terms, in the
same manner in which it services and administers similar mortgage loans for its
own portfolio, giving due consideration to customary and usual standards of
practice of mortgage lenders and loan servicers administering similar mortgage
loans but without regard to:
(i) any relationship that the Servicer, any Subservicer or any
Affiliate of the
Servicer or any Subservicer may have with the related Mortgagor;
(ii) the ownership or non-ownership of any Certificate by the
Servicer or any Affiliate of the Servicer;
(iii) the Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) the Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, the Servicer shall seek
to maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Servicer shall
have full power and authority, acting alone or through Subservicers as provided
in Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a Subservicer is hereby authorized and empowered by the
Trustee when the Servicer believes it appropriate in its best judgment in
accordance with Accepted Servicing Practices, to execute and deliver 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 the Mortgaged Properties and to institute foreclosure proceedings or
obtain a deed-in-lieu of foreclosure so as to convert the ownership of such
properties, and to hold or cause to be held title to such properties, on behalf
of the Trustee. The Servicer shall at its own expense be responsible for
preparing and recording all lien releases and mortgage satisfactions in
accordance with state and local regulations. The Servicer shall service and
administer the Mortgage Loans in accordance with applicable state and federal
law and shall provide to the Mortgagors any reports required to be provided to
them thereby. The Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
standard hazard insurance policy. Subject to Section 3.16, the Trustee shall
execute, at the written request of the Servicer, and furnish to the Servicer and
any Subservicer such documents provided to the Trustee as are necessary or
appropriate to enable the Servicer or any Subservicer to carry out their
servicing and administrative duties hereunder, and the Trustee hereby grants to
the Servicer, and this Agreement shall constitute, a power of attorney to carry
out such duties including a power of attorney to take title to Mortgaged
Properties after foreclosure on behalf of the Trustee. The Trustee shall execute
a separate power of attorney in the form of Exhibit O hereto, furnished to it by
the Servicer, in favor of the Servicer for the purposes described herein to the
extent necessary or desirable to enable the Servicer to perform its duties
hereunder. The Trustee shall not be liable for the actions of the Servicer or
any Subservicers under such powers of attorney and shall be indemnified by
Servicer for any costs, liabilities or expenses incurred by the Trustee in
connection with the Servicer's misuse of such power of attorney.
(b) Subject to Section 3.09(b), in accordance with the standards of
the preceding paragraph, the Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by the Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Consistent with the terms of this Agreement, the Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer's reasonable and prudent
determination such waiver, modification, postponement or indulgence is not
materially adverse to the Certificateholders. Notwithstanding anything in this
Agreement to the contrary, the Servicer may not make any future advances with
respect to a Mortgage Loan (except as provided in Section 4.01) and the Servicer
shall not (i) (unless the Mortgagor is in default with respect to the Mortgage
Loan or such default is, in the judgment of the Servicer, reasonably
foreseeable) permit any modification with respect to any Mortgage Loan that
would change the Mortgage Rate, reduce or increase the principal balance (except
for reductions resulting from actual payments of principal) or change the final
maturity date on such Mortgage Loan (except for a reduction of interest payments
resulting from the application of the Servicemembers Civil Relief Act or any
similar state statutes) or (ii) permit any modification, waiver or amendment of
any term of any Mortgage Loan that would both (A) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or final,
temporary or proposed Treasury regulations promulgated thereunder) and (B) cause
any Trust REMIC to fail to qualify as a REMIC under the Code or the imposition
of any tax on "prohibited transactions" or "contributions after the startup day"
under the REMIC Provisions, or (iii) except as provided in Section 3.07(a),
waive any Prepayment Charges. In connection with any modification pursuant to
this Section 3.01, to the extent there are any xxxxxxxxxxxx X&X Advances or
Servicing Advances, the Servicer shall reimburse itself for such amounts from
the Collection Account.
(d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.
(e) With respect to the Servicing Transfer Loans with a Servicing
Transfer Date in April 2006, the Servicer shall not be required to remit, report
or service the Servicing Transfer Loans, and shall not be required to include in
any certification to be provided by the Servicer pursuant to this Agreement
information with respect to the Servicing Transfer Loans, in connection with the
Reporting Date or the Distribution Date in April 2006.
Section 3.02 Subservicing Agreements between the Servicer and
Subservicers. (a) The Servicer may enter into subservicing agreements with
Subservicers, for the servicing and administration of the Mortgage Loans
("Subservicing Agreements"). The Servicer represents and warrants to the other
parties hereto that, except as otherwise set forth herein, no Subservicing
Agreement is in effect as of the Closing Date with respect to any Mortgage Loans
required to be serviced by it hereunder. The Servicer shall give notice to the
Depositor and the Trustee of any such Subservicer and Subservicing Agreement,
which notice shall contain all information (including without limitation a copy
of the Subservicing Agreement) reasonably necessary to enable the Trustee,
pursuant to Section 8.12(g), to accurately and timely report the event under
Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports under the
Exchange Act are required to be filed under the Exchange Act). During the period
when reports are required to be filed for the Trust under the Exchange Act, no
Subservicing Agreement shall be effective until 30 days after such written
notice is received by both the Depositor and the Trustee and thereafter shall be
effective at the time the Servicer and any Subservicer enter into any such
Subservicing Agreement. The Trustee shall not be required to review or consent
to such Subservicing Agreements and shall have no liability in connection
therewith.
(b) Each Subservicer shall be (i) authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement and (ii) a Xxxxxxx Mac or Xxxxxx Mae approved mortgage servicer. Each
Subservicing Agreement must impose on the Subservicer requirements conforming to
the provisions set forth in Section 3.08 and provide for servicing of the
Mortgage Loans consistent with the terms of this Agreement. The Servicer will
examine each Subservicing Agreement and will be familiar with the terms thereof.
The terms of any Subservicing Agreement will not be inconsistent with any of the
provisions of this Agreement. The Servicer and the Subservicers may enter into
and make amendments to the Subservicing Agreements or enter into different forms
of Subservicing Agreements; provided, however, that any such amendments or
different forms shall be consistent with and not violate the provisions of this
Agreement, and that no such amendment or different form shall be made or entered
into which could be reasonably expected to be materially adverse to the
interests of the Trustee, without the consent of the Trustee. Any variation
without the consent of the Trustee from the provisions set forth in Section 3.08
relating to insurance or priority requirements of Subservicing Accounts, or
credits and charges to the Subservicing Accounts or the timing and amount of
remittances by the Subservicers to the Servicer, are conclusively deemed to be
inconsistent with this Agreement and therefore prohibited. The Servicer shall
deliver to the Trustee and the Depositor copies of all Subservicing Agreements,
and any amendments or modifications thereof, promptly upon the Servicer's
execution and delivery of such instruments.
(c) As part of its servicing activities hereunder, the Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement, including, without limitation, any
obligation to make advances in respect of delinquent payments as required by a
Subservicing Agreement. Such enforcement, including, without limitation, the
legal prosecution of claims, termination of Subservicing Agreements, and the
pursuit of other appropriate remedies, shall be in such form and carried out to
such an extent and at such time as the Servicer, in its good faith business
judgment, would require were it the owner of the related Mortgage Loans. The
Servicer shall pay the costs of such enforcement at its own expense, and shall
be reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
(d) The Servicer shall cause any Subservicer engaged by the Servicer
(or by any Subservicer) for the benefit of the Depositor to comply with the
provisions of this Section 3.02 and with Sections 3.22, 3.23, 6.02 and 6.05 of
this Agreement to the same extent as if such Subservicer were the Servicer, and
to provide the information required with respect to such Subservicer under
Section 8.12(f) of this Agreement. The Servicer shall be responsible for
obtaining from each such Subservicer and delivering to applicable Persons any
servicer compliance statement required to be delivered by such Subservicer under
Section 3.22 and any assessment of compliance report and related accountant's
attestation required to be delivered by such Subservicer under Section 3.23, in
each case as and when required to be delivered.
(e) Subject to the conditions set forth in this Section 3.02(e), the
Servicer and any Subservicer engaged by the Servicer is permitted to utilize one
or more Subcontractors to perform certain of its obligations hereunder. The
Servicer shall promptly upon request provide to the Depositor a written
description (in form and substance satisfactory to the Depositor) of the role
and function of each Subcontractor utilized by the Servicer or any such
Subservicer (i) "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB, and (ii) which elements of the Servicing Criteria
will be addressed in assessments of compliance provided by each Subcontractor
identified pursuant to clause (ii) of this paragraph. As a condition to the
utilization by the Servicer or any such Subservicer of any Subcontractor
determined to be "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB, the Servicer shall cause any such Subcontractor used
by the Servicer (or by any such Subservicer) for the benefit of the Depositor to
comply with the provisions of Section 3.23 of this Agreement to the same extent
as if such Subcontractor were the Servicer. The Servicer shall be responsible
for obtaining from each such Subcontractor and delivering to the applicable
Persons any assessment of compliance report and related accountant's attestation
required to be delivered by such Subcontractor under Section 3.23, in each case
as and when required to be delivered.
Notwithstanding the foregoing, if the Servicer engages a
Subcontractor in connection with the performance of any of its duties under this
Agreement, the Servicer shall be responsible for determining whether such
Subcontractor is a "servicer" within the meaning of Item 1101 of Regulation AB
and whether any such affiliate or third-party vendor meets the criteria in Item
1108(a)(2)(i) through (iii) of Regulation AB. If the Servicer determines,
pursuant to the preceding sentence, that such Subcontractor is a "servicer"
within the meaning of Item 1101 of Regulation AB and meets any of the criteria
in Item 1108(a)(2)(i) through (iii) of Regulation AB, then such Subcontractor
shall be deemed to be a Subservicer for purposes of this Agreement (and shall
not be required to meet the requirements of a Subservicer set forth in Section
3.02(b)), the engagement of such Subservicer shall not be effective unless and
until notice is given pursuant to Section 3.02(a) and the Servicer shall comply
with Section 3.02(d) with respect thereto.
Section 3.03 Successor Subservicers. The Servicer shall be entitled
to terminate any Subservicing Agreement and the rights and obligations of any
Subservicer pursuant to any Subservicing Agreement in accordance with the terms
and conditions of such Subservicing Agreement; provided, however, that during
the period when reports are required to be filed for the Trust under the
Exchange Act, the termination, resignation or removal of a Subservicer shall be
not be effective until 30 days after written notice is received by both the
Depositor and the Trustee that contains all information reasonably necessary to
enable the Trustee, pursuant to Section 8.12(g), to accurately and timely report
the event under Item 6.02 of Form 8-K pursuant to the Exchange Act (if such
reports under the Exchange Act are required to be filed under the Exchange Act).
In the event of termination of any Subservicer, all servicing obligations of
such Subservicer shall be assumed simultaneously by the Servicer without any act
or deed on the part of such Subservicer or the Servicer, and the Servicer either
shall service directly the related Mortgage Loans or shall enter into a
Subservicing Agreement with a successor Subservicer which qualifies under
Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer shall, for any reason, no longer be the Servicer (including termination
due to an Event of Default).
Section 3.04 Liability of the Servicer. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between the Servicer and a Subservicer or reference
to actions taken through a Subservicer or otherwise, the Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 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 Servicer alone were servicing and administering the Mortgage Loans. The
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of the Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and the Trustee (or any successor Servicer) shall not be deemed
a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. In the event the Servicer at any time shall for any reason no longer be
the Servicer (including by reason of the occurrence of an Event of Default), the
Trustee, or its designee or the successor Servicer if the successor is not the
Trustee, shall thereupon assume all of the rights and obligations of the
Servicer under each Subservicing Agreement that the Servicer may have entered
into, with copies thereof provided to the Trustee or the successor Servicer if
the successor is not the Trustee, prior to the Trustee or the successor Servicer
if the successor is not the Trustee, assuming such rights and obligations,
unless the Trustee elects to terminate any Subservicing Agreement in accordance
with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, its designee or the successor
servicer shall be deemed, subject to Section 3.03, to have assumed all of the
Servicer's interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) the Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be the Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor Servicer shall be
deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.
The Servicer at its expense shall, upon request of the Trustee, its
designee or the successor Servicer deliver to the assuming party all documents
and records relating to each Subservicing Agreement and the Mortgage Loans then
being serviced and an accounting of amounts collected and held by or on behalf
of it, and otherwise use its best efforts to effect the orderly and efficient
transfer of the Subservicing Agreements to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) The
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any applicable Insurance Policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, the Servicer may (i) waive any late payment charge or, if applicable,
any penalty interest, or (ii) extend the due dates for the Scheduled Payments
due on a Mortgage Note for a period of not greater than 180 days; provided, that
any extension pursuant to clause (ii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, subject to Section 4.01(d) pursuant to which the Servicer shall
not be required to make any such advances that are Nonrecoverable P&I Advances.
Notwithstanding the foregoing, the Servicer may waive, in whole or in part, a
Prepayment Charge only under the following circumstances: (i) such waiver
relates to a default or a reasonably foreseeable default and would, in the
reasonable judgment of the Servicer, maximize recovery of total proceeds taking
into account the value of such Prepayment Charge and the related Mortgage Loan,
(ii) such Prepayment Charge is not permitted to be collected by applicable law
or (iii) if sufficient information is not available to enable the Servicer to
collect the Prepayment Charge. If a Prepayment Charge is waived other than as
permitted by the prior sentence, then the Servicer is required to pay the amount
of such waived Prepayment Charge, for the benefit of the Holders of the Class P
Certificates, by depositing such amount into the Collection Account from its own
funds, without any right of reimbursement therefor, together with and at the
time that the amount prepaid on the related Mortgage Loan is required to be
deposited into the Collection Account; provided, however, that the Servicer
shall not have an obligation to pay the amount of any uncollected Prepayment
Charge if the failure to collect such amount is the direct result of inaccurate
or incomplete information on the Mortgage Loan Schedule in effect at such time.
(b) (i) The Trustee shall establish and maintain the Excess Reserve
Fund Account, on behalf of the Class CE Certificateholders, to receive any Basis
Risk Payment and to secure their limited recourse obligation to pay to the
Principal Certificateholders Basis Risk Carry Forward Amounts (in the case of
the LIBOR Certificates, prior to using any Net Swap Receipts). For the avoidance
of doubt, any Basis Risk Carry Forward Amounts shall be paid to the Principal
Certificates first from the Excess Reserve Fund Account and then, in the case of
the LIBOR Certificates, from the Supplemental Interest Trust Account.
(ii) On each Distribution Date, the Trustee shall deposit the amount
of any Basis Risk Payment for such date into the Excess Reserve Fund
Account.
(c) (i) On each Distribution Date on which there exists a Basis Risk
Carry Forward Amount on any Class of Principal Certificates, the Trustee shall
(1) withdraw from the Distribution Account and deposit in the Excess Reserve
Fund Account, as set forth in Section 4.02(a)(iii)(W), the lesser of (x) the
Class CE Distributable Amount (without regard to the reduction in the definition
thereof with respect to the Basis Risk Payment (to the extent remaining after
the distributions specified in Sections 4.02(a)(iii)(A)-(V)) and without regard
to the reduction in clause (ii) of the definition thereof for any Basis Risk
Payment or Defaulted Swap Termination Payment) and (y) the aggregate Basis Risk
Carry Forward Amounts for such Distribution Date and (2) withdraw from the
Excess Reserve Fund Account amounts necessary to pay to such Class or Classes of
Certificates the Basis Risk Carry Forward Amount. Such payments shall be
allocated to those Classes on a pro rata basis based upon the amount of Basis
Risk Carry Forward Amount owed to each such Class and shall be paid in the
priority set forth in Sections 4.02(a)(iii)(X).
(ii) The Trustee shall account for the Excess Reserve Fund Account
as an asset of a grantor trust under subpart E, Part I of subchapter J of
the Code and not as an asset of any REMIC created pursuant to this
Agreement. The beneficial owners of the Excess Reserve Fund Account are
the Class CE Certificateholders. For all federal tax purposes, amounts
transferred by the Upper-Tier REMIC to the Excess Reserve Fund Account
shall be treated as distributions by the Trustee to the Class CE
Certificateholders.
(iii) Any Basis Risk Carry Forward Amounts paid by the Trustee to
the Principal Certificateholders from the Excess Reserve Fund Account
shall be accounted for by the Trustee as amounts paid first to the Class
XX XXXXX in respect of the Class UT-CE Interest, then to the Holders of
the Class CE Certificates (in respect of the Class CE Interest) and then
to the respective Class or Classes of Principal Certificates. In addition,
the Trustee shall account for the Principal Certificateholders' rights to
receive payments of Basis Risk Carry Forward Amounts from the Excess
Reserve Fund Account (along with, in the case of the LIBOR Certificates,
payments of Basis Risk Carry Forward Amounts from the Supplemental
Interest Trust Account) as rights in a limited recourse interest rate cap
contract written by the Class CE Certificateholders in favor of the
Principal Certificateholders.
(iv) Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any payments from the Excess Reserve
Fund Account except as expressly set forth in this Section 3.07(c) and
Sections 4.02(a)(iii)(X) and (AA).
(d) The Trustee shall establish and maintain the Distribution
Account on behalf of the Certificateholders. The Trustee shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicer to the Trustee
pursuant to Section 3.11;
(ii) any amount deposited by the Servicer pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that the Servicer shall remit any amount not required
to be remitted, it may at any time direct the Trustee in writing to withdraw
such amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to the
Trustee which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 4.02. In no event shall
the Trustee incur liability for withdrawals from the Distribution Account at the
direction of the Servicer.
(e) The Trustee may invest the funds in the Distribution Account in
one or more Permitted Investments in accordance with Section 3.12. The Trustee
may withdraw from the Distribution Account any income or gain earned from the
investment of funds deposited therein for its own benefit.
(f) The Servicer shall give notice to the Trustee, each Rating
Agency and the Depositor of any proposed change of the location of the
Collection Account not later than 30 days and not more than 45 days prior to any
change thereof.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more
segregated accounts (collectively, the "Subservicing Account"). The Subservicing
Account shall be an Eligible Account and shall otherwise be acceptable to the
Servicer. The Subservicer shall deposit in the clearing account (which account
must be an Eligible Account) in which it customarily deposits payments and
collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Subservicer's receipt thereof, all proceeds of Mortgage Loans received by
the Subservicer less its servicing compensation to the extent permitted by the
Subservicing Agreement, and shall thereafter deposit such amounts in the
Subservicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Subservicer shall thereafter
deposit such proceeds in the Collection Account or remit such proceeds to the
Servicer for deposit in the Collection Account not later than two Business Days
after the deposit of such amounts in the Subservicing Account. For purposes of
this Agreement, the Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) To the extent a paid-in-full, life-of-the-loan tax service
contract with a provider mutually acceptable to the Depositor and Servicer
(each, a "Tax Service Contract") is not provided by the Depositor, the Servicer
shall ensure that each First Lien Mortgage Loan shall be covered by a Tax
Service Contract. Each Tax Service Contract shall be assigned to the Trustee, or
its designee, at the Servicer's expense in the event that the Servicer is
terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) hereof, the Servicer undertakes to perform such functions. To the
extent the related Mortgage provides for Escrow Payments, the Servicer shall
establish and maintain, or cause to be established and maintained, one or more
segregated accounts (the "Escrow Accounts"), which shall be Eligible Accounts.
The Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, all (i) collections from the Mortgagors (or related advances
from Subservicers) for the payment of taxes, assessments, hazard insurance
premiums and comparable items for the account of the Mortgagors ("Escrow
Payments") collected on account of the Mortgage Loans and (ii) all Condemnation
Proceeds and Insurance Proceeds to be applied to the restoration of the related
Mortgaged Property or released to the related Mortgagor in accordance with
applicable law and Accepted Servicing Practices, and the Servicer shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than two Business Days after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the Servicer (or a Subservicer to
the extent provided in the related Subservicing Agreement) out of related
collections for any advances made pursuant to Section 3.01 (with respect to
taxes and assessments) and Section 3.13 (with respect to hazard insurance);
(iii) refund to Mortgagors any sums as may be determined to be overages; (iv)
pay itself any interest earned on the Escrow Account or, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) clear and
terminate the Escrow Account at the termination of the Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement; (vi)
transfer such funds to replacement Escrow Account that meets the requirements
hereof or (vii) recover amounts deposited in error or (viii) to release
Condemnation Proceeds or Insurance Proceeds to be applied to the restoration of
the related Mortgaged Property or to the related Mortgagor in accordance with
the applicable law and Accepted Servicing Practices. As part of its servicing
duties, the Servicer or Subservicers shall pay to the Mortgagors interest on
funds in Escrow Accounts, to the extent required by law and, to the extent that
interest earned on funds in the Escrow Accounts is insufficient, to pay such
interest from its or their own funds, without any reimbursement therefor. To the
extent that a Mortgage does not provide for Escrow Payments, the Servicer shall
use its reasonable best efforts to determine whether any such payments are made
by the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The Servicer
assumes full responsibility for the payment of all such bills within such time
and shall effect payments of all such bills irrespective of the Mortgagor's
faithful performance in the payment of same or the making of the Escrow Payments
and shall make advances from its own funds to effect such payments, including
any payment required to be made in connection with a Mortgage Loan that does
provide for Escrow Payments and is insufficient to make such payments; provided,
however, that such advances are deemed to be Servicing Advances.
Section 3.10 Collection Account. (a) On behalf of the
Certificateholders, the Servicer shall establish and maintain, or cause to be
established and maintained, one or more segregated Eligible Accounts (such
account or accounts, the "Collection Account"), held in trust for the benefit of
the Trustee on behalf of the Certificateholders. On behalf of the Trustee, the
Servicer shall deposit into the Collection Account on a daily basis as soon as
proper allocation can be determined generally within two Business Days of
receipt, the following payments and collections received or made by it
subsequent to the Cut-off Date (other than in respect of principal or interest
on the related Mortgage Loans due on or before the Cut-off Date), or payments
(other than Principal Prepayments) received by it on or prior to the Cut-off
Date but allocable to a Due Period subsequent thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the extent
such Insurance Proceeds and Condemnation Proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the express requirements of law or in
accordance with Accepted Servicing Practices, Liquidation Proceeds and
Subsequent Recoveries;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the Collection Account;
(v) any amounts required to be deposited by the Servicer pursuant to
the second paragraph of Section 3.13(a) in respect of any blanket policy
deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement;
(vii) all Prepayment Charges collected by the Servicer; and
(viii) all Subsequent Recoveries.
The foregoing requirements for deposit in 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, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding. The Servicer shall at its own expense be responsible for
reviewing and reconciling the Collection Account in accordance with industry
standards and shall act promptly to resolve any discrepancies related thereto.
(b) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Servicer shall give notice to the Trustee and the Depositor of the location of
the Collection Account maintained by it when established and prior to any change
thereof.
Section 3.11 Withdrawals from the Collection Account. (a) The
Servicer shall, from time to time, make withdrawals from the Collection Account
for any of the following purposes or as described in Section 4.01:
(i) on or prior to each Remittance Date, to remit to the Trustee for
deposit in the Distribution Account all Available Funds (which solely for
purposes of this Section 3.11(a)(i) shall not be net of the Trustee Fee)
in respect of the related Distribution Date together with all amounts
representing Prepayment Charges (payable to the Class P
Certificateholders) from the Mortgage Loans received during the related
Prepayment Period;
(ii) to reimburse the Servicer for P&I Advances, but only to the
extent of amounts received which represent payments of principal or
interest (net of the related Servicing Fees) on the related Mortgage Loans
with respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01 or Condemnation Proceeds, Insurance Proceeds or
Liquidation Proceeds or Unreimbursed Advances to the extent of funds held
in the Collection Account for future distribution;
(iii) to pay the Servicer or any Subservicer (A) any unpaid
Servicing Fees or (B) any unreimbursed Servicing Advances with respect to
each Mortgage Loan, but only to the extent of any Late Collections or
other amounts as may be collected by the Servicer from a Mortgagor, or
otherwise received with respect to such Mortgage Loan (or the related REO
Property), and to reimburse the Servicer for Advances made at the time a
Mortgage Loan was modified;
(iv) to pay to the Servicer as servicing compensation (in addition
to the Servicing Fee) on each Remittance Date any interest or investment
income earned on funds deposited in the Collection Account;
(v) to pay to the Seller, with respect to each Mortgage Loan that
has previously been repurchased or replaced pursuant to this Agreement,
all amounts received thereon subsequent to the date of purchase or
substitution, as the case may be;
(vi) to reimburse the Servicer for any P&I Advance or Servicing
Advance previously made which the Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01;
(vii) to pay, or to reimburse the Servicer for Servicing Advances in
respect of, expenses incurred in connection with any Mortgage Loan
pursuant to Section 3.15;
(viii) to reimburse the Servicer, the Depositor or the Trustee for
expenses incurred by or reimbursable to the Servicer, the Depositor or the
Trustee, as the case may be, pursuant to Section 6.03, Section 7.02 or
Section 8.05;
(ix) to reimburse the Servicer or the Trustee, as the case may be,
for expenses reasonably incurred in respect of the breach or defect giving
rise to the repurchase obligation of the Seller under this Agreement that
were included in the Repurchase Price of the Mortgage Loan, including any
expenses arising out of the enforcement of the repurchase obligation, to
the extent not otherwise paid pursuant to the terms hereof;
(x) to withdraw any amounts deposited in the Collection Account in
error; and
(xi) to clear and terminate the Collection Account upon termination
of this Agreement.
(b) The 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, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix)
above. The Servicer shall provide written notification (as set forth in Section
4.01(d)) to the Depositor, on or prior to the next succeeding Remittance Date,
upon making any withdrawals from the Collection Account pursuant to subclause
(a)(vi) above.
Section 3.12 Investment of Funds in the Collection Account, Escrow
Accounts and the Distribution Account. (a) The Servicer may invest the funds in
the Collection Account and the Escrow Accounts (to the extent permitted by law
and the related Mortgage Loan documents) and the Trustee may invest funds in the
Distribution Account (for purposes of this Section 3.12, each such Account is
referred to as an "Investment Account"), in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement;
provided, however, that any such Permitted Investment managed by or advised by
the Trustee or any of its Affiliates may mature, unless payable on demand, no
later than the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement. All such Permitted Investments shall be held
to maturity, unless payable on demand. Any investment of funds in an Investment
Account shall be made in the name of the Servicer or the Trustee, as applicable.
The Servicer or the Trustee, as applicable, shall be entitled to sole possession
over each such investment, and any certificate or other instrument evidencing
any such investment shall be delivered directly to the Servicer or the Trustee
or its agent, as applicable, together with any document of transfer necessary to
transfer title to such investment to the Servicer or the Trustee or its agent,
as applicable. In the event amounts on deposit in an Investment Account are at
any time invested in a Permitted Investment payable on demand, the Servicer or
the Trustee, as applicable, may:
(x) consistent with any notice required to be given thereunder,
demand that payment thereon be made on the last day such
Permitted Investment may otherwise mature hereunder in an
amount equal to the lesser of (1) all amounts then payable
thereunder and (2) the amount required to be withdrawn on such
date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in an
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Collection Account or Escrow Account, as applicable, held by or
on behalf of the Servicer, shall be for the benefit of the Servicer and shall be
subject to its withdrawal in the manner set forth in Section 3.11. The Servicer
shall deposit in the Collection Account or Escrow Account, as applicable, the
amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.
(c) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Trustee, shall be for the
benefit of the Trustee, and shall be subject to the Trustee's withdrawal in the
manner set forth in Section 3.07(e). The Trustee shall deposit in the
Distribution Account the amount of any loss of principal incurred in respect of
any such Permitted Investment made with funds in such account immediately upon
realization of such loss.
(d) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment of
funds held in the Escrow Account or the Collection Account, or if a default
occurs in any other performance required under any Permitted Investment of funds
held in the Escrow Account or the Collection Account, the Servicer shall take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate proceedings.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) The Servicer shall cause to be maintained
for each first lien Mortgage Loan fire and hazard insurance with extended
coverage as is customary in the area where the Mortgaged Property is located in
an amount which is at least equal to the lesser of (i) the amount necessary to
fully compensate for any damage or loss to the improvements which are a part of
such property on a replacement cost basis, (ii) the Principal Balance of the
Mortgage Loan, in each case in an amount not less than such amount as is
necessary to prevent the Mortgagor and/or the Mortgagee from becoming a
co-insurer or (iii) the amount required under applicable HUD/FHA regulations. If
the Mortgaged Property is in an area identified in the Federal Register by the
Flood Emergency Management Agency as having special flood hazards and flood
insurance has been made available, the Servicer will cause to be maintained a
flood insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration with a generally acceptable insurance carrier,
in an amount representing coverage not less than the least of (i) the Principal
Balance of the Mortgage Loan, (ii) the maximum insurable value of the
improvements securing such Mortgage Loan or (iii) the maximum amount of
insurance which is available under the Flood Disaster Protection Act of 1973, as
amended. The Servicer shall also maintain on the REO Property for the benefit of
the Certificateholders, (x) fire and hazard insurance with extended coverage in
an amount which is at least equal to the replacement cost of the improvements
which are a part of such property, (y) public liability insurance and, (z) to
the extent required and available under the Flood Disaster Protection Act of
1973, as amended, flood insurance in an amount as provided above. Any amounts
collected by the Servicer under any such policies other than amounts to be
deposited in the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or REO Property, or released to the Mortgagor in accordance
with the Servicer's normal servicing procedures, shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.10. It is
understood and agreed that no earthquake or other additional insurance is
required to be maintained by the Servicer or the Mortgagor or maintained on
property acquired in respect of the Mortgage Loan, other than pursuant to such
Applicable Regulations as shall at any time be in force and as shall require
such additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer and shall provide for at
least thirty days prior written notice of any cancellation, reduction in the
amount of or material change in coverage to the Servicer. The Servicer shall not
interfere with the Mortgagor's freedom of choice in selecting either the
Mortgagor's insurance carrier or agent, provided, however, that the Servicer
shall not accept any such insurance policies from insurance companies unless
such companies currently reflect a general policy rating of B:VI or better in
Best's Key Rating Guide and are licensed to do business in the state wherein the
property subject to the policy is located.
(b) Maintenance of Mortgage Impairment Insurance Policy. In the
event that the Servicer shall obtain and maintain a blanket policy issued by an
insurer that has a general policy rating of B:VI or better in Best's Key Rating
Guide insuring against hazard losses on all of the Mortgage Loans, then, to the
extent such policy provides coverage in an amount equal to the amount required
pursuant to Section 3.10 and otherwise complies with all other requirements of
Section 3.13, it shall conclusively be deemed to have satisfied its obligations
as set forth in Section 3.13, it being understood and agreed that such policy
may contain a deductible clause, in which case the Servicer shall, in the event
that there shall not have been maintained on the related Mortgaged Property or
REO Property a policy complying with Section 3.13, and there shall have been a
loss which would have been covered by such policy, deliver to the Trustee for
deposit in the Distribution Account the amount not otherwise payable under the
blanket policy because of such deductible clause, which amount shall not be
reimbursable to the Servicer from the Trust Fund. In connection with its
activities as servicer of the Mortgage Loans, the Servicer agrees to prepare and
present, on behalf of the Trust Fund, claims under any such blanket policy in a
timely fashion in accordance with the terms of such policy.
(c) Fidelity Bond, Errors and Omissions Insurance. The Servicer
shall maintain, at its own expense, a blanket fidelity bond (the "Fidelity
Bond") and an errors and omissions insurance policy, with broad coverage with
financially responsible companies on all officers, employees or other persons
acting in any capacity with regard to the Mortgage Loans to handle funds, money,
documents and papers relating to the Mortgage Loans. The Fidelity Bond and
errors and omissions insurance shall be in the form of the Mortgage Banker's
Blanket Bond and shall protect and insure the Servicer against losses, including
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts of
such persons. Such Fidelity Bond shall also protect and insure the Servicer
against losses in connection with the failure to maintain any insurance policies
required pursuant to this Agreement and the release or satisfaction of a
Mortgage Loan without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 3.13 requiring the Fidelity Bond
and errors and omissions insurance shall diminish or relieve the Servicer from
its duties and obligations as set forth in this Agreement. The minimum coverage
under any such bond and insurance policy shall be at least equal to the
corresponding amounts required by Xxxxxx Xxx in the Xxxxxx Mae MBS Selling and
Servicing Guide or by Xxxxxxx Mac in the Xxxxxxx Mac Servicer's Guide. Each
year, together with the Annual Statement as to Compliance delivered pursuant to
Section 3.22, the Servicer shall cause to be delivered to the Trustee proof of
coverage of the Fidelity Bond and Errors and omissions insurance policy and a
statement from the surety and insurer that the surety and insurer shall endeavor
to notify the Trustee within 30 days prior to such Fidelity Bond's and errors
and omissions insurance policy's termination or material modification. In the
absence of notice from the surety, insurer or Servicer of such termination or
material modification, the Trustee shall be under no obligation to take any
action to determine whether or not such Fidelity Bond or errors and omission
policy has been terminated or materially modified.
Section 3.14 Enforcement of Due-On-Sale Clauses; Assumption
Agreements. The Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto; provided, however, that the
Servicer shall not be required to take such action if, in the reasonable belief
of the Servicer, it is not in the best interests of the Trust Fund and shall not
exercise any such rights if prohibited by law from doing so. If the Servicer
reasonably believes it is unable under applicable law to enforce such
"due-on-sale" clause or if any of the other conditions set forth in the proviso
to the preceding sentence apply, the Servicer will make reasonable efforts to
enter into either (i) an assumption and modification agreement from or with the
person to whom such property has been conveyed or is proposed to be conveyed,
pursuant to which such person becomes liable under the Mortgage Note and, to the
extent permitted by applicable state law, the Mortgagor remains liable thereon
or (ii) a substitution agreement as provided in the succeeding sentence. The
Servicer is also authorized 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 the Mortgagor and becomes liable
under the Mortgage Note. The Mortgage Loan, as assumed, shall conform in all
respects to the requirements, representations and warranties of this Agreement.
Any fee collected by the Servicer in respect of an assumption or substitution of
liability agreement will be retained by the Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the related Mortgage Rate and the
amount of the Scheduled Payment) may be amended or modified, except as otherwise
required pursuant to the terms thereof. The Servicer shall notify the Trustee
that any such substitution, modification or assumption agreement has been
completed by forwarding to the 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 paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. In the event
that any payment due under any Mortgage Loan is not paid when the same becomes
due and payable, or in the event the Mortgagor fails to perform any other
covenant or obligation under the Mortgage Loan and such failure continues beyond
any applicable grace period, the Servicer shall take such action as it shall
deem to be in the best interest of the Certificateholders. With respect to any
defaulted Mortgage Loan, the Servicer shall have the right to review the status
of the related forbearance plan and, subject to the second paragraph of Section
3.01, may modify such forbearance plan; including, extending the Mortgage Loan
repayment date for a period of one year or reducing the Mortgage Interest Rate.
In connection with a foreclosure or other conversion, the Servicer
shall exercise such rights and powers vested in it hereunder and use the same
degree of care and skill in its exercise as prudent mortgage servicers would
exercise or use under the circumstances in the conduct of their own affairs and
consistent with Applicable Regulations and the servicing standards set forth in
the Xxxxxx Xxx Guide, including, without limitation, advancing funds for the
payment of taxes and insurance premiums with respect to first lien Mortgage
Loans.
Notwithstanding the foregoing provisions of this Section 3.15, with
respect to any Mortgage Loan as to which the Servicer has received actual notice
of, or has actual knowledge of, the presence of any toxic or hazardous substance
on the related Mortgaged Property, the Servicer shall not either (i) obtain
title to such Mortgaged Property as a result of or in lieu of foreclosure or
otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property if, as a result of any such action, the
Trust Fund would be considered to hold title to, to be a mortgagee-in-possession
of, or to be an owner or operator of such Mortgaged Property within the meaning
of the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Servicer
has also previously determined, based on its reasonable judgment and a prudent
report prepared by a Person who regularly conducts environmental audits using
customary industry standards, that:
A. such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic
interest of the Certificateholders to take such actions as are necessary
to bring the Mortgaged Property into compliance therewith; and
B. there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for
which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any federal, state or local law or
regulation, or that if any such materials are present for which such
action could be required, that it would be in the best economic interest
of the Certificateholders to take such actions with respect to the
affected Mortgaged Property.
The cost of the environmental audit report contemplated by this
Section 3.15 shall be advanced by the Servicer, subject to the Servicer's right
to be reimbursed therefor from the Collection Account.
If the Servicer determines, as described above, that it is in the
best economic interest of the Certificateholders to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Certificateholders. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Servicer, subject
to the Servicer's right to be reimbursed therefor from the Collection Account.
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by the Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, the
Servicer will deliver to the Trustee or the Custodian, as the case may be, a
Request for Release in the form of Exhibit K hereto, which Request for Release
may be in an electronic format. Upon receipt of such certification and Request
for Release, the Trustee or the Custodian, as the case may be, shall promptly
release the related Custodial File to the Servicer or such other party
identified on the Request for Release within two (2) Business Days. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Collection Account. Upon any such
payment in full, or the receipt of such notification that such funds have been
placed in escrow, the Servicer shall direct the Trustee in writing to execute an
instrument of satisfaction (or assignment of Mortgage without recourse)
regarding the Mortgaged Property relating to such Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person
or Persons entitled thereto against receipt therefor of payment in full, it
being understood and agreed that no expense incurred in connection with such
instrument of satisfaction or assignment, as the case may be, shall be
chargeable to the Collection Account. In lieu of executing any such satisfaction
or assignment, as the case may be, the Servicer may prepare and submit to the
Trustee a satisfaction (or assignment without recourse, if requested by the
Person or Persons entitled thereto) in form for execution by the Trustee with
all requisite information completed by the Servicer; in such event, the Trustee
shall execute and acknowledge such satisfaction or assignment, as the case may
be, and deliver the same with the related Mortgage File, as aforesaid.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the Trustee or the
Custodian, as the case may be, shall, upon request of the Servicer and delivery
to the Trustee or the Custodian, as the case may be, of a Request for Release,
which Request for Release may be in an electronic format in a form acceptable to
the Trustee or the Custodian, as the case may be, release the related Custodial
File to the Servicer, and the Trustee or the Custodian, as the case may be,
shall, at the direction of the Servicer, execute such documents as shall be
necessary to the prosecution of any such proceedings and the Servicer shall
retain the Mortgage File in trust for the benefit of the Trustee. Such Request
for Release shall obligate the Servicer to return each and every document
previously requested from the Custodial File to the Trustee or the Custodian, as
the case may be, when the need therefor by the Servicer no longer exists, unless
the Mortgage Loan has been liquidated and the Liquidation Proceeds relating to
the Mortgage Loan have been deposited in the Collection Account or the Mortgage
File or such document has been delivered to an attorney, or to a public trustee
or other public official as required by law, for purposes of initiating or
pursuing legal action or other proceedings for the foreclosure of the Mortgaged
Property either judicially or non-judicially, and the Servicer has delivered to
the Trustee or the Custodian, as the case may be, a certificate of a Servicing
Officer certifying as to the name and address of the Person to which such
Mortgage File or such document was delivered and the purpose or purposes of such
delivery. Upon receipt of a certificate of a Servicing Officer stating that such
Mortgage Loan was liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release shall be released by the
Trustee or the Custodian, as the case may be, to the Servicer or its designee.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer copies of any court pleadings, requests for
trustee's sale or other documents reasonably necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity, or shall exercise and deliver to the Servicer a power of attorney
sufficient to authorize the Servicer to execute such documents on its behalf.
Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or
pleadings are required and that the execution and delivery thereof by the
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property. In
the event that title to a Mortgaged Property is acquired in foreclosure or by
deed in lieu of foreclosure, the deed or certificate of sale shall be taken
(pursuant to a limited power of attorney to be provided by the Trustee to the
Servicer) in the name of the Trustee or a nominee thereof, on behalf of the
Certificateholders, or in the event the Trustee or a nominee thereof is not
authorized or permitted to hold title to real property in the state where the
REO Property is located, or would be adversely affected under the "doing
business" or tax laws of such state by so holding title, the deed or certificate
of sale shall be taken in the name of such Person or Persons as shall be
consistent with an Opinion of Counsel obtained by the Servicer from an attorney
duly licensed to practice law in the state where the REO Property is located.
Any Person or Persons holding such title other than the Trustee shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Trustee. The Trustee's name shall be placed on the title to such REO
Property solely as the Trustee hereunder and not in its individual capacity. The
Servicer shall ensure that the title to such REO Property references this
Agreement and the Trustee's capacity hereunder.
In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such REO Property before the end of
the third calendar year beginning after the year of its acquisition by the Trust
Fund for purposes of Section 860G(a)(8) of the Code or, at the expense of the
Trust Fund, request from the Internal Revenue Service, more than 60 days before
the day on which the above-mentioned grace period would otherwise expire, an
extension of the above-mentioned grace period, unless the Servicer obtains an
Opinion of Counsel, addressed to the Servicer and the Trustee, to the effect
that the holding by the Trust Fund of such REO Property subsequent to such
period will not: (i) result in the imposition of any tax on "prohibited
transactions" as defined in Section 860F of the Code; or (ii) cause any REMIC
constituting any part of the Trust Fund to fail to qualify as a REMIC at any
time that any Certificates are outstanding, in which case the Trust Fund may
continue to hold such REO Property (subject to any conditions contained in such
Opinion of Counsel). The Servicer shall be entitled to be reimbursed from the
Collection Account for any costs incurred in obtaining such Opinion of Counsel,
as provided in Section 3.05.
Subject to compliance with applicable laws and regulations as shall
at any time be in force, and notwithstanding any other provisions of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or pursuant to any terms that would: (i) cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code; or (ii) subject any REMIC constituting part of
the Trust Fund to the imposition of any federal income taxes on the income
earned from such REO Property, including any taxes imposed by reason of Sections
860F or 860G(c) of the Code, unless the Servicer has agreed to indemnify and
hold harmless the Trust Fund with respect to the imposition of any such taxes.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders and the Trust Fund solely for the purpose of
its prompt disposition and sale in a manner which does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by the related REMIC of
any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which
is subject to taxation under the REMIC Provisions. The Servicer shall cause each
REO Property to be inspected promptly upon the acquisition of title thereto and
shall cause each REO Property to be inspected at least annually thereafter. The
Servicer shall make or cause to be made a written report of each such
inspection. Such reports shall be retained in the Mortgage Servicing File and
copies thereof shall be forwarded by the Servicer to the Trustee upon request.
The Servicer shall attempt to sell the same (and may temporarily rent the same)
on such terms and conditions as the Servicer deems to be in the best interest of
the Certificateholders and the Trust Fund.
With respect to each REO Property, the Servicer shall account
separately for each REO Property with respect to all funds collected and
received in connection with the operation of such REO Property.
The Servicer shall deposit or cause to be deposited, on a daily
basis, within two Business Days of receipt, in the Collection Account, all
revenues received with respect to each REO Property and shall withdraw therefrom
funds necessary for the proper operation, management and maintenance of the
related REO Property, including the cost of maintaining any hazard insurance
pursuant to Section 3.13 hereof and the fees of any managing agent acting on
behalf of the Servicer.
The Servicer shall furnish to the Trustee, on each Servicer
Remittance Date, an operating statement for each REO Property covering the
operation of each REO Property for the previous month. Such operating statement
shall be accompanied by such other information as the Trustee shall reasonably
request.
The Servicer shall use its best efforts to dispose of the REO
Property as promptly as is practically consistent with protecting the
Certificateholders' interests.
Each REO Disposition shall be carried out by the Servicer at such
price and upon such terms and conditions as the Servicer deems to be in the best
interest of the Certificateholders. If as of the date title to any REO Property
was acquired by the Servicer there were outstanding unreimbursed Servicing
Advances with respect to the REO Property, the Servicer, upon an REO Disposition
of such REO Property, shall be entitled to reimbursement for any related
unreimbursed Servicing Advances from proceeds received in connection with such
REO Disposition. The proceeds from the REO Disposition, net of any payment to
the Servicer as provided above, shall be deposited in the Collection Account for
distribution on the succeeding Servicer Remittance Date.
Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration and an Opinion of Counsel is obtained by the Servicer to the
effect that such sale shall not cause any REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC).
Section 3.18 Notification of Adjustments. With respect to each
Adjustable Rate Mortgage Loan, the Servicer shall adjust the Mortgage Rate on
the related Adjustment Date and shall adjust the Scheduled Payment on the
related mortgage payment adjustment date, if applicable, in compliance with the
requirements of applicable law and the related Mortgage and Mortgage Note. In
the event that an Index becomes unavailable or otherwise unpublished, the
Servicer shall select a comparable alternative index over which it has no direct
control and which is readily verifiable. The Servicer shall execute and deliver
any and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Rate and Scheduled
Payment adjustments. Upon the discovery by the Servicer that the Servicer has
failed to adjust a Mortgage Rate or Scheduled Payment in accordance with the
terms of the related Mortgage Note, the Servicer shall deposit in the Collection
Account from its own funds the amount of any interest loss caused as such
interest loss occurs; provided, however, the Servicer shall be held harmless for
any Mortgage Interest Rate Adjustments made by any prior servicer.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. In the event the Servicer reasonably believes that
compliance with this Section will make the Mortgage Loans legal for investment
by federally insured savings and loan associations, the Servicer shall provide,
or cause the Subservicer to provide, to the Depositor, the Trustee, the OTS or
the FDIC and the examiners and supervisory agents thereof, access to the
documentation regarding the Mortgage Loans in its possession required by
applicable regulations of the OTS. 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 Servicer or, if applicable, any Subservicer. Nothing
in this Section shall derogate from the obligation of any such party to observe
any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of any such party to provide access as provided in
this Section as a result of such obligation shall not constitute a breach of
this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicer to Be Held for the Trustee. Not later than thirty days after each
Distribution Date, the Servicer shall forward to the Trustee a statement
prepared by the Servicer setting forth the status of the Collection Account as
of the close of business on the last day of the calendar month relating to such
Distribution Date and showing, for the period covered by such statement, the
aggregate amount of deposits into and withdrawals from the Collection Account of
each category of deposit specified in Section 3.10(a) and each category of
withdrawal specified in Section 3.11. Such statement may be in the form of the
then current Xxxxxx Xxx Monthly Accounting Report for its Guaranteed Mortgage
Pass-Through Program with appropriate additions and changes. Copies of such
statement shall be provided by the Trustee to any Certificateholder and to any
Person identified to the Trustee as a prospective transferee of a Certificate,
upon the request and at the expense of the requesting party, provided such
statement is delivered by the Servicer to the Trustee.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, the Servicer shall, with respect to each Mortgage Loan, be
entitled to retain from deposits to the Collection Account and from Liquidation
Proceeds, Prepayment Interest Excess, Condemnation Proceeds, Insurance Proceeds,
Subsequent Recoveries and REO Proceeds related to such Mortgage Loan, the
Servicing Fee with respect to each Mortgage Loan (less any portion of such
amounts retained by any Subservicer). In addition, the Servicer shall be
entitled to recover unpaid Servicing Fees out of related Late Collections and as
otherwise permitted under Section 3.11. The right to receive the Servicing Fee
may not be transferred in whole or in part except in connection with the
transfer of all of the Servicer's responsibilities and obligations under this
Agreement; provided, however, that the Servicer may pay from the Servicing Fee
any amounts due to a Subservicer pursuant to a Subservicing Agreement entered
into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Servicer only to the extent such fees or charges are received by the
Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account, as additional servicing compensation,
interest or other income earned on deposits therein. The Servicer shall also be
entitled as additional servicing compensation, to interest or other income
earned on deposits in the Escrow Account (to the extent permitted by law and the
related Mortgage Loan documents) in accordance with Section 3.12.
(c) The Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. The Servicer shall
deliver or cause to be delivered, and shall cause each Subservicer engaged by
such Servicer to deliver or cause to be delivered to the Depositor, the Rating
Agencies and the Trustee on or before March 15th of each calendar year,
commencing in 2007, an Officer's Certificate stating, as to each signatory
thereof, that (i) a review of the activities of such Servicer or Subservicer, as
applicable, during the preceding calendar year and of performance under this
Agreement, or the applicable Subservicing Agreement, as the case may be, has
been made under such officers' supervision, and (ii) to the best of such
officers' knowledge, based on such review, such Servicer or Subservicer, and
each Subcontractor utilized by such Servicer and determined by such Servicer
pursuant to Section 3.02(e) to be "participating in a servicing function" within
the meaning of Item 1122 of Regulation AB, as applicable, has fulfilled all of
its obligations under this Agreement in all material respects throughout such
year, or, if there has been a failure to fulfill any such obligation in any
material respect, specifying each such failure known to such officers and the
nature and status thereof. Promptly after receipt of such Officer's Certificate,
the Depositor shall review such Officer's Certificate and, if applicable,
consult with the applicable Servicer as to the nature of any defaults by such
Servicer or any related Subservicer in the fulfillment of any such Servicer's or
any related Subservicer's obligations. The obligations of a Servicer or
Subservicer under this Section apply to each Servicer that serviced a Mortgage
Loan during the applicable period, whether or not such Servicer or Subservicer
is acting as a Servicer or Subservicer at the time such Officer's Certificate is
required to be delivered. For purposes of (ii) above, the Servicer or
Subservicer will be entitled to rely reasonably upon a certification of any
Subcontractor not affiliated with the Servicer or Subservicer. Notwithstanding
anything to the contrary set forth herein, the statement required under this
Section 3.22 with respect to any Subservicer or Subcontractor shall not be
required to be delivered with respect to any year in which an annual report on
Form 10-K for the Trust is not required to be filed pursuant to the Exchange
Act.
Section 3.23 Assessment of Compliance with Servicing Criteria;
Independent Public Accountants' Attestation. (a) Not later than March 15th of
each calendar year commencing in 2007, the Servicer and the Custodian (pursuant
to the Custodial Agreement), each shall deliver, and the Servicer shall cause
each Subservicer engaged by such Servicer and the Servicer shall cause each
Subcontractor utilized by such Servicer and determined by such Servicer pursuant
to Section 3.02(e) to be "participating in a servicing function" within the
meaning of Item 1122 of Regulation AB, to deliver, and not later than March 15
of each calendar year in which the annual report on Form 10-K for the Trust
contemplated by this Agreement is required to be filed in accordance with the
Exchange Act and the rules and regulations of the Commission, (or, if such March
15 is not a Business Day, the immediately preceding Business Day), the Trustee
shall deliver, and the Trustee shall cause each Subcontractor utilized by the
Trustee and determined by the Trustee pursuant to Section 3.02(e) to be
"participating in a servicing function" within the meaning of Item 1122 of
Regulation AB, to deliver, each at its own expense, to the Depositor and the
Trustee, with a copy to the Rating Agencies, a report on an assessment of
compliance with the Servicing Criteria that contains (A) a statement by such
party of its responsibility for assessing compliance with the Servicing Criteria
applicable to it, (B) a statement that such party used the Servicing Criteria to
assess compliance with the applicable Servicing Criteria, (C) such party's
assessment of compliance with the applicable Servicing Criteria as of and for
the period ending the end of the fiscal year covered by the Form 10-K required
to be filed pursuant to Section 8.12, setting forth any material instance of
noncompliance with the applicable Servicing Criteria, and (D) a statement that a
registered public accounting firm has issued an attestation report on such
Person's assessment of compliance with the applicable Servicing Criteria as of
and for such period. Each such assessment of compliance report shall be
delivered to the Depositor and shall address each of the Servicing Criteria
applicable to such party specified on a certification substantially in the form
of Exhibit N hereto delivered to the Depositor on the Closing Date.
Notwithstanding anything to the contrary set forth herein, the statements and
attestations required under this Section 3.23 with respect to any Subservicer or
Subcontractor shall not be required to be delivered with respect to any year in
which an annual report on Form 10-K for the Trust is not required to be filed
pursuant to the Exchange Act.
(b) Not later than March 15th of each calendar year commencing in
2007, the Servicer shall and the Servicer shall direct the Custodian, and the
Servicer shall cause each Subservicer engaged by such Servicer and each
Subcontractor utilized by such Servicer and determined by such Servicer pursuant
to Section 3.02(e) to be "participating in a servicing function" within the
meaning of Item 1122 of Regulation AB, to, cause, and not later than March 15 of
each calendar year in which the Depositor's annual report on Form 10-K with
respect to the transactions contemplated by this Agreement is required to be
filed in accordance with the Exchange Act and the rules and regulations of the
Commission (or, if such March 15 is not a Business Day, the immediately
preceding Business Day), the Trustee shall cause, each at its own expense, a
registered public accounting firm (which may also render other services to such
party) and that is a member of the American Institute of Certified Public
Accountants to furnish a report to the Trustee and the Depositor, with a copy to
the Rating Agencies, to the effect that (i) it has obtained a representation
regarding certain matters from the management of such Person, which includes an
assertion that such Person has complied with the Servicing Criteria and (ii) on
the basis of an examination conducted by such firm in accordance with standards
for attestation engagements issued or adopted by the PCAOB, it is expressing an
opinion as to whether such Person's compliance with the Servicing Criteria was
fairly stated in all material respects, or it cannot express an overall opinion
regarding such Person's assessment of compliance with the Servicing Criteria. 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. Each such related accountant's attestation report 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. Notwithstanding anything to the contrary
set forth herein, the statements and attestations required under this Section
3.23 with respect to any Subservicer or Subcontractor shall not be required to
be delivered with respect to any year in which an annual report on Form 10-K for
the Trust is not required to be filed pursuant to the Exchange Act.
(c) On the Closing Date, the Servicer, the Trustee and the Custodian
(pursuant to the Custodial Agreement) shall furnish to the Depositor the
Servicing Criteria, substantially in the form of Exhibit N hereto appropriately
completed, to be subject of the assessment of compliance to be delivered
pursuant to Section 3.23(a) by each of them (and in the case of the Servicer,
each Subservicer engaged by such Servicer and in the case of the Servicer and
Trustee each Subcontractor utilized by the Servicer or the Trustee, as
applicable, and determined by such Servicer or the Trustee, as applicable,
pursuant to Section 3.02(e) to be "participating in a servicing function" within
the meaning of Item 1122 of Regulation AB).
Section 3.24 Trustee to Act as Servicer. (a) In the event that the
Servicer shall for any reason no longer be the Servicer hereunder (including by
reason of an Event of Default), the Trustee or its successor, subject to the
rights of the Servicing Rights Pledgee and in accordance with Section 7.02
hereof, shall thereupon assume all of the rights and obligations of the Servicer
hereunder arising thereafter, except that the Trustee shall not be (i) liable
for losses of the predecessor Servicer pursuant to Section 3.10 or any acts or
omissions of the predecessor Servicer hereunder, (ii) obligated to effectuate
repurchases or substitutions of Mortgage Loans hereunder, (iii) responsible for
expenses of the predecessor Servicer pursuant to Section 2.03, (iv) obligated to
make Advances if it is prohibited from doing so by applicable law, (v) deemed to
have made any representations and warranties of the Servicer hereunder or (vi)
obligated to perform an obligation of the Servicer under Sections 3.22 or 3.23
with respect to any period of time during which the Trustee was not the
Servicer. Any such assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by the Servicer shall
contain a provision giving the successor Servicer the option to terminate such
agreement in the event a successor Servicer is appointed.
(c) If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer), subject to the rights of the Servicing Rights Pledgee, may,
at its option, succeed to any rights and obligations of the Servicer under any
Subservicing Agreement in accordance with the terms thereof; provided, that the
Trustee (or any other successor Servicer) shall not incur any liability or have
any obligations in its capacity as successor 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 Servicer thereunder; and
the Servicer shall not thereby be relieved of any liability or obligations under
the Subservicing Agreement arising prior to the date of such succession.
(d) The Servicer shall, upon request of the Trustee, but at the
expense of the Servicer, deliver to the assuming party all documents and records
relating to each Subservicing Agreement (if any) and the Mortgage Loans then
being serviced thereunder and an accounting of amounts collected and 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 3.25 Compensating Interest. The Servicer shall remit to the
Trustee on each Remittance Date an amount from its own funds equal to the
Compensating Interest payable by the Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a) With
respect to each Mortgage Loan, the Servicer agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on the
primary borrower of such Mortgage Loan to Equifax, Experian and TransUnion
Credit Information Company (three of the credit repositories) on a monthly
basis.
(b) The Servicer shall comply with Title V of the Xxxxx-Xxxxx-Xxxxxx
Act of 1999 and all applicable regulations promulgated thereunder, relating to
the Mortgage Loans and the related borrowers and shall provide all required
notices thereunder.
Section 3.27 Optional Purchases of Mortgage Loans by Servicer. The
Servicer (or an affiliate of the Servicer) may, at its option, purchase a
Mortgage Loan or REO Property which becomes 120 or more days Delinquent or for
which the Servicer has accepted a deed in lieu of foreclosure, during the period
commencing on the first day of the calendar quarter succeeding the calendar
quarter in which the Initial Delinquency Date occurred with respect to such
Mortgage Loan and ending on the last Business Day of such calendar quarter. If
the Servicer (or an affiliate of the Servicer) does not exercise its purchase
right with respect to a Mortgage Loan during the period specified in the
preceding sentence, such Mortgage Loan shall thereafter again become eligible
for purchase pursuant to the preceding sentence only after the Mortgage Loan
ceases to be 120 days or more Delinquent and thereafter becomes 120 days
Delinquent again. The "Initial Delinquency Date" of a Mortgage Loan shall mean
the date on which the Mortgage Loan first became 120 days Delinquent. Prior to
repurchase pursuant to this Section 3.16, the Servicer shall be required to
continue to make monthly advances pursuant to Section 4.07. The Servicer shall
not use any procedure in selecting Mortgage Loans to be repurchased which is
materially adverse to the interests of the Certificateholders. The Servicer
shall purchase such (i) delinquent Mortgage Loan at a price equal to the
Principal Balance of the Mortgage Loan plus accrued interest thereon at the
Mortgage Interest Rate from the date to which interest has last been paid to the
Trust Fund to the date of purchase plus any unreimbursed Servicing Advances and
Advances or (ii) REO Property at its fair market value as determined in good
faith by the Servicer. Any such repurchase of a Mortgage Loan or REO Property
pursuant to this Section 3.16 shall be accomplished by delivery to the Trustee
for deposit in the Distribution Account of the amount of the purchase price. The
Trustee shall immediately effectuate the conveyance of such delinquent Mortgage
Loan or REO Property to the Servicer to the extent necessary, including the
prompt delivery of all documentation to the Servicer, without recourse.
Section 3.28 Advance Facility. (a) The Servicer is hereby authorized
to enter into a financing or other facility (any such arrangement, an "Advance
Facility"), the documentation for which complies with Section 3.28(e) below,
under which (1) the Servicer assigns or pledges its rights under this Agreement
to be reimbursed for any or all P&I Advances and/or Servicing Advances to (i) a
Person, which may be a special-purpose bankruptcy-remote entity (an "SPV"), (ii)
a Person, which may simultaneously assign or pledge such rights to an SPV or
(iii) a lender (a "Lender"), which, in the case of any Person or SPV of the type
described in either of the preceding clauses (i) or (ii), may directly or
through other assignees and/or pledgees, assign or pledge such rights to a
Person, which may include a trustee acting on behalf of holders of debt
instruments (any such Person or any such Lender, an "Advance Financing Person"),
and/or (2) an Advance Financing Person agrees to fund all the P&I Advances
and/or Servicing Advances required to be made by the Servicer pursuant to this
Agreement. No consent of the Trustee, Certificateholders or any other party
shall be required before the Servicer may enter into an Advance Facility nor
shall the Trustee or the Certificateholders be a third party beneficiary of any
obligation of an Advance Financing Person to the Servicer. Notwithstanding the
existence of any Advance Facility under which an Advance Financing Person agrees
to fund P&I Advances and/or Servicing Advances, (A) the Servicer (i) shall
remain obligated pursuant to this Agreement to make P&I Advances and/or
Servicing Advances pursuant to and as required by this Agreement and (ii) shall
not be relieved of such obligations by virtue of such Advance Facility and (B)
neither the Advance Financing Person nor any Servicer's Assignee (as hereinafter
defined) shall have any right to proceed against or otherwise contact any
Mortgagor for the purpose of collecting any payment that may be due with respect
to any related Mortgage Loan or enforcing any covenant of such Mortgagor under
the related Mortgage Loan documents.
(b) If the Servicer enters into an Advance Facility, the Servicer
and the related Advance Financing Person shall deliver to the Trustee at the
address set forth in Section 10.05 hereof a written notice (an "Advance Facility
Notice"), stating (a) the identity of the Advance Financing Person and (b) the
identity of the Person (the "Servicer's Assignee") that will, subject to Section
3.28(c) hereof, have the right to make withdrawals from the Collection Account
pursuant to Section 3.11 hereof to reimburse previously xxxxxxxxxxxx X&X
Advances and/or Servicing Advances ("Advance Reimbursement Amounts"). Advance
Reimbursement Amounts (i) shall consist solely of amounts in respect of P&I
Advances and/or Servicing Advances for which the Servicer would be permitted to
reimburse itself in accordance with Section 3.11 hereof, assuming the Servicer
had made the related P&I Advance(s) and/or Servicing Advance(s) and (ii) shall
not consist of amounts payable to a successor Servicer in accordance with
Section 3.11 hereof to the extent permitted under Section 3.28(e) below.
(c) Notwithstanding the existence of an Advance Facility, the
Servicer, on behalf of the Advance Financing Person, shall be entitled to
receive reimbursements of P&I Advances and/or Servicing Advances in accordance
with Section 3.05 hereof, which entitlement may be terminated by the Advance
Financing Person pursuant to a written notice to the Trustee in the manner set
forth in Section 10.05 hereof. Upon receipt of such written notice, the Servicer
shall no longer be entitled to receive reimbursement for any Advance
Reimbursement Amounts and the Servicer's Assignee shall immediately have the
right to receive from the Collection Account all Advance Reimbursement Amounts.
Notwithstanding the foregoing, and for the avoidance of doubt, (i) the Servicer
and/or the Servicer's Assignee shall only be entitled to reimbursement of
Advance Reimbursement Amounts hereunder pursuant to Section 3.11 of this
Agreement and shall not otherwise be entitled to make withdrawals of, or
receive, Advance Reimbursement Amounts that shall be deposited in the
Distribution Account pursuant to Section 3.10 hereof, and (ii) none of the
Trustee or the Certificateholders shall have any right to, or otherwise be
entitled to, receive any Advance Reimbursement Amounts to which the Servicer or
Servicer's Assignee, as applicable, shall be entitled pursuant to Section 3.11
hereof. Without limiting the foregoing, none of the Trustee or the
Certificateholders shall have any right to set off against Advance Reimbursement
Amounts hereunder. An Advance Facility may be terminated by the joint written
direction of the Servicer and the related Advance Financing Person. Written
notice of such termination shall be delivered to the Trustee in the manner set
forth in Section 10.05 hereof. The Trustee shall have no duty or liability with
respect to the calculation of any Advance Reimbursement Amount and shall be
entitled to rely without independent investigation on the Advance Facility
Notice and on such Servicer's report of the amount of Advance Reimbursement
Amounts and Servicing Advance Reimbursement Amounts that were included in the
remittance from such Servicer to the Trustee pursuant to Section 4.01 Such
Servicer shall maintain and provide to any successor Servicer a detailed
accounting on a loan-by-loan basis as to amounts advanced by, pledged or
assigned to, and reimbursed to any Advance Financing Person. The successor
Servicer shall be entitled to rely on any such information provided by the
predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.
(d) [Reserved].
(e) As between a predecessor Servicer and its Advance Financing
Person, on the one hand, and a successor Servicer and its Advance Financing
Person, if any, on the other hand, Advance Reimbursement Amounts on a
loan-by-loan basis with respect to each Mortgage Loan as to which a P&I Advance
and/or Servicing Advance shall have been made and be outstanding shall be
allocated on a "first-in, first out" basis. In the event the Servicer's Assignee
shall have received some or all of an Advance Reimbursement Amount related to
P&I Advances and/or Servicing Advances that were made by a Person other than
such predecessor Servicer or its related Advance Financing Person in error, then
such Servicer's Assignee shall be required to remit any portion of such Advance
Reimbursement Amount to each Person entitled to such portion of such Advance
Reimbursement Amount. Without limiting the generality of the foregoing, the
Servicer shall remain entitled to be reimbursed by the Advance Financing Person
for all P&I Advances and/or Servicing Advances funded by the Servicer to the
extent the related Advance Reimbursement Amounts have not been assigned or
pledged to such Advance Financing Person or Servicer's Assignee.
(f) For purposes of any certification of a Servicing Officer of the
Servicer made pursuant to Section 4.01, any Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance referred to therein may have been made by such
Servicer or any predecessor Servicer. In making its determination that any P&I
Advance or Servicing Advance theretofore made has become a Nonrecoverable P&I
Advance or Nonrecoverable Servicing Advance, the Servicer shall apply the same
criteria in making such determination regardless of whether such P&I Advance or
Servicing Advance shall have been made by the Servicer or any predecessor
Servicer.
(g) The Trustee shall not, as a result of the existence of any
Advance Facility, have any additional responsibility to track or monitor Advance
Reimbursement Amounts or any Advance Facility, and, except as expressly provided
in Section 3.28(c) above, is not and shall not be obligated to make any payment
with respect to any Advance Reimbursement Amount. The Servicer hereby
indemnifies the Trustee, the Trust Fund and any successor Servicer, as
applicable, from and against any claims, losses, liabilities or damages
resulting from any claim by the related Advancing Person, except to the extent
that such claim, loss, liability or damage resulted from or arose out of
negligence, recklessness or willful misconduct on the part of the Trustee or the
successor Servicer, or failure by the successor Servicer or the Trustee to remit
funds as required by this Agreement or the commission of an act or omission to
act by the successor Servicer or the Trustee, and the passage of any applicable
cure or grace period, such that a Servicer Event of Termination under this
Agreement occurs or such entity is subject to termination for cause under this
Agreement.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICER
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
the Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee and other than the portion of
the Scheduled Payment representing principal on any second lien Mortgage Loan),
due during the Due Period immediately preceding such Remittance Date in respect
of the Mortgage Loans, which Scheduled Payments were not received as of the
close of business on the related Determination Date, plus (ii) with respect to
each REO Property, which REO Property was acquired during or prior to the
related Prepayment Period and as to which such REO Property an REO Disposition
did not occur during the related Prepayment Period, an amount equal to the
excess, if any, of the interest portion of the Scheduled Payments (with each
interest portion thereof net of the related Servicing Fee) that would have been
due on the related Due Date in respect of the related Mortgage Loans, over the
net income from such REO Property transferred to the Collection Account for
distribution on such Remittance Date.
(b) On each Remittance Date, the Servicer shall remit in immediately
available funds to the Trustee an amount equal to the aggregate amount of P&I
Advances, if any, to be made in respect of the Mortgage Loans and REO Properties
for the related Remittance Date either (i) from its own funds or (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case, it will cause to be made an appropriate entry in the records of
Collection Account that Amounts Held for Future Distribution have been, as
permitted by this Section 4.01, used by the Servicer in discharge of any such
P&I Advance) or (iii) in the form of any combination of (i) and (ii) aggregating
the total amount of P&I Advances to be made by the Servicer with respect to the
Mortgage Loans and REO Properties. In addition, the Servicer shall have the
right to reimburse itself for any P&I Advances previously made from the
Collection Account to the extent of Amounts Held for Future Distribution. Any
Amounts Held for Future Distribution and so used shall be appropriately
reflected in the Servicer's records and replaced by the Servicer by deposit in
the Collection Account on or before any future Remittance Date to the extent
required. The Servicer shall have the right to reimburse itself from the
Collection Account for xxxxxxxxxxxx X&X Advances or Servicing Advances made in
connection with the modification of a Mortgage Loan.
(c) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from coverage under this Agreement, except as otherwise provided
in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance
or Servicing Advance shall be required to be made hereunder by the Servicer if
such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by the Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of the Servicer delivered to the Trustee.
(e) Except as otherwise provided herein, the Servicer shall be
entitled to reimbursement pursuant to Section 3.11 for Servicing Advances from
recoveries from the related Mortgagor or from all Liquidation Proceeds and other
payments or recoveries (including Insurance Proceeds, Condemnation Proceeds and
Subsequent Recoveries) with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Trustee will make the disbursements and transfers from amounts then on
deposit in the Distribution Account in the following order of priority and to
the extent of the Available Funds remaining:
(i) to the Supplemental Interest Trust and to the holders of each
Class of Principal Certificates in the following order of priority:
(A) to the Supplemental Interest Trust, the sum of (x) all Net
Swap Payments, if any, and (y) any Swap Termination Payment owed to
the Swap Provider other than a Defaulted Swap Termination Payment;
(B) from the Interest Remittance Amounts, to the Class A-1,
Class A-2 and Class A-3 Certificates, the related Accrued
Certificate Interest Distribution Amount and Unpaid Interest Amounts
for such Classes for such Distribution Date;
(C) from any remaining Interest Remittance Amounts, to the
Class M-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(D) from any remaining Interest Remittance Amounts, to the
Class M-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(E) from any remaining Interest Remittance Amounts, to the
Class M-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to the
Class M-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on
such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the
Class M-5 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to the
Class M-6 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(I) from any remaining Interest Remittance Amounts, to the
Class B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(J) from any remaining Interest Remittance Amounts, to the
Class B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on
such Distribution Date;
(K) from any remaining Interest Remittance Amounts, to the
Class B-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(L) from any remaining Interest Remittance Amounts, to the
Class B-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date; and
(M) from any remaining Interest Remittance Amounts, to the
Class B-5 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date.
(ii) (A) on each Distribution Date (1) before the Stepdown Date or
(2) with respect to which a Trigger Event is in effect, to the holders of
the related Class or Classes of Principal Certificates then entitled to
distributions of principal as set forth below, from Available Funds
remaining on deposit in the Distribution Account after making
distributions pursuant to clause (i) above, an amount equal to the
Principal Distribution Amount in the following order of priority:
(a) to the Class A Certificates, allocated as described in
Section 4.02, until the respective Class Certificate Balances
thereof are reduced to zero; and
(b) sequentially to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2, Class B-3, Class
B-4 and Class B-5 Certificates, in that order, until the respective
Class Certificate Balances are reduced to zero;
(B) on each Distribution Date (1) on and after the Stepdown
Date and (2) as long as a Trigger Event is not in effect, to the holders
of the related Class or Classes of Principal Certificates then entitled to
distribution of principal, from Available Funds remaining on deposit in
the Distribution Account after making distributions pursuant to clause (i)
above, an amount equal to, in the aggregate, the Principal Distribution
Amount in the following amounts and order of priority:
(a) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount, allocated as described in Section 4.02, until
the respective Class Certificate Balances thereof are reduced to
zero;
(b) to the Class M-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above and (y) the Class M-1 Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced to zero;
(c) to the Class M-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above and to the Class M-1 Certificates in clause (ii)(B)(b) above
and (y) the Class M-2 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(d) to the Class M-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above and
to the Class M-2 Certificates in clause (ii)(B)(c) above and (y) the
Class M-3 Principal Distribution Amount, until the Class Certificate
Balance thereof has been reduced to zero;
(e) to the Class M-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above and to the
Class M-3 Certificates in clause (ii)(B)(d) above and (y) the Class
M-4 Principal Distribution Amount, until the Class Certificate
Balance thereof has been reduced to zero;
(f) to the Class M-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above, to the Class
M-3 Certificates in clause (ii)(B)(d) above and to the Class M-4
Certificates in clause (ii)(B)(e) above and (y) the Class M-5
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(g) to the Class M-6 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above, to the Class
M-3 Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above and to the Class M-5
Certificates in clause (ii)(B)(f) above and (y) the Class M-6
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(h) to the Class B-1 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above, to the Class
M-3 Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above, to the Class M-5
Certificates in clause (ii)(B)(f) above and to the Class M-6
Certificates in clause (ii)(B)(g) above and (y) the Class B-1
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(i) to the Class B-2 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above, to the Class
M-3 Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above, to the Class M-5
Certificates in clause (ii)(B)(f) above, to the Class M-6
Certificates in clause (ii)(B)(g) above and to the Class B-1
Certificates in clause (ii)(B)(h) above and (y) the Class B-2
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(j) to the Class B-3 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the amount
distributed to the Class A Certificateholders in clause (ii)(B)(a)
above, to the Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above, to the Class
M-3 Certificates in clause (ii)(B)(d) above, to the Class M-4
Certificates in clause (ii)(B)(e) above, to the Class M-5
Certificates in clause (ii)(B)(f) above, to the Class M-6
Certificates in clause (ii)(B)(g) above, to the Class B-1
Certificates in clause (ii)(B)(h) above and to the Class B-2
Certificates in clause (ii)(B)(i) above and (y) the Class B-3
Principal Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(k) to the Class B-4 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificateholders in clause
(ii)(B)(b) above, to the Class M-2 Certificateholders in clause
(ii)(B)(c) above, to the Class M-3 Certificateholders in clause
(ii)(B)(d) above, to the Class M-4 Certificateholders in clause
(ii)(B)(e) above, to the Class M-5 Certificateholders in clause
(ii)(B)(f) above, to the Class M-6 Certificateholders in clause
(ii)(B)(g) above to the Class B-1 Certificateholders in clause
(ii)(B)(h) above, to the Class B-2 Certificateholders in clause
(ii)(B)(i) above and to the Class B-3 Certificateholders in clause
(ii)(B)(j) above and (y) the Class B-4 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero; and
(l) to the Class B-5 Certificates, the lesser of (x) the
excess of (i) the Principal Distribution Amount over (ii) the
amounts distributed to the Class A Certificateholders in clause
(ii)(B)(a) above, to the Class M-1 Certificateholders in clause
(ii)(B)(b) above, to the Class M-2 Certificateholders in clause
(ii)(B)(c) above, to the Class M-3 Certificateholders in clause
(ii)(B)(d) above, to the Class M-4 Certificateholders in clause
(ii)(B)(e) above, to the Class M-5 Certificateholders in clause
(ii)(B)(f) above, to the Class M-6 Certificateholders in clause
(ii)(B)(g) above, to the Class B-1 Certificateholders in clause
(ii)(B)(h) above, to the Class B-2 Certificateholders in clause
(ii)(B)(i) above, to the Class B-3 Certificateholders in clause
(ii)(B)(j) above and to the Class B-4 Certificateholders in clause
(ii)(B)(k) above and (y) the Class B-5 Principal Distribution
Amount, until their Class Certificate Balance has been reduced to
zero;
(iii) any amount of Available Funds remaining after the
distributions in clauses (i) and (ii) above, plus as specifically
indicated below, from amounts on deposit in the Excess Reserve Fund
Account shall be distributed in the following order of priority:
(A) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amount for such Class;
(B) to the holders of the Class M-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(C) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amount for such Class;
(D) to the holders of the Class M-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(E) to the holders of the Class M-3 Certificates, any Unpaid
Interest Amount for such Class;
(F) to the holders of the Class M-3 Certificates, any Unpaid
Realized Loss Amount for such Class;
(G) to the holders of the Class M-4 Certificates, any Unpaid
Interest Amount for such Class;
(H) to the holders of the Class M-4 Certificates, any Unpaid
Realized Loss Amount for such Class;
(I) to the holders of the Class M-5 Certificates, any Unpaid
Interest Amount for such Class;
(J) to the holders of the Class M-5 Certificates, any Unpaid
Realized Loss Amount for such Class;
(K) to the holders of the Class M-6 Certificates, any Unpaid
Interest Amount for such Class;
(L) to the holders of the Class M-6 Certificates, any Unpaid
Realized Loss Amount for such Class;
(M) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amount for such Class;
(N) to the holders of the Class B-1 Certificates, any Unpaid
Realized Loss Amount for such Class;
(O) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amount for such Class;
(P) to the holders of the Class B-2 Certificates, any Unpaid
Realized Loss Amount for such Class;
(Q) to the holders of the Class B-3 Certificates, any Unpaid
Interest Amount for such Class;
(R) to the holders of the Class B-3 Certificates, any Unpaid
Realized Loss Amount for such Class;
(S) to the holders of the Class B-4 Certificates, any Unpaid
Interest Amount for that Class;
(T) to the holders of the Class B-4 Certificates, any Unpaid
Realized Loss Amount for that Class;
(U) to the holders of the Class B-5 Certificates, any Unpaid
Interest Amount for that Class;
(V) to the holders of the Class B-5 Certificates, any Unpaid
Realized Loss Amount for that Class;
(W) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(X) from funds on deposit in the Excess Reserve Fund Account
with respect to such Distribution Date, an amount equal to any
unpaid Basis Risk Carry Forward Amount with respect to any Principal
Certificate for such Distribution Date to the Principal Certificates
in the same order and priority in which the Accrued Certificate
Interest Distribution Amount is allocated among such Classes of
Certificates, except that the Class A Certificates shall be paid (a)
first, pro rata, based upon their respective Class Certificate
Balances (only with respect to those Class A Certificates with an
outstanding Basis Risk Carry Forward Amount) and (b) second, any
remaining amounts, pro rata, based on any such Basis Risk Carry
Forward Amounts remaining unpaid;
(Y) to the Supplemental Interest Trust, the amount of any
Defaulted Swap Termination Payment;
(Z) if a 40-Year Trigger Event is in effect, any remaining
amounts, sequentially, to the Class X-0, Xxxxx X-0, Class A-3, Class
M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
B-1, Class B-2, Class B-3, Class B-4 and Class B-5 Certificates the
lesser of (x) any remaining amounts and (y) the amount necessary to
increase the actual Overcollateralization Amount for such
Distribution Date so that a 40-Year Trigger Event is no longer in
effect, in each case, until their respective Class Certificate
Balances have been reduced to zero;
(AA) to the holders of the Class CE Certificates, the
remainder of the Class CE Distributable Amount not distributed
pursuant to Sections 4.02(a)(iii)(A)-(Z) and any remaining amounts
in the Excess Reserve Fund Account; and
(BB) to the holders of the Class R and Class R-X Certificates,
any remaining amount.
(b) On each Distribution Date, all amounts representing Prepayment
Charges from the Mortgage Loans received during the related Prepayment Period
shall be distributed by the Trustee to the holders of the Class P Certificates.
On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Trustee first, to reduce the amount distributable to the Class CE
Certificates and second, pro rata, as a reduction of the Accrued Certificate
Interest Distribution Amount for the Class A, Class M and Class B Certificates,
based on the amount of interest to which such Classes would otherwise be
entitled.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Servicer, the Depositor and each Rating Agency a
statement, based on information provided by the Servicer, setting forth with
respect to the related distribution:
(i) the amount thereof allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments, Liquidation
Proceeds and Subsequent Recoveries;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amounts included in such distribution and any remaining Unpaid Interest
Amounts after giving effect to such distribution, any Basis Risk Carry
Forward Amount for such Distribution Date and the amount of all Basis Risk
Carry Forward Amount covered by withdrawals from the Excess Reserve Fund
Account or, in the case of the LIBOR Certificates, the Supplemental
Interest Trust Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation thereof as between principal and
interest, including any Basis Risk Carry Forward Amount not covered by
amounts in the Excess Reserve Fund Account or, in the case of the LIBOR
Certificates, the Supplemental Interest Trust Account;
(iv) the Class Certificate Balance of each Class of Certificates
before and after giving effect to the distribution of principal on such
Distribution Date;
(v) the Pool Stated Principal Balance for the following Distribution
Date;
(vi) the amount of the Expense Fees (in the aggregate and separately
stated) paid to or retained by the Servicer or Subservicer or the Trustee
(with respect to the Subservicers, in the aggregate) with respect to such
Distribution Date;
(vii) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(viii) the amount of P&I Advances included in the distribution on
such Distribution Date and the aggregate amount of P&I Advances reported
by the Servicer as outstanding as of the close of business on the
Determination Date immediately preceding such Distribution Date;
(ix) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days, 91 days or more, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(x) with respect to Mortgage Loans that became REO Properties during
the preceding calendar month, the number and the aggregate Stated
Principal Balance of such Mortgage Loans as of the close of business on
the Determination Date preceding such Distribution Date and the date of
acquisition thereof;
(xi) the total number and aggregate principal balance of any REO
Properties (and market value, upon request) as of the close of business on
the Determination Date preceding such Distribution Date;
(xii) whether a Trigger Event has occurred and is continuing
(including the calculation thereof and the aggregate outstanding balance
of all 60+ Day Delinquent Mortgage Loans);
(xiii) the amount of any Basis Risk Carry Forward Amounts paid from
the Excess Reserve Fund Account or, in the case of the LIBOR Certificates,
from the Supplemental Interest Trust Account;
(xiv) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xv) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Applied Realized Loss Amounts and Unpaid Interest Amounts;
(xvi) the Overcollateralized Amount and Specified Overcollateralized
Amount;
(xvii) Prepayment Charges collected by the Servicer;
(xviii) the amount of any Net Swap Payments, Net Swap Receipts, Swap
Termination Payments or Defaulted Swap Termination Payments;
(xix) the calculations of LIBOR and Swap LIBOR;
(xx) the Cumulative Loss Percentage;
(xxi) the calculations of LIBOR;
(xxii) the related Record Date;
(xxiii) the related Accrual Period;
(xxiv) the related Determination Date;
(xxv) the related Distribution Date;
(xxvi) the amount of cash received with respect to the related
Accrual Period;
(xxvii) the amount distributed on the Class CE Certificates; and
(xxviii) the number of Mortgage Loans at the end of the applicable
reporting period, the pool factor, and the weighted average interest rate,
and weighted average remaining term;
(b) The Trustee's responsibility for providing the above statement
to the Certificateholders, each Rating Agency, the Servicer and the Depositor is
limited to the availability, timeliness and accuracy of the information derived
from the Servicer. The Trustee will provide the above statement via the
Trustee's internet website. The Trustee's website will initially be located at
xxxx://xxx.xxxxxx.xxx/xxx and assistance in using the website can be obtained by
calling the Trustee's customer service desk at (000) 000-0000. Parties that are
unable to use the above distribution method are entitled to have a paper copy
mailed to them via first class mail by calling the customer service desk and
indicating such. The Trustee shall have the right to change the manner in which
the above statement is distributed in order to make such distribution more
convenient and/or more accessible, and the Trustee shall provide timely and
adequate notification to the Certificateholders and the parties hereto regarding
any such changes. A paper copy of the statement will also be made available upon
request.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall cause to be furnished to each Person who at any
time during the calendar year was a Certificateholder, a statement containing
the information set forth in clauses (a)(i), (a)(ii) and (a)(vi) of this Section
4.03 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall have previously been provided by the Trustee pursuant to any
requirements of the Code as from time to time in effect.
(d) Not later than three Business Days following the Determination
Date and in no event later than the 20th calendar day of each month, the
Servicer shall furnish to the Trustee a monthly remittance advice statement (in
a format mutually agreed upon by the Servicer and the Trustee) containing such
information as shall be reasonably requested by the Trustee to enable the
Trustee to provide the reports required by Section 4.03(a) as to the
accompanying remittance (the "Servicer Remittance Report").
The Servicer shall furnish to the Trustee an individual loan
accounting report, as of the related Determination Date, to document Mortgage
Loan payment activity on an individual Mortgage Loan basis. With respect to each
month, the corresponding individual loan accounting report (in electronic
format) shall be received by the Trustee no later than three Business Days
following the related Determination Date and in no event later than the 20th
calendar day of each month, which report shall contain (without limitation) the
following:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Charges, along with a detailed report of interest on principal
prepayment amounts remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of Servicing Fees received by the Servicer during
the prior distribution period;
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(v) the aggregate of any expenses reimbursed to the Servicer during
the prior distribution period pursuant to Section 3.11; and
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 31 to 60 days, (2) 61 to 90 days, (3) 91
days or more; (b) as to which foreclosure has commenced; and (c) as to
which REO Property has been acquired.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Trustee in accordance with the definition of
LIBOR. Until all of the LIBOR Certificates are paid in full, the Trustee will at
all times retain at least four Reference Banks for the purpose of determining
LIBOR with respect to each LIBOR Determination Date. The Trustee initially shall
designate the Reference Banks (after consultation with the Depositor). Each
"Reference Bank" shall be a leading bank engaged in transactions in Eurodollar
deposits in the international Eurocurrency market, shall not control, be
controlled by, or be under common control with, the Trustee and shall have an
established place of business in London. If any such Reference Bank should be
unwilling or unable to act as such or if the Trustee should terminate its
appointment as Reference Bank, the Trustee shall promptly appoint or cause to be
appointed another Reference Bank (after consultation with the Depositor). The
Trustee shall have no liability or responsibility to any Person for (i) the
selection of any Reference Bank for purposes of determining LIBOR or (ii) any
inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.
(i) The Pass-Through Rate for each Class of LIBOR Certificates for
each Interest Accrual Period shall be determined by the Trustee on each
LIBOR Determination Date so long as the LIBOR Certificates are outstanding
on the basis of LIBOR and the respective formulae appearing in footnotes
corresponding to the LIBOR Certificates in the table relating to the
Certificates in the Preliminary Statement. The Trustee shall not have any
liability or responsibility to any Person for its inability, following a
good-faith reasonable effort, to obtain quotations from the Reference
Banks or to determine the arithmetic mean referred to in the definition of
LIBOR, all as provided for in this Section 4.04 and the definition of
LIBOR. The establishment of LIBOR and each Pass-Through Rate for the LIBOR
Certificates by the Trustee shall (in the absence of manifest error) be
final, conclusive and binding upon each Holder of a Certificate and the
Trustee.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts will be allocated by the Trustee to the most
junior Class of Subordinated Certificates then outstanding in reduction of the
Class Certificate Balance thereof.
Section 4.06 Supplemental Interest Trust. On the Closing Date, the
Trustee shall establish and maintain in its name, a separate non-interest
bearing trust account (the "Supplemental Interest Trust Account"), which will be
a separate account, for the benefit of the holders of the Principal Certificates
as a part of the Trust Fund (the "Supplemental Interest Trust"). The
Supplemental Interest Trust Account shall be an Eligible Account, and funds on
deposit therein shall be held separate and apart from, and shall not be
commingled with, any other moneys, including, without limitation, other moneys
of the Trustee held pursuant to this Agreement.
On any Distribution Date, Swap Termination Payments, Net Swap
Payments owed to the Swap Provider and Net Swap Receipts for that Distribution
Date will be deposited into the Supplemental Interest Trust Account. Funds in
the Supplemental Interest Trust Account will be distributed in the following
order of priority:
(i) to the Swap Provider, the sum of (x) all Net Swap Payments and
(y) any Swap Termination Payment, other than a Defaulted Swap Termination
Payment, to the Swap Provider, if any, owed for that Distribution Date;
(ii) to the holders of the Principal Certificates, to pay principal
as described in Section 4.02(a)(ii), but only to the extent necessary to
maintain the Overcollateralized Amount at the Specified Overcollateralized
Amount as a result of current or prior Realized Losses not yet reimbursed,
after giving effect to payments and distributions from other Available
Funds;
(iii) to the LIBOR Certificateholders, to pay Basis Risk Carry
Forward Amounts as described in Section 4.02(a)(iii), to the extent unpaid
from other Available Funds (including Basis Risk Payments on deposit in
the Excess Reserve Fund Account);
(iv) to the Swap Provider, any Defaulted Swap Termination Payment
owed to the Swap Provider for that Distribution Date; and
(v) to the holders of the Class CE Certificates, any remaining
amounts.
Upon termination of the Trust, any amounts remaining in the
Supplemental Interest Trust Account shall be distributed pursuant to the
priorities set forth in this Section 4.06.
The Trustee shall account for the Supplemental Interest Trust as an
asset of a grantor trust under subpart E, Part I of subchapter J of the Code and
not as an asset of any Trust REMIC created pursuant to this Agreement. The
beneficial owners of the Supplemental Interest Trust are the Class CE
Certificateholders. For federal income tax purposes, Net Swap Payments and Swap
Termination Payments payable to the Swap Provider shall be deemed to be paid to
the Supplemental Interest Trust Account first, from the Class XX XXXXX, by the
Holder of the Class CE Certificates (in respect of the Class IO Interest and, if
applicable, Class CE Interest) and second, other than any Defaulted Swap
Termination Payment, from the Upper-Tier REMIC by the Holders of the applicable
Class or Classes of Principal Certificates (in respect of Class IO Shortfalls),
as and to the extent provided in Section 8.13.
Any Basis Risk Carry Forward Amounts distributed to the LIBOR
Certificateholders from the Supplemental Interest Trust Account shall be
accounted for by the Trustee, for federal income tax purposes, as amounts paid
first to the Holders of the Class CE Certificates in respect of the Class CE
Interest then to the respective Class or Classes of LIBOR Certificates. In
addition, the Trustee shall account for the rights of Holders of each Class of
LIBOR Certificates to receive payments of Basis Risk Carry Forward Amounts from
the Supplemental Interest Trust and from the Excess Reserve Fund Account as
rights in a separate limited recourse interest rate cap contract written by the
Class CE Certificateholders in favor of the Holders of each such Class.
The Supplemental Interest Trust shall be an "outside reserve fund"
for federal income tax purposes and not an asset of any Trust REMIC.
Furthermore, the Holders of the Class CE Certificates shall be the beneficial
owners of the Supplemental Interest Trust for all federal income tax purposes,
and shall be taxable on all income earned thereon.
With respect to the failure of the Swap Provider to perform any of
its obligations under the Interest Rate Swap Agreement, the breach by the Swap
Provider of any of its representations and warranties made pursuant to the
Interest Rate Swap Agreement, or the termination of the Interest Rate Swap
Agreement, the Trustee shall send any notices and make any demands, on behalf of
the Trust, as are required under the Interest Rate Swap Agreement. The Trustee
shall cause any replacement swap provider to provide a copy of the related
replacement interest rate swap agreement to the Trustee and the Depositor.
The Trustee shall provide notice to the Swap Provider no later than
the Business Day immediately following the date on which the Swap Provider fails
to make, when due, any transfer of collateral pursuant to the Credit Support
Annex of the Interest Rate Swap Agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount) and aggregate denominations per Class set forth in the
Preliminary Statement.
Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if such Holder has so
notified the Trustee at least five Business Days prior to the related Record
Date or (y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time such
signatures were affixed, authorized to sign on behalf of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
be so authorized prior to the authentication and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless authenticated by the Trustee by manual signature, and
such authentication upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their authentication. On
the Closing Date, the Trustee shall authenticate the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Trustee shall maintain, or cause to be
maintained in accordance with the provisions of Section 5.06, a Certificate
Register for the Trust Fund in which, subject to the provisions of subsections
(b) and (c) below and to such reasonable regulations as it may prescribe, the
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. Upon surrender for registration of
transfer of any Certificate, the Trustee shall execute and deliver, in the name
of the designated transferee or transferees, one or more new Certificates of the
same Class and aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Trustee. Whenever
any Certificates are so surrendered for exchange, the Trustee shall execute,
authenticate, and deliver the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Trustee duly executed by the
holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Trustee in
accordance with the Trustee's customary procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In
determining whether a transfer is being made pursuant to an effective
registration statement, the Trustee shall be entitled to rely solely upon a
written notice to such effect from the Depositor. The Trustee shall be under no
obligation to register or cause the registration of any Certificates under the
Securities Act or any applicable state securities laws or to take any other
action not otherwise required under this Agreement to permit the transfer of any
Certificate without registration. Except with respect to the transfer of the
Class CE, Class P, Class R-X or Class R Certificates to the Depositor or an
Affiliate of the Depositor, in the event that a transfer of a Private
Certificate which is a Physical Certificate is to be made in reliance upon an
exemption from the Securities Act and such laws, in order to assure compliance
with the Securities Act and such laws, the Certificateholder desiring to effect
such transfer shall certify to the Trustee in writing the facts surrounding the
transfer in substantially the form set forth in Exhibit H (the "Transferor
Certificate") and either (i) there shall be delivered to the Trustee a letter in
substantially the form of Exhibit I (the "Rule 144A Letter") or Exhibit I-2 (the
"Non-Rule 144A Investment Letter") or (ii) there shall be delivered to the
Trustee at the expense of the transferor an Opinion of Counsel that such
transfer may be made without registration under the Securities Act. In the event
that a transfer of a Private Certificate which is a Book-Entry Certificate is to
be made in reliance upon an exemption from the Securities Act and such laws, in
order to assure compliance with the Securities Act and such laws, the
Certificateholder desiring to effect such transfer will be deemed to have made
as of the transfer date each of the certifications set forth in the Transferor
Certificate in respect of such Certificate and the transferee will be deemed to
have made as of the transfer date each of the certifications set forth in the
Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate. A transferee of any
Private Certificate who is not a "qualified institutional buyer" as that term is
defined in Rule 144A of the Securities Act must take delivery of such Private
Certificates in definitive form. As directed by the Depositor, the Trustee shall
provide to any Holder of a Private Certificate and any prospective transferee
designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Depositor and
the Servicer shall cooperate with the Trustee in providing the Rule 144A
information referenced in the preceding sentence, including providing to the
Trustee such information regarding the Certificates, the Mortgage Loans and
other matters regarding the Trust Fund as the Depositor shall reasonably
determine to meet its obligation under the preceding sentence. Each Holder of a
Private Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trustee, the Servicer and the Depositor against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
Except with respect to the transfer of the Class CE, Class P, Class
R-X or Class R Certificates to the Depositor or an Affiliate of the Depositor,
no transfer of an ERISA-Restricted Certificate shall be made unless the Trustee
shall have received either (i) a representation from the transferee of such
Certificate acceptable to and in form and substance satisfactory to the Trustee
(in the event such Certificate is a Private Certificate or a Residual
Certificate, such requirement is satisfied only by the Trustee's receipt of a
representation letter from the transferee substantially in the form of Exhibit
I), to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code or a plan subject to any Federal, state or local law ("Similar Law")
materially similar to the foregoing provisions of ERISA or the Code, nor a
person acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement to effect such transfer, or (ii) in the case of an
ERISA-Restricted Certificate other than a Residual Certificate or a Class P
Certificate that has been the subject of an ERISA-Qualifying Underwriting, and
the purchaser is an insurance company, a representation that the purchaser is an
insurance company that is purchasing such Certificates with funds contained in
an "insurance company general account" (as such term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates are covered under Sections I and III
of PTCE 95-60 or (iii) in the case of any such ERISA-Restricted Certificate
other than a Residual Certificate or Class P Certificate presented for
registration in the name of an employee benefit plan subject to Title I of
ERISA, a plan or arrangement subject to Section 4975 of the Code (or comparable
provisions of any subsequent enactments), or a plan subject to Similar Law, or a
trustee of any such plan or any other person acting on behalf of any such plan
or arrangement or using such plan's or arrangement's assets, an Opinion of
Counsel satisfactory to the Trustee and the Servicer, which Opinion of Counsel
shall not be an expense of the Depositor, the Trustee, the Servicer or the Trust
Fund, addressed to the Trustee, to the effect that the purchase or holding of
such ERISA-Restricted Certificate will not constitute or result in a non-exempt
prohibited transaction within the meaning of ERISA, Section 4975 of the Code or
any Similar Law and will not subject the Depositor, the Trustee or the Servicer
to any obligation in addition to those expressly undertaken in this Agreement or
to any liability. For purposes of the preceding sentence, with respect to an
ERISA-Restricted Certificate that is not a Private Certificate or a Residual
Certificate, in the event the representation letter referred to in the preceding
sentence is not furnished, such representation shall be deemed to have been made
to the Trustee by the transferee's (including an initial acquirer's) acceptance
of the ERISA-Restricted Certificates. Notwithstanding anything else to the
contrary herein, (a) any purported transfer of an ERISA-Restricted Certificate,
other than a Class P Certificate or Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Trustee of an Opinion of Counsel satisfactory to the Trustee as
described above shall be void and of no effect and (b) any purported transfer of
a Class P Certificate or Residual Certificate to a transferee that does not make
the representation in clause (i) above shall be void and of no effect.
None of the Class R, Class R-X or Class P Certificates may be sold
to any employee benefit plan subject to Title I of ERISA, any plan subject to
Section 4975 of the Code, or any plan subject to any Similar Law or any person
investing on behalf or with plan assets of such plan.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.
As long as the Interest Rate Swap Agreement is in effect, each
beneficial owner of a Certificate other than an ERISA-Restricted Certificate or
a Fixed-Rate Certificate, or any interest therein, shall be deemed to have
represented that either (i) it is not a Plan or (ii) the acquisition and holding
of the Certificate are eligible for the exemptive relief available under at
least one of the Investor Based Exemptions
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the Trustee
shall not register the Transfer of any Residual Certificate unless, in
addition to the certificates required to be delivered to the Trustee under
subparagraph (b) above, the Trustee shall have been furnished with an
affidavit (a "Transfer Affidavit") of the initial owner or the proposed
transferee in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Trustee shall be under no
liability to any Person for any registration of Transfer of a Residual
Certificate that is in fact not permitted by Section 5.02(b) and this
Section 5.02(c) or for making any payments due on such Certificate to the
Holder thereof or taking any other action with respect to such Holder
under the provisions of this Agreement so long as the Transfer was
registered after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Trustee shall be entitled but
not obligated to recover from any Holder of a Residual Certificate that
was in fact a Non-Permitted Transferee at the time it became a Holder or,
at such subsequent time as it became a Non-Permitted Transferee, all
payments made on such Residual Certificate at and after either such time.
Any such payments so recovered by the Trustee shall be paid and delivered
by the Trustee to the last preceding Permitted Transferee of such
Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Trustee, all information necessary to
compute any tax imposed under Section 860E(e) of the Code as a result of a
Transfer of an Ownership Interest in a Residual Certificate to any Holder
who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee or the
Servicer, to the effect that the elimination of such restrictions will not cause
any Trust REMIC to fail to qualify as a REMIC at any time that the Certificates
are outstanding or result in the imposition of any tax on the Trust Fund, a
Certificateholder or another Person. Each Person holding or acquiring any
Ownership Interest in a Residual Certificate hereby consents to any amendment of
this Agreement which, based on an Opinion of Counsel furnished to the Trustee,
is reasonably necessary (a) to ensure that the record ownership of, or any
beneficial interest in, a Residual Certificate is not transferred, directly or
indirectly, to a Person that is a Non-Permitted Transferee and (b) to provide
for a means to compel the Transfer of a Residual Certificate which is held by a
Person that is a Non-Permitted Transferee to a Holder that is a Permitted
Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at
all times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.
All transfers by Certificate Owners of Book-Entry Certificates shall
be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, or (y) the Depositor notifies the
Depository of its intent to terminate the book-entry system through the
Depository and, upon receipt of notice of such intent from the Depository, the
Depository Participants holding beneficial interests in the Book-Entry
Certificates agree to initiate such termination, the Trustee shall notify all
Certificate Owners, through the Depository, of the occurrence of any such event
and of the availability of definitive, fully registered Certificates (the
"Definitive Certificates") to Certificate Owners requesting the same. Upon
surrender to the Trustee of the related Class of Certificates by the Depository,
accompanied by the instructions from the Depository for registration, the
Trustee shall issue the Definitive Certificates. None of the Servicer, the
Depositor or the Trustee shall be liable for any delay in delivery of such
instruction and each may conclusively rely on, and shall be protected in relying
on, such instructions. The Depositor shall provide the Trustee with an adequate
inventory of Certificates to facilitate the issuance and transfer of Definitive
Certificates. Upon the issuance of Definitive Certificates all references herein
to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Trustee, to the extent applicable with
respect to such Definitive Certificates and the Trustee shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder;
provided, that the Trustee shall not by virtue of its assumption of such
obligations become liable to any party for any act or failure to act of the
Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Trustee, duly
executed by the Certificateholder or his attorney duly authorized in writing.
Each Certificate presented or surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by the Trustee in
accordance with its customary practice. No service charge shall be made for any
registration of transfer or exchange of Private Certificates, but the Trustee
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Private
Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) there is delivered to the Depositor, the Servicer and the
Trustee such security or indemnity as may be required by them to hold each of
them harmless, then, in the absence of notice to the Trustee that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute, authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
Class, tenor and Percentage Interest. In connection with the issuance of any new
Certificate under this Section 5.03, the Trustee may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 5.03 shall constitute complete and indefeasible evidence of
ownership, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicer, the Trustee, the
Depositor and any agent of the Servicer, the Depositor or the Trustee may treat
the Person in whose name any Certificate is registered as the owner of such
Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither the Servicer, the
Trustee, the Depositor, nor any agent of the Servicer, the Depositor or the
Trustee shall be affected by any notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Trustee will
maintain or cause to be maintained at its expense an office or offices or agency
or agencies where Certificates may be surrendered for registration of transfer
or exchange. The Trustee initially designates its offices located at 00
Xxxxxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000. The Trustee shall give prompt
written notice to the Certificateholders of any change in such location of any
such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICER
Section 6.01 Respective Liabilities of the Depositor and the
Servicer. The Depositor and the Servicer 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 6.02 Merger or Consolidation of the Depositor or the
Servicer. (a) The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, under the laws of the United States or under the laws
of one of the states thereof and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
(b) The Servicer is and shall continue to be an institution which is
a Xxxxxx Xxx-approved and Xxxxxxx Mac-approved seller/servicer in good standing,
shall maintain a net worth of at least $15,000,000 (as determined in accordance
with generally accepted accounting principles) and shall maintain its license to
do business or service residential mortgage loans in any jurisdictions in which
the Mortgaged Properties are located.
(c) Any Person into which the Depositor or the Servicer may be
merged or consolidated, or any Person resulting from any merger or consolidation
to which the Depositor or the Servicer shall be a party, or any person
succeeding to the business of the Depositor or the Servicer, shall be the
successor of the Depositor or the Servicer, 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, however, that the successor or surviving Person to the Servicer shall
make the covenant set forth in Section 6.02(b). As a condition to the succession
to the Servicer under this Agreement by any Person (i) into which a Servicer may
be merged or consolidated, or (ii) which may be appointed as a successor to a
Servicer, such Servicer shall provide to the Depositor, at least 30 calendar
days (or 10 Business Days in the case of the appointment of the Servicing Rights
Pledgee or its designee as successor servicer pursuant to Sections 6.06 or 7.02
provided, however that the 30 calendar days or 10 Business Days notice period
shall not apply once the Depositor is not required to file reports pursuant to
the Exchange Act) 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 necessary to enable the Trustee, pursuant to Section
8.12(g), to accurately and timely report the event under Item 6.02 of Form 8-K
pursuant to the Exchange Act (if such reports under the Exchange Act are
required to be filed under the Exchange Act).
Section 6.03 Limitation on Liability of the Depositor, the Servicer
and Others. Neither the Depositor, the Servicer, nor any of their respective
directors, officers, employees or agents shall be under any liability to the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor, the
Servicer or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicer or any such Person from
any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, any of its Affiliates, the
Servicer and any of their respective directors, officers, employees or agents
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising hereunder. The
Depositor, any of its Affiliates, the Servicer and any of their respective
directors, officers, employees or agents shall be indemnified by the Trust Fund
and held harmless against any loss, liability or expense incurred in connection
with any audit, controversy or judicial proceeding relating to a governmental
taxing authority or any legal action relating to this Agreement or the
Certificates other than any loss, liability or expense related to 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. The Depositor shall not
be under any obligation to appear in, prosecute or defend any legal action that
is not incidental to its respective duties hereunder and which in its opinion
may involve it in any expense or liability; provided, however, that the
Depositor may in its discretion undertake any such action (or direct the Trustee
to undertake such actions pursuant to Section 2.03 for the benefit of the
Certificateholders) that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the parties hereto and interests of the
Trustee and the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor shall be
entitled to be reimbursed therefor out of the Collection Account.
Neither the Servicer nor any of the officers, employees or agents of
the Servicer shall be under any liability to the Trustee or the Depositor for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement. The Servicer and any officer, employee or agent of
the Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement and which in its
opinion may involve it in any expenses or liability; provided, however, that the
Servicer may undertake any such action which it may deem necessary or desirable
in respect to this Agreement and the rights and duties of the parties hereto. In
such event, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities for which the Trust
Fund will be liable, and the Servicer shall be entitled to be reimbursed
therefor out of the Collection Account. The Servicer's right to indemnity or
reimbursement pursuant to this Section shall survive any resignation or
termination of the Servicer with respect to any losses, expenses, costs or
liabilities arising prior to such resignation or termination (or arising from
events that occurred prior to such resignation or termination).
Section 6.04 Limitation on Resignation of the Servicer. Subject to
Sections 6.02, 6.06, 7.01 and the last paragraph of 7.02, the Servicer shall not
resign from the obligations and duties hereby imposed on it except by mutual
consent of the Servicer, the Depositor and the Trustee or (i) upon the
determination that the performance of its obligations or duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it or its subsidiaries or
Affiliates, the other activities of the Servicer so causing such a conflict
being of a type and nature carried on by the Servicer or its subsidiaries or
Affiliates at the date of this Agreement or (ii) upon satisfaction of the
following conditions: (a) the Servicer has proposed a successor servicer to the
Trustee and (b) each Rating Agency shall have delivered a letter to the Trustee
prior to the appointing of the successor servicer stating that the proposed
appointment of such successor servicer as Servicer hereunder will not result in
the reduction or withdrawal of the then current rating of the Certificates;
provided, however, that no such resignation by the Servicer shall become
effective until such successor servicer or, in the case of (i) above, the
Trustee shall have assumed the Servicer's responsibilities and obligations
hereunder or the Trustee shall have designated a successor servicer in
accordance with Section 7.02. Any such resignation shall not relieve the
Servicer of responsibility for any of the obligations specified in Sections 7.01
and 7.02 as obligations that survive the resignation or termination of the
Servicer. Any such determination permitting the resignation of the Servicer
pursuant to (i) above shall be evidenced by an Opinion of Counsel to such effect
delivered to the Depositor and the Trustee which Opinion of Counsel shall be in
form and substance reasonably acceptable to the Depositor and the Trustee. No
such resignation shall become effective until a successor shall have assumed in
writing the Servicer's responsibilities and obligations hereunder.
Section 6.05 Additional Indemnification by the Servicer and the
Seller; Third Party Claims. The Servicer shall indemnify the Seller, the
Depositor, the Trustee and any Affiliate, director, officer, employee or agent
of the Depositor and hold them harmless against any and all third party claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to any breach by the Servicer, of (i)
any of its representations and warranties in Section 2.05, (ii) any error in any
tax or information return prepared by the Servicer, or (iii) the failure of the
Servicer to perform its duties and service the Mortgage Loans in compliance with
the terms of this Agreement (including, without limitation, the failure to
deliver accurate and complete information on a timely basis pursuant to Section
4.03(d), or the failure to). The Servicer immediately shall notify the Depositor
and the Trustee if a claim is made by a third party with respect to this
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Depositor and the Trustee) the defense of any such claim and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it or the Seller,
the Depositor or the Trustee in respect of such claim.
(a) Notwithstanding anything to the contrary contained in this
Agreement, the Servicer shall indemnify the Depositor, the Trustee and any
director, officer, employee or agent of the Depositor or the Trustee and hold
them harmless against any and all claims, economic losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other related costs, fees and expenses that any of them
actually sustain, in each case that are likely foreseeable and directly related
to any failure by the Servicer or any Subservicer engaged by the Servicer or any
Subcontractor utilized by the Servicer to deliver any information, report,
certification or accountants' letter when and as required under Sections 3.22,
3.23, 6.02 or 8.12, including without limitation any failure by the Servicer to
identify pursuant to Section 3.02(e) any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB; provided,
however, the Servicer shall not be liable for any punitive damages.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Seller shall indemnify the Depositor, the Trustee and any
director, officer, employee or agent of the Depositor or the Trustee and hold
them harmless against any and all claims, economic losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other related costs, fees and expenses that any of them
actually sustain, in each case that are likely foreseeable and directly related
to any failure by the Seller to deliver any information as required under
Section 8.12; provided, however, the Seller shall not be liable for any punitive
damages.
(c) If the indemnification provided for in this Section 6.05 is
unavailable or insufficient to hold harmless any Person entitled to
indemnification thereunder, then such Servicer shall contribute to the amount
paid or payable to the party to be indemnified as a result of the losses,
claims, damages or liabilities of such Person in such proportion as is
appropriate to reflect the relative fault of such Person on the one hand and
such Servicer, on the other, in connection with a breach of such Servicer's
obligations pursuant to this Section 6.05. This Section 6.05 shall survive the
termination of this Agreement or the earlier resignation or removal of each
Servicer.
Section 6.06 Servicing Rights Pledge. The Trustee and the Depositor
hereby specifically (i) agree to the pledge and assignment by the Servicer of
all the Servicer's right, title and interest in, to and under this Agreement to
the Servicing Rights Pledgee, for the benefit of certain lenders, and (ii)
provided that no Event of Default exists with respect to the Servicer, agree
that ten Business Days after delivery to the Trustee by the Servicing Rights
Pledgee of a letter signed by the Servicer whereunder the Servicer shall resign
as Servicer under this Agreement, the Trustee shall appoint the Servicing Rights
Pledgee or its designee as successor Servicer, provided that at the time of such
appointment, the Servicing Rights Pledgee or such designee meets the
requirements of a successor Servicer pursuant to Section 7.02 and agrees to be
subject to the terms of this Agreement. If, pursuant to any provision hereof,
the duties of the Servicer are transferred to a successor, the entire amount of
the Servicing Fee and other compensation payable to the Servicer pursuant hereto
shall thereafter be payable to such successor.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default", wherever used
herein, means any one of the following events:
(a) any failure by the Servicer to remit to the Trustee any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Depositor or by the Trustee, or to the Servicer, the Depositor
and the Trustee by Certificateholders entitled to at least 25% of the Voting
Rights in the Certificates; or
(b) the failure on the part of the Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Servicer set forth in this Agreement which continues unremedied for
a period of forty-five days (except that (x) such number of days shall be thirty
in the case of a failure to pay any premium for any insurance policy required to
be maintained under this Agreement and (y) such number of days shall be ten in
the case of a failure to observe or perform any of the obligations set forth in
Sections 3.22, 3.23, 6.02, 6.04 or 8.12) after the earlier of (i) the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Servicer by the Depositor or by the Trustee, or to the
Servicer, the Depositor and the Trustee by Certificateholders entitled to at
least 25% of the Voting Rights in the Certificates and (ii) actual knowledge of
such failure by a Servicing Officer of the Servicer; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty consecutive days; or
(d) the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or
(e) the Servicer shall admit in writing its inability generally to
pay its debts as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or
(f) any failure of the Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01
which continues unremedied until 12:00 p.m. New York City time on the related
Distribution Date; or
(g) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to the Servicer by the Trustee or by the Depositor, or to the Servicer, the
Trustee and the Depositor by Certificateholders entitled to at least 25% of the
Voting Rights in the Certificates; or
(h) if a Cumulative Loss Event occurs.
If an Event of Default described in clauses (a) through (e), (g) or
(h) of this Section 7.01 shall occur, then, and in each and every such case, so
long as such Event of Default shall not have been remedied, the Trustee may, or
at the direction of a majority of the Voting Rights the Trustee shall, by notice
in writing to the Servicer (with a copy to each Rating Agency), terminate all of
the rights and obligations of the Servicer under this Agreement and in and to
the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder; provided, however, that the Trustee shall not be
required to give written notice to the Servicer of the occurrence of an Event of
Default unless and until a Responsible Officer of the Trustee has actual
knowledge of the occurrence of such an event. If an Event of Default described
in clause (f) of this Section 7.01 shall occur, all of the rights and
obligations of the Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof, other than its rights as a Certificateholder
hereunder, shall be immediately terminated and the Trustee shall thereafter give
prompt written notice thereof to the Servicer. On and after the receipt by the
Servicer of such written notice, or upon the occurrence of an Event of Default
described in clause (f) above, all authority and power of the Servicer
hereunder, whether with respect to the Mortgage Loans or otherwise, shall,
subject to Section 7.02, pass to and be vested in the Trustee. Subject to
Section 7.02, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the 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 Servicer to pay amounts owed pursuant to Article VIII. The Servicer
agrees to cooperate with the Trustee in effecting the termination of the
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the 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.
Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding P&I Advances and
Servicing Advances.
Section 7.02 Trustee to Act; Appointment of Successor. On and after
the time the Servicer receives a notice of termination pursuant to Section 7.01,
or in the case of an Event of Default pursuant to Section 7.01(f), immediately
upon the occurrence of such Event of Default, the Trustee shall, subject to and
to the extent provided in Section 3.24 and subject to the rights of the
Servicing Rights Pledgee, be the successor to the 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 Servicer by the terms and provisions hereof and
applicable law including the obligation to make P&I Advances or Servicing
Advances pursuant to Section 4.01. As compensation therefor, the Trustee shall
be entitled to all funds relating to the Mortgage Loans that the Servicer would
have been entitled to charge to the Collection Account if the Servicer had
continued to act hereunder including, if the Servicer was receiving the
Servicing Fee, the Servicing Fee and the income on investments or gain related
to the Collection Account (in addition to income on investments or gain related
to the Distribution Account for the benefit of the Trustee). Notwithstanding the
foregoing, if the Trustee has become the successor to the Servicer in accordance
with this Section 7.02, the Trustee may, if it shall be unwilling to so act, or
shall, if it is prohibited by applicable law from making P&I Advances and
Servicing Advances pursuant to Section 4.01 or if it is otherwise unable to so
act, or, at the written request of Certificateholders entitled to a majority of
the Voting Rights, appoint, or petition a court of competent jurisdiction to
appoint, any established mortgage loan servicing institution the appointment of
which does not adversely affect the then current rating of the Certificates by
each Rating Agency, as the successor to the Servicer hereunder in the assumption
of all or any part of the responsibilities, duties or liabilities of the
Servicer hereunder. Any successor to the Servicer shall be an institution which
is a Xxxxxx Xxx- and Xxxxxxx Mac-approved seller/servicer in good standing,
which has a net worth of at least $15,000,000, which is willing to service the
Mortgage Loans and which executes and delivers to the Depositor and the Trustee
an agreement accepting such delegation and assignment, containing an assumption
by such Person of the rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer (other than liabilities of the Servicer under
Section 6.03 incurred prior to termination of the Servicer under Section 7.01),
with like effect as if originally named as a party to this Agreement; provided,
that each Rating Agency acknowledges that its rating of the Certificates in
effect immediately prior to such assignment and delegation will not be qualified
or reduced, as a result of such assignment and delegation. Pending appointment
of a successor to the Servicer hereunder, the Trustee, unless the Trustee is
prohibited by law from so acting, shall, subject to Section 3.24, act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it, the Depositor and such
successor shall agree; provided, however, that no such compensation shall be in
excess of the Servicing Fee Rate and amounts paid to the Servicer from
investments. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Neither the Trustee nor any other successor 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 Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.
In the event that the Servicer is terminated pursuant to Section
7.01, the terminated Servicer shall provide notices to the Mortgagors, transfer
the Servicing Files to a successor Servicer and pay all of its own out-of-pocket
costs and expenses at its own expense. In addition, all reasonable out-of-pocket
costs and expenses of a servicing transfer incurred by parties other than the
terminated Servicer (including, without limitation, any costs or expenses
(including but not limited to personnel time) associated with the complete
transfer of all servicing data and the completion, correction or manipulation of
such servicing data as may be required by the Trustee or successor servicer to
correct ay errors or insufficiencies in the servicing data or otherwise to
enable the Trustee or successor servicer to service the Mortgage Loans properly
and effectively, but excluding set-up costs and other administrative expenses of
the successor Servicer, in which case the successor Servicer shall pay for such
costs and expenses but shall not be entitled to reimbursement therefor from the
Trust Fund), such an amount shall be paid by the terminated Servicer promptly
upon presentation of reasonable documentation of such costs. If the Trustee is
the predecessor Servicer (except in the case where the Trustee in its role as
successor Servicer is being terminated pursuant to Section 7.01 by reason of an
Event of Default caused solely by the Trustee as the successor Servicer and not
by the predecessor Servicer's actions or omissions), such costs shall be paid by
the prior terminated Servicer promptly upon presentation of reasonable
documentation of such costs.
Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of Servicer, in accordance with applicable federal and
state law, and shall, during the term of its service as Servicer, maintain in
force the policy or policies that the Servicer is required to maintain pursuant
to Section 3.13.
In the event an Event of Default has occurred with respect to the
Servicer, notwithstanding anything to the contrary above, the Trustee and the
Depositor hereby agree that ten Business Days after delivery to the Trustee by
or on behalf of the Servicing Rights Pledgee of a letter signed by the Servicer
within ten Business Days of the date on which the Trustee sent notice of such
default, whereunder the Servicer shall resign as Servicer under this Agreement,
the Trustee shall appoint the Servicing Rights Pledgee or its designee as
successor Servicer, provided that at the time of appointment, the Servicing
Rights Pledgee or such designee meets the requirements of a successor Servicer
set forth above and the Servicing Rights Pledgee or such designee agrees to be
subject to the terms of this Agreement. If the Servicing Rights Pledgee fails to
provide the Trustee with such letter, the Trustee shall appoint a successor
Servicer in accordance with Section 7.02. Notwithstanding anything to the
contrary above, the Servicer shall continue to perform all of the obligations of
Servicer hereunder until the Trustee appoints a successor Servicer.
Any such successor Servicer shall be required to satisfy the
requirements of a successor Servicer under this Section 7.02.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to the Servicer, the Trustee shall
give prompt written notice thereof to Certificateholders and each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default of
which a Responsible Officer of the Trustee has actual knowledge, the Trustee
shall transmit by mail to all Certificateholders and each Rating Agency notice
of each such Event of Default, unless such event shall have been cured or
waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before 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 Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person's own affairs.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and is
continuing:
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believes in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with
the direction of the Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
(d) The Trustee shall indemnify the Depositor, the Servicer and any
director, officer, employee or agent of the Depositor and the Servicer and hold
them harmless against any and all claims, losses, damages, penalties, fines,
forfeitures, reasonable and necessary legal fees and related costs, judgments,
and any other costs, fees and expenses (other than punitive damages) that any of
them may sustain in any way related to a breach of its obligation or the failure
of the Trustee to perform any of its obligations under Section 3.23(a) and (c).
This indemnity shall survive the termination of this Agreement or the earlier
resignation or removal of the Trustee.
Section 8.02 Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 8.01:
(a) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties and the Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;
(b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(c) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than in its corporate capacity as
obligor of the investment security and with respect to the investment of funds
in the Distribution Account);
(h) the Trustee shall not be deemed to have knowledge of an Event of
Default until a Responsible Officer of the Trustee shall have received written
notice thereof; and
(i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Depositor and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect to the Trustee's execution and
authentication of the Certificates. The Trustee shall not be accountable for the
use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.
The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).
The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.
Section 8.04 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee may withdraw from the Distribution
Account on each Distribution Date the Trustee Fee for the Distribution Date and
any interest or investment income earned on funds deposited in the Distribution
Account. The Trustee and any director, officer, employee, or agent of the
Trustee shall be indemnified by the Trust Fund and held harmless against any
loss, liability, or expense (including reasonable attorney's fees) resulting
from any error in any tax or information return prepared by the Servicer or
incurred in connection with:
(a) this Agreement,
(b) the Certificates, or
(c) the performance of any of the Trustee's duties under this
Agreement,
other than any loss, liability, or expense (i) resulting from any breach of the
Servicer's obligations in connection with this Agreement for which the Servicer
has performed its obligation to indemnify the Trustee pursuant to Section 6.05,
(ii) resulting from any breach of the Seller's obligations in connection with
this Agreement for which the Seller has performed its obligation to indemnify
the Trustee pursuant to Section 2.03(h) or (iii) incurred because of willful
misconduct, bad faith, or negligence in the performance of any of the Trustee's
duties under this Agreement. This indemnity shall survive the termination of
this Agreement or the resignation or removal of the Trustee under this
Agreement. Without limiting the foregoing, except as otherwise agreed upon in
writing by the Depositor and the Trustee, and except for any expense,
disbursement, or advance arising from the Trustee's negligence, bad faith, or
willful misconduct, the Trust Fund shall pay or reimburse the Trustee for all
reasonable expenses, disbursements, and advances incurred or made by the Trustee
in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements of its
counsel not associated with the closing of the issuance of the
Certificates, and
(B) the reasonable compensation, expenses, and disbursements of any
accountant, engineer, or appraiser that is not regularly employed by the
Trustee, to the extent that the Trustee must engage them to perform
services under this Agreement.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee, Registrar, or
paying agent under this Agreement or for any other routine expenses incurred by
the Trustee.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause any of
the Rating Agencies to reduce their respective then current ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section 8.06
the combined capital and surplus of such corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its affiliates or the Servicer and its affiliates; provided,
however, that such entity cannot be an affiliate of the Depositor or the
Servicer other than the Trustee in its role as successor to the Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Servicer and each Rating
Agency not less than 60 days before the date specified in such notice, when,
subject to Section 8.08, such resignation is to take effect, and acceptance by a
successor trustee in accordance with Section 8.08 meeting the qualifications set
forth in Section 8.06. If no successor trustee meeting such qualifications shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice or resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor or the Servicer may remove the Trustee and
appoint a successor trustee by written instrument, in triplicate, one copy of
which shall be delivered to the Trustee, one copy to the Servicer and one copy
to the successor trustee.
The Holders of Certificates entitled to at least a majority of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to the Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicer an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee herein. The Depositor, the Servicer and
the predecessor trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly vesting
and confirming in the successor trustee all such rights, powers, duties, and
obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding. As a
condition to the succession to the Trustee under this Agreement by any Person
(i) into which the Trustee may be merged or consolidated, or (ii) which may be
appointed as a successor to the Trustee, the Trustee shall notify the Depositor,
at least 15 calendar days prior to the effective date of such succession or
appointment, and shall furnish to the Depositor in writing and in form and
substance reasonably satisfactory to the Depositor, all information reasonably
necessary for the Trustee to accurately and timely report, pursuant to Section
8.12(g), the event under Item 6.02 of Form 8-K pursuant to the Exchange Act (if
such reports under the Exchange Act are required to be filed under the Exchange
Act).
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing any Mortgage Note may at the time be
located, the Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.
Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee under this Agreement
to advance funds on behalf of the Servicer, shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed (whether as Trustee hereunder or as
successor to the Servicer hereunder), the Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the applicable Trust
Fund or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Trustee;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Servicer and the Trustee, acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee except
that following the occurrence of a Servicer Event of Termination, the Trustee
acting alone may accept the resignation or remove any separate trustee or
co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection and indemnity to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer and the Depositor.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Trustee covenants and agrees that it shall act as agent (and the Trustee is
hereby appointed to act as agent) on behalf of each Trust REMIC and that in such
capacity it shall:
(a) prepare and file in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit (REMIC) Income Tax Return (Form 1066 or any successor form
adopted by the Internal Revenue Service) and prepare and file with the Internal
Revenue Service and applicable state or local tax authorities income tax or
information returns for each taxable year with respect to each Trust REMIC
containing such information and at the times and in the manner as may be
required by the Code or state or local tax laws, regulations, or rules, and
furnish to Certificateholders the schedules, statements or information at such
times and in such manner as may be required thereby;
(b) within thirty days of the Closing Date, the Trustee will apply
for an employer identification number from the Internal Revenue Service via Form
SS-4 or any other acceptable method for all tax entities and shall also furnish
to the Internal Revenue Service, on Form 8811 or as otherwise may be required by
the Code, the name, title, address, and telephone number of the person that the
holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that Pooling-Tier REMIC-1, Pooling-Tier
REMIC-2, each of the Lower-Tier REMIC, the Upper-Tier REMIC, the Class B-1
REMIC, the Class B-2 REMIC, the Class B-3 REMIC, the Class B-4 REMIC, the Class
B-5 REMIC and the Class XX XXXXX be treated as a REMIC on the federal tax return
for its first taxable year (and, if necessary, under applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax imposed
on the transfer of a Residual Certificate to a Person that is a Non-Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of computing
and furnishing such information may be charged to the Person liable for such
tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on each Trust REMIC before its
termination when and as the same shall be due and payable (but such obligation
shall not prevent the Trustee or any other appropriate Person from contesting
any such tax in appropriate proceedings and shall not prevent the Trustee from
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings);
(i) cause federal, state or local income tax or information returns
to be signed by the Trustee or such other person as may be required to sign such
returns by the Code or state or local laws, regulations or rules; and
(j) maintain records relating to each of the Trust REMICs, including
the income, expenses, assets, and liabilities thereof on a calendar year basis
and on the accrual method of accounting and the adjusted basis of the assets
determined at such intervals as may be required by the Code, as may be necessary
to prepare the foregoing returns, schedules, statements or information.
The Holder of the largest Percentage Interest of (i) the Class R
Certificates shall act as Tax Matters Person for the Pooling-Tier REMIC-1, the
Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC and (ii) the
Class R-X Certificates shall act as Tax Matters Person for each other Trust
REMIC, in each case, within the meaning of Treasury Regulations Section
1.860F-4(d), and the Trustee is hereby designated as agent of such
Certificateholder for such purpose (or if the Trustee is not so permitted, such
Holder shall be the Tax Matters Person in accordance with the REMIC Provisions).
In such capacity, the Trustee shall, as and when necessary and appropriate,
represent any Trust REMIC in any administrative or judicial proceedings relating
to an examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of any Trust REMIC, enter into
settlement agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any Trust REMIC, and otherwise act on
behalf of each REMIC in relation to any tax matter or controversy involving it.
The Trustee shall treat the rights of the Class P Certificateholders
to receive Prepayment Charges, the rights of Class CE Certificateholders to
receive amounts in respect of the Class CE Regular Interest, including ownership
in the Excess Reserve Fund Account and the Supplemental Interest Trust Account
(subject to the obligation to pay Basis Risk Carry Forward Amounts) and the
rights of the Principal Certificateholders to receive Basis Risk Carry Forward
Amounts as the beneficial ownership of interests in a grantor trust, and not as
an obligation of any Trust REMIC created hereunder, for federal income tax
purposes. The Trustee shall file or cause to be filed with the IRS together with
Form 1041 or such other form as may be applicable and shall furnish or cause to
be furnished to the Class CE Certificateholders and the Principal
Certificateholders, the respective amounts described above that are received
through a grantor trust, as described in this paragraph, in the time or times
and in the manner required by the Code.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten days after the Closing
Date all information or data that the Trustee requests in writing and determines
to be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value to each Class of
Principal Certificates of the right to receive Basis Risk Carry Forward Amounts
from the Excess Reserve Fund Account and, in the case of the LIBOR Certificates
from the Supplemental Interest Trust Account. Unless otherwise advised by the
Depositor, for federal income tax purposes, the Trustee is hereby directed to
assign a value of zero to the right of each Holder allocating the purchase price
of an initial Principal Certificateholder between such right and the related
Upper-Tier Regular Interest. Thereafter, the Depositor shall provide to the
Trustee promptly upon written request therefor any additional information or
data that the Trustee may, from time to time, reasonably request to enable the
Trustee to perform its duties under this Agreement; provided, however, that the
Depositor shall not be required to provide any information regarding the
Mortgage Loans that the Servicer is required to provide to the Trustee pursuant
to this Agreement. The Depositor hereby indemnifies the Trustee for any losses,
liabilities, damages, claims, or expenses of the Trustee arising from any errors
or miscalculations of the Trustee that result from any failure of the Depositor
to provide, pursuant to this paragraph, accurate information or data to the
Trustee on a timely basis.
Neither the Servicer nor Trustee shall (i) permit the creation of
any interests in any Trust REMIC other than the regular and residual interests
set forth in the Preliminary Statement, (ii) receive any amount representing a
fee or other compensation for services (except as otherwise permitted by this
Agreement) or (iii) otherwise knowingly or intentionally take any action, cause
the Trust Fund to take any action or fail to take (or fail to cause to be taken)
any action reasonably within its control and the scope of duties more
specifically set forth herein, that, under the REMIC Provisions, if taken or not
taken, as the case may be, could (A) endanger the status of any Trust REMIC as a
REMIC or (B) result in the imposition of a tax upon any Trust REMIC or the Trust
Fund (including but not limited to the tax on "prohibited transactions" as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
Trust REMIC set forth in Section 860G(d) of the Code, or the tax on "net income
from foreclosure property") unless the Trustee receives an Opinion of Counsel
(at the expense of the party seeking to take such action or, if such party fails
to pay such expense, and the Trustee determines that taking such action is in
the best interest of the Trust Fund and the Certificateholders, at the expense
of the Trust Fund, but in no event at the expense of the Trustee) to the effect
that the contemplated action will not, with respect to the Trust Fund or any
Trust REMIC created hereunder, endanger such status or, unless the Trustee
determines in its sole discretion to indemnify the Trust Fund against such tax,
result in the imposition of such a tax).
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Lower-Tier REMIC as defined in Section 860G(c) of
the Code, on any contribution to any Trust REMIC after the Startup Day pursuant
to Section 860G(d) of the Code, or any other tax is imposed, including any
minimum tax imposed on any Trust REMIC pursuant to Sections 23153 and 24874 of
the California Revenue and Taxation Code, if not paid as otherwise provided for
herein, the tax shall be paid by (i) the Trustee if such tax arises out of or
results from negligence of the Trustee in the performance of any of its
obligations under this Agreement, (ii) the Servicer, in the case of any such
minimum tax, and otherwise if such tax arises out of or results from a breach by
the Servicer of any of its obligations under this Agreement, or (iii) in all
other cases, or if the Trustee or the Servicer fails to honor its obligations
under the preceding clause (i) or (ii), any such tax will be paid with amounts
otherwise to be distributed to the Certificateholders, as provided in Section
4.02(a).
Section 8.12 Periodic Filings. (a) The Trustee and the Servicer
shall reasonably cooperate with the Depositor in connection with the reporting
requirements of the Trust under the Exchange Act. As set forth below, the
Trustee shall prepare for execution by the Depositor and Servicer any Forms 10-D
and 10-K, respectively, required by the Exchange Act and the rules and
regulations of the Commission thereunder, in order to permit the timely filing
thereof, and the Trustee shall file (via the Commission's Electronic Data
Gathering and Retrieval System) such Forms executed by the Depositor and
Servicer (as applicable).
(b) Each Form 10-D shall be filed by the Trustee within 15 days
after each Distribution Date, including (i) a copy of the monthly statement to
the Certificateholders for such Distribution Date as an exhibit thereto; and
(ii) such other information as is required by Form 10-D as listed on Exhibit T
and provided by the party listed on Exhibit T; provided that such information is
provided to the Trustee no later than the first Business Day immediately
following the related Distribution Date. The Trustee shall not be responsible
for determining what information is required to be filed on Form 10-D (unless
such information is specific to the Trustee, in which case the Trustee will be
responsible for making such a determination) or for any filing that is not made
on a timely basis in accordance with Regulation AB in the event that such
information is not delivered to the Trustee on or prior to the first Business
Day immediately following the related Determination Date. If the Trustee is
unable to file a Form 10-D within 15 days after a Distribution Date, the Trustee
shall prepare for execution by the Depositor and file a Form 12b-25 not later
than one Business Day following the due date for such Form 10-D. Within 5 days
following the filing of such Form 12b-25, the Trustee shall prepare and file the
related Form 10-D.
Prior to March 30th of each year commencing in 2007 (or such earlier
date as may be required by the Exchange Act and the Rules and Regulations of the
Commission) (the "Form 10-K Filing Deadline"), the Trustee shall file a Form
10-K. To facilitate the Trustee's preparation of the Form 10-K, the Trustee
shall provide to the Depositor its proposed Form 10-K template no later than
forty-five (45) days prior to the Form 10-K Filing Deadline and the Depositor
shall review such template and provide to the Trustee, no later than thirty (30)
days prior to the Form 10-K Filing Deadline, any comments to such Form 10-K
template. Such Form 10-K shall include the information listed on Exhibit U and
each party shall provide the information they are responsible for pursuant to
Exhibit U. Such Form 10-K shall include as exhibits (i) each annual statement as
to compliance described under Section 3.22 of this Agreement, (ii) the annual
report on assessments of compliance and annual independent public accountant's
servicing reports described under Section 3.23 of the Agreement, in each case to
the extent they have been timely delivered to the Trustee. Promptly upon receipt
by the Servicer of (i) (A) any Officer's Certificate relating to the Trustee's
or Subservicer's annual statement as to compliance delivered pursuant to Section
3.22 of this Agreement and (B) any annual report on assessment of compliance and
annual independent public accountant's servicing report, pursuant to Section
3.23 of this Agreement, the Servicer shall review such Officer's Certificate's
and reports. As part of the Form 10-K required to be filed pursuant to this
Section 8.12, the Servicer shall include (i) each such annual statement as to
compliance, annual report on assessment of servicing compliance with servicing
criteria and annual independent public accountant's servicing report required to
be delivered under this Agreement. In addition, if there is any material
instance of non-compliance disclosed in a report delivered pursuant to Section
3.22 or 3.23 of this Agreement, each material instance of noncompliance shall be
disclosed in the Form 10-K required to be filed pursuant to this Section 8.12.
If the Trustee is unable to file such Form 10-K by the applicable due date, the
Trustee shall prepare for execution by the Depositor and file, a Form 12b-25 not
later than one Business Day following the due date for such Form 10-K. Within 5
days following the filing of such Form 12b-25, the Trustee shall prepare and
file the related Form 10-K. The Trustee shall have no liability with respect to
any failure to properly prepare or file such periodic reports resulting from or
relating to the Trustee's inability or failure to obtain any information not
resulting from its own negligence, willful misconduct or bad faith. The Form
10-K shall also include a certification in the form attached hereto as Exhibit
L, with such changes as may be necessary or appropriate as a result of changes
promulgated by the Commission and reasonably acceptable to the Depositor (the
"Sarbanes Certification"), which shall, except as described below, be signed by
the senior officer in charge of the servicing function of the Servicer.
(c) In connection with the Form 10-K, the Trustee shall sign a
certification (in the form attached hereto as Exhibit M) for the benefit of the
Servicer and its officers, directors and Affiliates. Each such certification
shall be delivered to the Servicer no later than March 10th of each year (or if
such day is not a Business Day, the immediately preceding Business Day) and the
Servicer shall deliver the Sarbanes Certification to be filed to the Trustee and
the Depositor no later than March 20th of each year (or if such day is not a
Business Day, the immediately preceding Business Day). In the event that prior
to the filing date of the Form 10-K in March of each year, if any party hereto
has actual knowledge of information material to the Sarbanes Certification, that
party shall promptly notify the Servicer and each of the other parties signing
the certifications. In addition, (i) the Trustee shall, subject to Sections 8.01
and 8.02 hereof, indemnify and hold harmless the Depositor and the Servicer and
any of their officers, directors, employees, agents 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 any breach of the Trustee's obligations under this
Section 8.12, the Trustee's negligence, bad faith or willful misconduct in
connection therewith or any material misstatement in the Trustee's certification
and (ii) the Servicer shall indemnify and hold harmless the Depositor and the
Trustee and any of their respective officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
(other than punitive damages) arising out of or based upon any breach of the
Servicer's obligations under Section 8.12 or any material misstatement or
omission in the Sarbanes Certificate. If the indemnification provided for in the
preceding sentence is unavailable or insufficient to hold harmless any
indemnified party, then (i) the Trustee agrees in connection with a breach of
the Trustee's obligations under this Section 8.12 or the Trustee's negligence,
bad faith or willful misconduct in connection therewith that it shall contribute
to the amount paid or payable by the indemnified party as a result of the
losses, claims, damages or liabilities of the indemnified party in such
proportion as is appropriate to reflect the relative fault of the indemnified
party, on the one hand, and the Trustee, on the other, and (ii) the Servicer
agrees that it shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities of
such indemnified party in such proportion as is appropriate to reflect the
relative fault of such indemnified party, on the one hand, and the Servicer, on
the other hand, in connection with a breach of the Servicer's obligations under
this Section 8.12.
(d) Upon any filing with the Commission, the Trustee shall promptly
deliver to the Depositor a copy of any such executed report, statement or
information.
(e) The obligations set forth in paragraphs (a) through (c) of this
Section shall only apply with respect to periods for which reports are required
to be filed with respect to the Trust under the Exchange Act. Prior to January
30 of the first year in which the Trustee is able to do so under applicable law,
the Trustee shall file a Form 15 Suspension Notification with respect to the
Trust. At any time after the filing of a Form 15 Suspension Notification, if the
number of Certificateholders of record exceeds the number set forth in Section
15(d) of the Exchange Act or the regulations promulgated pursuant thereto which
would cause the Trust to again become subject to the reporting requirements of
the Exchange Act, the Trustee shall recommence preparing and filing reports on
Form 10-K and 10-D as required pursuant to this Section 8.12 and the parties
hereto shall have the obligations set forth in this Section.
(f) For so long as reports are required to be filed with the
Commission under the Exchange Act with respect to the Trust, each of the
Depositor, the Trustee and the Servicer shall notify the Depositor, the Servicer
and the Trustee in writing of any litigation (material to Certificateholders) or
proceeding pending against such notifying person (or, in the case of the
Depositor, against the Depositor, or in the case of any Servicer, against the
Servicer or any Subservicer engaged by it), or any affiliations or relationships
that develop following the Closing Date between such notifying person, or in the
case of any Servicer, between the Servicer or any Subservicer engaged by it) and
any other party hereto or any originator, that may have to be reported on a Form
8-K, Form 10-K or Form 10-D with respect to the Trust.
(g) The Trustee will prepare for execution by the Depositor and file
Current Reports on Form 8-K in respect of the Trust at the direction of the
Depositor or the Servicer, provided, that as set forth on Exhibit S, the
Depositor, the Seller or the Servicer shall have timely notified the Trustee of
an item reportable on a Form 8-K (unless such item is specific to the Trustee,
in which case the Trustee will be deemed to have notice) and shall have
delivered to the Trustee no later than two Business Days prior to the filing
deadline for such Form 8-K, all information, signatures, data, and exhibits
required to be provided or filed with such Form 8-K. The Trustee shall not be
responsible for determining what information is required to be filed on a Form
8-K in connection with the transactions contemplated by this Agreement (unless
such information is specific to the Trustee, in which case the Trustee will be
responsible for making such a determination) or what events shall cause a Form
8-K to be required to be filed (unless such event is specific to the Trustee, in
which case the Trustee will be responsible for causing such Form 8-K to be
filed) and shall not be liable for any late filing of a Form 8-K in the event
that it does not receive all information, data, signatures and exhibits required
to be provided or filed on or prior to the second Business Day prior to the
applicable filing deadline. If the Depositor directs that any information is to
be filed with any Form 8-K, such information shall be delivered to the Trustee
in XXXXX-compatible form or as otherwise agreed upon by the Trustee and the
Depositor, at the Depositor's expense, and any necessary conversion to
XXXXX-compatible format will be at the Depositor's expense. The Servicer and the
Trustee shall and each Servicer shall cause any Subservicer engaged by such
Servicer to promptly notify the Depositor and the Trustee, but in no event later
than one (1) Business Day after its occurrence, of any Reportable Event of which
it has knowledge.
Section 8.13 Tax Treatment of Basis Risk Carry Forward Amounts, the
Supplemental Interest Trust and the Interest Rate Swap Agreement. For federal
income tax purposes, the Trustee shall treat the rights that each Class of
Principal Certificates has to receive payments of Basis Risk Carry Forward
Amounts from the Excess Reserve Fund Account and, in the case of the LIBOR
Certificates, to the extent not paid from the Excess Reserve Fund Account from
the Supplemental Interest Trust, as rights to receive payments under a limited
recourse interest rate cap contract written by the Class CE Certificateholders
in favor of each such Class. Accordingly, each Class of Principal Certificates
will be comprised of two components - an Upper-Tier Regular Interest and an
interest in an interest rate cap contract, and the Class CE Certificate will be
comprised of five components - two regular interests in the Class XX XXXXX (the
Class CE Interest and the Class IO Interest), ownership of the Excess Reserve
Fund Account, subject to an obligation to pay Basis Risk Carry Forward Amounts
to the Principal Certificates, ownership of the Supplemental Interest Trust and
the Interest Rate Swap Agreement, subject to the obligation to pay Basis Risk
Carry Forward Amounts to the LIBOR Certificates, and the right to receive Class
IO Shortfalls. The Trustee shall allocate the issue price for a Class of
Principal Certificates among the respective components for purposes of
determining the issue price of the Upper-Tier Regular Interest component based
on information received from the Depositor. Unless otherwise advised by the
Depositor in writing, for federal income tax purposes, the Trustee is hereby
directed to assign a value of zero to the right of each Holder of a Principal
Certificate to receive Basis Risk Carry Forward Amounts for purposes of
allocating the purchase price of an initial Principal Certificateholder between
such rights and the related regular interest issued by the Corresponding REMIC.
Holders of Principal Certificates shall also be treated as having
agreed to pay, on each Distribution Date, to the Holders of the Class CE
Certificates an aggregate amount equal to the excess, if any, of (i) Net Swap
Payments and Swap Termination Payments (other than Defaulted Swap Termination
Payments) over (ii) the sum of amounts payable on the Class CE Interest
available for such payments and amounts payable on the Class IO Interest (such
excess, a "Class IO Shortfall"), first from interest and then from principal
distributable on the Principal Certificates. A Class IO Shortfall payable from
interest collections shall be allocated pro rata among such Principal
Certificates based on the amount of interest otherwise payable to such Class of
Principal Certificates, and a Class IO Shortfall payable from principal
collections shall be allocated in reverse sequential order beginning with the
most subordinate Class of Principal Certificates then Outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of Principal
Certificates in respect of the regular interest issued by the Corresponding
REMIC and as having been paid by such Holders to the Holders of the Class CE
Certificates through the Supplemental Interest Trust.
Section 8.14 Trustee May Enforce Claims Without Possession of
Certificates. (a) All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such proceeding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee for the benefit of all
Holders of such Certificates, subject to the provisions of this Agreement. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursement and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Certificateholders in respect of
which such judgment has been recovered.
(b) The Trustee shall afford the Seller, the Depositor, the Servicer
and each Certificateholder upon reasonable notice during normal business hours,
access to all records maintained by the Trustee in respect of its duties
hereunder and access to officers of the Trustee responsible for performing such
duties. The Trustee shall cooperate fully with the Seller, the Servicer, the
Depositor and such Certificateholder and shall make available to the Seller, the
Servicer, the Depositor and such Certificateholder for review and copying at the
expense of the party requesting such copies, such books, documents or records as
may be requested with respect to the Trustee's duties hereunder. The Seller, the
Depositor, the Servicer and the Certificateholders shall not have any
responsibility or liability for any action or failure to act by the Trustee and
are not obligated to supervise the performance of the Trustee under this
Agreement or otherwise.
Section 8.15 Suits for Enforcement. In case a Servicer Event of
Termination or other default by the Servicer or the Seller hereunder shall occur
and be continuing, the Trustee may proceed to protect and enforce its rights and
the rights of the Certificateholders under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy, as the Trustee, being advised by
counsel, and subject to the foregoing, shall deem most effectual to protect and
enforce any of the rights of the Trustee and the Certificateholders.
Section 8.16 Waiver of Bond Requirement. The Trustee shall be
relieved of, and each Certificateholder hereby waives, any requirement of any
jurisdiction in which the Trust, or any part thereof, may be located that the
Trustee post a bond or other surety with any court, agency or body whatsoever.
Section 8.17 Waiver of Inventory, Accounting and Appraisal
Requirement. The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 9.03, the obligations and responsibilities of
the Depositor, the Servicer and the Trustee created hereby with respect to the
Trust Fund shall terminate upon the earlier of (a) the purchase, on the Optional
Termination Date, by the Servicer, or an affiliate of the Servicer, of all
Mortgage Loans (and REO Properties) at the price equal to the sum of (i) 100% of
the unpaid principal balance of each Mortgage Loan (other than in respect of REO
Property) plus accrued and unpaid interest thereon at the applicable Mortgage
Interest Rate, (ii) the lesser of (x) the appraised value of any REO Property as
determined by an independent appraiser selected by the Servicer, at the
Servicer's expense, plus accrued and unpaid interest on the related Mortgage
Loan at the applicable Mortgage Interest Rates and (y) the unpaid principal
balance of each Mortgage Loan related to any REO Property, in each case plus
accrued and unpaid interest thereon at the applicable Mortgage Interest Rate,
and (iii) any Swap Termination Payment owed to the Swap Provider or owed to the
Trust Fund, as applicable (as provided to the Trustee by the Swap Provider
pursuant to the Interest Rate Swap Agreement) ("Termination Price") and (b) the
later of (i) the maturity or other Liquidation Event (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement. In
no event shall the trusts created hereby continue beyond the expiration of 21
years from the death of the survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late Ambassador of the United States to the Court of St. James's, living on
the date hereof.
Section 9.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicer determines that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Account, the Servicer shall direct the Trustee promptly to send a
Notice of Final Distribution to each Certificateholder and the Swap Provider. If
the Servicer elects to exercise its option to purchase the Mortgage Loans
pursuant to clause (a) of Section 9.01, at least 20 days prior to the date the
Notice of Final Distribution is to be mailed to the affected Certificateholders,
the Servicer shall notify the Depositor and the Trustee of the Final
Distribution Date and the Termination Price.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to Certificateholders mailed not later than the 15th day of the month of
such final distribution. Any such Notice of Final Distribution shall specify (a)
the Distribution Date upon which final distribution on the Certificates will be
made upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such Notice
of Final Distribution to each Rating Agency at the time such Notice of Final
Distribution is given to Certificateholders.
In the event such Notice of Final Distribution is given, the
Servicer shall cause all funds in the Collection Account to be remitted to the
Trustee for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee or the Custodian, as the case may be, of a
Request for Release therefor, the Trustee or the Custodian, as the case may be,
shall promptly release to the Servicer the Custodial Files for the Mortgage
Loans.
Upon presentation and surrender of the Certificates, the Trustee
shall cause to be distributed to the Certificateholders of each Class (after
reimbursement of all amounts due to the Servicer, the Depositor and the Trustee
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.02, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, up to an amount equal to
(i) as to each Class of Regular Certificates (except the Class CE Certificates),
the Certificate Balance thereof plus for each such Class and the Class CE
Certificates accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02, and (ii) as to the Residual Certificates, the amount, if any,
which remains on deposit in the Distribution Account (other than the amounts
retained to meet claims) after application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the Notice of Final Distribution, the Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six months after such second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their
Certificates, and the cost thereof shall be paid out of the funds and other
assets which remain a part of the Trust Fund. If within one year after the
second notice all Certificates shall not have been surrendered for cancellation,
the Class R Certificateholders shall be entitled to all unclaimed funds and
other assets of the Trust Fund which remain subject hereto.
Section 9.03 Additional Termination Requirements. In the event the
Servicer exercises its purchase option with respect to the Mortgage Loans as
provided in Section 9.01, the Servicer shall cause to be delivered to the
Trustee an Opinion of Counsel, at the expense of the Servicer, to the effect
that the failure to comply with the requirements of this Section 9.03 will not
(i) result in the imposition of taxes on "prohibited transactions" on any Trust
REMIC as defined in Section 860F of the Code or (ii) cause any Trust REMIC to
fail to qualify as a REMIC at any time that any Certificates are outstanding:
Following the Trustee's receipt of such Opinion of Counsel, the
Trustee shall sell all of the assets of the Trust Fund to the Servicer, and,
within 90 days of such sale, shall distribute to the Certificateholders the
proceeds of such sale in complete liquidation of each of the Trust REMICs; and
the Trustee shall attach a statement to the final federal income tax return for
each of the Trust REMICs stating that pursuant to Treasury Regulations Section
1.860F-1, the first day of the 90-day liquidation period for each such REMIC was
the date on which the Trustee sold the assets of the Trust Fund pursuant to
Section 9.01(a).
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Seller, the Servicer and the Trustee, without the
consent of any of the Certificateholders (i) to cure any ambiguity or mistake,
(ii) to correct any defective provision herein or to supplement any provision
herein which may be inconsistent with any other provision herein, (iii) to add
to the duties of the Depositor or the Servicer, (iv) to add any other provisions
with respect to matters or questions arising hereunder or (v) to modify, alter,
amend, add to or rescind any of the terms or provisions contained in this
Agreement; provided, that any amendment pursuant to clause (iv) or (v) above
shall not, as evidenced by an Opinion of Counsel (which Opinion of Counsel shall
not be an expense of the Trustee or the Trust Fund), adversely affect in any
material respect the interests of any Certificateholder; provided, further, that
the amendment shall not be deemed to adversely affect in any material respect
the interests of the Certificateholders if the Person requesting the amendment
obtains a letter from each Rating Agency stating that the amendment would not
result in the downgrading or withdrawal of the respective ratings then assigned
to the Certificates; it being understood and agreed that any such letter in and
of itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating. The Trustee, the Depositor, the Seller and the
Servicer also may at any time and from time to time amend this Agreement, but
without the consent of the Certificateholders to modify, eliminate or add to any
of its provisions to such extent as shall be necessary or helpful to (i)
maintain the qualification of each Trust REMIC under the Code, (ii) avoid or
minimize the risk of the imposition of any tax on any Trust REMIC pursuant to
the Code that would be a claim at any time prior to the final redemption of the
Certificates or (iii) comply with any other requirements of the Code or
Regulation AB; provided, that the Trustee has been provided an Opinion of
Counsel, which opinion shall be an expense of the party requesting such opinion
but in any case shall not be an expense of the Trustee or the Trust Fund, to the
effect that such action is necessary or helpful to, as applicable, (i) maintain
such qualification, (ii) avoid or minimize the risk of the imposition of such a
tax or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Seller, the Servicer and the Trustee, but with the consent of the
Holders of Certificates evidencing Percentage Interests aggregating not less
than 66% of each Class of Certificates affected thereby for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Holders of Certificates; provided, however, that no such amendment shall (i)
reduce in any manner the amount of, or delay the timing of, payments required to
be distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in
clause (i), without the consent of the Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less than 66%
or (iii) reduce the aforesaid percentages of Certificates the Holders of which
are required to consent to any such amendment, without the consent of the
Holders of all such Certificates then Outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any Trust REMIC or the Certificateholders or
cause any Trust REMIC to fail to qualify as a REMIC or the grantor trust to fail
to qualify as a grantor trust at any time that any Certificates are Outstanding
and (ii) the party seeking such amendment shall have provided written notice to
the Rating Agencies (with a copy of such notice to the Trustee) of such
amendment, stating the provisions of the Agreement to be amended.
Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer, any Certificate beneficially owned by the Depositor
shall be deemed not to be Outstanding (and shall not be considered when
determining the percentage of Certificateholders consenting or when calculating
the total number of Certificates entitled to consent) for purposes of
determining if the requisite consents of Certificateholders under this Section
10.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 10.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
The Trustee shall not consent to any amendment and/or supplement to
this Agreement without the prior written consent of the Swap Provider (such
consent not to be unreasonably withheld), if such amendment and/or supplement
would: (i) materially and adversely affect any of the Swap Provider's rights or
obligations under this Agreement; or (b) materially and adversely impact the
ability of the Trustee to fully perform any of Trustee's obligations under this
Agreement.
Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund), satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with and (ii) either
(A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 10.01.
Section 10.02 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 Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the direction and expense of the Trust, but only upon receipt of an
Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 10.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, as the case may be, or if for any other reason this
Agreement is held or deemed to create a security interest in either such assets,
then (i) this Agreement shall be deemed to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
Section 10.05 Notices. (a) The Trustee shall use its best efforts to
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any Event of Default that has not been cured;
3. The resignation or termination of the Servicer or the Trustee and
the appointment of any successor;
4. The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
5. The final payment to Certificateholders.
(b) In addition, the Trustee shall promptly make available on its
internet website to each Rating Agency copies of each report to
Certificateholders described in Section 4.03.
(c) All directions, demands, consents and notices hereunder shall be
in writing and shall be deemed to have been duly given when delivered to: (a) in
the case of the Depositor, to GS Mortgage Securities Corp., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Principal Finance Group/Xxxxxxxxxxx X. Xxxxxxx
and Asset Management Group/Senior Asset Manager (and, in the case of the
Officer's Certificate delivered pursuant to Section 3.22, to
PricewaterhouseCoopers LLP, 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxx Xxxxx,
Xxxxxxx 00000, Attention: Xxxxxxxx Xxxxxxx), or such other address as may be
hereafter furnished to the other parties hereto by the Depositor in writing (b)
in the case of the Servicer, Xxxxxx Loan Servicing LP, 0000 Xxxx Xxxxxxx Xxxxx,
Xxxxxxx, Xxxxx 00000, Attention: Secretary, or such other address as may be
hereafter furnished to the Depositor, the Swap Provider and the Trustee by the
Servicer in writing; (c) in the case of the Trustee to U.S. Bank National
Association, 00 Xxxxxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attention:
Corporate Trust Services - GSAMP 2006-HE2, or in each case such other address as
the Trustee may hereafter furnish to the Depositor, the Swap Provider and the
Servicer in writing; (d) in the case of the Seller, to Credit-Based Asset
Servicing and Securitization LLC, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Director, Mortgage Finance, with a copy to General
Counsel or such other address as may be hereafter furnished to the Depositor,
the Servicer and the Trustee in writing and; and (f) in the case of each of the
Rating Agencies, the address specified therefor in the definition corresponding
to the name of such Rating Agency. Notices to Certificateholders shall be deemed
given when mailed, first class postage prepaid, to their respective addresses
appearing in the Certificate Register.
Section 10.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 10.07 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses, and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity shall have neglected or refused to institute any
such action, suit or proceeding; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 10.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.08 Inspection and Audit Rights. The Servicer agrees that,
on reasonable prior notice, it will permit any representative of the Depositor
or the Trustee during the Servicer's normal business hours, to examine all the
books of account, records, reports and other papers of the Servicer relating to
the Mortgage Loans, to make copies and extracts therefrom, to cause such books
to be audited by independent certified public accountants selected by the
Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision the Servicer hereby authorizes said
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 of the Servicer incident to the exercise by
the Depositor or the Trustee of any right under this Section 10.09 shall be
borne by the Servicer.
Section 10.09 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.10 Rule of Construction. Article and section headings are
for the convenience of the reader and shall not be considered in interpreting
this Pooling and Servicing Agreement or the intent of the parties hereto.
Section 10.11 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 10.12 Rights of the Swap Provider. The Swap Provider shall
be deemed a third-party beneficiary of this Agreement to the same extent as if
it were a party hereto and shall have the right to enforce its rights under this
Agreement.
Section 10.13 Regulation AB Compliance; Intent of the Parties;
Reasonableness. The parties to this Agreement acknowledge and agree that the
purpose of this Agreement is to facilitate compliance by the Depositor with the
provisions of Regulation AB and related rules and regulations of the Commission.
The Depositor shall not exercise its right to request delivery of information or
other performance under this Agreement other than in good faith, or for purposes
other than compliance with the Securities Act, the Exchange Act and the rules
and regulations of the Commission thereunder. The parties hereto acknowledge
that interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and, to the extent practicable from a timing and
information systems perspective and to the extent the Depositor will pay any
increased costs of the Trustee caused by such request, agree to comply with
requests made by the Depositor in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB.
Depositor agrees to act in good faith and comply with requests made to it by
parties. In connection with the GSAMP Trust 2006-HE2, the Servicer, the Trustee
and the Seller shall, to the extent practicable from a timing and information
systems perspective and to the extent the Depositor will pay any increased costs
of the Trustee caused by such request, cooperate fully with the Depositor to
deliver to the Depositor (including its assignees or designees), any and all
statements, reports, certifications, records and any other information necessary
in the good faith determination of the Depositor to permit the Depositor to
comply with the provisions of Regulation AB, together with such disclosures
relating to the Servicer, the Trustee, the Seller and the Custodian, as
applicable, reasonably believed by the Depositor to be necessary in order to
effect such compliance.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Depositor, the Trustee, the Seller and the
Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.
GS MORTGAGE SECURITIES CORP.
By: /s/ Xxxxxxxx Xxxx
-------------------------------------
Name: Xxxxxxxx Xxxx
Title: Vice President
XXXXXX LOAN SERVICING LP
By: /s/ Xxxxxx XxXxxxx
-------------------------------------
Name: Xxxxxx XxXxxxx
Title: Senior Vice President
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, solely
as Trustee and not in its individual
capacity
By: /s/ X. Xxxxxxxxxxxxxx
-------------------------------------
Name: X. Xxxxxxxxxxxxxx
Title: Vice President
SCHEDULE I
Mortgage Loan Schedule
(Delivered to the Trustee and not attached to
the Pooling and Servicing Agreement)
EXHIBIT A
To be added to the Class B-1, Class B-2, Class B-3, Class B-4 and Class B-5
Certificates while such Certificates remain Private Certificates. [IF THIS
CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY INTEREST
HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE
A TRANSFEROR LETTER (THE "TRANSFEROR LETTER") IN THE FORM OF EXHIBIT H TO THE
AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE RECEIVES A LETTER FROM
THE TRANSFEREE THEREOF IN THE FORM OF EXHIBIT I-1 (THE "144A LETTER") OR EXHIBIT
I-2 TO THE AGREEMENT REFERRED TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION
OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY
BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE.
In the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate.]
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT,"
AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER
ASSETS.
To be added to the Class A and Class M. [AS LONG AS THE INTEREST RATE SWAP
AGREEMENT IS IN EFFECT, EACH BENEFICIAL OWNER OF THIS CERTIFICATE, OR ANY
INTEREST THEREIN, SHALL BE DEEMED TO HAVE REPRESENTED THAT EITHER (I) IT IS NOT
AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO ANY FEDERAL, STATE OR
LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF
ERISA OR THE CODE, NOR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT
NOR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT OR (II) THE ACQUISITION AND
HOLDING OF THIS CERTIFICATE ARE ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE
UNDER AT LEAST ONE OF PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 84-14,
XXXX 00-0, XXXX 00-0, XXXX 95-60 OR PTCE 96-23 OR A COMPARABLE EXEMPTION
AVAILABLE UNDER SIMILAR LAW.]
Certificate No: A-1-[ ]
A-2-[ ]
A-3-[ ]
M-1-[ ]
M-2-[ ]
M-3-[ ]
M-4-[ ]
M-5-[ ]
M-6-[ ]
B-1-[ ]
B-2-[ ]
B-3-[ ]
B-4-[ ]
B-5-[ ]
Cut-off Date: March 1, 2006
First Distribution Date: April 25, 2006
Initial Certificate Balance
of this Certificate
("Denomination"): $[ ]
Initial Certificate
Balances of all
Certificates of this Class: [A-1] $282,460,000
[A-2] $181,748,000
[A-3] $21,005,000
[M-1] $24,214,000
[M-2] $22,327,000
[M-3] $13,207,000
[M-4] $12,264,000
[M-5] $11,321,000
[M-6] $10,377,000
[B-1] $11,635,000
[B-2] $10,377,000
[B-3] $7,547,000
[B-4] $7,233,000
[B-5] $6,289,000
CUSIP: [A-1] 362334 LF 9
[A-2] 362334 LG 7
[A-3] 362334 LH 5
[M-1] 362334 LJ 1
[M-2] 362334 LK 8
[M-3] 362334 LL 6
[M-4] 362334 LM 4
[M-5] 362334 LN 2
[M-6] 362334 LP 7
[B-1] 362334 LU 6
[B-2] 362334 LV 4
[B-3] 362334 LW 2
[B-4] 362334 LX 0
[B-5] 362334 LY 8
ISIN: [A-1] US362334LF92
[A-2] US362334LG75
[A-3] US362334LH58
[M-1] US362334LJ15
[M-2] US362334LK87
[M-3] US362334LL60
[M-4] US362334LM44
[M-5] US362334LN27
[M-6] XX000000XX00
[X-0] XX000000XX00
[X-0] US362334LV43
[B-3] XX000000XX00
[X-0] US362334LX09
[B-5] US362334LY81
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
[Class A-][Class M-][Class B-]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Seller, the Servicer or the Trustee referred to below or any of
their respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that CEDE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among GS Mortgage Securities
Corp., as depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as servicer
(the "Servicer"), Credit-Based Asset Servicing and Securitization LLC, as seller
(the "Seller"), and U.S. Bank National Association, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed. Dated:
U.S. BANK NATIONAL ASSOCIATION, not in
its individual capacity, but solely
as Trustee
By ____________________________________
Authenticated:
By ____________________________________
Authorized Signatory of U.S. BANK
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as
Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2006-HE2 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date; provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Seller, the Servicer and the Trustee with the consent of
the Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes, accompanied by a written instrument of transfer in form satisfactory
to the Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:______
-------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ,
-------------------------------------------------------------------------------,
for the account of ,
account number __________, or, if mailed by check, to .
Applicable statements should be mailed to ,
-------------------------------------------------------------------------------.
This information is provided by ,
the assignee named above, or ,
as its agent.
EXHIBIT B
FORM OF CLASS P CERTIFICATE
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR CERTIFICATE IN THE FORM
OF EXHIBIT I TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (i) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I-1 TO THE AGREEMENT REFERRED
TO HEREIN OR (ii) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE, OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. :
Cut-off Date : March 1, 2006
First Distribution Date : April 25, 2006
Percentage Interest of
this Certificate
("Denomination") : [__]%
CUSIP : 362334 LT 0
XXXX XX000000XX00
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
Class P
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_____________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement, dated as of the
Cut-off Date specified above (the "Agreement") among GS Mortgage Securities
Corp., as depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as servicer
(the "Servicer"), Credit-Based Asset Servicing and Securitization LLC, as seller
(the "Seller"), and U.S. Bank National Association, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Trustee for such purpose.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Pooling and Servicing
Agreement) and deliver either (i) a Rule 144A Letter, in either case
substantially in the form attached to the Agreement, or (ii) a written Opinion
of Counsel to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
1933 Act or is being made pursuant to the 1933 Act, which Opinion of Counsel
shall be an expense of the transferor.
No transfer of a Certificate of this Class shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan
subject to Section 406 of ERISA, Section 4975 of the Code or any materially
similar provisions of applicable Federal, state or local law ("Similar Law"), or
a person acting on behalf of or investing plan assets of any such plan, which
representation letter shall not be an expense of the Trustee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
***
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:______
U.S. BANK NATIONAL ASSOCIATION, not in
its individual capacity, but solely
as Trustee
By_____________________________________
Authenticated:
By ____________________________________
Authorized Signatory of U.S. BANK
NATIONAL ASSOCIATION, not in its
individual capacity, but solely as
Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2006-HE2 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Seller and the Trustee with the consent of
the Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in Minnesota,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:______
---------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ,
------------------------------------------------------------------------------,
for the account of ,
account number __________, or, if mailed by check, to .
Applicable statements should be mailed to ,
------------------------------------------------------------------------------.
This information is provided by ,
the assignee named above, or ,
as its agent.
EXHIBIT C
FORM OF CLASS R CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN FOUR "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS
OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT SUCH
REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT,
SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : March 1, 2006
First Distribution Date : April 25, 2006
Initial Certificate Balance
of this Certificate
("Denomination") : $0
Initial Certificate Balance
of all Certificates of this
Class : $0
CUSIP : 362334 LR 3
ISIN : US362334LR31
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
Class R
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Class R Certificate is not entitled to
distributions in respect of interest. This Certificate does not evidence an
obligation of, or an interest in, and is not guaranteed by the Depositor, the
Trustee or any other party to the Agreement referred to below or any of their
respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_____________] is the registered owner of the
Percentage Interest evidenced by this Certificate in certain monthly
distributions pursuant to a Pooling and Servicing Agreement, dated as of the
Cut-off Date specified above (the "Agreement"), among GS Mortgage Securities
Corp., as depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as servicer
(the "Servicer"), Credit-Based Asset Servicing and Securitization LLC, as seller
(the "Seller"), and U.S. Bank National Association, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Class R Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of such Person or any other U.S.
Person and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is
not a Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed. Dated:
U.S. BANK NATIONAL ASSOCIATION, not in
its individual capacity, but solely
as Trustee
By_____________________________________
Authenticated:
By:____________________________________
Authorized Signatory of
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2006-HE2 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Seller and the Trustee with the consent of
the Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in Minnesota,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:______
---------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ,
------------------------------------------------------------------------------,
for the account of ,
account number __________, or, if mailed by check, to .
Applicable statements should be mailed to ,
------------------------------------------------------------------------------.
This information is provided by ,
the assignee named above, or ,
as its agent.
EXHIBIT C-2
FORM OF CLASS R-X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN SIX "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT
TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS
OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT SUCH
REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR
ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT,
SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : March 1, 2006
First Distribution Date : April 25, 2006
Initial Certificate Balance
of this Certificate
("Denomination") : $0
Initial Certificate Balances
of all Certificates of this
Class : $0
CUSIP : 362334 LQ 5
ISIN : US362334LQ57
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
Class R-X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Class R-X Certificate is not entitled to
distributions in respect of interest. This Certificate does not evidence an
obligation of, or an interest in, and is not guaranteed by the Depositor, the
Trustee or any other party to the Agreement referred to below or any of their
respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_____________] is the registered owner of the
Percentage Interest evidenced by this Certificate in certain monthly
distributions pursuant to a Pooling and Servicing Agreement, dated as of the
Cut-off Date specified above (the "Agreement"), among GS Mortgage Securities
Corp., as depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as servicer
(the "Servicer"), Credit-Based Asset Servicing and Securitization LLC, as seller
(the "Seller"), and U.S. Bank National Association, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R-X
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Class R-X Certificate shall be made unless the
Trustee shall have received a representation letter from the transferee of such
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan or arrangement subject to
Section 4975 of the Code or a plan subject to Similar Law, or a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer, which representation letter shall not be an
expense of the Trustee, the Servicer or the Trust Fund. In the event that such
representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R-X Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R-X Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R-X Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R-X Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R-X Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R-X Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R-X Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of this
Class R-X Certificate, (C) not to cause income with respect to the Class R-X
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of such Person or
any other U.S. Person and (D) not to Transfer the Ownership Interest in this
Class R-X Certificate or to cause the Transfer of the Ownership Interest in this
Class R-X Certificate to any other Person if it has actual knowledge that such
Person is not a Permitted Transferee and (iv) any attempted or purported
Transfer of the Ownership Interest in this Class R-X Certificate in violation of
the provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:______
U.S. BANK NATIONAL ASSOCIATION, not in
its individual capacity, but solely
as Trustee
By_____________________________________
Authenticated:
By:_____________________________________
Authorized Signatory of
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2006-HE2 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Seller and the Trustee with the consent of
the Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in Minnesota,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:______
---------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to __________________________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ________, or, if mailed by check, to _________________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by ,
the assignee named above, or ,
as its agent.
EXHIBIT D
FORM OF CLASS CE CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS TWO
"REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), AND CERTAIN OTHER ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR CERTIFICATE IN THE FORM
OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (i) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I-1 TO THE AGREEMENT REFERRED
TO HEREIN OR (ii) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE EITHER A REPRESENTATION LETTER TO THE EFFECT
THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN
SUBJECT TO SECTION 4975 OF THE CODE, OR A PLAN SUBJECT TO APPLICABLE FEDERAL,
STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING
PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING ON BEHALF OF OR WITH PLAN
ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN INSURANCE COMPANY, A
REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS GENERAL ACCOUNT AND
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE COVERED UNDER SECTIONS I
AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 OR AN OPINION OF COUNSEL
SATISFACTORY TO THE TRUSTEE, TO THE EFFECT THAT THE PURCHASE OR HOLDING OF THIS
CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY SIMILAR LAW AND WILL NOT
SUBJECT THE TRUSTEE, THE DEPOSITOR OR THE SERVICER TO ANY OBLIGATION IN ADDITION
TO THOSE EXPRESSLY UNDERTAKEN IN THE AGREEMENT OR TO ANY LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION
LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE TRUSTEE AS DESCRIBED ABOVE
SHALL BE VOID AND OF NO EFFECT.
Certificate No. : 1
Cut-off Date : March 1, 2006
First Distribution Date : April 25, 2006
Percentage Interest of this
Certificate ("Denomination") :
CUSIP : 362334 LS 1
ISIN: : US362334LS14
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
Class CE
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Class CE Certificate has no Certificate
Balance and is not entitled to distributions in respect of principal or
interest. This Certificate does not evidence an obligation of, or an interest
in, and is not guaranteed by the Depositor, the Servicer, the Purchaser, the
Original Loan Sellers, each Custodian or the Trustee referred to below or any of
their respective affiliates. Neither this Certificate nor the Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_______________________] is the registered
owner of the Percentage Interest evidenced by this Certificate in certain
monthly distributions pursuant to a Pooling and Servicing Agreement, dated as of
the Cut-off Date specified above (the "Agreement"), among GS Mortgage Securities
Corp., as depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as servicer
(the "Servicer"), Credit-Based Asset Servicing and Securitization LLC, as seller
(the "Seller"), and U.S. Bank National Association, as trustee (the "Trustee").
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class CE
Certificate at the offices designated by the Trustee for such purposes or such
other location specified in the notice to Certificateholders.
No transfer of a Class CE Certificate shall be made unless the
Trustee shall have received either (i) a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Trustee, to the effect that such transferee is not an
employee benefit plan or arrangement subject to Section 406 of ERISA, a plan or
arrangement subject to Section 4975 of the Code or a plan subject to Similar
Law, or a person acting on behalf of any such plan or arrangement nor using the
assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee, the Depositor, the
Servicer or the Trust Fund, or (ii) if the Class CE Certificate has been the
subject of an ERISA Qualifying Underwriting and the transferee is an insurance
company, a representation letter that it is purchasing such Certificates with
the assets of its general account and that the purchase and holding of such
Certificates are covered under Sections I and III of PTCE 95-60, or (iii) in the
case of a Class CE Certificate presented for registration in the name of an
employee benefit plan subject to ERISA, or a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent enactments)
or a plan subject to Similar Law, or a trustee of any such plan or any other
person acting on behalf of any such plan or arrangement or using such plan's or
arrangement's assets, an Opinion of Counsel satisfactory to the Trustee, which
Opinion of Counsel shall not be an expense of the Trustee, the Depositor, the
Servicer or the Trust Fund, addressed to the Trustee, to the effect that the
purchase or holding of such Certificate will not constitute or result in a
non-exempt prohibited transaction within the meaning of ERISA, Section 4975 of
the Code or any Similar Law and will not subject the Trustee, the Depositor or
the Servicer to any obligation in addition to those expressly undertaken in the
Agreement or to any liability. In the event that such representation is
violated, or any attempt is made to transfer to a plan or arrangement subject to
Section 406 of ERISA or a plan subject to Section 4975 of the Code or a plan
subject to Similar Law, or a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement, such attempted
transfer or acquisition shall be void and of no effect.
Each Holder of this Class CE Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class CE Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class CE Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class CE Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class CE Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this
Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit H to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class CE Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class CE Certificate,
(B) to obtain a Transfer Affidavit from any Person for whom such Person is
acting as nominee, trustee or agent in connection with any Transfer of this
Class CE Certificate, (C) not to cause income with respect to the Class CE
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of such Person or
any other U.S. Person and (D) not to Transfer the Ownership Interest in this
Class CE Certificate or to cause the Transfer of the Ownership Interest in this
Class CE Certificate to any other Person if it has actual knowledge that such
Person is not a Permitted Transferee and (iv) any attempted or purported
Transfer of the Ownership Interest in this Class CE Certificate in violation of
the provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:______
U.S. BANK NATIONAL ASSOCIATION, not in
its individual capacity, but solely
as Trustee
By_____________________________________
Authenticated:
By:_____________________________________
Authorized Signatory of
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Trustee
GS MORTGAGE SECURITIES CORP.
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
This Certificate is one of a duly authorized issue of Certificates
designated as GSAMP Trust 2006-HE2 Mortgage Pass-Through Certificates, of the
Series specified on the face hereof (herein collectively called the
"Certificates"), and representing a beneficial ownership interest in the Trust
Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the Depositor, the Servicer, the Seller and the Trustee with the consent of
the Holders of Certificates affected by such amendment evidencing the requisite
Percentage Interest, as provided in the Agreement. Any such consent by the
Holder of this Certificate shall be conclusive and binding on such Holder and
upon all future Holders of this Certificate and of any Certificate issued upon
the transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the offices designated by the Trustee for such
purposes or the office or agency maintained by the Trustee in Minnesota,
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations and evidencing the same aggregate Percentage
Interest in the Trust Fund will be issued to the designated transferee or
transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as the
owner hereof for all purposes, and neither the Depositor, the Trustee, nor any
such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Servicer will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Trustee to issue a new Certificate of a
like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:______
---------------------------------------
Signature by or on behalf of assignor
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to __________________________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ________, or, if mailed by check, to _________________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by ,
the assignee named above, or ,
as its agent.
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF TRUSTEE
[date]
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Loan Servicing LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Re: Pooling and Servicing Agreement, dated as of March 1, 2006, by and
among GS Mortgage Securities Corp., as depositor (the "Depositor"),
Xxxxxx Loan Servicing LP, as servicer (the "Servicer"), Credit-Based
Asset Servicing and Securitization LLC, as seller (the "Seller"),
and U.S. Bank National Association, as trustee (the "Trustee"),
GSAMP Trust 2006-HE2 Mortgage Pass-Through Certificates, Series
2006-HE2
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan listed
in the attached schedule), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) a duly executed assignment of the Mortgage (which may be
included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By:__________________________________
Name:________________________________
Title:
EXHIBIT F-1
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF CUSTODIAN
[date]
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Loan Servicing LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Re: Pooling and Servicing Agreement, dated as of March 1, 2006, among GS
Mortgage Securities Corp., as depositor (the "Depositor"), Xxxxxx
Loan Servicing LP, as servicer (the "Servicer"), Credit-Based Asset
Servicing and Securitization LLC, as seller (the "Seller"), and U.S.
Bank National Association, as trustee (the "Trustee"), GSAMP Trust
2006-HE2 Mortgage Pass-Through Certificates, Series 2006-HE2
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Custodian, 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) it has received:
(i) the original Mortgage Note including any riders thereto,
endorsed either (A) in blank or (B) in the following form: "Pay to the
order of U.S. Bank National Association as Trustee for the Mortgage
Pass-Through Certificates, Series 2006-HE2, without recourse", or with
respect to any lost Mortgage Note, an original lost note affidavit stating
that the original mortgage note was lost, misplaced or destroyed, together
with a copy of the related Mortgage Note;
(ii) the original Mortgage including any riders thereto with
evidence of recording thereon, and the original recorded power of
attorney, if the Mortgage was executed pursuant to a power of attorney,
with evidence of recording thereon or, if such Mortgage or power of
attorney has been submitted for recording but has not been returned from
the applicable public recording office, has been lost or is not otherwise
available, a copy of such Mortgage or power of attorney, as the case may
be, certified to be a true and complete copy of the original submitted for
recording;
(iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned either (A) in
blank or (B) to "U.S. Bank National Association, as Trustee for the
Mortgage Pass-Through Certificates, Series 2006-HE2, without recourse";
(iv) an original or a certified copy of any intervening assignment
of Mortgage showing a complete chain of assignments;
(v) the original or a certified copy of the lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2), (3), (15),
(22) and (30) of the Data Tape Information accurately reflects information set
forth in the Custodial File.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Custodian
makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectability, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Trustee has
made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
THE BANK OF NEW YORK,
as Custodian
By:__________________________________
Name:________________________________
Title:
EXHIBIT F-2
FORM OF CUSTODIAN'S FINAL CERTIFICATION
[Date]
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Loan Servicing LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Re: Pooling and Servicing Agreement, dated as of March 1, 2006, among GS
Mortgage Securities Corp., as depositor (the "Depositor"), Xxxxxx
Loan Servicing LP, as servicer (the "Servicer"), Credit-Based Asset
Servicing and Securitization, LLC, as seller (the "Seller"), and
U.S. Bank National Association, as trustee (the "Trustee"), GSAMP
Trust 2006-HE2 Mortgage Pass-Through Certificates, Series 2006-HE2
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Custodian, 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 Schedule I hereto) it has received the applicable
documents listed in Section 2.01 of the Pooling and Servicing Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in the Mortgage Loan Schedule is
correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement. This
Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
THE BANK OF NEW YORK TRUST COMPANY, N.A., as
Custodian
By:
_________________________________________
Name:
Title:
EXHIBIT G-1
RESIDUAL TRANSFER AFFIDAVIT
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement (the
"Agreement"), relating to the above-referenced Series, by and among GS Mortgage
Securities Corp., as depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as
servicer (the "Servicer"), Credit-Based Asset Servicing and Securitization LLC,
as seller (the "Seller"), and U.S. Bank National Association, as trustee (the
"Trustee"). Capitalized terms used, but not defined herein, shall have the
meanings ascribed to such terms in the Agreement. The Transferee has authorized
the undersigned to make this affidavit on behalf of the Transferee for the
benefit of the Depositor and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are
Non-Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Non-Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Non-Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is a Non-Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "Transferor Certificate") to the
effect that, among other things, such Transferee has no actual knowledge that
the Person to which the Transfer is to be made is a Non-Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate. The Transferee has historically paid its debts as they have
come due and intends to pay its debts as they come due in the future. The
Transferee intends to pay all taxes due with respect to the Certificate as they
become due.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is not a Disqualified Non-U.S. Person as defined
in the Agreement.
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the Residual
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other U.S. Person.
12. Check the applicable paragraph:
[ ] The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
(i) the present value of any consideration given to the Transferee
to acquire such Certificate;
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
[ ] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(viii) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income
from the Certificate will only be taxed in the United States;
(ix) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding
any obligation of a person related to the Transferee within the meaning of
U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(x) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury Regulations Section
1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of
Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of
the U.S. Treasury Regulations; and
(xi) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions (including,
but not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other
factors specific to the Transferee) that it has determined in good faith.
[ ] None of the above.
13. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law that is substantially similar to
Title I of ERISA or Section 4975 of the Code, and the Transferee is not acting
on behalf of or investing plan assets of such a plan.
* * *
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ___ day of _______, 20__.
_________________________________________
Print Name of Transferee
By:______________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
_______________________________________
[Assistant] Secretary
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this day of , 20__.
_______________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
RESIDUAL TRANSFER AFFIDAVIT
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
The undersigned, ___________________, the proposed Transferee of an
Ownership Interest in a Class R-X Certificate (the "Certificate") issued
pursuant to the Pooling and Servicing Agreement dated as of March 1, 2006 (the
"Agreement"), relating to the above-referenced Series, by and among GS Mortgage
Securities Corp., as depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as
servicer (the "Servicer"), Credit-Based Asset Servicing and Securitization LLC,
as seller (the "Seller"), and U.S. Bank National Association, as trustee (the
"Trustee"). Capitalized terms used, but not defined herein, shall have the
meanings ascribed to such terms in the Agreement. The Transferee has authorized
the undersigned to make this affidavit on behalf of the Transferee for the
benefit of the Depositor and the Trustee.
1. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Certificate for its own account. The Transferee has no
knowledge that any such affidavit is false.
2. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are
Non-Permitted Transferees; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Non-Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
3. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Non-Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is a Permitted Transferee and the pass-through
entity does not have actual knowledge that such affidavit is false. (For this
purpose, a "pass-through entity" includes a regulated investment company, a real
estate investment trust or common trust fund, a partnership, trust or estate,
and certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
4. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
5. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is a Non-Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "Transferor Certificate") to the
effect that, among other things, such Transferee has no actual knowledge that
the Person to which the Transfer is to be made is a Non-Permitted Transferee.
6. The Transferee has historically paid its debts as they have come
due and intends to pay its debts as they come due in the future. The Transferee
intends to pay all taxes due with respect to the Certificate as they become due.
7. The Transferee's taxpayer identification number is __________.
8. The Transferee is not a Disqualified Non-U.S. Person as defined
in the Agreement.
9. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income on such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
10. The Transferee will not cause income from the Residual
Certificate to be attributable to a foreign permanent establishment or fixed
base, within the meaning of an applicable income tax treaty, of the Transferee
or any other U.S. Person.
11. Check the applicable paragraph:
[ ] The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
(i) the present value of any consideration given to the Transferee
to acquire such Certificate;
(ii) the present value of the expected future distributions on such
Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such
Certificate as the related REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
[ ] The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(xii) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income
from the Certificate will only be taxed in the United States;
(xiii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding
any obligation of a person related to the Transferee within the meaning of
U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100
million and net assets in excess of $10 million;
(xiv) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury Regulations Section
1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of
Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of
the U.S. Treasury Regulations; and
(xv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions (including,
but not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other
factors specific to the Transferee) that it has determined in good faith.
[ ] None of the above.
12. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975 of the Code or a
plan subject to any Federal, state or local law that is substantially similar to
Title I of ERISA or Section 4975 of the Code, and the Transferee is not acting
on behalf of or investing plan assets of such a plan.
* * *
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, duly attested, this ___ day of _______, 20__.
_________________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
ATTEST:
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this day of , 20__.
_______________________________________
NOTARY PUBLIC
My Commission expires the __ day
of _________, 20__
EXHIBIT H
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [_________]
U.S. Bank National Association,
as Trustee
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: GSAMP 2006-HE2
Re: GSAMP Trust 2006-HE2 C-BASS Mortgage Loan Asset-Backed
Certificates, Series 2006-HE2, Class [__________________________]
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and
(c) to the extent we are disposing of a Residual Certificate, (i) we have no
knowledge the Transferee is a Non-Permitted Transferee and (ii) after conducting
a reasonable investigation of the financial condition of the Transferee, we have
no knowledge and no reason to believe that the Transferee will not pay all taxes
with respect to the Residual Certificates as they become due and (iii) we have
no reason to believe that the statements made in paragraphs 7, 10 and 11 of the
Transferee's Residual Transfer Affidavit are false.
Very truly yours,
_________________________________________
Print Name of Transferor
By:______________________________________
Authorized Officer
EXHIBIT I-1
FORM OF RULE 144A LETTER
____________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
U.S. Bank National Association, as Trustee
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: GSAMP 2006-HE2
Re: GSAMP Trust 2006-HE2 Mortgage Pass-Through Certificates, Series
2006-HE2 [_____________________________________________________]
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we have
such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) either we are purchasing a Class A, Class M or
Class B Certificate or we are not an employee benefit plan that is subject to
Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, or a plan subject to materially
similar provisions of applicable federal, state or local law, nor are we acting
on behalf of any such plan or arrangement nor using the assets of any such plan
or arrangement to effect such acquisition or, with respect to a CE Certificate,
the purchaser is an insurance company that is purchasing this certificate with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and the purchase and holding of such Certificates are covered under
Sections I and III of PTCE 95-60, (e) we have not, nor has anyone acting on our
behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the Certificates, any interest in the Certificates or any other similar
security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act or
that would render the disposition of the Certificates a violation of Section 5
of the Securities Act or require registration pursuant thereto, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, and (f) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
either of the forms of certification to that effect attached hereto as Annex 1
or Annex 2. We are aware that the sale to us is being made in reliance on Rule
144A. We are acquiring the Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $ (1) in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is substantially
confined to banking and is supervised by the State or
territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its
latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security
Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
_________________________________________
Print Name of Transferee
By:____________________________________
Name:
Title:
Date:__________________________________
----------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That Are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ The Buyer owned $_______ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $_______ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the undersigned
will notify the parties listed in the Rule 144A Transferee Certificate to which
this certification relates of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of the Certificates
will constitute a reaffirmation of this certification by the undersigned as of
the date of such purchase.
_________________________________________
Print Name of Transferee
By: _____________________________________
Name:
Title:
IF AN ADVISER:
_________________________________________
Print Name of Buyer
Date: ___________________________________
EXHIBIT I-2
FORM OF INVESTMENT LETTER (NON RULE 144A)
_____________________
Date
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
U.S. Bank National Association.
as trustee
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: GSAMP 2006-HE2
Re: GSAMP Trust, Series 2006-HE2, Mortgage Pass-Through
Certificates, Series 2006-HE2 Class [__]
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is exempt
from the registration requirements of the Act and any such laws, (b) we are an
institutional "accredited investor" (within the meaning of Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the Act, and have such knowledge and experience
in financial and business matters that we are capable of evaluating the merits
and risks of investments in the Certificates, (c) we have had the opportunity to
ask questions of and receive answers from the Depositor concerning the purchase
of the Certificates and all matters relating thereto or any additional
information deemed necessary to our decision to purchase the Certificates, (d)
either we are purchasing a Class A, Class M or Class B Certificate or we are not
an employee benefit plan that is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or a plan or arrangement that is
subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code") or a plan subject to any federal, state or local law materially similar
to the foregoing provisions of ERISA or the Code, nor are we acting on behalf of
any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such acquisition or, with respect to a CE Certificate, the
purchaser is an insurance company that is purchasing this certificate with funds
contained in an "insurance company general account" (as such term is defined in
Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and
the purchase and holding of such Certificates are covered under Sections I and
III of PTCE 95-60, (e) we are acquiring the Certificates for investment for our
own account and not with a view to any distribution of such Certificates (but
without prejudice to our right at all times to sell or otherwise dispose of the
Certificates in accordance with clause (g) below), (f) we have not offered or
sold any Certificates to, or solicited offers to buy any Certificates from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of Section
5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any
Certificates unless (1) such sale, transfer or other disposition is made
pursuant to an effective registration statement under the Act or is exempt from
such registration requirements, and if requested, we will at our expense provide
an opinion of counsel satisfactory to the addressees of this Certificate that
such sale, transfer or other disposition may be made pursuant to an exemption
from the Act, (2) the purchaser or transferee of such Certificate has executed
and delivered to you a certificate to substantially the same effect as this
certificate, and (3) the purchaser or transferee has otherwise complied with any
conditions for transfer set forth in the Pooling and Servicing Agreement.
Very truly yours,
_________________________________________
Print Name of Transferee
By:____________________________________
Authorized Officer
EXHIBIT J
FORM OF REQUEST FOR RELEASE
(for Trustee)
To: U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Inventory Control - GSAMP 2006-HE2
Re: Pooling and Servicing Agreement dated March 1, 2006 among GS
Mortgage Securities Corp., as depositor (the "Depositor"), Xxxxxx
Loan Servicing LP, as servicer (the "Servicer"), Credit-Based Asset
Servicing and Securitization LLC, as seller (the "Seller"), and U.S.
Bank National Association, as trustee (the "Trustee")
In connection with the administration of the Mortgage Loans held by
you as the [Trustee] on behalf of the Certificateholders, we request the
release, and acknowledge receipt, of the (Custodial File/[specify documents])
for the Mortgage Loan described below, for the reason indicated.
Mortgagor's Name, Address & Zip Code:
-------------------------------------
Mortgage Loan Number:
---------------------
Send Custodial File to:
-----------------------
Delivery Method (check one)
---------------------------
____1. Regular mail
____2. Overnight courier (Tracking information: )
If neither box 1 nor 2 is checked, regular mail shall be assumed.
Reason for Requesting Documents (check one)
-------------------------------
____1. Mortgage Loan Paid in Full. (The Company hereby certifies that all
amounts received in connection therewith have been credited to the
Collection Account as provided in the Pooling and Servicing
Agreement.)
____2. Mortgage Loan Repurchase Pursuant to Section 2.03 of the Pooling and
Servicing Agreement. (The Company hereby certifies that the
repurchase price has been credited to the Collection Account as
provided in the Pooling and Servicing Agreement.)
____3. Mortgage Loan Liquidated by _________________. (The Company hereby
certifies that all proceeds of foreclosure, insurance, condemnation
or other liquidation have been finally received and credited to the
Collection Account pursuant to the Pooling and Servicing Agreement.)
____4. Mortgage Loan in Foreclosure.
____5. Other (explain).
If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous
request and receipt on file with you, as well as any additional documents in
your possession relating to the specified Mortgage Loan.
If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Trustee, please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested by us.
XXXXXX LOAN SERVICING LP
By:____________________________________
Name:
Title:
Date:
[ACKNOWLEDGED AND AGREED:
U.S. BANK NATIONAL ASSOCIATION
By: ___________________________________
Name:
Title:
Date: ]
EXHIBIT K
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and which shall be retained by the Servicer or delivered to and
retained by the Trustee, as applicable:
(a) The documents or instruments set forth as items (i) to (vi) in
Section 2.01(a) of the Agreement.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income, if applicable.
(e) Verification of acceptable evidence of source and amount of down
payment.
(f) Credit report on Mortgagor.
(g) Residential appraisal report.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy,
i.e., map or plat, restrictions, easements, sewer agreements, home
association declarations, etc.
(k) All required disclosure statements.
(l) If required in an appraisal, termite report, structural
engineer's report, water potability and septic certification.
(m) Sales contract, if applicable.
Evidence of payment of taxes and insurance, insurance claim files,
correspondence, current and historical computerized data files (which include
records of tax receipts and payment history from the date of origination), and
all other processing, underwriting and closing papers and records which are
customarily contained in a mortgage loan file and which are required to document
the Mortgage Loan or to service the Mortgage Loan.
EXHIBIT L
FORM OF CERTIFICATION TO BE PROVIDED WITH FORM 10-K
Re: GSAMP Trust 2006-HE2 (the "Trust"), Mortgage Pass-Through
Certificates, Series 2006-HE2, issued pursuant to the Pooling and
Servicing Agreement, dated as March 1, 2006 (the "Pooling and
Servicing Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as servicer
(the "Servicer"), Credit-Based Asset Servicing and Securitization
LLC, as seller (the "Seller"), and U.S. Bank National Association,
as trustee (the "Trustee")
I, [identify the certifying individual], certify that:
(1) I have reviewed the report on Form 10-K and all reports on Form
10-D required to be filed in respect of the period covered by this report on
Form 10-K of [identify the issuing entity] (the "Exchange Act periodic
reports");
(2) Based on my knowledge, the Exchange Act periodic reports, taken
as a whole, do not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
(3) Based on my knowledge, all of the distribution, servicing and
other information required to be provided under Form 10-D for the period covered
by this report is included in the Exchange Act periodic reports;
(4) [I am responsible for reviewing the activities performed by the
servicer(s) and based on my knowledge and the compliance review(s) conducted in
preparing the servicer compliance statement(s) required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic
reports, the servicer(s) [has/have] fulfilled [its/their] obligations under the
servicing agreement(s) in all material respects; and]
(5) All of the reports on assessment of compliance with servicing
criteria for ABS and their related attestation reports on assessment of
compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this report on
Form 10-K.
[In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties [name of
servicer, sub-servicer, co-servicer, depositor, trustee or the custodian].]
Date:__________________________________
____________________________________
[Signature]
[Title]
EXHIBIT M
FORM OF CERTIFICATION TO BE PROVIDED
BY THE TRUSTEE TO THE SERVICER
Re: GSAMP Trust 2006-HE2 (the "Trust"), Mortgage Pass-Through
Certificates, Series 2006-HE2, issued pursuant to the Pooling and
Servicing Agreement, dated as March 1, 2006 (the "Pooling and
Servicing Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), Xxxxxx Loan Servicing LP, as servicer
(the "Servicer"), Credit-Based Asset Servicing and Securitization
LLC, as seller (the "Seller"), and U.S. Bank National Association,
as trustee (the "Trustee")
The Trustee hereby certifies to the Servicer, and its officers,
directors and affiliates, and with the knowledge and intent that they will rely
upon this certification, that:
(1) I have reviewed the annual report on Form 10-K for the fiscal
year [___] (the "Annual Report"), and all reports on Monthly Statements filed in
respect of period covered by the Annual Report (collectively with the Annual
Report, the "Reports"), of the Trust;
(2) Subject to Paragraph 4 based on my knowledge, the Distribution
Information in the Monthly Statements prepared by the Trustee, taken as a whole,
do not contain any untrue statement of a material fact or omit to state a
material fact required by the Pooling and Servicing Agreement to be included
therein and necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period
covered by the Annual Report;
(3) Based on my knowledge, the Distribution Information required to
be provided by the Trustee under the Pooling and Servicing Agreement is included
in the Reports;
(4) In compiling the Distribution Information and making the
foregoing certifications, the Trustee has relied upon information furnished to
it by the Servicer under the Pooling and Servicing Agreement. The Trustee shall
have no responsibility or liability for any inaccuracy in such Reports resulting
from information so provided by the Servicer.
Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement.
Date:
___________________________
Name:
Title:
EXHIBIT N
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Trustee, the Servicer, each
Subservicer and each Subservicer identified by a Servicer shall address, at a
minimum, the criteria identified as below as "Applicable Servicing Criteria":
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
----------------------------------------------------------------------------------------------
Reference Criteria
----------------------------------------------------------------------------------------------
General Servicing Considerations
----------------------------------------------------------------------------------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor the
third party's performance and compliance with such servicing
activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a
back-up servicer for the mortgage loans are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the
transaction agreements.
----------------------------------------------------------------------------------------------
Cash Collection and Administration
----------------------------------------------------------------------------------------------
1122(d)(2)(i) Payments on mortgage loans are deposited into the appropriate
custodial bank accounts and related bank clearing accounts no
more than two business days following receipt, or such other
number of days specified in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor
or to an investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees charged
for such advances, are made, reviewed and approved as
specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash reserve
accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally insured
depository institution" with respect to a foreign financial
institution means a foreign financial institution that meets
the requirements of Rule 13k-1(b)(1) of the Securities
Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized
access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original
identification, or such other number of days specified in the
transaction agreements.
----------------------------------------------------------------------------------------------
Investor Remittances and Reporting
----------------------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance with
timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C)
are filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number of
mortgage loans serviced by the Servicer.
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or such
other number of days specified in the transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree
with cancelled checks, or other form of payment, or custodial
bank statements.
----------------------------------------------------------------------------------------------
Pool Asset Administration
----------------------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related mortgage
loan documents.
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as
required by the transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool are
made, reviewed and approved in accordance with any conditions
or requirements in the transaction agreements.
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are posted
to the Servicer's obligor records maintained no more than two
business days after receipt, or such other number of days
specified in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree with
the Servicer's records with respect to an obligor's unpaid
principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
asset documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures
and repossessions, as applicable) are initiated, conducted and
concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained during
the period a mortgage loan is delinquent in accordance with
the transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities
in monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling plans
in cases where delinquency is deemed temporary (e.g., illness
or unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage
loans with variable rates are computed based on the related
mortgage loan documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's mortgage loan documents, on at least an
annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid, or
credited, to obligors in accordance with applicable mortgage
loan documents and state laws; and (C) such funds are returned
to the obligor within 30 calendar days of full repayment of
the related mortgage loans, or such other number of days
specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related penalty
or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has been
received by the servicer at least 30 calendar days prior to
these dates, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any payment to
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late payment
was due to the obligor's error or omission.
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within
two business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the transaction agreements.
----------------------------------------------------------------------------------------------
Date:
By:
Name:
Title:
EXHIBIT O
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
XXXXXX LOAN SERVICING LP
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: _________________________________
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that _____________________, having its principal
place of business at _________________________, as Trustee (the "Trustee")
pursuant to that Pooling and Servicing Agreement among _____________________
(the "Depositor"), Xxxxxx Loan Servicing LP (the "Servicer"), and the Trustee,
dated as of _______________ 1, 200__ (the "Pooling and Servicing Agreement"),
hereby constitutes and appoints the Servicer, by and through the Servicer's
officers, the Trustee's true and lawful Attorney-in-Fact, in the Trustee's name,
place and stead and for the Trustee's benefit, in connection with all mortgage
loans serviced by the Servicer pursuant to the Pooling and Servicing Agreement
for the purpose of performing all acts and executing all documents in the name
of the Trustee as may be customarily and reasonably necessary and appropriate to
effectuate the following enumerated transactions in respect of any of the
mortgages or deeds of trust (the "Mortgages" and the "Deeds of Trust",
respectively) and promissory notes secured thereby (the "Mortgage Notes") for
which the undersigned is acting as Trustee for various certificateholders
(whether the undersigned is named therein as mortgagee or beneficiary or has
become mortgagee by virtue of endorsement of the Mortgage Note secured by any
such Mortgage or Deed of Trust) and for which the Servicer is acting as
servicer, all subject to the terms of the Pooling and Servicing Agreement.
1. This appointment shall apply to the following enumerated transactions
only:
2. The modification or re-recording of a Mortgage or Deed of Trust, where
said modification or re-recordings is for the purpose of correcting the
Mortgage or Deed of Trust to conform same to the original intent of the
parties thereto or to correct title errors discovered after such title
insurance was issued and said modification or re-recording, in either
instance, does not adversely affect the lien of the Mortgage or Deed of
Trust as insured.
3. The subordination of the lien of a Mortgage or Deed of Trust to an
easement in favor of a public utility company of a government agency or
unit with powers of eminent domain; this section shall include, without
limitation, the execution of partial satisfactions/releases, partial
reconveyances or the execution or requests to trustees to accomplish same.
4. The conveyance of the properties to the mortgage insurer, or the closing
of the title to the property to be acquired as real estate owned, or
conveyance of title to real estate owned.
5. The completion of loan assumption agreements.
6. The full satisfaction/release of a Mortgage or Deed of Trust or full
conveyance upon payment and discharge of all sums secured thereby,
including, without limitation, cancellation of the related Mortgage Note.
7. The assignment of any Mortgage or Deed of Trust and the related Mortgage
Note, in connection with the repurchase of the mortgage loan secured and
evidenced thereby.
8. The full assignment of a Mortgage or Deed of Trust upon payment and
discharge of all sums secured thereby in conjunction with the refinancing
thereof, including, without limitation, the assignment of the related
Mortgage Note.
9. With respect to a Mortgage or Deed of Trust, the foreclosure, the taking
of a deed in lieu of foreclosure, or the completion of judicial or
non-judicial foreclosure or termination, cancellation or rescission of any
such foreclosure, including, without limitation, any and all of the
following acts:
a. the substitution of trustee(s) serving under a Deed of Trust, in
accordance with state law and the Deed of Trust;
b. the preparation and issuance of statements of breach or
non-performance;
c. the preparation and filing of notices of default and/or notices of
sale;
d. the cancellation/rescission of notices of default and/or notices of
sale;
e. the taking of a deed in lieu of foreclosure; and
f. the preparation and execution of such other documents and
performance of such other actions as may be necessary under the
terms of the Mortgage, Deed of Trust or state law to expeditiously
complete said transactions in paragraphs 8.a. through 8.e., above.
The undersigned gives said Attorney-in-Fact full power and authority to execute
such instruments and to do and perform all and every act and thing necessary and
proper to carry into effect the power or powers granted by or under this Limited
Power of Attorney as fully as the undersigned might or could do, and hereby does
ratify and confirm to all that said Attorney-in-Fact shall lawfully do or cause
to be done by authority hereof.
Third parties without actual notice may rely upon the exercise of the power
granted under this Limited Power of attorney; and may be satisfied that this
Limited Power of Attorney shall continue in full force and effect and has not
been revoked unless an instrument of revocation has been made in writing by the
undersigned.
IN WITNESS WHEREOF, ________________________________ as Trustee pursuant to that
Pooling and Servicing Agreement among the Depositor, the Servicer, and the
Trustee, dated as of _____________ 1, 200__ (___________________ Mortgage
Pass-Through Certificates, Series 200___-__), has caused its corporate seal to
be hereto affixed and these presents to be signed and acknowledged in its name
and behalf by _____________________ its duly elected and authorized Vice
President this __ day of _______________, 200__.
as Trustee for _____ Mortgage Pass-Through
Certificates, Series 200___-__
By __________________________________
STATE OF _______________
COUNTY OF _____________
On ____________, 200__, before me, the undersigned, a Notary Public in and for
said state, personally appeared __________________, Vice President of
_________________________ as Trustee for _______________ Mortgage Pass-Through
Certificates, Series 200___-__, personally known to me to be the person whose
name is subscribed to the within instrument and acknowledged to me that he/she
executed that same in his/her authorized capacity, and that by his/her signature
on the instrument the entity upon behalf of which the person acted and executed
the instrument.
WITNESS my hand and official seal.
(SEAL)
______________________________________
Notary Public
My Commission Expires ________________
EXHIBIT P-1
SELLER MORTGAGE LOAN PURCHASE AGREEMENT
================================================================================
GS MORTGAGE SECURITIES CORP.
as Purchaser
and
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC
as Seller
MORTGAGE LOAN PURCHASE AGREEMENT
Fixed Rate and Adjustable Rate Mortgage Loans
GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
Dated as of March 1, 2006
================================================================================
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Definitions...................................................
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans and Interest Rate Swap Agreement.......
Section 2.02 Obligations of Seller Upon Sale...............................
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Mortgage Loans...............................................
Section 3.02 Seller Representations and Warranties.........................
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller.......................................
ARTICLE V
CONDITIONS OF CLOSING
Section 5.01 Conditions of Depositor's Obligations.........................
ARTICLE VI
OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS
ARTICLE VII
TERMINATION
Section 7.01 Termination...................................................
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment.....................................................
Section 8.02 Governing Law.................................................
Section 8.03 Notices.......................................................
Section 8.04 Severability of Provisions....................................
Section 8.05 Counterparts..................................................
Section 8.06 Further Agreements............................................
Section 8.07 Intention of the Parties......................................
Section 8.08 Successors and Assigns; Assignment of this Agreement..........
Section 8.09 Survival......................................................
Schedule I Mortgage Loan Schedule
MORTGAGE LOAN PURCHASE AGREEMENT, dated as of March 1, 2006 (the
"Agreement"), between CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC
("C-BASS" or the "Seller") and GS MORTGAGE SECURITIES CORP. (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Seller is the owner of either the notes or other
evidence of indebtedness (the "Mortgage Notes") or other evidence of ownership
so indicated on Schedule I hereto, and the other documents or instruments
constituting the Mortgage File (collectively, the "Mortgage Loans"); and
WHEREAS, the Seller, as of the date hereof, owns the mortgages (the
"Mortgages") on the properties (the "Mortgaged Properties") securing such
Mortgage Loans, including rights (a) to any property acquired by foreclosure or
deed in lieu of foreclosure or otherwise and (b) to the proceeds of any
insurance policies covering the Mortgage Loans or the Mortgaged Properties or
the obligors on the Mortgage Loans; and
WHEREAS, the parties hereto desire that the Seller sell the Mortgage
Loans to the Purchaser and the Purchaser purchase the Mortgage Loans from the
Seller pursuant to the terms of this Agreement; and
WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement,
dated as of March 1, 2006 (the "Pooling and Servicing Agreement"), among the
Seller, as seller, the Purchaser, as depositor, Xxxxxx Loan Servicing LP
("Xxxxxx"), as servicer, and U.S. Bank National Association, as trustee (the
"Trustee"), the Purchaser will convey the Mortgage Loans to GSAMP Trust
2006-HE2.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. All capitalized terms used but not defined
herein and below shall have the meanings assigned thereto in the Pooling and
Servicing Agreement.
"Custodian": A custodian acceptable to the Trustee, which may be the
Trustee and which shall not be the Seller or any affiliate of the Seller. The
initial Custodian shall be The Bank of New York.
ARTICLE II
SALE OF MORTGAGE LOANS; PAYMENT OF PURCHASE PRICE
Section 2.01 Sale of Mortgage Loans and Interest Rate Swap Agreement
(a) The Seller does hereby agree to and does hereby sell, assign,
set over, and otherwise convey to the Purchaser, without recourse, on the
Closing Date, all its right, title and interest, in and to (i) each Mortgage
Loan and the related Cut-off Date Principal Balance thereof, including any
Related Documents; (ii) all payments on or collections in respect of the
Mortgage Loans due after the Cut-off Date; (iii) property which secured such
Mortgage Loan and which has been acquired by foreclosure or deed in lieu of
foreclosure; (iv) its interest in any insurance policies in respect of the
Mortgage Loans; and (v) all proceeds of any of the foregoing.
(b) The Seller, concurrently with the execution and delivery of this
Agreement does hereby sell, and in connection therewith hereby assigns to the
Purchaser, effective as of the Closing Date, without recourse, (i) all of its
right, title and interest in the Interest Rate Swap Agreement, dated April 6,
2006 and (ii) all proceeds of the foregoing.
Section 2.02 Obligations of Seller Upon Sale
(a) In connection with any transfer pursuant to Section 2.01 hereof,
the Seller further agrees, at its own expense, on or prior to the Closing Date,
(x) to indicate in its books and records that the Mortgage Loans have been sold
to the Purchaser pursuant to this Agreement and (y) to deliver to the Purchaser
and the Trustee a computer file containing a true and complete list of all the
Mortgage Loans specifying, among other things, for each Mortgage Loan, as of the
Cut-off Date, its account number and Cut-off Date Principal Balance. Such file
(the "Mortgage Loan Schedule") which is included as Exhibit D to the Pooling and
Servicing Agreement, shall also be marked as Schedule I to this Agreement and is
hereby incorporated into and made a part of this Agreement.
In connection with such transfer and assignment, the Seller, on
behalf of the Purchaser, does hereby deliver or cause to be delivered to, and
deposit with the Trustee, or its designated agent (the "Custodian"), the
following documents or instruments with respect to each Mortgage Loan (a
"Mortgage File") so transferred and assigned:
(i) the original Mortgage Note, endorsed either (a) in blank or (b)
in the following form: "Pay to the order of U.S. Bank National
Association, as Trustee for the Mortgage Pass-Through Certificates, Series
2006-HE2, without recourse," or with respect to any lost Mortgage Note, an
original lost note affidavit, together with a copy of the related Mortgage
Note;
(ii) the original Mortgage with evidence of recording thereon, and
the original recorded power of attorney, if the Mortgage was executed
pursuant to a power of attorney, with evidence of recording thereon or, if
such Mortgage or power of attorney has been submitted for recording but
has not been returned from the applicable public recording office, has
been lost or is not otherwise available, a copy of such Mortgage or power
of attorney, as the case may be, certified to be a true and complete copy
of the original submitted for recording;
(iii) an original Assignment of Mortgage, in form and substance
acceptable for recording. The Mortgage shall be assigned either (a) in
blank or (b) to "U.S. Bank National Association, as Trustee for the
Mortgage Pass-Through Certificates, Series 2006-HE2, without recourse";
(iv) an original or a certified copy of any intervening assignment
of Mortgage showing a complete chain of assignments;
(v) the original or a certified copy of lender's title insurance
policy; and
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
If any of the documents referred to in Section 2.02(ii), (iii) or
(iv) above has as of the Closing Date been submitted for recording but either
(x) has not been returned from the applicable public recording office or (y) has
been lost or such public recording office has retained the original of such
document, the obligations of the Seller to deliver such documents shall be
deemed to be satisfied upon (1) delivery to the Trustee or the Custodian no
later than the Closing Date, of a copy of each such document certified by the
Seller in the case of (x) above or the applicable public recording office in the
case of (y) above to be a true and complete copy of the original that was
submitted for recording and (2) if such copy is certified by the Seller,
delivery to the Trustee or the Custodian, promptly upon receipt thereof of
either the original or a copy of such document certified by the applicable
public recording office to be a true and complete copy of the original. The
Seller shall deliver or cause to be delivered to the Trustee or the Custodian
promptly upon receipt thereof any other documents constituting a part of a
Mortgage File received with respect to any Mortgage Loan, including, but not
limited to, any original documents evidencing an assumption or modification of
any Mortgage Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Seller
shall have 120 days to cure such defect or 150 days following the Closing Date,
in the case of missing Mortgages or Assignments or deliver such missing document
to the Trustee or the Custodian. If the Seller does not cure such defect or
deliver such missing document within such time period, the Seller shall either
repurchase or substitute for such Mortgage Loan in accordance with Section 3.01
hereof.
The Purchaser hereby acknowledges its acceptance of all right, title
and interest to the Mortgage Loans and other property, now existing and
hereafter created, conveyed to it pursuant to Section 2.01.
The parties hereto intend that the transaction set forth herein be a
sale by the Seller to the Purchaser of all the Seller's right, title and
interest in and to the Mortgage Loans and other property described above. In the
event the transaction set forth herein is deemed not to be a sale, the Seller
hereby grants to the Purchaser a security interest in all of the Seller's right,
title and interest in, to and under the Mortgage Loans and other property
described above, whether now existing or hereafter created, to secure all of the
Seller's obligations hereunder; and this Agreement shall constitute a security
agreement under applicable law. The Seller and the Purchaser shall, to the
extent consistent with this Agreement, take such actions as may be necessary to
ensure that, if this Agreement were deemed to create a security interest in the
Mortgage Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of this Agreement.
(b) The Seller shall cause the Assignments of Mortgage which were
delivered in blank to be completed and shall cause all Assignments referred to
in Section 2.02(iii) hereof and, to the extent necessary, in Section 2.02(iv)
hereof to be recorded. The Seller or its designee shall be required to deliver
such assignments for recording within 30 days of the Closing Date. The Seller or
its designee shall furnish the Trustee, or its designated agent, with a copy of
each assignment of Mortgage submitted for recording. In the event that any such
Assignment is lost or returned unrecorded because of a defect therein, the
Seller shall promptly have a substitute Assignment prepared or have such defect
cured, as the case may be, and thereafter cause each such Assignment to be duly
recorded.
In the event that any Mortgage Note is endorsed in blank as of the
Closing Date, promptly following the Closing Date the Seller shall cause to be
completed such endorsements in the following form: "Pay to the order of U.S.
Bank National Association, as Trustee for the Mortgage Pass-Through
Certificates, Series 2006-HE2, without recourse."
ARTICLE III
REPRESENTATIONS AND WARRANTIES; REMEDIES FOR BREACH
Section 3.01 Seller Representations and Warranties Relating to the
Mortgage Loans. The Seller hereby represents and warrants to the Purchaser, with
respect to the Mortgage Loans, that as of the Closing Date:
(a) The information set forth in the Mortgage Loan Schedule is
complete, true and correct as of the Cut-off Date.
(b) There are no delinquent taxes, ground rents, water charges,
sewer rents, assessments, including assessments payable in future installments,
or other outstanding charges affecting the related Mortgaged Property.
(c) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments, recorded in the applicable public recording office if necessary to
maintain the lien priority of the Mortgage and the interests of the
Certificateholders, and which have been delivered to the Trustee; the substance
of any such waiver, alteration or modification has been approved by the title
insurer, to the extent required by the related policy, and is reflected on the
Mortgage Loan Schedule. No instrument of waiver, alteration or modification has
been executed, and no Mortgagor has been released, in whole or in part, except,
in connection with an assumption agreement approved by the title insurer, to the
extent required by the policy, and which assumption agreement has been delivered
to the Trustee and the terms of which are reflected in the Mortgage Loan
Schedule.
(d) The Mortgage Note and the Mortgage are not subject to any right
of rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto.
(e) All buildings upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are customary in the area where the Mortgaged Property
is located, pursuant to insurance policies conforming to the requirements of the
Pooling and Servicing Agreement. All such insurance policies contain a standard
mortgagee clause naming the Seller, its successors and assigns as mortgagee and
all premiums thereon have been paid. If upon origination of the Mortgage Loan,
the Mortgaged Property was in an area identified on a Flood Hazard Map or Flood
Insurance Rate Map issued by the Federal Emergency Management Agency as having
special flood hazards (and such flood insurance has been made available) a flood
insurance policy meeting the requirements of the current guidelines of the
Federal Insurance Administration is in effect which policy conforms to the
requirements of the Federal National Mortgage Association ("FNMA") and the
Federal Home Loan Mortgage Corporation ("FHLMC"). The Mortgage obligates the
Mortgagor thereunder to maintain all such insurance at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to maintain such insurance at the Mortgagor's cost and expense and to
seek reimbursement therefor from the Mortgagor. All acts required to be
performed to preserve the rights and remedies of the Trustee in any such
insurance policies have been performed, including, without limitation, any
necessary notifications of insurers and assignments of policies or interests
therein.
(f) As of the date of origination of the Mortgage Loan, any and all
requirements of any federal, state or local law, including, without limitation,
usury, truth in lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity or disclosure laws applicable to the
origination of the Mortgage Loans have been complied with. Any and all
requirements of any federal, state or local law, including, without limitation,
usury, truth in lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity or disclosure laws applicable to the
servicing of the Mortgage Loans have been complied with.
(g) The Mortgage has not been satisfied, canceled, subordinated
(other than with respect to second lien loans, the subordination to the first
lien loan) rescinded, in whole or in part, and the Mortgaged Property has not
been released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such satisfaction, cancellation,
subordination, rescission or release.
(h) The Mortgage is a valid, existing and enforceable first or
second lien on the Mortgaged Property, including all improvements on the
Mortgaged Property subject only to (1) the lien of current real property taxes
and assessments not yet due and payable, (2) covenants, conditions and
restrictions, rights of way, easements and other matters of the public record as
of the date of recording being acceptable to mortgage lending institutions
generally, (3) other matters to which like properties are commonly subject which
do not materially interfere with the benefits of the security intended to be
provided by the Mortgage or the use, enjoyment, value or marketability of the
related Mortgaged Property and (4) with respect to any second lien mortgage
loan, the lien of the related first mortgage loan. Any security agreement,
chattel mortgage or equivalent document related to and delivered in connection
with the Mortgage Loan establishes and creates a valid, existing and enforceable
first or second lien and first or second priority security interest on the
property described therein and the Seller has full right to sell and assign the
same to the Purchaser.
(i) The 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.
(j) The proceeds of the Mortgage Loan have been fully disbursed to
or for the account of the Mortgagor and there is no obligation for the mortgagee
to advance additional funds thereunder and any and all requirements as to
completion of any on-site or off-site improvement and as to disbursements of any
escrow funds therefor have been complied with. All costs, fees and expenses
incurred in making or closing the Mortgage Loan and the recording of the
Mortgage have been paid, and the Mortgagor is not entitled to any refund of any
amounts paid or due to the mortgagee pursuant to the Mortgage Note or Mortgage.
(k) Immediately prior to the transfer and assignment contemplated
herein, the Seller was the sole owner and holder of the Mortgage Loans and has
good and marketable title to each Mortgage Loan, free and clear of any and all
liens, pledges, charges, claims, participation interests, mortgages, security
interests or encumbrances or other interests of any nature and has full right
and authority to sell and assign the same.
(l) Each Mortgage Loan is covered by an ALTA mortgagee title
insurance policy acceptable to FNMA or FHLMC, issued by a title insurer
acceptable to FNMA and FHLMC, and qualified to do business in the jurisdiction
where the Mortgaged Property is located, insuring (subject to the exceptions
contained in (h)(1) and (2) above) the Seller, its successors and assigns as to
the first or second priority lien of the Mortgage in the original principal
amount of the Mortgage Loan and against any loss by reason of the invalidity or
unenforceability of the lien resulting from the provisions of the Mortgage
providing for adjustment in the mortgage interest rate and/or monthly payment
including any negative amortization thereunder. Additionally, such mortgagee
title insurance policy affirmatively insures ingress and egress to and from the
Mortgaged Property, and against encroachments by or upon the Mortgaged Property
or any interest therein. The Seller is the sole insured of such mortgagee title
insurance policy, and such lender's title insurance policy is in full force and
effect and will be in full force and effect upon the consummation of the
transactions contemplated by this Agreement. No claims have been made under such
mortgagee 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 mortgagee title insurance policy.
(m) There are no mechanics' or similar liens or claims which have
been filed for work, labor or material (and no rights are outstanding that under
law could give rise to such lien) affecting the related Mortgaged Property which
are or may be liens prior to, or equal or coordinate with, the lien of the
related Mortgage.
(n) The collection practices used by the Servicer with respect to
each Mortgage Note and Mortgage have been in all respects legal, proper, prudent
and customary in the mortgage servicing industry.
(o) The Mortgage and related Mortgage Note contain customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (1) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (2) otherwise by
judicial foreclosure. There is no homestead or other exemption available to the
Mortgagor which would interfere with the right to sell the Mortgaged Property at
a trustee's sale or the right to foreclose the Mortgage. The Mortgagor has not
notified the Seller and the Seller has no knowledge of any relief requested or
allowed to the Mortgagor under the Servicemembers Civil Relief Act of 1940.
(p) The Mortgage Note is not and has not been secured by any
collateral except the lien of the corresponding Mortgage on the Mortgaged
Property and the security interest of any applicable security agreement or
chattel mortgage.
(q) In the event the Mortgage constitutes a deed of trust, a
trustee, duly qualified under applicable law to serve as such, has been properly
designated and currently so serves and is named in the Mortgage, and no fees or
expenses are or will become payable by the Purchaser to the trustee under the
deed of trust, except in connection with a trustee's sale after default by the
Mortgagor.
(r) No Mortgage Loan contains provisions pursuant to which monthly
payments are (1) paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, (2) paid by any source other than the Mortgagor or (3) contains any
other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature.
(s) The Mortgage Note, the Mortgage, the Assignment and any other
documents required to be delivered with respect to each Mortgage Loan pursuant
to Section 2.02 hereof have been delivered to the Purchaser or its designee, all
in compliance with the specific requirements of Section 2.02 hereof.
(t) If the residential dwelling on the Mortgaged Property is a
condominium unit or a unit in a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project meets FNMA's eligibility requirements.
(u) [reserved]
(v) The rights with respect to each Mortgage Loan are assignable by
the Seller without the consent of any Person other than consents which will have
been obtained on or before the Closing Date.
(w) The Mortgage Loans are not being transferred by the Seller with
any intent to hinder, delay or defraud any creditors of the Seller.
(x) All parties which have had any interest in each Mortgage Loan,
whether as mortgagee, assignee, pledgee or otherwise, and including, without
limitation, the Seller, are (or during the period in which they held and
disposed such interest, were) in compliance with any and all applicable
licensing requirements of the laws of the state wherein the property securing
the Mortgage is located to the extent that any noncompliance thereunder would
affect the value or marketability of the Mortgage Loans.
(y) To the best of Seller's knowledge, the Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or regulation.
(z) The Mortgaged Property is free from material damage.
(aa) Each Mortgage Loan has been serviced by the Servicer in
accordance with the terms thereof and Applicable Regulations.
(bb) There is no proceeding pending for the total or partial
condemnation and no eminent domain proceedings pending affecting any Mortgaged
Property.
(cc) To the best of the Seller's knowledge there was no fraud or
gross negligence involved in the origination of any Mortgage Loan by the
applicable mortgagee or Mortgagor, and to the best of the Seller's knowledge,
there was no fraud or gross negligence by the appraiser or any other party
involved in the origination of any such Mortgage Loan.
(dd) Each mortgage file contains an appraisal of or a broker's price
opinion regarding the related Mortgaged Property indicating an appraised value
equal to the appraised value identified for such Mortgaged Property on the
Mortgage Loan Schedule. Each appraisal has been prepared on FNMA or FHLMC forms.
(ee) No improvements on any Mortgaged Property encroach on adjoining
properties (and in the case of a condominium unit, such improvements are within
the project with respect to that unit), and no improvements on adjoining
properties encroach upon such Mortgaged Property unless there exists in the
applicable Mortgage File a title policy with endorsements which insure against
losses sustained by the insured as a result of such encroachments.
(ff) With respect to escrow deposits, if any, all such payments are
in the possession of, or under the control of, the Servicer and there exists no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. No escrow deposits or escrow advances or
other charges or payments due the Servicer have been capitalized under any
Mortgage or the related Note.
(gg) No Mortgage Loan, other than a Bankruptcy Plan Mortgage Loan,
is subject to any pending bankruptcy or insolvency proceeding. To the Seller's
best knowledge, no material litigation or lawsuit relating to any Mortgage Loan
is pending.
(hh) The Seller used no selection procedures that identified the
Mortgage Loans as being less desirable or valuable than other comparable
mortgage loans acquired by the Seller.
(ii) The sale, transfer, assignment and conveyance of Mortgage Loans
by the Seller pursuant to this Agreement will not result in any tax, fee or
governmental charge (other than income taxes and related taxes) payable by the
Seller, the Depositor or the Trustee to any federal, state or local government
other than taxes which have or will be paid by the Seller as due ("Transfer
Taxes"). In the event that the Depositor or the Trustee receives actual notice
of any Transfer Taxes arising out of the transfer, assignment and conveyance of
the Mortgage Loans, other than any taxes to be paid by the creditor, on written
demand by the Depositor, or the Trustee, or upon the Seller's otherwise being
given notice thereof by the Depositor or the Trustee, the Seller shall pay, and
otherwise indemnify and hold the Depositor and the Trustee harmless, on an
after-tax basis, from and against any and all such Transfer Taxes (it being
understood that the Certificateholders, the Trustee and the Depositor shall have
no obligation to pay such Transfer Taxes).
(jj) With respect to each Mortgage Loan that is a "mortgage" as such
term is defined in 15 U.S.C. 1602(aa), no obligor has or will have a claim or
defense under such Mortgage Loan as a result of a violation of the Home
Ownership and Equity Protection Act of 1994.
(kk) With respect to the Mortgage Loans, the Mortgaged Properties
securing repayment of the related Mortgage Note consist of a fee simple interest
in a single parcel or two contiguous parcels of real property (i) improved by a
(a) detached or semi-detached one-family dwelling, (b) detached or semi-detached
two-to four family dwelling, (c) one-family unit in a FNMA eligible condominium
project, (d) detached or semi-detached one-family dwelling in a planned unit
development, (e) multi-family dwelling or townhouse or (f) mobile home or
manufactured dwelling which constitutes real property or (ii) unimproved by any
residential dwelling.
(ll) Except for the Mortgage Loans identified on the Mortgage Loan
Schedule as delinquent, there is no default, breach, violation or event of
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event of
acceleration, and the Seller has not waived any default, breach, violation or
event of acceleration.
(mm) The Seller has no actual knowledge that with respect to any
Mortgage Loan (1) the Servicer has sent a notice of default to the related
Mortgagor which the Servicer is currently seeking to enforce, or (2) any
foreclosure proceedings have been commenced or acceleration been declared which
is currently pending. The Seller is not transferring any Mortgage Loan to the
Purchaser with the intention or knowledge that the Purchaser or the Trust will
acquire the related Mortgaged Property.
(nn) With respect to any Mortgage Loan that is secured by a second
lien on the related Mortgaged Property, either (i) no consent for the Mortgage
Loan is required by the holder of any related senior lien or (ii) such consent
has been obtained and is contained in the Mortgage File.
(oo) In any case in which a Mortgage Loan is secured by a second
lien and a senior lien on the related Mortgaged Property provides for negative
amortization or deferred interest, the balance of such senior lien on the
related Mortgaged Property used to calculate the Combined Loan to Value Ratio
for the Mortgage Loan is based on the maximum amount of negative amortization
possible under such senior loan.
(pp) With respect to a Mortgage Loan which is a second lien, as of
the date hereof, the Seller has not received a notice of default of a senior
lien on the related Mortgaged Property which has not been cured.
(qq) No Mortgage Loan is delinquent (other than Mortgage Loans
subject to a bankruptcy plan or forbearance plan). The Seller has not waived any
default, breach, violation or event of acceleration, and the Seller has not
taken any action to waive any default, breach, violation or event of
acceleration, with respect to any Mortgage Loan.
(rr) Each Mortgage Loan is a "qualified Mortgage" within the meaning
of Section 860 G(a)(3) of the Code.
(ss) With respect to any Adjustable-Rate Mortgage Loan, all rate
adjustments have been performed in accordance with the terms of the related
Mortgage Note or subsequent modifications, if any.
(tt) With respect to each Mortgage Loan that is a mobile or
manufactured housing unit, such unit is a "single family residence" within the
meaning of Section 25(e)(1) of the Code, and has a minimum of 400 square feet of
living space, a minimum width of 102 inches and is of a kind customarily used at
a fixed location.
(uu) Any written agreement between the Mortgagor in respect of a
Mortgage Loan and the Servicer modifying such Mortgagor's obligation to make
payments under the Mortgage Loan (such modified Mortgage Loan, a "Modified
Mortgage Loan") involved some assessment of the Mortgagor's ability to repay the
Modified Mortgage Loan.
(vv) No Mortgage Loan is covered by the Home Ownership and Equity
Protection Act of 1994 ("HOEPA") and no Mortgage Loan is in violation of any
state law or ordinance similar to HOEPA.
(ww) No proceeds from any Mortgage Loan were used to finance
single-premium credit insurance policies.
(xx) No Mortgage Loan originated prior to October 1, 2002 will
impose a Prepayment Charge in excess of five years.
(yy) The Servicer has fully furnished and will continue to fully
furnish, in accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (e.g., favorable and unfavorable)
on its borrower credit files to Equifax, Experian and Trans Union Credit
Information Company (three of the credit repositories), on a monthly basis.
(zz) There is no Mortgage Loan in the Trust Fund that was originated
on or after March 7, 2003, which is a "high cost home loan" as defined under the
Georgia Fair Lending Act.
(aaa) (a) No Mortgage Loan is classified as a high cost mortgage
loan under HOEPA; and (b) no Mortgage Loan in the Trust Fund is a "high cost
home," "covered" (excluding home loans defined as "covered home loans" pursuant
to clause (1) of the definition of that term in the New Jersey Home Ownership
Security Act of 2002), "high risk home" or "predatory" loan under any other
applicable state, federal or local law (or a similarly classified loan using
different terminology under a law imposing heightened regulatory scrutiny or
additional legal liability for residential mortgage loans having high interest
rates, points and/or fees).
(bbb) None of the Mortgage Loans are High Cost as defined by the
applicable predatory and abusive lending laws or any federal, state or local
law.
(ccc) No Mortgage Loans are subject to the Georgia Fair Lending act
("GFLA") effective from October 1, 2002 to March 6, 2003.
(ddd) The Prepayment Charges included in the transaction are
enforceable and were originated in compliance with all federal, state and local
laws.
(eee) Each Mortgage Loan, at origination, complied in all material
respects with applicable state, local and federal laws, including, but not
limited to all applicable predatory and abusive lending laws.
(fff) Information provided to the rating agencies, including the
loan level detail, is true and correct according to the rating agency
requirements.
(ggg) No Mortgage Loan is a High Cost Loan or a Covered Loan, as
applicable (as such terms are defined in the then current Standard & Poor's
LEVELS Glossary, Appendix E).
(hhh) No borrower obtained a prepaid single-premium credit-life,
credit disability, credit unemployment or credit property insurance policy in
connection with the origination of the Mortgage Loan.
(iii) With respect to any Mortgage Loan originated on or after
August 1, 2004, neither the related Mortgage nor the related Mortgage Note
requires the borrower to submit to arbitration to resolve any dispute arising
out of or relating in any way to the mortgage loan transaction.
With respect to the representations and warranties set forth in this
Section 3.01 that are made to the best of the Seller's knowledge or as to which
the Seller has no knowledge, if it is discovered by the Depositor, the Seller,
the Servicer or the Trustee, as set forth in Section 2.04 of the Pooling and
Servicing Agreement, that the substance of such representation and warranty is
inaccurate and such inaccuracy materially and adversely affects the value of the
related Mortgage Loan or the interest therein of the Purchaser or the
Purchaser's assignee, transferee or designee for the benefit of the
Certificateholders then, notwithstanding the Seller's lack of knowledge with
respect to the substance of such representation and warranty being inaccurate at
the time the representation or warranty was made, such inaccuracy shall be
deemed a breach of the applicable representation or warranty.
Upon discovery by the Depositor, the Seller, the Servicer, the
Purchaser or any assignee, transferee or designee of the Purchaser of a breach
of any of the representations and warranties contained in this Article III or
Section 2.04 of the Pooling and Servicing Agreement that materially and
adversely affects the value of any Mortgage Loan or the interest therein of the
Purchaser or the Purchaser's assignee, transferee or designee for the benefit of
the Certificateholders, the party discovering the breach shall give prompt
written notice to the others and in no event later than two Business Days from
the date of such discovery. Within 90 days of the earlier of its discovery or
its receipt of notice of any such breach of a representation or warranty, the
Seller shall promptly cure such breach in all material respects, or in the event
such defect or breach cannot be cured, the Seller shall repurchase the affected
Mortgage Loan or cause the removal of such Mortgage Loan from the Trust Fund and
substitute for it one or more Eligible Substitute Mortgage Loans, in either
case, in accordance with Section 2.03 of the Pooling and Servicing Agreement.
Upon discovery or receipt of written notice by the Seller of any
materially defective document in, or that a material document is missing from, a
Mortgage File, the Seller shall have 120 days to cure such defect or 150 days
following the Closing Date, in the case of missing Mortgages or Assignments (or
within 90 days of the earlier of the Seller's discovery or receipt of
notification if such defect would cause the Mortgage Loan not to be a "qualified
mortgage" for REMIC purposes), or in the event such defect cannot be cured, the
Seller shall repurchase the affected Mortgage Loan or cause the removal of such
Mortgage Loan from the Trust Fund and substitute for it one or more Eligible
Substitute Mortgage Loans, in either case, within such time periods and in
accordance with Section 2.03 of the Pooling and Servicing Agreement.
It is understood and agreed that the representations and warranties
set forth in this Section 3.01 shall survive delivery of the respective Mortgage
Files to the Trustee or its agent, on behalf of the Purchaser and shall inure to
the benefit of the Certificateholders notwithstanding any restrictive or
qualified endorsement or assignment.
It is understood and agreed that the obligations of the Seller set
forth in this Section 3.01 to cure, repurchase or substitute for a defective
Mortgage Loan constitute the sole remedies of the Purchaser, the
Certificateholders or the Trustee on their behalf respecting a missing or
defective document or a breach of the representations or warranties contained in
this Section 3.01.
Section 3.02 Seller Representations and Warranties. The Seller
hereby represents and warrants to the Purchaser that as of the Closing Date or
as of such date specifically provided herein:
(A) The Seller is duly organized, validly existing and in good
standing as a limited liability company under the laws of the State
of Delaware and has the power and authority to own its assets and to
transact the business in which it is currently engaged. The Seller
is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it
or properties owned or leased by it requires such qualification and
in which the failure to so qualify would have a material adverse
effect on (a) its business, properties, assets or condition
(financial or other), (b) the performance of its obligations under
this Agreement, (c) the value or marketability of the Mortgage
Loans, or (d) its ability to foreclose on the related Mortgaged
Properties.
(B) The Seller has the power and authority to make, execute,
deliver and perform this Agreement and to consummate all of the
transactions contemplated hereunder and has taken all necessary
action to authorize the execution, delivery and performance of this
Agreement. When executed and delivered, this Agreement will
constitute the Seller's legal, valid and binding obligations
enforceable in accordance with its terms, except as enforcement of
such terms may be limited by (1) bankruptcy, insolvency,
reorganization, receivership, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by the
availability of equitable remedies, (2) general equity principals
(regardless of whether such enforcement is considered in a
proceeding in equity or at law) or (3) public policy considerations
underlying the securities laws, to the extent that such policy
considerations limit the enforceability of the provisions of this
Agreement which purport to provide indemnification from securities
laws liabilities.
(C) The Seller holds all necessary licenses, certificates and
permits from all governmental authorities necessary for conducting
its business as it is presently conducted, except for such licenses,
certificates and permits the absence of which, individually or in
the aggregate, would not have a material adverse effect on the
ability of the Seller to conduct its business as it is presently
conducted. It is not required to obtain the consent of any other
party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau
or agency in connection with the execution, delivery, performance,
validity or enforceability of this Agreement, except for such
consents, licenses, approvals or authorizations, or registrations or
declarations as shall have been obtained or filed, as the case may
be, prior to the Closing Date.
(D) The execution, delivery and performance of this Agreement
by the Seller will not conflict with or result in a breach of, or
constitute a default under, any provision of any existing law or
regulation or any order or decree of any court applicable to the
Seller or any of its properties or any provision of its Limited
Liability Company Agreement, or constitute a material breach of, or
result in the creation or imposition of any lien, charge or
encumbrance upon any of its properties pursuant to any mortgage,
indenture, contract or other agreement to which it is a party or by
which it may be bound.
(E) No certificate of an officer, written statement or report
delivered pursuant to the terms hereof by the Seller contains any
untrue statement of a material fact or omits to state any material
fact necessary to make the certificate, statement or report not
misleading.
(F) The transactions contemplated by this Agreement are in the
ordinary course of the Seller's business.
(G) The Seller is not insolvent, nor will the Seller be made
insolvent by the transfer of the Mortgage Loans, nor is the Seller
aware of any pending insolvency.
(H) The Seller is not in violation of, and the execution and
delivery of this Agreement by it and its performance and compliance
with the terms of this Agreement will not constitute a violation
with respect to any order or decree of any court, or any order or
regulation of any federal, state, municipal or governmental agency
having jurisdiction, which violation would materially and adversely
affect the Seller's condition (financial or otherwise) or operations
or any of the Seller's properties, or materially and adversely
affect the performance of any of its duties hereunder.
(I) There are no actions or proceedings against, or
investigations of, the Seller pending or, to its knowledge,
threatened, before any court, administrative agency or other
tribunal (i) that, if determined adversely, would prohibit the
Seller from entering into this Agreement and the Pooling and
Servicing Agreement, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or (iii) that, if
determined adversely, would prohibit or materially and adversely
affect the Seller's performance of any of its respective obligations
under, or the validity or enforceability of, this Agreement and the
Pooling and Servicing Agreement.
(J) The Seller is not transferring the Mortgage Loans to the
Purchaser hereunder with any intent to hinder, delay or defraud any
of its creditors.
(K) The Seller acquired title to the Mortgage Loans in good
faith, without notice of any adverse claims.
(L) The transfer, assignment and conveyance of the Mortgage
Notes and the Mortgages by the Seller pursuant to this Agreement are
not subject to the bulk transfer laws or any similar statutory
provisions in effect in any applicable jurisdiction.
(M) The Seller understands that (a) the Retained Certificates
have not been and will not be registered or qualified under the
Securities Act of 1933, as amended (the "Securities Act") or any
state securities law, (b) the Purchaser is not required to so
register or qualify the Retained Certificates, (c) the Retained
Certificates may be resold only if registered and qualified pursuant
to the provisions of the Act or any state securities law, or if an
exemption from such registration and qualification is available, (d)
the Pooling and Servicing Agreement contains restrictions regarding
the transfer of the Retained Certificates and (e) the Retained
Certificates will bear a legend to the foregoing effect.
(N) The Seller is acquiring the Retained Certificates for its
own account for investment only and not with a view to or for sale
in connection with any distribution thereof in any manner that would
violate the Securities Act or any applicable state securities laws.
(O) The Seller is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such matters
related to securities similar to the Retained Certificates, such
that it is capable of evaluating the merits and risks of investment
in the Retained Certificates, (b) able to bear the economic risks of
such an investment and (c) an "accredited investor" within the
meaning of Rule 501 (a) promulgated pursuant to the Securities Act.
(P) The Seller has been furnished with such information
concerning the Retained Certificates and the Purchaser as has been
requested by the Seller from the Purchaser and is relevant to the
Seller's decision to purchase the Retained Certificates. The Seller
has had any questions arising from such review answered by the
Purchaser to the satisfaction of the Seller.
(Q) The Seller has not and will not nor has it authorized or
will it authorize any person to (a) offer, pledge, sell, dispose of
or otherwise transfer any Retained Certificate, any interest in any
Retained Certificate or any other similar security to any person in
any manner, (b) solicit any offer to buy or to accept a pledge,
disposition of other transfer of any Retained Certificate, any
interest in any Retained Certificate or any other similar security
from any person in any manner, (c) otherwise approach or negotiate
with respect to any Retained Certificate, any interest in any
Retained Certificate or any other similar security with any person
in any manner, (d) make any general solicitation by means of general
advertising or in any other manner or (e) take any other action,
that (as to any of (a) through (e) above) would constitute a
distribution of any Retained Certificate under the Securities Act,
that would render the disposition of any Retained Certificate a
violation of Section 5 of the Securities Act or any state securities
law, or that would require registration or qualification pursuant
thereto. The Seller will not sell or otherwise transfer any of the
Retained Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
(R) The Seller is not an employee benefit plan or other
retirement arrangement subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"),
(collectively, an "ERISA Plan"), and is not acting on behalf of, as
named fiduciary of, as trustee of, or investing the assets of an
ERISA Plan.
ARTICLE IV
SELLER'S COVENANTS
Section 4.01 Covenants of the Seller.
(a) The Seller hereby covenants that except for the transfer
hereunder, the Seller will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any lien on any
Mortgage Loan, or any interest therein; the Seller will notify the Trustee, as
assignee of the Purchaser, of the existence of any lien on any Mortgage Loan
immediately upon discovery thereof, and the Seller will defend the right, title
and interest of the Trust, as assignee of the Purchaser, in, to and under the
Mortgage Loans, against all claims of third parties claiming through or under
the Seller; provided, however, that nothing in this Section 4.01 shall prevent
or be deemed to prohibit the Seller from suffering to exist upon any of the
Mortgage Loans any liens for municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the time
be due and payable or if the Seller shall currently be contesting the validity
thereof in good faith by appropriate proceedings and shall have set aside on its
books adequate reserves with respect thereto.
(b) The Seller hereby covenants that neither it nor any affiliate of
the Seller will directly solicit any Mortgagor hereunder to refinance the
related Mortgage Loan. Notwithstanding the foregoing, the Seller and its
Affiliates will be permitted to solicit a Mortgagor if the Seller or such
Affiliate has received a request for verification of a Mortgage, a request for
demand for payoff, a Mortgagor initiated written or verbal communication
indicating a desire to prepay or refinance the related Mortgage Loan or the
Mortgagor initiates a title search, or if the Mortgagor receives marketing
materials which are generally disseminated.
ARTICLE V
CONDITIONS OF CLOSING
Section 5.01 Conditions of Depositor's Obligations
The obligations of the Depositor to purchase the Mortgage Loans will
be subject to the satisfaction on the Closing Date of the following conditions.
Upon payment of the purchase price for the Mortgage Loans, such conditions shall
be deemed satisfied or waived.
(a) The Depositor shall have received a letter dated the date of
this Agreement, in form and substance acceptable to the Depositor and its
counsel, prepared by Deloitte & Touche LLP, independent certified public
accountants, regarding (i) the numerical information contained in the Free
Writing Prospectus dated March 28, 2006 and the Prospectus Supplement including,
but not limited to the information under the captions "Prepayment and Yield
Considerations" and "The Mortgage Loan Pool", (ii) any numerical information in
any marketing materials relating to the Certificates and (iii) any other
information as reasonably requested by the Depositor.
(b) The Depositor shall have received the following additional
closing documents, in form and substance reasonably satisfactory to the
Depositor and its counsel:
(i) the Mortgage Loan Schedule;
(ii) this Agreement, the Pooling and Servicing Agreement, and all
documents required thereunder, duly executed and delivered by Seller;
(iii) officer's certificate of an officer of the Seller, dated as of
the Closing Date, and a copy of the Seller's charter and by-laws;
(iv) opinions of counsel for the Seller and Servicer as to the
information relating to the Seller and Servicer included in the Free
Writing Prospectus dated March 28, 2006 and the Prospectus Supplement, in
form and substance reasonably acceptable to the Depositor and its counsel.
(v) opinions of counsel for the Seller as to various corporate
matters and other matters in form and substance acceptable to the
Depositor, its counsel, S&P and Xxxxx'x (it being agreed that each such
opinion shall expressly provide that the Trustee shall be entitled to rely
on such opinion);
(vi) a letter from Xxxxx'x to the effect that it has assigned
ratings of "Aaa," "Aaa," "Xxx," "Xx0," "Xx0," "Aa3," "X0," "X0," "X0," to
the Class X-0, Xxxxx X-0, Class A-3, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5 and Class M-6 Certificates, respectively;
(vii) a letter from S&P to the effect that it has assigned ratings
of "AAA," "AAA," "AAA," "AAA," "AA+," "AA+," "AA," "AA," "AA-" to the
Class A-1, Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates, respectively;
(viii) an opinion of counsel for the Trustee in form and substance
reasonably acceptable to the Depositor, its counsel, Xxxxx'x and S&P;
(ix) opinions of counsel for the Servicer, in form and substance
reasonably acceptable to the Depositor, its counsel, Xxxxx'x and S&P; and
(c) All proceedings in connection with the transactions contemplated
by this Agreement and all documents incident hereto shall be reasonably
satisfactory in form and substance to the Depositor and its counsel.
ARTICLE VI
OPTIONAL PURCHASE OF DEFAULTED MORTGAGE LOANS
(a) In accordance with the terms of Section 3.16 of the Pooling and
Servicing Agreement, as to any Mortgage Loan which is Delinquent in payment by
120 days or more or any REO Property, an Affiliate of the Seller may, at its
option, purchase such Mortgage Loan from the Trust Fund at the Purchase Price
for such Mortgage Loan provided that an Affiliate of the Seller may exercise the
purchase right during the period commencing on the first day of the calendar
quarter succeeding the calendar quarter in which the Initial Delinquency Date
occurred and ending on the last Business Day of such calendar quarter. The
"Initial Delinquency Date" of a Mortgage Loan shall mean the date on which the
Mortgage Loan first became 120 days Delinquent.
(b) If an Affiliate of the Seller does not exercise the purchase
right with respect to a Mortgage Loan during the period specified in the
preceding paragraph, such Mortgage Loan shall thereafter again become eligible
for purchase pursuant to the preceding paragraph only after the Mortgage Loan
ceases to be 120 days or more Delinquent and thereafter becomes 120 day
Delinquent again.
ARTICLE VII
TERMINATION
Section 7.01 Termination. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate
upon the termination of the Trust as provided in Section 8.01 of the Trust
Agreement.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
Section 8.01 Amendment. This Agreement may be amended from time to
time by the Seller and the Purchaser, by written agreement signed by the Seller
and the Purchaser.
Section 8.02 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Section 8.03 Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by registered mail, postage prepaid, addressed
as follows:
if to the Seller:
Credit-Based Asset Servicing and Securitization LLC
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
or such other address as may hereafter be furnished
to the Purchaser in writing by the Seller.
if to the Purchaser:
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
or such other address as may hereafter be furnished
to the Seller in writing by the Purchaser.
Section 8.04 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held
invalid for any reason whatsoever, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement.
Section 8.05 Counterparts. This Agreement may be executed in one or
more counterparts by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original and such
counterparts, together, shall constitute one and the same agreement.
Section 8.06 Further Agreements. The Purchaser and the Seller each
agree to execute and deliver to the other such additional documents, instruments
or agreements as may be necessary or reasonable and appropriate to effectuate
the purposes of this Agreement or in connection with the issuance of any Series
of Certificates representing interests in the Mortgage Loans.
Without limiting the generality of the foregoing, as a further
inducement for the Purchaser to purchase the Mortgage Loans from the Seller, the
Seller will cooperate with the Purchaser in connection with the sale of any of
the securities representing interests in the Mortgage Loans. In that connection,
the Seller will provide to the Purchaser any and all information and appropriate
verification of information, whether through letters of its auditors and counsel
or otherwise, as the Purchaser shall reasonably request and will provide to the
Purchaser such additional representations and warranties, covenants, opinions of
counsel, letters from auditors, and certificates of public officials or officers
of the Seller as are reasonably required in connection with such transactions
and the offering of investment grade securities rated by the Rating Agencies.
Section 8.07 Intention of the Parties. It is the intention of the
parties that the Purchaser is purchasing, and the Seller is selling, the
Mortgage Loans rather than the pledging of the Mortgage Loans by the Seller to
secure a loan by the Purchaser to the Seller. Accordingly, the parties hereto
each intend to treat the transaction for Federal income tax purposes and all
other purposes as a sale by the Seller and a purchase by the Purchaser of the
Mortgage Loans. The Purchaser will have the right to review the Mortgage Loans
and the related Mortgage Files to determine the characteristics of the Mortgage
Loans which will affect the Federal income tax consequences of owning the
Mortgage Loans and the Seller will cooperate with all reasonable requests made
by the Purchaser in the course of such review.
Section 8.08 Successors and Assigns; Assignment of this Agreement.
This Agreement shall bind and inure to the benefit of and be enforceable by the
Seller, the Purchaser and the Trustee. The obligations of the Seller under this
Agreement cannot be assigned or delegated to a third party without the consent
of the Purchaser and which consent shall be at the Purchaser's sole discretion,
except that the Purchaser acknowledges and agrees that the Seller may assign its
obligations hereunder to any Person into which the Seller is merged or any
corporation resulting from any merger, conversion or consolidation to which the
Seller is a party or any Person succeeding to the business of the Seller. The
parties hereto acknowledge that the Purchaser is acquiring the Mortgage Loans
for the purpose of contributing them to a trust that will issue a series of
certificates representing undivided interests in such Mortgage Loans. As an
inducement to the Purchaser to purchase the Mortgage Loans, the Seller
acknowledges and consents to the assignment by the Purchaser to the Trustee of
all of the Purchaser's rights against the Seller pursuant to this Agreement
insofar as such rights relate to Mortgage Loans transferred to the Trustee and
to the enforcement or exercise of any right or remedy against the Seller
pursuant to this Agreement by the Trustee. Such enforcement of a right or remedy
by the Trustee shall have the same force and effect as if the right or remedy
had been enforced or exercised by the Purchaser directly.
Section 8.09 Survival. The representations and warranties set forth
in Sections 3.01 and 3.02 hereof shall survive the purchase of the Mortgage
Loans hereunder.
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed to this Mortgage Loan Purchase Agreement by their respective
officers thereunto duly authorized as of the day and year first above written.
GS MORTGAGE SECURITIES CORP., as Purchaser
By: /s/ Xxxxxxxx Xxxx
--------------------------------------------
Name: Xxxxxxxx Xxxx
Title: Vice President
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC, as Seller
By: /s/ Xxxxx X. Xxxx
--------------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
SCHEDULE I
MORTGAGE LOAN SCHEDULE
AVAILABLE UPON REQUEST
EXHIBIT P-2
GSMC MORTGAGE LOAN PURCHASE AGREEMENT
================================================================================
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
CREDIT-BASED ASSET SERVICING AND SECURITIZATION LLC,
Purchaser
XXXXXXX SACHS MORTGAGE COMPANY,
Seller
Dated as of April 6, 2006
Conventional,
Fixed and Adjustable Rate Residential Mortgage Loans
================================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS..................................................
SECTION 2. AGREEMENT TO PURCHASE........................................
SECTION 3. MORTGAGE SCHEDULES...........................................
SECTION 4. PURCHASE PRICE...............................................
SECTION 5. EXAMINATION OF MORTGAGE FILES................................
SECTION 6. CONVEYANCE FROM SELLER TO PURCHASER..........................
Subsection 6.01 Conveyance of Mortgage Loans.............................
Subsection 6.02 Books and Records........................................
Subsection 6.03 Delivery of Mortgage Loan Documents......................
SECTION 7. SERVICING OF THE MORTGAGE LOANS..............................
SECTION 8. TRANSFER OF SERVICING........................................
SECTION 9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER; REMEDIES FOR BREACH..................................
Subsection 9.01 Representations and Warranties Regarding Individual
Mortgage Loans...........................................
Subsection 9.02 Representations and Warranties Regarding the Seller......
Subsection 9.03 Purchaser's Right to Review..............................
SECTION 10. CLOSING......................................................
SECTION 11. CLOSING DOCUMENTS............................................
SECTION 12. COSTS........................................................
SECTION 13. COOPERATION OF SELLER WITH A RECONSTITUTION..................
SECTION 14. THE SELLER...................................................
Subsection 14.01 Additional Indemnification by the Seller;
Third Party Claims......................................
Subsection 14.02 Merger or Consolidation of the Seller...................
SECTION 15. GRANT OF SECURITY INTEREST...................................
SECTION 16. NOTICES......................................................
SECTION 17. SEVERABILITY CLAUSE..........................................
SECTION 18. COUNTERPARTS.................................................
SECTION 19. GOVERNING LAW................................................
SECTION 20. INTENTION OF THE PARTIES.....................................
SECTION 21. SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.....
SECTION 22. WAIVERS......................................................
SECTION 23. EXHIBITS.....................................................
SECTION 24. GENERAL INTERPRETIVE PRINCIPLES..............................
SECTION 25. REPRODUCTION OF DOCUMENTS....................................
SECTION 26. FURTHER AGREEMENTS...........................................
SECTION 27. RECORDATION OF ASSIGNMENTS OF MORTGAGE.......................
SECTION 28. NO SOLICITATION..............................................
SECTION 29. WAIVER OF TRIAL BY JURY......................................
SECTION 30. SUBMISSION TO JURISDICTION; WAIVERS..........................
SECTION 31. PRIVACY ACT COMPLIANCE.......................................
SECTION 32. COMPLIANCE WITH REGULATION AB................................
Subsection 32.01 Intent of the Parties; Reasonableness...................
Subsection 32.02 Additional Representations and Warranties of the Seller.
Subsection 32.03 Information To Be Provided by the Seller................
Subsection 32.04 Indemnification.........................................
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C RESERVED
EXHIBIT D MORTGAGE LOAN SCHEDULE
EXHIBIT E RESERVED
EXHIBIT F ORIGINATOR'S UNDERWRITING GUIDELINES
EXHIBIT G RESERVED
EXHIBIT H ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of April 6, 2006, by and between Xxxxxxx Xxxxx Mortgage
Company, a New York limited partnership, having an office at 00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the "Seller") and Credit-Based Asset Servicing and
Securitization LLC, a Delaware limited liability corporation, having an office
at 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Seller desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Seller, certain conventional adjustable
and fixed rate residential first and second lien mortgage loans (the "Mortgage
Loans") on a servicing released basis as described herein, and which shall be
delivered as a pool of whole loans;
WHEREAS, each Mortgage Loan is secured by a mortgage, deed of trust
or other security instrument creating a first or second lien on a residential
dwelling located in the jurisdiction indicated on the Mortgage Loan Schedule;
WHEREAS, the Purchaser and the Seller wish to prescribe the manner
of the conveyance and control of the Mortgage Loans; and
WHEREAS, following its purchase of the Mortgage Loans from the
Seller, the Purchaser desires to sell all of the Mortgage Loans to one or more
purchasers as a public or private, rated or unrated mortgage pass-through
transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser and the
Seller agree as follows:
SECTION 1. Definitions.
For purposes of this Agreement the following capitalized terms shall
have the respective meanings set forth below.
Accepted Servicing Practices: With respect to any Mortgage Loan
those mortgage servicing practices of prudent mortgage lending institutions
which service mortgage loans of the same type as such Mortgage Loan in the
jurisdiction where the related Mortgaged Property is located and incorporating
the Delinquency Collection Policies and Procedures.
Act: The National Housing Act, as amended from time to time.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan
purchased pursuant to this Agreement.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Mortgage Loan Purchase and Warranties Agreement and
all amendments hereof and supplements hereto.
ALTA: The American Land Title Association, or any successor thereto.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Appropriate Federal Banking Agency: Appropriate Federal Banking
Agency shall have the meaning ascribed to it by Section 1813(q) of Title 12 of
the United States Code, as amended from time to time.
Assignment and Assumption Agreement: As defined in Section 22.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to reflect
the sale of the Mortgage to the Purchaser.
BIF: The Bank Insurance Fund, or any successor thereto.
Business Day: Any day other than (i) a Saturday or Sunday, (ii) a
day on which banking and savings and loan institutions in the State of New York
are located, are authorized or obligated by law or executive order to be closed.
Closing Date: April 6, 2006.
CLTV: As of the date of origination and as to any Second Lien
Mortgage Loan, the ratio, expressed as a percentage, of the (a) sum of (i) the
outstanding principal balance of the Second Lien Mortgage Loan as of the date of
origination and (ii) the outstanding principal balance as of the date of
origination of any mortgage loan or mortgage loans that are senior or equal in
priority to the Second Lien Mortgage Loan and which are secured by the same
Mortgaged Property to (b) the lesser of the Appraised Value and the purchase
price of the Mortgaged Property.
Code: Internal Revenue Code of 1986, as amended.
Commission: The United States Securities and Exchange Commission.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan purchased pursuant to this Agreement which contains a provision whereby the
Mortgagor is permitted to convert the Adjustable Rate Mortgage Loan to a fixed
rate Mortgage Loan in accordance with the terms of the related Mortgage Note.
Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard & Poor's Glossary.
Credit File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit B annexed hereto, and any additional documents required
to be added to the credit File pursuant to this Agreement.
Cut-off Date: March 1, 2006.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased or
replaced or to be replaced with a Qualified Substitute Mortgage Loan by the
Seller in accordance with the terms of this Agreement.
Depositor: The depositor, as such term is defined in Regulation AB,
with respect to any Securitization Transaction.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Equity Take-Out Refinanced Mortgage Loan: A Mortgage Loan used to
refinance an existing mortgage loan, the proceeds of which were in excess of the
outstanding principal balance of the existing mortgage loan.
Escrow Payments: With respect to any Mortgage Loan, the amounts
constituting ground rents, taxes, assessments, water rates, sewer rents,
municipal charges, mortgage insurance premiums, fire and hazard insurance
premiums, condominium charges, and any other payments required to be escrowed by
the Mortgagor with the mortgagee pursuant to the Mortgage or any other document.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Mae Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
FICO: Fair Xxxxx Corporation, or any successor thereto.
Fitch: Fitch, Inc., or its successor in interest.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor thereto.
Xxxxxxx Mac Transfer: As defined in Section 13 hereof.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note which amount
is added to the Index in accordance with the terms of the related Mortgage Note
to determine on each Interest Rate Adjustment Date the Mortgage Interest Rate
for such Mortgage Loan.
High Cost Loan: A Mortgage Loan (a) covered by the Home Ownership
and Equity Protection Act of 1994, (b) classified as a "high cost home,"
"threshold," "covered," "high risk home," "predatory" or similar loan under any
other applicable state, federal or local law (or a similarly classified loan
using different terminology under a law imposing heightened regulatory scrutiny
or additional legal liability for residential mortgage loans having high
interest rates, points and/or fees) or (c) categorized as High Cost pursuant to
Appendix E of Standard & Poor's Glossary. For avoidance of doubt, the parties
agree that this definition shall apply to any law regardless of whether such law
is presently, or in the future becomes, the subject of judicial review or
litigation.
Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum as specified in the Mortgage Loan Schedule.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Rate Adjustment Date: With respect to each adjustable rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Interest Rate is adjusted.
Interim Funder: With respect to each MERS Designated Mortgage Loan,
the Person named on the MERS(R) System as the interim funder pursuant to the
MERS Procedures Manual.
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Lifetime Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum Mortgage
Interest Rate thereunder. The Mortgage Interest Rate during the terms of each
Adjustable Rate Mortgage Loan shall not at any time exceed the Mortgage Interest
Rate at the time of origination of such Adjustable Rate Mortgage Loan by more
than the amount per annum set forth on the Mortgage Loan Schedule.
Limited Documentation Program: The guidelines under which the Seller
generally originates Mortgage Loans principally on the basis of the
Loan-to-Value Ratio of the related Mortgage Loan and the creditworthiness of the
Mortgagor.
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise or the sale
of the related Mortgaged Property if the Mortgaged Property is acquired in
satisfaction of the Mortgage Loan.
Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the outstanding principal amount of the
Mortgage Loan as of the Cut-off Date (unless otherwise indicated), to the lesser
of (a) the Appraised Value of the Mortgaged Property at origination and (b) if
the Mortgage Loan was made to finance the acquisition of the related Mortgaged
Property, the purchase price of the Mortgaged Property.
MERS: MERSCORP, Inc., its successors and assigns.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Seller has designated or will designate MERS as, and has taken or will take such
action as is necessary to cause MERS to be, the mortgagee of record, as nominee
for the Seller, in accordance with MERS Procedure Manual and (b) the Seller has
designated or will designate a custodian as the Investor on the MERS(R) System.
MERS Procedure Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS Report: The report from the MERS(R) System listing MERS
Designated Mortgage Loans and other information.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Moody's: Xxxxx'x Investors Service, Inc., and any successor thereto.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien on an unsubordinated estate
in fee simple in real property securing the Mortgage Note; except that with
respect to real property located in jurisdictions in which the use of leasehold
estates for residential properties is a widely-accepted practice, the mortgage,
deed of trust or other instrument securing the Mortgage Note may secure and
create a first or second lien upon a leasehold estate of the Mortgagor.
Mortgage File: The items pertaining to a particular Mortgage Loan
referred to in Exhibit A annexed hereto, and any additional documents required
to be added to the Mortgage File pursuant to this Agreement.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
Mortgage Interest Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the limit on each Mortgage Interest Rate adjustment as set forth
in the related Mortgage Note.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes
without limitation the Mortgage File, the Credit File, the Servicing File, the
Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Servicing Rights, Prepayment Penalties, and all
other rights, benefits, proceeds and obligations arising from or in connection
with such Mortgage Loan, excluding replaced or repurchased mortgage loans.
Mortgage Loan Documents: The documents in the Mortgage File.
Mortgage Loan Schedule: The schedule of Mortgage Loans, attached as
Exhibit D hereto, setting forth the following information with respect to each
Mortgage Loan: (1) the Seller's Mortgage Loan identifying number; (2) the
Mortgagor's name; (3) the street address of the Mortgaged Property including the
city, state and zip code; (4) a code indicating whether the Mortgaged Property
is owner-occupied, a second home or investment property; (5) the number and type
of residential units constituting the Mortgaged Property (i.e. a single family
residence, a 2-4 family residence, a unit in a condominium project or a unit in
a planned unit development, manufactured housing); (6) the original months to
maturity or the remaining months to maturity from the Cut-off Date, in any case
based on the original amortization schedule and, if different, the maturity
expressed in the same manner but based on the actual amortization schedule; (7)
the LTV and CLTV, each at the origination; (8) the Mortgage Interest Rate as of
the Cut-off Date; (9) the date on which the Monthly Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (10) the stated maturity date; (11) the amount of the
Monthly Payment as of the Cut-off Date; (12) the last payment date on which a
Monthly Payment was actually applied to pay interest and the outstanding
principal balance; (13) the original principal amount of the Mortgage Loan; (14)
the principal balance of the Mortgage Loan as of the close of business on the
Cut-off Date, after deduction of payments of principal due and collected on or
before the Cut-off Date; (15) with respect to Adjustable Rate Mortgage Loans,
the Interest Rate Adjustment Date; (16) with respect to Adjustable Rate Mortgage
Loans, the Gross Margin; (17) with respect to Adjustable Rate Mortgage Loans,
the Lifetime Rate Cap under the terms of the Mortgage Note; (18) with respect to
Adjustable Rate Mortgage Loans, a code indicating the type of Index; (19) with
respect to Adjustable Rate Mortgage Loans, the Periodic Rate Cap under the terms
of the Mortgage Note; (20) with respect to Adjustable Rate Mortgage Loans, the
Periodic Rate Floor under the terms of the Mortgage Note; (21) the type of
Mortgage Loan (i.e., Fixed Rate, Adjustable Rate, First Lien, Second Lien); (22)
a code indicating the purpose of the loan (i.e., purchase, rate and term
refinance, equity take-out refinance); (23) a code indicating the documentation
style (i.e. full, alternative or reduced); (24) the loan credit classification
(as described in the Underwriting Guidelines); (25) whether such Mortgage Loan
provides for a Prepayment Penalty; (26) the Prepayment Penalty period of such
Mortgage Loan, if applicable; (27) a description of the Prepayment Penalty, if
applicable; (28) the Mortgage Interest Rate as of origination; (29) the credit
risk score (FICO score) at origination; (30) the date of origination; (31) the
Mortgage Interest Rate adjustment period; (32) the Mortgage Interest Rate
adjustment percentage; (33) the Mortgage Interest Rate floor; (34) the Mortgage
Interest Rate calculation method (i.e., 30/360, simple interest, other); (35) a
code indicating whether the Mortgage Loan is a Section 32 Mortgage Loan; (36) a
code indicating whether the Mortgage Loan is assumable; (37) a code indicating
whether the Mortgage Loan has been modified; (38) the one-year payment history;
(39) the Due Date for the first Monthly Payment; (40) the original Monthly
Payment due; (41) with respect to the related Mortgagor, the debt-to-income
ratio; (42) the Appraised Value of the Mortgaged Property; (44) the sales price
of the Mortgaged Property if the Mortgage Loan was originated in connection with
the purchase of the Mortgaged Property and (45) a code indicating if the
Mortgage Loan is a High Cost Loan or Home Loan as such terms are defined in the
then current Standard & Poor's Glossary. With respect to the Mortgage Loans in
the aggregate, the Mortgage Loan Schedule shall set forth the following
information, as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Interest Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: The real property (or leasehold estate, if
applicable) securing repayment of the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
OTS: Office of Thrift Supervision, and any successor thereto.
Periodic Rate Cap: The provision of each Mortgage Note related to an
Adjustable Rate Mortgage Loan which provides for an absolute maximum amount by
which the Mortgage Interest Rate therein may increase or decrease on an Interest
Rate Adjustment Date above or below the Mortgage Interest Rate previously in
effect. The Periodic Rate Cap for each Adjustable Rate Mortgage Loan is the rate
set forth on the Mortgage Loan Schedule.
Periodic Rate Floor: With respect to each Adjustable Rate Mortgage
Loan, the provision of each Mortgage Note which provides for an absolute maximum
amount by which the Mortgage Interest Rate therein may decrease on an Interest
Rate Adjustment Date below the Mortgage Interest Rate previously in effect.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof.
Preliminary Mortgage Schedule: As defined in Section 3.
Prepayment Penalty: With respect to each Mortgage Loan, the fee, if
any, payable upon the prepayment, in whole or in part, of such Mortgage Loan, as
set forth in the related Mortgage Note.
Prime Rate: The prime rate announced to be in effect from time to
time, as published as the average rate in The Wall Street Journal (Northeast
edition).
Principal Prepayment: Any payment or other recovery of principal on
a Mortgage Loan which is received in advance of its scheduled Due Date,
including any Prepayment Penalty or premium thereon and which is not accompanied
by an amount of interest representing scheduled interest due on any date or
dates in any month or months subsequent to the month of prepayment.
Purchase Price: The price paid on the Closing Date by the Purchaser
to the Seller in exchange for the Mortgage Loans as calculated in Section 4 of
this Agreement.
Purchase Price and Terms Agreement: That certain letter agreement
setting forth the general terms and conditions of such transaction consummated
herein and identifying the Mortgage Loans to be purchased hereunder, by and
between the Seller and the Purchaser.
Purchaser: Credit-Based Asset Servicing and Securitization LLC, a
Delaware limited liability company, and its successors in interest and assigns,
and any successor to the Purchaser under this Agreement as herein provided.
Qualified Appraiser: An appraiser, duly appointed by the Seller, who
had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by the
approval or disapproval of the Mortgage Loan, and such appraiser and the
appraisal made by such appraiser both satisfy the requirements of Title XI of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the Mortgage
Loan was originated.
Qualified Correspondent: any Person from which the Seller purchased
Mortgage Loans, provided that the following conditions are satisfied: (i) such
Mortgage Loans were originated pursuant to an agreement between the Seller and
such Person that contemplated that such Person would underwrite mortgage loans
from time to time, for sale to the Seller, in accordance with underwriting
guidelines designated by the Seller ("Designated Guidelines") or guidelines that
do not vary materially from such Designated Guidelines; (ii) such Mortgage Loans
were in fact underwritten as described in clause (i) above and were acquired by
the Seller within 180 days after origination; (iii) either (x) the Designated
Guidelines were, at the time such Mortgage Loans were originated, used by the
Seller in origination of mortgage loans of the same type as the Mortgage Loans
for the Seller's own account or (y) the Designated Guidelines were, at the time
such Mortgage Loans were underwritten, designated by the Seller on a consistent
basis for use by lenders in originating mortgage loans to be purchased by the
Seller; and (iv) the Seller employed, at the time such Mortgage Loans were
acquired by the Seller, pre-purchase or post-purchase quality assurance
procedures (which may involve, among other things, review of a sample of
mortgage loans purchased during a particular time period or through particular
channels) designed to ensure that Persons from which it purchased mortgage loans
properly applied the underwriting criteria designated by the Seller.
Qualified Insurer: An insurance company duly qualified as such under
the laws of the states in which the Mortgaged Properties are located, duly
authorized and licensed in such states to transact the applicable insurance
business and to write the insurance provided, approved as an insurer by Xxxxxx
Xxx and Xxxxxxx Mac and whose claims paying ability is rated in the highest
rating category by any of the Rating Agencies with respect to primary mortgage
insurance and in the two highest rating categories by A.M. Best's with respect
to hazard and flood insurance (or such other rating as may be required by a
Rating Agency in connection with a Securitization Transaction in order to
achieve the desired ratings for the securities to be issued in connection with
such Securitization Transaction).
Qualified Substitute Mortgage Loan: A mortgage loan eligible to be
substituted by the Seller for a Deleted Mortgage Loan which must, on the date of
such substitution, (i) have an outstanding principal balance, after deduction of
all scheduled payments due in the month of substitution (or in the case of a
substitution of more than one mortgage loan for a Deleted Mortgage Loan, an
aggregate principal balance), not in excess of the outstanding principal balance
of the Deleted Mortgage Loan; (ii) have a Mortgage Interest Rate not less than
and not more than 1% greater than the Mortgage Interest Rate of the Deleted
Mortgage Loan; (iii) have a remaining term to maturity not greater than and not
more than one (1) year less than that of the Deleted Mortgage Loan (iv) be of
the same type as the Deleted Mortgage Loan (i.e., fixed rate or adjustable rate
with same Periodic Rate Cap, Lifetime Rate Cap, Index and lien priority); and
(v) comply with each representation and warranty (respecting individual Mortgage
Loans) set forth in Section 9 hereof.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution Date: As defined in Section 13.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation or warranty under this Agreement is found, a price
equal to the outstanding principal balance of the Mortgage Loan to be
repurchased as of the date of repurchase, plus accrued interest thereon at the
Mortgage Interest Rate from the date on which interest had last been paid
through the date of such repurchase.
RESPA: Real Estate Settlement Procedures Act, as amended from time
to time.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a
sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or (2)
an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Seller: Xxxxxxx Sachs Mortgage Company, a New York limited
partnership, and its successors in interest and assigns.
Seller Information: As defined in Section 32.07(a).
Servicing Fee: With respect to each Mortgage Loan, the fee payable
to the servicer of the Mortgage Loan.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Seller consisting of originals of all documents in the Mortgage
File which are not delivered to the Purchaser or its designee and copies of the
Mortgage Loan Documents set forth in as provided in Subsection 6.03 hereof.
Servicing Rights: Any and all of the following: (a) any and all
rights to service the Mortgage Loans; (b) any payments to or monies received by
the Seller for servicing the Mortgage Loans; (c) any late fees, penalties or
similar payments with respect to the Mortgage Loans but not including any
Prepayment Penalties; (d) all agreements or documents creating, defining or
evidencing any such servicing rights to the extent they relate to such servicing
rights and all rights of the Seller thereunder; (e) Escrow Payments or other
similar payments with respect to the Mortgage Loans and any amounts actually
collected by the Seller with respect thereto; (f) all accounts and other rights
to payment related to any of the property described in this paragraph; and (g)
any and all documents, files, records, servicing files, servicing documents,
servicing records, data tapes, computer records, or other information pertaining
to the Mortgage Loans or pertaining to the past, present or prospective
servicing of the Mortgage Loans.
Standard & Poor's: Standard & Poor's Rating Services, a division of
The XxXxxx-Xxxx Companies Inc., and its successors in interest.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the Cut-off Date after giving effect
to payments of principal due on or before such date, to the extent received,
minus (ii) all amounts previously distributed to the Purchaser with respect to
the related Mortgage Loan representing payments or recoveries of principal or
advances in lieu thereof.
Static Pool Information: Static pool information as described in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Successor Servicer: A servicer designated by the Purchaser pursuant
to Section 8 and Subsection 9.02 which is entitled to the benefits of the
indemnifications set forth in Subsections 9.02 and 14.01.
Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Transfer Date: With respect to each Mortgage Loan, (a) the date set
forth in the Purchase Price and Terms Agreement or (b) such other date as
mutually agreed by the Seller and the Purchaser.
Underwriting Guidelines: The underwriting guidelines of the Seller,
a copy of which is attached hereto as Exhibit F.
SECTION 2. Agreement to Purchase.
The Seller, on the Closing Date, agrees to sell, and the Purchaser
agrees to purchase, Mortgage Loans having an aggregate Stated Principal Balance
on the Cut-off Date in an amount as set forth in the Purchase Price and Terms
Agreement, or in such other amount as agreed by the Purchaser and the Seller as
evidenced by the aggregate principal balance of the Mortgage Loans accepted by
the Purchaser on the Closing Date. The Seller shall also assign to Purchaser,
and Purchaser shall take on the Closing Date (and upon Seller's receipt of the
applicable Purchase Price) the Servicing Rights with respect to each Mortgage
Loan, except that prior to the Transfer Date, the Seller or its designee shall
retain all Servicing Rights.
SECTION 3. Mortgage Schedules.
The Seller shall provide the Purchaser with certain information
constituting a preliminary listing of the Mortgage Loans to be purchased on the
Closing Date in accordance with the Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Schedule").
The Seller shall deliver the Mortgage Loan Schedule for the Mortgage
Loans to be purchased on the Closing Date to the Purchaser at least two (2)
Business Days prior to the Closing Date; provided, however, that the Seller
shall not be responsible for any delays in the delivery of the Mortgage Loan
Schedule caused by changes to the Mortgage Loans made at the Purchaser's
request, so long as the Seller delivers the Mortgage Loan Schedule within a
reasonable period of time after such changes are requested.
SECTION 4. Purchase Price.
The Purchase Price for each Mortgage Loan and the related Servicing
Rights shall be the percentage of par as stated in the Purchase Price and Terms
Agreement (subject to adjustment as provided therein), multiplied by the Stated
Principal Balance, after application of scheduled payments of principal due on
or before the related Cut off Date.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the related Mortgage Loans from the last paid through date to but not
including the Closing Date at the weighted average Mortgage Interest Rate of
those Mortgage Loans. The Purchase Price plus accrued interest as set forth in
the preceding paragraph shall be paid to the Seller by wire transfer of
immediately available funds to an account designated by the Seller in writing.
The Purchaser shall be entitled to (1) all scheduled principal due
after the Cut-off Date, (2) all other recoveries of principal collected on or
after the Cut-off Date, and (3) all scheduled payments of interest on the
Mortgage Loans net of applicable Servicing Fees after the Closing Date.
SECTION 5. Examination of Mortgage Files.
On or prior to the Closing Date, the Seller shall deliver to the
Purchaser or its designee in escrow, for examination with respect to each
Mortgage Loan to be purchased, the related Mortgage File, including a copy of
the Assignment of Mortgage, pertaining to each Mortgage Loan.
With respect to each Mortgage Loan to be purchased, the Seller shall
make the related Servicing Files and Credit Files available to the Purchaser for
examination at such other location as shall otherwise be acceptable to the
Purchaser.
Such examination of the Mortgage Files may be made by the Purchaser
or its designee at any reasonable time before or after the Closing Date. If the
Purchaser makes such examination prior to the Closing Date and determines, in
its sole discretion, that any Mortgage Loans are unacceptable to the Purchaser
for any reason, such Mortgage Loans shall be deleted from the Mortgage Loan
Schedule, and may be replaced by a Qualified Substitute Mortgage Loan (or Loans)
acceptable to the Purchaser. The Purchaser may, at its option and without notice
to the Seller, purchase some or all of the Mortgage Loans without conducting any
partial or complete examination. The fact that the Purchaser or its designee has
conducted or has failed to conduct any partial or complete examination of the
Mortgage Files or the Credit Files shall not affect the Purchaser's (or any of
its successor's) rights to demand repurchase, substitution or other relief as
provided herein.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans.
The Seller, on the Closing Date, does hereby sell, transfer, assign,
set over and convey to the Purchaser, without recourse, but subject to the terms
of this Agreement, all rights, title and interest of the Seller in and to (i)
the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as
Exhibit D and (ii) the Servicing Rights, together with the related Mortgage
Files and all rights and obligations arising under the documents contained
therein. Pursuant to Subsection 6.03 of the Agreement, on or prior to the
Closing Date, the Seller has delivered to the Purchaser or its designee the
documents for each Mortgage Loan to be purchased as set forth in the Agreement.
The ownership of each Mortgage Note, Mortgage, and the contents of each Mortgage
File is vested in the Purchaser and the ownership of all records and documents
with respect to the related Mortgage Loan prepared by or which come into the
possession of the Seller shall immediately vest in the Purchaser and shall be
delivered promptly by the Seller to the Purchaser..
Subsection 6.02 Books and Records.
Record title to each Mortgage as of the Closing Date shall be in the
name of MERS, the Seller, an Affiliate of the Seller, the Purchaser or one or
more designees of the Purchaser, as the Purchaser shall select. Notwithstanding
the foregoing, each Mortgage and related Mortgage Note shall be possessed solely
by the Purchaser or the appropriate designee of the Purchaser, as the case may
be. All rights arising out of the Mortgage Loans including, but not limited to,
all funds received by the Seller after the Cut-off Date on or in connection with
a Mortgage Loan shall be vested in the Purchaser or one or more designees of the
Purchaser; provided, however, that all funds received on or in connection with a
Mortgage Loan shall be received and held by the Seller in trust for the benefit
of the Purchaser or the appropriate designee of the Purchaser, as the case may
be, as the owner of the Mortgage Loans pursuant to the terms of this Agreement.
The sale of each Mortgage Loan shall be reflected on the Seller's
balance sheet and other financial statements as a sale of assets by the Seller.
Subsection 6.03 Delivery of Mortgage Loan Documents.
The Seller shall deliver and release to the Purchaser or its
designee no later than two (2) Business Days prior to the Closing Date the
Mortgage Files with respect to each Mortgage Loan.
The Purchaser or its designee shall certify its receipt of all such
Mortgage Loan Documents required to be delivered for the Closing Date, as
evidenced by an initial certification of the Purchaser or its designee. The
Purchaser shall pay all fees and expenses of any custodian.
The Seller shall forward, or shall cause to be forwarded, to the
Purchaser, or to such other Person as the Purchaser shall designate in writing,
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into in accordance with this Agreement
within two weeks of their execution, provided, however, that the Seller shall
provide the Purchaser, or to such other Person as the Purchaser shall designate
in writing, with a copy of any such document submitted for recordation within
two weeks of its execution, and shall promptly provide the original of any
document submitted for recordation or a copy of such document within ninety days
of its submission for recordation.
In the event any document required to be delivered to the Purchaser,
including an original or imaged copy of any document submitted for recordation
to the appropriate public recording office, is not so delivered to the
Purchaser, or to such other Person as the Purchaser shall designate in writing,
within 180 days following the Closing Date (other than with respect to the
Assignments of Mortgage which shall be delivered to the Purchaser in blank and
recorded subsequently by the Purchaser or its designee), and in the event that
the Seller does not cure such failure within 90 days of discovery or receipt of
written notification of such failure from the Purchaser, the related Mortgage
Loan shall, upon the request of the Purchaser, be repurchased by the Seller at
the price and in the manner specified in Section 9.03. The foregoing repurchase
obligation shall not apply in the event that the Seller cannot deliver an
original document submitted for recordation to the appropriate public recording
office within the specified period due to a delay caused by the recording office
in the applicable jurisdiction.
The Seller shall pay any fees or costs in transferring all original
documents to the Purchaser or, upon written request of the Purchaser, to the
Purchaser or the Purchaser's designee. The Seller or the Seller's designee shall
be responsible for recording the Assignments of Mortgage.
SECTION 7. Servicing of the Mortgage Loans.
The Mortgage Loans have been sold by the Seller to the Purchaser on
a servicing released basis. Subject to and upon the terms and conditions of this
Agreement, the Seller hereby sells, transfers, assigns, conveys and delivers to
the Purchaser the Servicing Rights.
SECTION 8. Transfer of Servicing.
On or prior to the Closing Date, the Seller shall transfer to an
affiliate of the Purchaser any and all rights to service the Mortgage Loans sold
on the Closing Date, including but not limited to Seller's right to receive all
payments and receivables with respect to the Mortgage Loans, responsibility for
the Escrow Payments relating to each such Mortgage Loan, and all Servicing
Rights as owner and holder of the Mortgage Loans.
SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding Individual
Mortgage Loans.
The Seller hereby represents and warrants to the Purchaser, its
successors and assigns and the Successor Servicer that, as to each Mortgage
Loan, as of the Closing Date for such Mortgage Loan:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule with respect to the Mortgage Loans is complete,
true and accurate;
(b) Criteria for Eligible Loans. The Mortgage Loan has been
underwritten in accordance with, and meets the parameters of, the
underwriting requirements set forth in the Underwriting Guide or the
Seller's underwriting guidelines. No Mortgage Loan is (i) covered by the
provisions of the Homeownership and Equity Protection Act of 1994 or (ii)
in violation of, or classified as a "high cost", "threshold", "covered" or
"predatory" loan under, any other applicable state, federal or local law
(or a similarly classified loan using different terminology under a law
imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or
fees). No Mortgage Loan is subject to any rights of rescission,
counterclaims or defenses;
(c) Compliance with Applicable Laws: To the best of the Seller's
knowledge, each Mortgage Loan has been originated in compliance with all
applicable local, state and federal laws and regulations including,
without limitation, usury and predatory lending laws;
(d) Origination/Doing Business: The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act, a savings
and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and
examined by a federal or state authority. All parties who have had any
interest in the Mortgage Loan, whether as a mortgagee, assignee, pledgee
or otherwise are (or during the period in which they held and disposed of
such interest, were) (a) in compliance with any and all applicable
licensing requirements of the laws of the state where the Mortgaged
Property is located, and (b) either (i) organized under the laws of such
state, or (ii) qualified to do business in such state, or (iii) a federal
savings and loan association, a savings bank or a national bank having a
principal office in such state, or (c) not doing business in such state;
(e) Validity of Loan Documents: The Mortgage Note and the Mortgage
and any other agreement executed by a Mortgagor in connection with a
Mortgage Loan are genuine and each is the legal, valid, and binding
obligation of its maker. Each is enforceable according with its terms
(including without limitation, any provisions relating to prepayment
charges or penalties), except as limited by bankruptcy, insolvency or
other similar laws generally affecting the enforcement of creditor's
rights. To the best of the Seller's knowledge, all parties associated with
the Mortgage Note, the Mortgage and any related document had legal
capacity to enter into the Mortgage Loan and to execute and deliver said
documents and said documents have been duly and properly executed by all
such related parties;
(f) No Defenses: The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the defense of usury. The operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, will not
render the Mortgage Note or the Mortgage unenforceable, in whole or in
part or subject to any right of rescission, set-off, counterclaim or
defense, including without limitation, the defense of usury. In addition,
no such right of rescission, set-off, counterclaim or defense has been
asserted with respect to the Mortgage Note or the Mortgage. To the best of
the Seller's knowledge, no Mortgagor was a debtor in any local, state or
federal bankruptcy or insolvency proceeding at the time the related
Mortgage Loan was originated or as of the related origination date;
(g) No Defaults: Except with respect to 1.2% of the Mortgage Loans
which are delinquent, as calculated using the "OTS Method," and other than
payments due but not yet 30 days or more delinquent, to the best of the
Seller's knowledge, there is no default, breach, violation or event which
would permit acceleration existing under the Mortgage or the Mortgage Note
and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default,
breach, violation or event which would permit acceleration. No such
default, breach, violation or event which would permit acceleration has
been waived by the Seller or by any other entity involved in originating
the Mortgage Loan. With respect to each second lien loan, (i) the prior
mortgage is in full force and effect, (ii) there is no default, breach,
violation or event which would permit acceleration existing under such
prior mortgage or the related mortgage note, (iii) there is no event
which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or
event which would permit acceleration thereunder, and either (A) the prior
mortgage contains a provision which allows or (B) applicable law requires,
the mortgagee under the second lien loan to receive notice of, and affords
such mortgagee an opportunity to cure any default by payment in full or
otherwise under the prior mortgage;
(h) Original Terms Unmodified: The terms of the Mortgage Note and
the Mortgage have not been impaired, waived, altered or modified in any
respect from the date of origination, except by written instrument. Any
such instrument was recorded in the applicable public recording office if
necessary to protect the interests of the Purchaser in the related
Mortgage Loan. In addition, the changes to the terms have been delivered
to the Purchaser or its designee and reflected on the Loan Schedule. No
Mortgage Loan has been modified so as to restructure the payment
obligations or extend the maturity date of the Mortgage Loan. The
substance of any such waiver, alteration or modification has been approved
by the title insurer to the extent required by the title policy. No
Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement, approved by the issuer of the title
insurance, to the extent required by the policy, and which assumption
agreement is part of the Custodial File delivered to the Purchaser or its
designee and the terms of which are reflected in the Loan Schedule;
(i) No Satisfaction of Mortgage: The Mortgage has not been
satisfied, cancelled, subordinated or rescinded, in whole or in part and
the Mortgaged Property has not been released from the lien of the
Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such satisfaction, cancellation, subordination, or
rescission. The Seller has not waived the performance by the Mortgagor of
any action, if the Mortgagor's failure to perform such action would cause
the Mortgage Loan to be in default, nor has the Seller waived any default
resulting from any action or inaction by the Mortgagor;
(j) Customary Provisions: The Mortgage and related Mortgage Note
contain customary and enforceable provisions such as to render the rights
and remedies of the holder thereof adequate for the realization against
the Mortgaged Property of the benefits of the security provided thereby,
including: by trustee's sale, in the case of a Mortgage designated as a
deed of trust; and by judicial foreclosure. There are no homestead or
other exemptions or other rights or interests available to the Mortgagor
that would interfere with the right to sell the Mortgaged Property at a
trustee's sale or the right to foreclose the Mortgage, subject to
applicable federal, state and local laws and judicial precedent with
respect to bankruptcy and right of redemption or similar law;
(k) Full Disbursement of Loan Proceeds: Each Mortgage Loan has been
closed and the proceeds of the Mortgage Loan have been fully disbursed.
There is no obligation for the Mortgagee to advance additional funds and
any and all requirements to complete any on-site or off-site improvement
have been complied with as well as any disbursements of escrow funds;
(l) Ownership: The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note.
The Mortgage Loan is not assigned or pledged other than for normal
warehouse arrangements or other warehouse arrangements previously
disclosed to the Purchaser, and the Seller has good, indefeasible and
marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest,
and has full right and authority subject to no interest or participation
of, or agreement with, any other party, to sell and assign each Mortgage
Loan pursuant to the underlying purchase documents, as applicable;
(m) Improvements: To the best of Seller's knowledge, all the
improvements that were considered in determining the appraised value of
the Mortgaged Property lie wholly within its boundaries and the building
restriction lines of the Mortgaged Property. Otherwise, the title
insurance policy insures against loss or damage by reason of any
violation, variation, encroachment or adverse circumstance that either is
disclosed or would have been disclosed by an accurate survey. No
improvements to adjoining properties encroach upon the Mortgaged Property
in any respect so as to affect the value or marketability of the Mortgaged
Property. No improvement located on, or being part of, the Mortgaged
Property is in violation of any applicable zoning law or regulation;
(n) Proper Servicing: The Mortgage Loan has been serviced by the
Seller (or a servicer or subservicer on its behalf) and any predecessor
servicer in accordance with Accepted Servicing Practices, applicable laws
and regulations and have been in all respects legal and proper and prudent
in the mortgage origination and servicing business;
(o) All Payments Made: Other than with respect to payments not yet
30 days delinquent, no Mortgage Loan is 30 or more days delinquent on the
Closing Date, nor has any Mortgage Loan been delinquent since its
origination date. The Seller has not advanced funds, or induced, solicited
or knowingly received any advance of funds, directly or indirectly, from a
party other than the owner of the related Mortgaged Property for the
payment of any amount required by the Mortgage Note or Mortgage, except
for interest accruing from the date of the Mortgage Note or date of
disbursement of the Mortgage Loan proceeds, whichever is earlier, to the
date which precedes by one month the due date of the first installment of
principal and interest;
(p) Title Insurance Policy: Each Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California, a CLTA
lender's title insurance policy or other generally acceptable form of
policy or insurance acceptable to Xxxxxx Xxx or Xxxxxxx Mac. The title
insurance policy:
(1) is issued by a title insurer who is qualified to do business
in the jurisdiction where the Mortgaged Property is located;
(2) insures the Seller, its successors and assigns, as to the
first or second priority lien of the Mortgage in the original
principal amount of the Mortgage Loan;
(3) insures 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 interest rate and
monthly payment for any adjustable rate Mortgage Loan;
(4) affirmatively insures ingress and egress to and from the
Mortgaged Property;
(5) insures against encroachments by or upon the Mortgaged
Property or any interest therein;
(6) names the Seller, its successors and assigns, as the sole
insured of the title insurance policy;
(7) is valid and remains in full force and effect; and
(8) does not contain any special exceptions (other than standard
exclusions) for zoning and uses and has been marked to delete
the standard survey exceptions or to replace the standard
exceptions with a specific survey reading;
In addition, no claims are pending under such lender's title insurance
policy, and no prior holder of the related Mortgage, including the Seller,
has done, by act or omission, anything that would impair the coverage of
such policy;
(q) Fire, Hazard and Flood Insurance: All buildings and other
improvements on the Mortgaged Property are insured. The buildings and
other improvements are insured against loss by fire, hazards of extended
coverage and other hazards. If the Mortgaged Property is in an area
identified on a Flood Hazard Map or Flood Insurance Rate Map issued by the
Federal Emergency Management Agency as having special flood hazards, the
property must have a flood insurance policy in effect. The flood insurance
policy meets the requirements of the current guidelines of the Federal
Insurance Administration. All such insurance policies contain a standard
Mortgagee clause naming the Seller, its successors and assigns as
Mortgagee and all premiums due have been paid. Each Mortgage obligates the
Mortgagor to maintain all such insurance at the Mortgagor's cost and
expense. If the Mortgagor fails to maintain such insurance, then the
holder of the Mortgage is authorized to obtain such insurance and to seek
reimbursement from the Mortgagor;
(r) Mortgaged Property Undamaged; No Condemnation Proceedings: (i)
There is no proceeding pending or, to the Seller's knowledge, threatened
for the total or partial condemnation of the Mortgaged Property. (ii) To
the Seller's knowledge, the Mortgaged Property is undamaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were
intended; provided, however, that if it is discovered by the Seller that
the substance of such representation and warranty is inaccurate,
notwithstanding the Seller's lack of knowledge with respect to the
substance of such representation and warranty, such inaccuracy shall be
deemed a breach of such representation and warranty.
(s) No Mechanics' Liens: There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights
are outstanding that under law could give rise to such liens) affecting
the related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the related Mortgage; provided,
however, that this warranty shall be deemed not to have been made at the
time of the initial issuance of the Certificates if a title policy
affording, in substance, the same protection afforded by this warranty is
furnished to the Trustee by the Seller;
(t) Single-premium Credit Insurance: In connection with the
origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance a single-premium credit life, credit disability, credit
unemployment or credit property insurance policy;
(u) Valid First and Second Lien: Each Mortgage is a valid,
enforceable and perfected first lien, with respect to first lien loans, or
second lien, with respect to second lien Mortgage Loans, on real estate
constituting the Mortgaged Property, including all buildings and
improvements on the Mortgaged Property and all installations and
mechanical, electrical, plumbing, heating and air conditioning systems
located in or annexed to such buildings, and all additions, alterations
and replacements made at any time, with respect to the foregoing. The lien
of the Mortgage is subject only to: with respect to second lien loans, the
lien of the first mortgage on the Mortgaged Property; the lien of current
real estate property taxes and assessments not yet due and payable;
covenants, conditions and restrictions, rights of way, easements and other
matters of the public record as of the date of recording acceptable to
prudent mortgage lending institutions generally and specifically referred
to in the lender's title insurance policy delivered to the originator of
the Mortgage Loan and (a) specifically referred to or otherwise considered
in the appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the appraised value of the Mortgaged Property set
forth in such appraisal; and other matters to which like properties are
commonly subject which do not materially interfere with the benefits of
the security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property. Any
security agreement, chattel mortgage or equivalent document related to and
delivered in connection with the Mortgage Loan establishes and creates a
valid, subsisting, enforceable and perfected (A) first lien and first
priority security interest with respect to each first lien loan, or (B)
second lien and second priority security interest with respect to each
second lien loan, in either case, on the property described therein and
Seller has full right to sell and assign the same to the Seller;
(v) No Delinquent Amounts: There are no delinquent amounts that
affect the Mortgaged Property including, but not limited to: real estate
property taxes; ground rents; water charges; sewer and municipal charges;
insurance premiums; leasehold payments; and governmental assessments;
(w) Payment Terms: Principal payments on each Mortgage Loan
commenced no more than sixty days after funds were disbursed in connection
with such Mortgage Loan. The Mortgage Interest Rate as well as, with
respect to Adjustable Rate Mortgage Loan, the lifetime rate cap and the
periodic cap are as set forth on the Mortgage Loan Schedule. Except during
the interest only period for any Interest Only Mortgage Loan and with
respect to any balloon Mortgage Loan, the Mortgage Note is payable in
equal monthly installments of principal and interest, which installments
of interest, with respect to adjustable-rate loans, are subject to change
due to the adjustments to the Mortgage Interest Rate on each adjustment
date, as set forth in the related Mortgage Note, with interest calculated
and payable in arrears, sufficient to fully amortize the Mortgage Loan by
the stated maturity date, over an original term of not more than thirty
years from commencement of amortization. No Mortgage Loan contains a
provision allowing the Mortgagor to convert the mortgage interest rate
from an adjustable interest rate to a fixed interest rate. No Mortgage
Loan contains terms or provisions which would result in negative
amortization;
(x) Prepayment Premiums: Except as set forth in the Mortgage Loan
Schedule, each Mortgage Loan is subject to a Prepayment Premium. With
respect to each Mortgage Loan that has a Prepayment Premium feature, each
such Prepayment Premium is enforceable, and each Prepayment Premium is
permitted pursuant to federal, state and local law. Each such Prepayment
Premium is in an amount equal to or less than the maximum amount permitted
under applicable law; however, no such Prepayment Premium may be imposed
for a term in excess of three (3) years (or five years with respect to
Mortgage Loans originated prior to October 1, 2002);
(y) Location and Type of Mortgaged Property: The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and
consists of real property with a detached single family residence erected
thereon, or a two- to four-family dwelling, or an individual condominium
unit in a condominium project, or an individual unit in a planned unit
development;
(z) Occupancy of Mortgaged Property: To the best of the Seller's
knowledge, the Mortgaged Property is lawfully occupied under applicable
law. All inspections, licenses and certificates required to be made or
issued with respect to all occupied portions of the Mortgaged Property
and, with respect to the use and occupancy of the same, including but not
limited to certificates of occupancy and fire underwriting certificates,
have been made or obtained from the appropriate authorities;
(aa) Leaseholds: If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple
interest in the land; (2) the terms of such lease expressly permit the
mortgaging of the leasehold estate, the assignment of the lease without
the lessor's consent and the acquisition by the holder of the Mortgage of
the rights of the lessee upon foreclosure or assignment in lieu of
foreclosure or provide the holder of the Mortgage with substantially
similar protections; (3) the terms of such lease do not (a) allow the
termination thereof upon the lessee's default without the holder of the
Mortgage being entitled to receive written notice of, and opportunity to
cure, such default, (b) allow the termination of the lease in the event of
damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving
proceeds of insurance) under the hazard insurance policy or policies
relating to the Mortgaged Property or (d) permit any increase in rent
other than pre-established increases set forth in the lease; (4) the
original term of such lease is not less than fifteen (15) years; (5) the
term of such lease to extend at least five (5) years beyond the term of
the Mortgage unless such lease contains a provision for future vesting of
land to the Mortgagor or homeowner's association after the maturity date
of the Mortgage Note; and (6) the Mortgaged Property is located in a
jurisdiction in which the use of leasehold estates in transferring
ownership in residential properties is a widely accepted practice;
(bb) Credit Information: As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by the Seller to the Purchaser, the Seller has full
right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser and the Purchaser is not
precluded by the terms of the Mortgage Loan Documents from furnishing the
same to any subsequent or prospective purchaser of such Mortgage. The
Seller has in its capacity as servicer, for each Mortgage Loan, fully
furnished, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax,
Experian Credit Information Services, Inc. and Trans Union Credit
Information Company (three of the credit repositories), on a monthly
basis;
(cc) Predatory Lending Regulations: No Mortgage Loan is a High Cost
Loan. No Mortgage Loan originated on or after October 1, 2002 through
March 6, 2003 is governed by the Georgia Fair Lending Act.
(dd) Arbitration: With respect to any Mortgage Loan originated after
August 1, 2004, no Mortgagor agreed to submit to arbitration to resolve
any dispute arising out of or relating in any way to the Mortgage Loan
transaction;
(ee) LTV. No Mortgage Loan has a LTV greater than 100%;
(ff) Qualified Mortgage. The Mortgage Loan is a "qualified mortgage"
within the meaning of Section 860G(a)(3) of the Code;
(gg) Delivery to the Custodian. With respect to each Mortgage Loan,
the Seller is in possession of a complete Mortgage File except for the
documents which have been delivered to a custodian or which have been
submitted for recording and not yet returned;
(hh) No Fraud. To the best of the Seller's knowledge, no action,
error, omission, misrepresentation, negligence, fraud or similar
occurrence regarding the Mortgage Loans has taken place on the part of the
Seller or any person, including, without limitation, the Mortgagor, any
independent contractor retained by the Seller, any appraiser, any broker,
any correspondent, any builder or developer, or any other party involved
in the origination or servicing of the Mortgage Loans; provided, however,
that if it is discovered by the Seller that the substance of such
representation and warranty is inaccurate, notwithstanding the Seller's
lack of knowledge with respect to the substance of such representation and
warranty, such inaccuracy shall be deemed a breach of such representation
and warranty;
(ii) Environmental Laws. To the best of the Seller's knowledge, the
Mortgaged Property is free from any and all toxic or hazardous substances
and there exists no violation of any local, state or federal environmental
law, rule or regulation; provided, however, that if it is discovered by
the Seller that the substance of such representation and warranty is
inaccurate, notwithstanding the Seller's lack of knowledge with respect to
the substance of such representation and warranty, such inaccuracy shall
be deemed a breach of such representation and warranty; and
(jj) Early Payment Default. With respect to each Mortgage Loan
listed on Schedule 1 attached hereto, each related Mortgagor will make its
Monthly Payment due on February 1, 2006 not later than April 30, 2006.
Subsection 9.02 Representations and Warranties Regarding the Seller.
(a) The Seller is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its formation;
(b) The Seller has full power and authority to execute, deliver and
perform its obligations under this Agreement, and has full power and authority
to perform its obligations under this Agreement.
(c) The execution by the Seller of this Agreement is in the ordinary
course of the Seller's business and will not conflict with, or result in a
breach of, any of the terms, conditions or provisions of the Seller's charter or
bylaws or any legal restriction, or any material agreement or instrument to
which the Seller is now a party or by which it is bound, or result in the
violation of any law, rule, regulation, order, judgment or decree to which the
Seller or its property is subject.
(d) The execution, delivery and performance by the Seller of this
Agreement have been duly authorized by all necessary corporate action on part of
the Seller.
(e) This Agreement has been duly executed and delivered by the
Seller, and, upon the due authorization, will constitute the valid and legally
binding obligation of the Seller, enforceable against the Seller in accordance
with its terms except as enforceability may be limited by bankruptcy,
reorganization, insolvency, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally, and by general principles of
equity regardless of whether enforceability is considered in a proceeding in
equity or at law;
(f) No consent, approval, order or authorization of, or declaration,
filing or registration with, any governmental entity is required to be obtained
or made by the Seller in connection with the execution, delivery or performance
by the Seller of this Agreement or the consummation by it of the transaction
contemplated hereby;
(g) There is no action, suit, proceeding or investigation pending or
threatened against the Seller, before any court, administrative agency or other
tribunal, which would draw into question the validity of this Agreement or
which, either in any one instance or in the aggregate, is likely to result in
any material adverse change in the ability of the Seller to perform its
obligations under this Agreement, and the Seller is solvent;
It is understood and agreed that the representations and warranties
set forth in Subsections 9.01 and 9.02 shall survive the sale of the Mortgage
Loans to the Purchaser and shall inure to the benefit of the Purchaser, its
successors and assigns and the Successor Servicer, notwithstanding any
restrictive or qualified endorsement on any Mortgage Note or Assignment of
Mortgage or the examination or failure to examine any Mortgage File. Upon
discovery by either the Seller or the Purchaser of a breach of any of the
foregoing representations and warranties, the party discovering such breach
shall give prompt written notice to the other.
Within sixty (60) days of the earlier of either discovery by or
notice to the Seller of any breach of a representation or warranty which
materially and adversely affects the value of the Mortgage Loans or the interest
of the Purchaser therein (or which materially and adversely affects the value of
the applicable Mortgage Loan or the interest of the Purchaser therein in the
case of a representation and warranty relating to a particular Mortgage Loan),
the Seller shall use its best efforts promptly to cure such breach in all
material respects and, if such breach cannot be cured, the Seller shall, at the
Purchaser's option, repurchase such Mortgage Loan at the Repurchase Price,
together with all expenses incurred by the Purchaser as a result of such
repurchase. Notwithstanding the above sentence, in the event that a breach shall
involve a representation or warranty set forth in Subsection 9.01 and the Seller
discovers or receives notice of any such breach within one hundred twenty (120)
days of the Closing Date, the Seller shall, at the Purchaser's option and
provided that the Seller has a Qualified Substitute Mortgage Loan, rather than
repurchase the Mortgage Loan as provided above, remove such Mortgage Loan (a
"Deleted Mortgage Loan") and substitute in its place a Qualified Substitute
Mortgage Loan or Loans, provided that any such substitution shall be effected
not later than one hundred twenty (120) days after the Closing Date. If the
Seller has no Qualified Substitute Mortgage Loan, it shall repurchase the
deficient Mortgage Loan. Any repurchase of a Mortgage Loan or Loans pursuant to
the foregoing provisions of this Subsection 9.02 shall be accomplished by direct
remittance of the Repurchase Price to the Purchaser or its designee in
accordance with the Purchaser's instructions.
At the time of repurchase or substitution, the Purchaser and the
Seller shall arrange for the reassignment of the Deleted Mortgage Loan to the
Seller and the delivery to the Seller of any documents held by any custodian
relating to the Deleted Mortgage Loan. In the event of a repurchase or
substitution, the Seller shall, simultaneously with such reassignment, give
written notice to the Purchaser that such repurchase or substitution has taken
place, amend the Mortgage Loan Schedule to reflect the withdrawal of the Deleted
Mortgage Loan from this Agreement, and, in the case of substitution, identify a
Qualified Substitute Mortgage Loan and amend the Mortgage Loan Schedule to
reflect the addition of such Qualified Substitute Mortgage Loan to this
Agreement. In connection with any such substitution, the Seller shall be deemed
to have made as to such Qualified Substitute Mortgage Loan the representations
and warranties set forth in this Agreement except that all such representations
and warranties set forth in this Agreement shall be deemed made as of the date
of such substitution. The Seller shall effect such substitution by delivering to
any custodian or to such other party as the Purchaser may designate in writing
for such Qualified Substitute Mortgage Loan the documents required by Subsection
6.03, with the Mortgage Note endorsed as required by Subsection 6.03. No
substitution will be made in any calendar month after the Determination Date for
such month. The Seller shall remit directly to the Purchaser, or its designee in
accordance with the Purchaser's instructions the Monthly Payment on such
Qualified Substitute Mortgage Loan or Loans in the month following the date of
such substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution shall be retained by the Seller. For
the month of substitution, distributions to the Purchaser shall include the
Monthly Payment due on any Deleted Mortgage Loan in the month of substitution,
and the Seller shall thereafter be entitled to retain all amounts subsequently
received by the Seller in respect of such Deleted Mortgage Loan.
For any month in which the Seller substitutes a Qualified Substitute
Mortgage Loan for a Deleted Mortgage Loan, the Seller shall determine the amount
(if any) by which the aggregate principal balance of all Qualified Substitute
Mortgage Loans as of the date of substitution is less than the aggregate Stated
Principal Balance of all Deleted Mortgage Loans (after application of scheduled
principal payments due in the month of substitution). The amount of such
shortfall shall be distributed by the Seller directly to the Purchaser or its
designee in accordance with the Purchaser's instructions within two (2) Business
Days of such substitution. Accordingly, on the date of such substitution, the
Seller will remit to the Servicer from its own funds for deposit into the
Custodial Account an amount equal to the amount of such shortfall plus one
month's interest thereon at the Mortgage Loan remittance rate.
In addition to such repurchase or substitution obligation, the
Seller shall indemnify the Purchaser, its successors and assigns and the
Successor Servicer and hold them harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the Seller representations and warranties contained in this Agreement or any
Reconstitution Agreement. It is understood and agreed that the obligations of
the Seller set forth in this Subsection 9.02 to cure, substitute for or
repurchase a defective Mortgage Loan and to indemnify the Purchaser, its
successors and assigns and the Successor Servicer as provided in this Subsection
9.02 constitute the sole remedies respecting a breach of the foregoing
representations and warranties. For purposes of this paragraph, "Purchaser"
shall mean the Person then acting as the Purchaser under this Agreement and any
and all Persons who previously were "Purchasers" under this Agreement and
"Successor Servicer" shall mean the Person then acting as the Successor Servicer
under this Agreement and any and all Persons who previously were "Successor
Servicers" under this Agreement.
Any cause of action against the Seller relating to or arising out of
the breach of any representations and warranties made in Subsections 9.01 and
9.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with
this Agreement.
Subsection 9.03 Purchaser's Right to Review.
Prior to the Closing Date, the Purchaser shall have the right to
perform on-site due diligence at the premises of the Seller with respect to the
Mortgage Loans. The Seller will provide information and otherwise cooperate with
the due diligence reviews of the Purchaser. The Seller shall make the legal
files and the credit files, together with any payment histories, collection
histories, bankruptcy histories, broker's price opinions, to the extent
available, and any other information with respect to the Mortgage Loans
requested by the Purchaser, available at the Seller's offices for review by
Purchaser or its agents during normal business hours before the Closing Date.
The Purchaser shall have the right to order additional broker's price opinions
in its sole discretion at the Purchaser's expense.
The Purchaser shall have the right to reject any Mortgage Loan (a)
for which the documentation listed in Subsection 6.03 is missing or defective in
whole or in part, (b) for which the related broker's price opinion is below the
appraisal provided in connection with the origination of the related Mortgage
Loan, (c) for which the loan-to-value ratio calculated based upon the broker's
price opinion is greater than 100%, (d) which does not conform to the Seller's
underwriting guidelines, (e) which does not conform to the terms of the Purchase
Price and Terms Letter or is in breach of the representations and warranties set
forth in this Purchase Agreement, (f) that is not securitizable in the
reasonable opinion of the Purchaser, or (g) which does not conform to the terms
of any applicable federal, state, or local law or regulation. The Purchaser
shall use its best efforts to notify the Seller of any such rejected Mortgage
Loan immediately upon discovery.
The fact that the Purchaser has conducted or failed to conduct any
partial or complete examination of the files shall not affect the Purchaser's
(or any of its successor's) rights to demand repurchase or other relief for
breach of Mortgage Loan representations and warranties, missing or defective
documents or as otherwise provided in this Agreement.
SECTION 10. Closing.
The closing for the purchase and sale of the Mortgage Loans shall
take place on the Closing Date. At the Purchaser's option, the Closing shall be
either: by telephone, confirmed by letter or wire as the parties shall agree, or
conducted in person, at such place as the parties shall agree.
The closing for the Mortgage Loans to be purchased on each Closing
Date shall be subject to each of the following conditions:
(i) Prior to the Closing Date or such later date on which the
Purchaser has identified to the Seller the final list of Mortgage
Loans the Purchaser desires to purchase, the Seller shall deliver to
the Purchaser via electronic medium a Mortgage Loan Schedule
acceptable to the Purchaser;
(ii) all of the representations and warranties of the Seller
under this Agreement shall be true and correct as of the Closing
Date and no event shall have occurred which, with notice or the
passage of time, would constitute a default under this Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all Closing Documents as
specified in Section 11 of this Agreement, in such forms as are
agreed upon and reasonably acceptable to the Purchaser, duly
executed by all signatories other than the Purchaser as required
pursuant to the terms hereof;
(iv) the Seller shall have delivered and released to a
custodian all documents required hereunder; and
(v) all other terms and conditions of this Agreement and the
Purchase Price and Terms Agreement shall have been complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the Closing Date the Purchase Price, plus accrued interest pursuant to
Section 4 of this Agreement, by wire transfer of immediately available funds to
the account(s) designated by the Seller.
SECTION 11. Closing Documents.
(a) The Closing Documents for the Mortgage Loans to be purchased on
the initial Closing Date shall consist of fully executed originals of the
following documents:
1. this Agreement;
2. the Underwriting Guidelines to be attached hereto as
Exhibit F; and
3. a certificate or other evidence of merger or change of
name, signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by merger or
acquired or originated by the Seller while conducting business under
a name other than its present name, if applicable.
4. a Purchase Price and Terms Agreement;
5. the Mortgage Loan Schedule;
6. each of the documents required to be delivered by the
Seller pursuant to Subsection 6.03 hereof;
7. a certificate or other evidence of merger or change of
name, signed or stamped by the applicable regulatory authority, if
any of the Mortgage Loans were acquired by the Seller by merger or
acquired or originated by the Seller while conducting business under
a name other than its present name, if applicable; and
8. the Mortgage File for each Mortgage Loan containing the
items set forth on Exhibit A hereto.
SECTION 12. Costs.
The Purchaser shall pay its due diligence fees and the fees and
expenses of its counsel. All servicing fees incurred prior to the Closing Date,
and all costs and expenses incurred in connection with the transfer of the
Mortgage Loans, fees to transfer files and prepare assignments/endorsements, all
initial recording fees, if any, for the assignments of mortgage for all Mortgage
Loans not recorded in the name of MERS, all fees, if any, for transferring
record ownership on the MERS(R) System of Mortgage Loans recorded in the name of
MERS, custodial fees, including the costs associated with clearing exceptions,
(including costs to record intervening assignments and any existing assumption
and modification agreements), together with the fees and expenses of Seller's
counsel, shall be payable by the Seller.
SECTION 13. Cooperation of Seller with a Reconstitution.
The Seller and the Purchaser agree that with respect to all of the
Mortgage Loans, after the Closing Date, on one or more dates (each a
"Reconstitution Date") at the Purchaser's sole option, the Purchaser may effect
a sale to Seller or an affiliate of the Seller (each a "Reconstitution") of the
Mortgage Loans then subject to this Agreement, without recourse, to one or more
trusts or other entities to be formed as part of one Securitization Transaction.
The Seller agrees to execute in connection with any Reconstitution, an
assignment, assumption and recognition agreement, in the form of Exhibit H
hereto.
With respect to each Securitization Transaction entered into by the
Purchaser, the Seller agrees, pursuant to the terms of the related assignment,
assumption and recognition agreement to restate the representations and
warranties set forth in this Agreement as of the settlement or closing date in
connection with such Reconstitution.
All Mortgage Loans not sold or transferred pursuant to a
Reconstitution shall remain subject to this Agreement and with respect thereto
this Agreement shall remain in full force and effect.
SECTION 14. The Seller.
Subsection 14.01 Additional Indemnification by the Seller; Third
Party Claims.
The Seller shall indemnify the Purchaser and hold it harmless
against any and all actual out-of-pocket third-party claims, losses, damages,
penalties, fines, forfeitures, legal fees (including (without limitation) legal
fees incurred in connection with the enforcement of the Seller's indemnification
obligation under this Subsection 14.01) and related costs, judgments, and any
other costs, fees and expenses that the Purchaser or the Successor Servicer may
sustain in any way related to (a) any breach of any of Seller's representations,
warranties or covenants set forth in this Agreement, (b) the Seller's gross
negligence or willful failure to perform any of its material duties under this
Agreement that materially and adversely affects the Purchaser's interests in the
Mortgage Loans. The Seller immediately shall notify the Purchaser if a claim is
made by a third party with respect to this Agreement or any Reconstitution
Agreement or the Mortgage Loans, assume (with the prior written consent of the
Purchaser) the defense of any such claim and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree which may be entered against it or the Purchaser in respect
of such claim. The Purchaser promptly shall reimburse the Seller for all amounts
advanced by it pursuant to the preceding sentence, except when the claim is in
any way related to the Seller's indemnification pursuant to Section 9 or the
first sentence of this Subsection 14.01.
Subsection 14.02 Merger or Consolidation of the Seller.
The Seller will keep in full effect its existence, rights and
franchises as a limited partnership under the laws of the state of its formation
except as permitted herein, and will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its duties under this Agreement.
SECTION 15. Grant of Security Interest.
The Seller hereby grants to the Purchaser a lien on and a continuing
security interest in each Mortgage Loan and each document and instrument
evidencing each such Mortgage Loan to secure the performance by the Seller of
its obligations under the Purchase Price and Terms Agreement, and the Seller
agrees that it shall hold such Mortgage Loans in custody for the Purchaser
subject to the Purchaser's (i) right to reject any Mortgage Loan (or Qualified
Substitute Mortgage Loan) under the terms of this Agreement and to require
another Mortgage Loan (or Qualified Substitute Mortgage Loan) to be substituted
therefor, and (ii) obligation to pay the Purchase Price for the Mortgage Loans.
All rights and remedies of the Purchaser under this Agreement are distinct from,
and cumulative with, any other rights or remedies under this Agreement or
afforded by law or equity and all such rights and remedies may be exercised
concurrently, independently or successively.
SECTION 16. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed, by registered or
certified mail, return receipt requested, or, if by other means, when received
by the other party at the address as follows:
(i) if to the Purchaser:
Credit-Based Asset Servicing and Securitization LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
(ii) if to the Seller:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to
have been received on the date delivered to or received at the premises of the
addressee (as evidenced, in the case of registered or certified mail, by the
date noted on the return receipt).
SECTION 17. Severability Clause.
Any part, provision representation or warranty of this Agreement
which is prohibited or unenforceable or is held to be void or unenforceable in
any jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof. If the invalidity of any
part, provision, representation or warranty of this Agreement shall deprive any
party of the economic benefit intended to be conferred by this Agreement, the
parties shall negotiate, in good-faith, to develop a structure the economic
effect of which is nearly as possible the same as the economic effect of this
Agreement without regard to such invalidity.
SECTION 18. Counterparts.
This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
SECTION 19. Governing Law.
This Agreement shall be deemed in effect when a fully executed
counterpart thereof is received by the Purchaser in the State of New York and
shall be deemed to have been made in the State of New York. The Agreement shall
be construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with the substantive laws of the State of New York (without regard to
conflicts of laws principles), except to the extent preempted by federal law.
SECTION 20. Intention of the Parties.
It is the intention of the parties that the Purchaser is purchasing,
and the Seller is selling the Mortgage Loans and not a debt instrument of the
Seller or another security. Accordingly, the parties hereto each intend to treat
the transaction for federal income tax purposes as a sale by the Seller, and a
purchase by the Purchaser, of the Mortgage Loans. Moreover, the arrangement
under which the Mortgage Loans are held shall be consistent with classification
of such arrangement as a grantor trust in the event it is not found to represent
direct ownership of the Mortgage Loans. The Purchaser shall have the right to
review the Mortgage Loans and the related Mortgage Loan Files to determine the
characteristics of the Mortgage Loans which shall affect the federal income tax
consequences of owning the Mortgage Loans and the Seller shall cooperate with
all reasonable requests made by the Purchaser in the course of such review.
SECTION 21. Successors and Assigns; Assignment of Purchase
Agreement.
This Agreement shall bind and inure to the benefit of and be
enforceable by the Seller and the Purchaser and the respective permitted
successors and assigns of the Seller and the successors and assigns of the
Purchaser. This Agreement shall not be assigned, pledged or hypothecated by the
Seller to a third party not affiliated with the Seller without the prior written
consent of the Purchaser, which consent may be withheld by the Purchaser in its
sole discretion. This Agreement may be assigned, pledged or hypothecated by the
Purchaser in whole or in part, and with respect to one or more of the Mortgage
Loans, without the consent of the Seller. If the Purchaser assigns any or all of
its rights as Purchaser hereunder, the assignee of the Purchaser will become the
"Purchaser" hereunder to the extent of such assignment.
SECTION 22. Waivers.
No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SECTION 23. Exhibits.
The exhibits to this Agreement are hereby incorporated and made a
part hereof and are an integral part of this Agreement.
SECTION 24. General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Agreement have the meanings assigned
to them in this Agreement and include the plural as well as the singular, and
the use of any gender herein shall be deemed to include the other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;
(c) references herein to "Articles," "Sections," "Subsections,"
"Paragraphs," and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subdivisions of
this Agreement;
(d) reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;
(e) the words "herein," "hereof," "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
provision; and
(f) the term "include" or "including" shall mean without limitation
by reason of enumeration.
SECTION 25. Reproduction of Documents.
This Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications which may hereafter
be executed, (b) documents received by any party at the closing, and (c)
financial statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
SECTION 26. Further Agreements.
The Seller and the Purchaser each agree to execute and deliver to
the other such reasonable and appropriate additional documents, instruments or
agreements as may be necessary or appropriate to effectuate the purposes of this
Agreement.
SECTION 27. Recordation of Assignments of Mortgage.
To the extent permitted by applicable law, for Mortgage Loans which
are not registered with MERS, each of the Assignments of Mortgage is subject to
recordation in all appropriate public offices for real property records in all
the counties or their comparable jurisdictions in which any or all of the
Mortgaged Properties are situated, and in any other appropriate public recording
office or elsewhere, such recordation to be effected at the Seller's expense in
the event recordation is either necessary under applicable law or requested by
the Purchaser (which request may be made by the Purchaser at any time following
the Closing Date) at its sole option.
SECTION 28. No Solicitation.
From and after the Closing Date, the Seller agrees that it will not
take any action or permit or cause any action to be taken by any of its agents
or affiliates, or by any independent contractors on the Seller's behalf, to
personally, by telephone or mail, solicit the Mortgagor under any Mortgage Loan
for any purpose whatsoever, including to refinance a Mortgage Loan, in whole or
in part, without the prior written consent of the Purchaser. It is understood
and agreed that all rights and benefits relating to the solicitation of any
Mortgagors and the attendant rights, title and interest in and to the list of
such Mortgagors and data relating to their Mortgages (including insurance
renewal dates) shall be transferred to the Purchaser pursuant hereto on the
Closing Date and the Seller shall take no action to undermine these rights and
benefits. Notwithstanding the foregoing, it is understood and agreed that
promotions undertaken by the Seller or any affiliate of the Seller which are
directed to the general public at large, including, without limitation, mass
mailing, internet and e-mail solicitations, based in all instances, on
commercially acquired mailing lists (which may not be targeted at the
Mortgagors) and newspaper, radio and television advertisements shall not
constitute solicitation under this Section 29.
SECTION 29. Waiver of Trial by Jury.
THE SELLER AND THE PURCHASER EACH KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 30. Submission to Jurisdiction; Waivers.
The Seller hereby irrevocably and unconditionally:
(A) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE
GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE
FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT
IN SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED
OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL),
POSTAGE PREPAID, TO ITS ADDRESS SET FORTH HEREIN OR AT SUCH OTHER
ADDRESS OF WHICH THE PURCHASER SHALL HAVE BEEN NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT TO XXX IN ANY OTHER JURISDICTION.
SECTION 31. Privacy Act Compliance.
Seller and Purchaser shall maintain policies, procedures, and
safeguards designed to protect the security and confidentiality of any
non-public personal information relating to Mortgagors. Seller and Purchaser
agree to comply with the provisions of the Xxxxx-Xxxxx-Xxxxxx Act of 1999, as
the same may be amended from time to time, and all implementing rules and
regulations regarding consumer financial privacy, to the extent applicable to
each of their actions and responsibilities hereunder.
SECTION 32. Compliance with Regulation AB.
Subsection 32.01 Intent of the Parties; Reasonableness.
The Purchaser and the Seller acknowledge and agree that the purpose
of Section 32 of this Agreement is to facilitate compliance by the Purchaser and
any Depositor with the provisions of Regulation AB and related rules and
regulations of the Commission. Although Regulation AB is applicable by its terms
only to offerings of asset-backed securities that are registered under the
Securities Act, the Seller acknowledges that investors in privately offered
securities may require that the Purchaser or any Depositor provide comparable
disclosure in unregistered offerings. References in this Agreement to compliance
with Regulation AB include provision of comparable disclosure in private
offerings.
Neither the Purchaser nor any Depositor shall exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
thereunder (or the provision in a private offering of disclosure comparable to
that required under the Securities Act). The Seller acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Purchaser
or any Depositor in good faith for delivery of information under these
provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Seller shall cooperate fully
with the Purchaser to deliver to the Purchaser (including any of its assignees
or designees) and any Depositor, any and all statements, reports,
certifications, records and any other information necessary in the good faith
determination of the Purchaser or any Depositor to permit the Purchaser or such
Depositor to comply with the provisions of Regulation AB, together with such
disclosures relating to the Seller, any Third-Party Originator and the Mortgage
Loans, or the servicing of the Mortgage Loans, reasonably believed by the
Purchaser or any Depositor to be necessary in order to effect such compliance.
The Purchaser (including any of its assignees or designees) shall
cooperate with the Seller by providing timely notice of requests for information
under these provisions and by reasonably limiting such requests to information
required, in the Purchaser's reasonable judgment, to comply with Regulation AB.
Subsection 32.02 Additional Representations and Warranties of the
Seller.
(a) The Seller shall be deemed to represent to the Purchaser and to
any Depositor, as of the date on which information is first provided to the
Purchaser or any Depositor under Subsection 32.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) there are no
material legal or governmental proceedings pending (or known to be contemplated)
against the Seller or any Third-Party Originator; and (ii) there are no
affiliations, relationships or transactions relating to the Seller or any
Third-Party Originator with respect to any Securitization Transaction and any
party thereto identified by the related Depositor of a type described in Item
1119 of Regulation AB.
(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Subsection 32.03, the Seller shall, within five (5) Business
Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or, if
any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Subsection 32.03 Information To Be Provided by the Seller.
In connection with any Securitization Transaction the Seller shall
(i) within five (5) Business Days following request by the Purchaser or any
Depositor, provide to the Purchaser and such Depositor (or, as applicable, cause
each Third-Party Originator to provide), in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor, the information and
materials specified in paragraphs (a) and (b) of this Subsection, and (ii) as
promptly as practicable following notice to or discovery by the Seller, provide
to the Purchaser and any Depositor (in writing and in form and substance
reasonably satisfactory to the Purchaser and such Depositor) the information
specified in paragraph (d) of this Subsection.
(a) If so requested by the Purchaser or any Depositor, the Seller
shall provide such information regarding (i) the Seller, as originator of the
Mortgage Loans (including as an acquirer of Mortgage Loans from a Qualified
Correspondent), or (ii) each Third-Party Originator, as is requested for the
purpose of compliance with Items 1103(a)(1), 1105, 1110, 1117 and 1119 of
Regulation AB. Such information shall include, at a minimum:
(A) the originator's form of organization;
(B) a description of the originator's origination program and
how long the originator has been engaged in originating residential
mortgage loans, which description shall include a discussion of the
originator's experience in originating mortgage loans of a similar
type as the Mortgage Loans; information regarding the size and
composition of the originator's origination portfolio; and
information that may be material, in the good faith judgment of the
Purchaser or any Depositor, to an analysis of the performance of the
Mortgage Loans, including the originator's credit-granting or
underwriting criteria for mortgage loans of similar type(s) as the
Mortgage Loans and such other information as the Purchaser or any
Depositor may reasonably request for the purpose of compliance with
Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the Seller
and each Third-Party Originator; and
(D) a description of any affiliation or relationship between
the Seller, each Third-Party Originator and any of the following
parties to a Securitization Transaction, as such parties are
identified to the Seller by the Purchaser or any Depositor in
writing in advance of such Securitization Transaction:
1. the sponsor;
2. the depositor;
3. the issuing entity;
4. any servicer;
5. any trustee;
6. any originator;
7. any significant obligor;
8. any enhancement or support provider; and
9. any other material transaction party.
(b) If so requested by the Purchaser or any Depositor, the Seller
shall provide (or, as applicable, cause each Third-Party Originator to provide)
Static Pool Information with respect to the mortgage loans (of a similar type as
the Mortgage Loans, as reasonably identified by the Purchaser as provided below)
originated by (i) the Seller, if the Seller is an originator of Mortgage Loans
(including as an acquirer of Mortgage Loans from a Qualified Correspondent),
and/or (ii) each Third-Party Originator. Such Static Pool Information shall be
prepared by the Seller (or Third-Party Originator) on the basis of its
reasonable, good faith interpretation of the requirements of Item 1105(a)(1)-(3)
of Regulation AB. To the extent that there is reasonably available to the Seller
(or Third-Party Originator) Static Pool Information with respect to more than
one mortgage loan type, the Purchaser or any Depositor shall be entitled to
specify whether some or all of such information shall be provided pursuant to
this paragraph. The content of such Static Pool Information may be in the form
customarily provided by the Seller, and need not be customized for the Purchaser
or any Depositor. Such Static Pool Information for each vintage origination year
or prior securitized pool, as applicable, shall be presented in increments no
less frequently than quarterly over the life of the mortgage loans included in
the vintage origination year or prior securitized pool. The most recent periodic
increment must be as of a date no later than one hundred thirty-five (135) days
prior to the date of the prospectus or other offering document in which the
Static Pool Information is to be included or incorporated by reference. The
Static Pool Information shall be provided in an electronic format that provides
a permanent record of the information provided, such as a portable document
format (pdf) file, or other such electronic format reasonably required by the
Purchaser or the Depositor, as applicable.
Promptly following notice or discovery of a material error in Static
Pool Information provided pursuant to the immediately preceding paragraph
(including an omission to include therein information required to be provided
pursuant to such paragraph), the Seller shall provide corrected Static Pool
Information to the Purchaser or any Depositor, as applicable, in the same format
in which Static Pool Information was previously provided to such party by the
Seller.
If so requested by the Purchaser or any Depositor, the Seller shall
provide (or, as applicable, cause each Third-Party Originator to provide), at
the expense of the requesting party (to the extent of any additional incremental
expense associated with delivery pursuant to this Agreement), such agreed-upon
procedures letters of certified public accountants reasonably acceptable to the
Purchaser or Depositor, as applicable, pertaining to Static Pool Information
relating to prior securitized pools for securitizations closed on or after
January 1, 2006 or, in the case of Static Pool Information with respect to the
Seller's or Third-Party Originator's originations or purchases, to calendar
months commencing January 1, 2006, as the Purchaser or such Depositor shall
reasonably request. Such letters shall be addressed to and be for the benefit of
such parties as the Purchaser or such Depositor shall designate, which may
include, by way of example, any Sponsor, any Depositor and any broker dealer
acting as underwriter, placement agent or initial purchaser with respect to a
Securitization Transaction. Any such statement or letter may take the form of a
standard, generally applicable document accompanied by a reliance letter
authorizing reliance by the addressees designated by the Purchaser or such
Depositor.
(c) [Reserved]
(d) If so requested by the Purchaser or any Depositor for the
purpose of satisfying its reporting obligation under the Exchange Act with
respect to any class of asset-backed securities, the Seller shall (or shall
cause each Third-Party Originator to) (i) notify the Purchaser and any Depositor
in writing of (A) any material litigation or governmental proceedings pending
against the Seller or any Third-Party Originator and (B) any affiliations or
relationships that develop following the closing date of a Securitization
Transaction between the Seller or any Third-Party Originator and any of the
parties specified in clause (D) of paragraph (a) of this Subsection (and any
other parties identified in writing by the requesting party) with respect to
such Securitization Transaction, and (ii) provide to the Purchaser and any
Depositor a description of such proceedings, affiliations or relationships.
Subsection 32.04 Indemnification.
The Seller shall indemnify the Purchaser, each affiliate of the
Purchaser, the Depositor and each of the following parties participating in a
Securitization Transaction: each sponsor and issuing entity; each Person
responsible for the preparation, execution or filing of any report required to
be filed with the Commission with respect to such Securitization Transaction, or
for execution of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d)
under the Exchange Act with respect to such Securitization Transaction; each
broker dealer acting as underwriter, placement agent or initial purchaser, each
Person who controls any of such parties or the Depositor (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act); and the
respective present and former directors, officers, employees and agents of each
of the foregoing and of the Depositor, and shall hold each of them harmless from
and against any losses, damages, penalties, fines, forfeitures, legal fees and
expenses and related costs, judgments, and any other costs, fees and expenses
that any of them may sustain arising out of or based upon:
(i)(A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification, accountants'
letter or other material provided in written or electronic form under this
Section 32 by or on behalf of the Seller, or provided under this Section
32 by or on behalf of any Third-Party Originator (collectively, the
"Seller Information"), or (B) the omission or alleged omission to state in
the Seller Information a material fact required to be stated in the Seller
Information or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, by way of clarification, that clause (B) of this paragraph shall
be construed solely by reference to the Seller Information and not to any
other information communicated in connection with a sale or purchase of
securities, without regard to whether the Seller Information or any
portion thereof is presented together with or separately from such other
information;
(ii) any failure by the Seller or any Third-Party Originator to
deliver any information, report, certification, accountants' letter or
other material when and as required under this Section 32; or
(iii) any breach by the Seller of a representation or warranty set
forth in Subsection 32.02(a) or in a writing furnished pursuant to
Subsection 32.02(b) and made as of a date prior to the closing date of the
related Securitization Transaction, to the extent that such breach is not
cured by such closing date, or any breach by the Seller of a
representation or warranty in a writing furnished pursuant to Subsection
32.02(b) to the extent made as of a date subsequent to such closing date.
In the case of any failure of performance described in clause
(a)(ii) of this Section, the Seller shall promptly reimburse the Purchaser, any
Depositor, as applicable, and each Person responsible for the preparation,
execution or filing of any report required to be filed with the Commission with
respect to such Securitization Transaction, or for execution of a certification
pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect
to such Securitization Transaction, for all costs reasonably incurred by each
such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the Seller or
any Third-Party Originator.
[Signatures Commence on Following Page]
IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed hereto by their respective officers thereunto duly authorized
as of the date first above written.
XXXXXXX XXXXX MORTGAGE COMPANY, a New York
limited partnership
(Seller)
By: XXXXXXX SACHS REAL ESTATE FUNDING CORP.,
a New York corporation, as General Partner
By: /s/ Xxxx Xxxxx
--------------------------------------------
Name: Xxxx Xxxxx
Title: Managing Director
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC
(Purchaser)
By: /s/ Xxxxx X. Xxxx
--------------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
Schedule 1
EXHIBIT A
CONTENTS OF EACH MORTGAGE FILE
With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items, which shall be available for inspection by the
Purchaser and any prospective Purchaser, and which shall be delivered to
Purchaser or its designee, or to such other Person as the Purchaser shall
designate in writing, pursuant to Section 6 of the Mortgage Loan Purchase and
Warranties Agreement to which this Exhibit is attached (the "Agreement"):
(a)___the original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _________, without recourse" and
signed in the name of the last endorsee (the "Last Endorsee") by an authorized
officer. To the extent that there is no room on the face of the Mortgage Notes
for endorsements, the endorsement may be contained on an allonge, if state law
so allows and any custodian is so advised by the Seller that state law so
allows. If the Mortgage Loan was acquired by the Seller in a merger, the
endorsement must be by "[Last Endorsee], successor by merger to [name of
predecessor]". If the Mortgage Loan was acquired or originated by the Last
Endorsee while doing business under another name, the endorsement must be by
"[Last Endorsee], formerly known as [previous name]";
(b) the original of any guarantee executed in connection with the
Mortgage Note;
(c) the original Mortgage with evidence of recording thereon. If in
connection with any Mortgage Loan, the Seller cannot deliver or cause to be
delivered the original Mortgage with evidence of recording thereon on or prior
to the Closing Date because of a delay caused by the public recording office
where such Mortgage has been delivered for recordation or because such Mortgage
has been lost or because such public recording office retains the original
recorded Mortgage, the Seller shall deliver or cause to be delivered to the
Purchaser or its designee, a photocopy of such Mortgage, together with (i) in
the case of a delay caused by the public recording office, an Officer's
Certificate of the Seller (or certified by the title company, escrow agent, or
closing attorney) stating that such Mortgage has been dispatched to the
appropriate public recording office for recordation and that the original
recorded Mortgage or a copy of such Mortgage certified by such public recording
office to be a true and complete copy of the original recorded Mortgage will be
promptly delivered to Purchaser or its designee upon receipt thereof by the
Seller; or (ii) in the case of a Mortgage where a public recording office
retains the original recorded Mortgage or in the case where a Mortgage is lost
after recordation in a public recording office, a copy of such Mortgage
certified by such public recording office to be a true and complete copy of the
original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) except with respect to each MERS Designated Mortgage Loan, the
original Assignment of Mortgage for each Mortgage Loan, in form and substance
acceptable for recording. The Assignment of Mortgage must be duly recorded only
if recordation is either necessary under applicable law or commonly required by
private institutional mortgage investors in the area where the Mortgaged
Property is located or on direction of the Purchaser as provided in this
Agreement. If the Assignment of Mortgage is to be recorded, the Mortgage shall
be assigned to the Purchaser. If the Assignment of Mortgage is not to be
recorded, the Assignment of Mortgage shall be delivered in blank. If the
Mortgage Loan was acquired by the Seller in a merger, the Assignment of Mortgage
must be made by "[SELLER], successor by merger to [name of predecessor]". If the
Mortgage Loan was acquired or originated by the Seller while doing business
under another name, the Assignment of Mortgage must be by "[SELLER], formerly
known as [previous name]";
(f) the originals of all intervening assignments of mortgage (if
any) evidencing a complete chain of assignment from the originator to the Last
Endorsee (or to MERS with respect to each MERS Designated Mortgage Loan) with
evidence of recording thereon, or if any such intervening assignment has not
been returned from the applicable recording office or has been lost or if such
public recording office retains the original recorded assignments of mortgage,
the Seller shall deliver or cause to be delivered to Purchaser or its designee,
a photocopy of such intervening assignment, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or certified by the title company, escrow agent, or closing attorney)
stating that such intervening assignment of mortgage has been dispatched to the
appropriate public recording office for recordation and that such original
recorded intervening assignment of mortgage or a copy of such intervening
assignment of mortgage certified by the appropriate public recording office to
be a true and complete copy of the original recorded intervening assignment of
mortgage will be promptly delivered to Purchaser or its designee upon receipt
thereof by the Seller; or (ii) in the case of an intervening assignment where a
public recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after recordation in a
public recording office, a copy of such intervening assignment certified by such
public recording office to be a true and complete copy of the original recorded
intervening assignment;
(g) The original mortgagee policy of title insurance or, in the
event such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and complete
by the title insurance company; and
(h) security agreement, chattel mortgage or equivalent document
executed in connection with the Mortgage.
EXHIBIT B
CONTENTS OF EACH CREDIT FILE
(a) The original hazard insurance policy and, if required by law,
flood insurance policy.
(b) Residential loan application.
(c) Mortgage Loan closing statement.
(d) Verification of employment and income (except for Mortgage Loans
originated under a Limited Documentation Program).
(e) Verification of acceptable evidence of source and amount of
downpayment.
(f) Credit report on the Mortgagor.
(g) Residential appraisal report, if available.
(h) Photograph of the Mortgaged Property.
(i) Survey of the Mortgaged Property, if any.
(j) Copy of each instrument necessary to complete identification of
any exception set forth in the exception schedule in the title policy, i.e., map
or plat, restrictions, easements, sewer agreements, home association
declarations, etc.
(k) All required disclosure statements.
(l) If available, termite report, structural engineer's report,
water potability and septic certification.
(m) Sales contract, if applicable.
(n) Tax receipts, insurance premium receipts, ledger sheets, payment
history from date of origination, insurance claim files, correspondence, current
and historical computerized data files, and all other processing, underwriting
and closing papers and records which are customarily contained in a mortgage
loan file and which are required to document the Mortgage Loan or to service the
Mortgage Loan.
(o) Amortization schedule, if applicable.
EXHIBIT C
RESERVED
EXHIBIT D
MORTGAGE LOAN SCHEDULE
EXHIBIT E
RESERVED
EXHIBIT F
ORIGINATOR'S UNDERWRITING GUIDELINES
EXHIBIT G
RESERVED
EXHIBIT H
ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT
THIS ASSIGNMENT, ASSUMPTION AND RECOGNITION AGREEMENT, dated April
6, 2006 ("Agreement"), is among Credit-Based Asset Servicing and Securitization
LLC ("Assignor"), GS Mortgage Securities Corp. ("Assignee"), and Xxxxxxx Xxxxx
Mortgage Company (the "Company").
For and in consideration of the sum of TEN DOLLARS ($10.00) and
other valuable consideration the receipt and sufficiency of which hereby are
acknowledged, and of the mutual covenants herein contained, the parties hereto
hereby agree as follows:
Assignment, Assumption and Conveyance
1. The Assignor hereby conveys, sells, grants, transfers and assigns
to the Assignee all of the right, title and interest (other than those rights
specifically retained by the Assignor pursuant to this Agreement) of the
Assignor, as purchaser, in, to and under (a) those certain Mortgage Loans listed
on the schedule (the "Mortgage Loan Schedule") attached hereto as Exhibit A (the
"Mortgage Loans"), (b) solely insofar as it relates to the Mortgage Loans, that
certain Mortgage Loan Purchase and Warranties Agreement, dated as of April 6,
2006 (the "Purchase Agreement"), between the Assignor and the Company, as
seller. The Assignor hereby agrees that it will (i) deliver possession of notes
evidencing the Mortgage Loans to, or at the direction of, the Assignee or its
designee and (ii) take in a timely manner all necessary steps under all
applicable laws to convey and to perfect the conveyance of the Mortgage Loans as
required under the Pooling Agreement (as defined below).
The Assignor specifically reserves and does not assign to the
Assignee hereunder (i) any and all right, title and interest in, to and under
and any obligations of the Assignor with respect to any mortgage loans subject
to the Purchase Agreement that are not the Mortgage Loans set forth on the
Mortgage Loan Schedule and are not the subject of this Agreement or (ii) the
rights of the Purchaser under Section 13 and Section 14.01 of the Purchase
Agreement.
The Assignee hereby assumes all of the Assignor's obligations under
the Mortgage Loans, the Purchase Agreement solely insofar as such obligations
relate to the Mortgage Loans.
Recognition of the Company
2. From and after the date hereof (the "Securitization Closing
Date"), the Company shall and does hereby recognize that the Assignee will
transfer the Mortgage Loans and assign its rights under the Purchase Agreement
(solely to the extent set forth herein) and this Agreement to U.S. Bank National
Association, as trustee (including its successors in interest and any successor
trustees under the Pooling Agreement, the "Trustee"), of the GSAMP Trust
2006-HE2 (the "Trust") created pursuant to a Pooling and Servicing Agreement,
dated as of March 1, 2006 (the "Pooling Agreement"), among the Assignor, the
Assignee, the Trustee, Xxxxxx Loan Servicing LP, as servicer of the Mortgage
Loans (including its successors in interest and any successor servicers of the
Mortgage Loans under the Pooling Agreement, the "Servicer"). The Company hereby
acknowledges and agrees that from and after the date hereof (i) the Trust will
be the owner of the Mortgage Loans and the Servicer will be the servicer of the
Mortgage Loans on or after the applicable Transfer Date pursuant to the terms
set forth in the Pooling Agreement, (ii) the Company shall look solely to the
Trust (including the Trustee and the Servicer acting on the Trust's behalf) for
performance of any obligations of the Assignor under the Mortgage Loans and the
Purchase Agreement (solely insofar as it relates to the Mortgage Loans), (iii)
the Trust (including the Trustee and the Servicer acting on the Trust's behalf)
shall have all the rights and remedies available to the Assignor, insofar as
they relate to the Mortgage Loans, under the Purchase Agreement, including,
without limitation, the enforcement of the document delivery requirements set
forth in Section 6.03 of the Purchase Agreement, and shall be entitled to
enforce all of the obligations of the Company thereunder insofar as they relate
to the Mortgage Loans, including without limitation, the remedies for breaches
of representations and warranties set forth in Section 9.02 of the Purchase
Agreement, (iv) all references to the Purchaser or its designee under the
Purchase Agreement insofar as they relate to the Mortgage Loans shall be deemed
to refer to the Trust (including the Trustee and the Servicer acting on the
Trust's behalf) and (v) the Mortgage Loans will be part of a REMIC. Neither the
Company nor the Assignor shall amend or agree to amend, modify, waive, or
otherwise alter any of the terms or provisions of the Purchase Agreements or the
Servicing Agreement which amendment, modification, waiver or other alteration
would in any way affect the Mortgage Loans or the Company's performance under
the Purchase Agreements or the Servicing Agreement with respect to the Mortgage
Loans without the prior written consent of the Trustee.
Representations and Warranties of the Company
3. Pursuant to Section 13 of the Purchase Agreement, the Company
hereby represents and warrants, for the benefit of the Assignor, the Assignee
and the Trust, that the representations and warranties set forth in Section 9.01
and Section 9.02 of the Purchase Agreement are true and correct as of April 6,
2006 as if such representations and warranties were made on the date hereof.
4. In the event a Mortgage Loan is required to be repurchased
pursuant to Subsection 9.01(jj) of the Purchase Agreement, the Company shall pay
to the Trust the Repurchase Price, and the Company shall pay to the Assignor the
amount by which the Purchase Price Percentage (as adjusted) set forth in the
Purchase Price and Terms Agreement, dated as of March 6, 2006, by and between
the Company and the Assignor, multiplied by the then outstanding scheduled
principal balance of the Mortgage Loans to be repurchased plus accrued and
unpaid interest thereon from the date to which interest was last paid through
the day prior to the repurchase date at the mortgage interest rate, exceeds such
Repurchase Price.
Remedies for Breach of Representations and Warranties of the Company
5. The Company hereby acknowledges and agrees that the remedies
available to the Assignor, the Assignee and the Trust (including the Trustee and
the Servicer acting on the Trust's behalf) in connection with any breach of the
representations and warranties made by the Company set forth in Sections 3 and 4
hereof shall be as set forth in Section 9.02 of the Purchase Agreement as if
they were set forth herein (including without limitation the repurchase and
indemnity obligations set forth therein).
Representations and Warranties of the Assignor
6. The Assignor warrants and represents to the Assignee and the
Trust as of date hereof that:
(a) The Assignor is the sole owner of record and holder of the
Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged, and the Assignor has good,
indefeasible and marketable title thereto, and has full right to transfer
and sell the Mortgage Loan to the Assignee free and clear of any
encumbrance, equity, participation interest, lien, pledge, charge, claim
or security interest, and has full right and authority subject to no
interest or participation of, or agreement with, any other party, to sell
and assign each Mortgage Loan pursuant to this Agreement and following the
sale of each Mortgage Loan, the Assignee will own such Mortgage Loan free
and clear of any encumbrance, equity, participation interest, lien,
pledge, charge, claim or security interest. The Assignor intends to
relinquish all rights to possess, control and monitor the Mortgage Loan;
(b) The Assignor has not waived the performance by the Mortgagor of
any action, if the Mortgagor's failure to perform such action would cause
the Mortgage Loan to be in default, nor has the Company waived any default
resulting from any action or inaction by the Mortgagor;
Remedies for Breach of Representations and Warranties of the Assignor
7. The Assignor hereby acknowledges and agrees that in the event of
any breach of the representations and warranties made by the Assignor set forth
in Section 7 hereof that materially and adversely affects the value of the
Mortgage Loans or the interest of the Assignee or the Trust therein within 60
days of the earlier of either discovery by or notice to the Assignor of such
breach of a representation or warranty, it shall cure, purchase or cause the
purchase of the applicable Mortgage Loan at the Repurchase Price set forth in
the relevant Purchase Agreement plus any costs and damages incurred by the Trust
in connection with any violation by such Mortgage Loan of any predatory lending
law or abusive lending law.
Miscellaneous
8. This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflicts of law principles, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
9. No term or provision of this Agreement may be waived or modified
unless such waiver or modification is in writing and signed by the party against
whom such waiver or modification is sought to be enforced, with the prior
written consent of the Trustee.
10. This Agreement shall inure to the benefit of (i) the successors
and assigns of the parties hereto and (ii) the Trust (including the Trustee and
the Servicer acting on the Trust's behalf). Any entity into which the Assignor,
Assignee or Company may be merged or consolidated shall, without the requirement
for any further writing, be deemed Assignor, Assignee or Company, respectively,
hereunder.
11. Each of this Agreement and the Purchase Agreement shall survive
the conveyance of the Mortgage Loans and the assignment of the Purchase
Agreement (to the extent assigned hereunder) by the Assignor to the Assignee and
by the Assignee to the Trust and nothing contained herein shall supersede or
amend the terms of the Purchase Agreement.
12. This Agreement may be executed simultaneously in any number of
counterparts. Each counterpart shall be deemed to be an original and all such
counterparts shall constitute one and the same instrument.
13. In the event that any provision of this Agreement conflicts with
any provision of the Purchase Agreement with respect to the Mortgage Loans, the
terms of this Agreement shall control.
14. Capitalized terms used in this Agreement (including the exhibits
hereto) but not defined in this Agreement shall have the meanings given to such
terms in the Purchase Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
GS MORTGAGE SECURITIES CORP.
By: /s/ Xxxxxxxx Xxxx
-------------------------------------------
Name: Xxxxxxxx Xxxx
Title: Vice President
XXXXXXX XXXXX MORTGAGE COMPANY,
a New York limited partnership
By: XXXXXXX SACHS REAL ESTATE FUNDING CORP.,
a New York corporation, as general partner
By: /s/ Xxxx Xxxxx
-------------------------------------------
Name: Xxxx Xxxxx
Title: Managing Director
CREDIT-BASED ASSET SERVICING AND
SECURITIZATION LLC
By: /s/ Xxxxx X. Xxxx
-------------------------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
EXHIBIT A TO ASSIGNMENT AND RECOGNITION AGREEMENT
Mortgage Loan Schedule
EXHIBIT Q
INTEREST RATE SWAP AGREEMENT
(Multicurrency--Cross Border)
ISDA(R)
International Swap and Derivatives Association, Inc.
MASTER AGREEMENT
dated as of April 6, 2006
BARCLAYS BANK PLC and U.S. BANK NATIONAL ASSOCIATION, NOT
INDIVIDUALLY, BUT SOLELY AS TRUSTEE ON
BEHALF OF THE TRUST CREATED PURSUANT TO
THE POOLING AND SERVICING AGREEMENT
(THE "TRUST") WITH RESEPCT TO GS
MORTGAGE SECURITIES CORP.,
MORTGAGE-BACKED PASS-THROUGH
CERTIFICATES, SERIES 2006-HE2
----------------------------------- ---------------------------------------
("Party A") ("Party B")
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be deducted
or withheld from any additional amount paid by X to Y under this
Section 2(d)) promptly upon the earlier of determining that such
deduction or withholding is required or receiving notice that such
amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy), or
other documentation reasonably acceptable to Y, evidencing such payment
to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes, whether
assessed against X or Y) will equal the full amount Y would have
received had no such deduction or withholding been required. However, X
will not be required to pay any additional amount to Y to the extent
that it would not be required to be paid but for:--
(A)the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B)the failure of a representation made by Y pursuant to Section
3(f) to be accurate and true unless such failure would not have
occurred but for (I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party
to this Agreement) or (II) a Change in Tax Law.
(ii)Liability. If:--
(1) X is required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, to make any deduction or
withholding in respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii)Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary
action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision of
its constitutional documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv)Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii)upon reasonable demand by such other party, any form or document that
may be required or reasonably requested in writing in order to allow such
other party or its Credit Support Provider to make a payment under this
Agreement or any applicable Credit Support Document without any deduction
or withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the
legal or commercial position of the party in receipt of such demand), with
any such form or document to be accurate and completed in a manner
reasonably satisfactory to such other party and to be executed and to be
delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii)Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction
of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however described) in
respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has
resulted in such Specified Indebtedness becoming, or becoming capable at
such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any
of the events specified in clauses (1) to (7) (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer:--
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party):--
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii)Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties
shall be as specified for such Additional Termination Event in the
Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii)Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of
its Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)( 1) or
a Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to Terminate. If:--
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then continuing,
designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii)Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii)Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an
Event of Default:--
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party. If that amount is
a positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting
Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event:--
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and
to the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in
respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:--
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it is a
negative number, X will pay the absolute value of that amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv)Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii)if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv)if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii)waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Xxx 0000 or any modification, extension or
reenactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a) (iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
BARCLAYS BANK PLC U.S. BANK NATIONAL ASSOCIATION, NOT
INDIVIDUALLY, BUT SOLELY AS
TRUSTEE ON BEHALF OF THE TRUST
CREATED PURSUANT TO THE POOLING AND
SERVICING AGREEMENT
(THE "TRUST") WITH RESEPCT TO GS
MORTGAGE SECURITIES CORP.,
MORTGAGE-BACKED PASS-THROUGH
CERTIFICATES, SERIES 2006-HE2
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------- ----------------------------------
Name: Xxxxx Xxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director Title: Vice President, U.S. Bank
Date: April 6, 2006 National Association
Date: April 6, 2006
(Multicurrency - Cross Border)
ISDA(R)
International Swaps and Derivatives Association, Inc.
SCHEDULE
to the
Master Agreement
dated as of April 6, 2006
between
U.S. BANK NATIONAL ASSOCIATION, NOT
INDIVIDUALLY, BUT SOLELY AS TRUSTEE ON
BEHALF OF THE TRUST CREATED PURSUANT TO
THE POOLING AND SERVICING AGREEMENT
BARCLAYS BANK PLC and (THE "TRUST") WITH RESEPCT TO GS
MORTGAGE SECURITIES CORP.,
MORTGAGE-BACKED PASS-THROUGH
CERTIFICATES, SERIES 2006-HE2
--------------------------------- ---------------------------------------
("Party A") ("Party B")
Part 1
Termination Provisions
(a) "Specified Entity" means in relation to Party A for the purpose of:
Section 5(a)(v), Not Applicable
Section 5(a)(vi), Not Applicable
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable
and in relation to Party B for the purpose of:
Section 5(a)(v), Not Applicable
Section 5(a)(vi), Not Applicable
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable
(b) "Specified Transaction" will have the meaning specified in Section 14 of
this Agreement.
(c) Certain Events of Default. The following Events of Default will apply to the
parties as specified below, and the definition of "Event of Default" in
Section 14 is deemed to be modified accordingly:
Section 5(a)(i) (Failure to Pay or Deliver) will apply to Party A and
Party B.
Section 5(a)(ii) (Breach of Agreement) will not apply to Party A or
Party B.
Section 5(a)(iii) (Credit Support Default) will apply to Party A and
will not apply to Party B.
Section 5(a)(iv) (Misrepresentation) will not apply to Party A or Party
B.
Section 5(a)(v) (Default under Specified Transaction) will not apply to
Party A or Party B.
Section 5(a)(vi) (Cross Default) will not apply to Party A or Party B.
Section 5(a)(vii)(2) (Bankruptcy) will not apply to Party B.
Section 5(a)(viii) (Merger without Assumption) will apply to Party A and
will not apply to Party B.
(d) Termination Events. The following Termination Events will apply to the
parties as specified below:
Section 5(b)(i) (Illegality) will apply to Party A and Party B.
Section 5(b)(ii) (Tax Event) will apply to Party A and Party B.
Section 5(b)(iii) (Tax Event upon Merger) will apply to Party A and will
not apply to Party B; provided for clarification that Party B may be a
Burdened Party for purpose of this provision.
Section 5(b)(iv) (Credit Event upon Merger) will not apply to Party A or
Party B.
(e) The "Automatic Early Termination" provision of Section 6(a) of this
Agreement will not apply to Party A and will not apply to Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "Termination Currency" means United States Dollars.
(h) Additional Termination Events. The following Additional Termination Events
will apply, in each case with respect to Party B as the sole Affected Party
(unless otherwise provided below):
(i) Party A fails to comply with the Downgrade Provisions as set forth in
Part 5(a). For all purposes of this Agreement, Party A shall be the
sole Affected Party with respect to the occurrence of a Termination
Event described in this Part 1(h)(i).
(ii) The Trust (as defined in the Pooling and Servicing Agreement, dated as
of April 1, 2006 (the Pooling and Servicing Agreement), among GS
MORTGAGE SECURITIES CORP., as depositor, Xxxxxx Servicing LP, as
servicer, Credit-Based Asset Servicing and Securitization LLC, as
seller, and U.S. Bank National Association, as trustee (the Trustee))
is terminated pursuant to the Pooling and Servicing Agreement and all
rated Certificates have been paid in accordance with the terms of the
Pooling and Servicing Agreement.
(iii) If any amendment and/or supplement to the Pooling and Servicing
Agreement (or any other Basic Document) is made without the prior
written consent of Party A (such consent not to be unreasonably
withheld), if such amendment and/or supplement would: (a) materially
and adversely affect any of Party A's rights or obligations under this
Agreement; or (b) materially and adversely impact the ability of Party
B to fully perform any of Party B's obligations under this Agreement.
In connection with such Additional Termination Event, Party B shall be
the sole Affected Party.
(iv) Notice of the requisite amount of the Terminator's intention to
exercise its option to purchase the Mortgage Loans pursuant the
Pooling and Servicing Agreement is given by the Trustee to
Certificateholders pursuant to the Pooling and Servicing Agreement;
provided, however, that notwithstanding the provisions of section
6(b)(iv) of this Agreement, either Party A or Party B may designate an
Early Termination Date (such date shall not be prior to the final
Distribution Date under the Pooling and Servicing Agreement) in
respect of this Additional Termination Event.
(v) If, upon the occurrence of a Swap Disclosure Event (as defined below)
Party A has not, within 10 days after such Swap Disclosure Event (or,
if the tenth calendar day after such Disclosure Event is not a
Business Day, by the Business Day immediately preceding the tenth
calendar day after the Disclosure Event) complied with any of the
provisions set forth in clause 3 of this Part 1(h)(v), then an
Additional Termination Event shall have occurred with respect to Party
A and Party A shall be the sole Affected Party with respect to such
Additional Termination Event.
1. Party A agrees and acknowledges that GS MORTGAGE SECURITIES CORP.,
not in its individual capacity but solely as depositor (the
"Depositor") is required under Regulation AB under the Securities
Act of 1933, as amended, and the Securities Exchange Act of 1934,
as amended (the "Exchange Act") ("Regulation AB"), to disclose
certain financial information regarding Party A or its group of
affiliated entities, if applicable, depending on the aggregate
"significance percentage" of this Agreement and any other
derivative contracts between Party A or its group of affiliated
entities, if applicable, and Counterparty, as calculated from time
to time in accordance with Item 1115 of Regulation AB.
2. It shall be a swap disclosure event ("Swap Disclosure Event") if,
on any Business Day after the date hereof, Depositor requests from
Party A the applicable financial information described in Item
1115 of Regulation AB (the "Swap Financial Disclosure").
3. Upon the occurrence of a Swap Disclosure Event, Party A will, if
such Swap Financial Disclosure is not reasonably publicly
available on "XXXXX" or Party A's internet home page, promptly
upon reasonable written request (and at its own expense), (a)
provide to Depositor the Swap Financial Disclosure, or (b) secure
another entity to replace Party A as party to this Agreement on
terms substantially similar to this Agreement and subject to prior
notification to the Swap Rating Agencies, which entity (or a
guarantor therefor) meets or exceeds the Approved Rating
Thresholds (and which satisfies the Rating Agency Condition) and
which entity (x) is able to comply with the requirements of Item
1115 of Regulation AB and (y) indemnifies and holds harmless
Depositor, its respective directors or officers and any person
controlling Depositor, from and against any and all losses,
claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in any Swap
Financial Disclosure or caused by any omission or alleged omission
to state in any such Swap Financial Disclosure a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading or (c) obtain a guaranty of Party A' obligations
under this Agreement from an affiliate of Party A that satisfies
the Rating Agency Condition and that is able to comply with the
financial information disclosure requirements of Item 1115 of
Regulation AB, such that disclosure provided in respect of the
affiliate will satisfy any disclosure requirements applicable to
the Swap Provider, and cause such affiliate to provide Swap
Financial Disclosure. If permitted by Regulation AB, any required
Swap Financial Disclosure may be provided by incorporation by
reference from reports filed pursuant to the Exchange Act.
4. Party A and any guarantor agree that, in the event that Party A
provides Swap Financial Disclosure to Depositor in accordance with
Part 1(h)(v)(3) or causes its affiliate to provide Swap Financial
Disclosure to Depositor in accordance with Part 1(h)(v)(3), Party
A and any such guarantor will indemnify and hold harmless
Depositor, its respective directors or officers and any person
controlling Depositor, from and against any and all losses,
claims, damages and liabilities caused by any untrue statement or
alleged untrue statement of a material fact contained in such Swap
Financial Disclosure or caused by any omission or alleged omission
to state in such Swap Financial Disclosure a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading.
5. The Depositor shall be an express third party beneficiary of this
Agreement as if a party hereto to the extent of the Depositor's
rights explicitly specified herein.
Part 2
Tax Representations.
(a) Payer Representations. For the purpose of Section 3(e) of this Agreement,
Party A will make the following representation and Party B will make the
following representation:
It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to
make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of
any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of this Agreement, provided that
it shall not be a breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or document under
Section 4(a)(iii) of this Agreement by reason of material prejudice to its
legal or commercial position.
(b) Payee Representations. For the purpose of Section 3(f) of this Agreement,
Party A and Party B make the representations specified below, if any:
(i) With respect to payments made to Party A which are not effectively
connected to the U.S.: It is a non-U.S. branch of a foreign person
for U.S. federal income tax purposes
With respect to payments made to Party A which are effectively
connected to the U.S.: Each payment received or to be received
by it in connection with this Agreement will be effectively
connected with its conduct of a trade or business in the U.S.
(ii) With respect to payments made to Party B which are not effectively
connected to the US:
It is fully eligible for the benefits of the "Business Profits"
, the "Interest" provision or the "Other Income" provision (if
any) of the Double Tax Treaty between UK and the US with respect
to any payment described in such provisions and received or to
be received by it in connection with this Agreement and no such
payment is attributable to a trade or business carried on by it
through a permanent establishment in the US.
(iii) Party B is a common law trust formed under the laws of the State
of New York.
Part 3
Agreement to Deliver Documents.
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party required Form/Document/Certificate Date by which to be delivered
to deliver
document
Party A and Any form or document required or reasonably requested to Promptly upon
Party B allow the other party to make payments under the Agreement reasonable demand by the
without any deduction or withholding for or on account of other party.
any Tax, or with such deduction or withholding at a reduced
rate.
(b) Other documents to be delivered are:
Party required Form/Document/Certificate Date by which to be Covered by
to deliver delivered Section 3(d)
document Representation
Party B Certified copy of the Board of Directors resolution (or Concurrently with the Yes
equivalent authorizing documentation) which sets forth the execution and
authority of each signatory to this Agreement and each delivery of this
Credit Support Document (if any) signing on its behalf and Agreement.
the authority of such party to enter into Transactions
contemplated and performance of its obligations hereunder.
Party A and Incumbency Certificate (or, if available the current Concurrently with the Yes
Party B authorized signature book or equivalent authorizing execution and
documentation) specifying the names, titles, authority and delivery of this
specimen signatures of the persons authorized Agreement unless
to execute this Agreement which sets forth the previously delivered and
specimen signatures of each signatory to still in full force and
this Agreement, each Confirmation and each effect.
Credit Support Document (if any) signing on its behalf.
Party A Opinions of counsel of Party A reasonably satisfactory to Concurrently with the No
Party B. execution and
delivery of the
Confirmation.
Party B Opinions of counsel of Party B reasonably satisfactory to Concurrently with the No
Party A. execution and
delivery of the
Confirmation.
Party B An executed copy of the Pooling and Servicing Agreement. Within 30 days after No
the date of this
Agreement.
Part 4.
Miscellaneous.
(a) Addresses for Notices. For the purposes of Section 12(a) of this Agreement:
Party A:
Addresses for notices to Party A under Sections 5 or 6 (other than notices
under Section 5(a)(i)) shall be sent to:
Address: 5 Xxx Xxxxx Xxxxxxxxx
Xxxxxx Xxxxx
X00 0XX
Facsimile: 00(00) 000 00000
Phone: 00(00) 000 00000
All other notices to Party A shall be sent directly to the Office through
which Party A is acting for the relevant Transaction, using the address
and contact particulars specified in the Confirmation of that Transaction
or otherwise notified.
Party B:
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-Xx0x
Xx. Xxxx, XX 00000
Facsimile: (000) 000-0000
Phone: (000) 000-0000
(b) Process Agent. For the purposes of Section 13(c) of this Agreement:
Party A appoints as its Process Agent: Not Applicable.
Party B appoints as its Process Agent: Not Applicable.
(c) Offices. With respect to Party A only, the provisions of Section 10(a) will
apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:
Party A is a Multibranch Party and may act through its London and New York
Offices.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support Document: the ISDA
Credit Support Annex and supplementary "Paragraph 13 - Elections & Variables" in
the form appended hereto shall constitute a "Credit Support Document" in
relation to Party A with respect to all of the obligations of Party A and for
all purposes of this Agreement dated as of a date even herewith.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Not Applicable, unless
Party A has a person guarantee its payment obligations under this Agreement
in order to remedy a Rating Event, in which event such person shall be a
Credit Support Provider.
Credit Support Provider means in relation to Party B: Not Applicable.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
choice of law doctrine other than New York General Obligations Law Sections
5-1401 and 5-1402).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement
will apply to all Transactions (in each case starting from the date of this
Agreement). Notwithstanding anything to the contrary in Section 2(c),
amounts that are payable with respect to the same Calculation Period shall
be netted, as provided in Section 2(c), even if such amounts are not due on
the same Payment Date,
(j) "Affiliate." Each of Party A and Party B shall be deemed to have no
Affiliates, including for purposes of Section 6(b)(ii).
(k) Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in the second
line of subparagraph (i) thereof the word "non-", (ii) deleting "; and" from
the end of subparagraph 1 and inserting "." at the end of such provision,
and (iii) deleting the final paragraph thereof.
(l) Waiver of Jury Trial. Each party waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in respect of any
suit, action or proceeding relating to this Agreement or any Credit Support
Document. Each party certifies (i) that no representative, agent or attorney
of the other party or any Credit Support Provider has represented, expressly
or otherwise, that such other party would not, in the event of such a suit,
action or proceeding, seek to enforce the foregoing waiver and (ii)
acknowledges that it and the other party have been induced to enter into
this Agreement and provide for any Credit Support Document, as applicable,
by, among other things, the mutual waivers and certifications in this
Section.
(m) Consent to Recording. Each party (i) consents to the recording of the
telephone conversations of trading and marketing personnel of the parties
and their Affiliates in connection with this Agreement or any potential
transaction and (ii) if applicable, agrees to obtain any necessary consent
of, and give notice of such recording to, such personnel of it and its
Affiliates.
(n) Severability. If any term, provision, covenant, or condition of this
Agreement, or the application thereof to any party or circumstance, shall be
held to be illegal, invalid or unenforceable (in whole or in part) for any
reason, the remaining terms, provisions, covenants and conditions hereof
shall continue in full force and effect as if this Agreement had been
executed with the illegal, invalid or unenforceable portion eliminated, so
long as this Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter of
this Agreement and the deletion of such portion of this Agreement will not
substantially impair the respective benefits or expectations of the parties
to this Agreement.
The parties shall endeavor to engage in good faith negotiations to replace
any illegal, invalid or unenforceable term, provision, covenant or condition
with a valid or enforceable term, provision, covenant or condition, the
economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable term, provision, covenant or condition.
Part 5.
Other Provisions.
(a) Downgrade Provisions.
1. Ratings Downgrade Event. It shall be a "Ratings Downgrade Event" if
at any time:
(i) with respect to Moody's, if Party A has only a long-term rating by
Moody's, Party A fails to have a long-term senior, unsecured debt
obligation rating, credit rating or other similar rating (as the
case may be, the "Long-Term Rating") of at least "A1" by Moody's (or
has a Long-Term Rating of "A1" on negative credit watch by Moody's)
or, if Party A has both a Long Term Rating and a short-term senior,
unsecured debt obligation rating, credit rating or other similar
rating (as the case may be, the "Short-Term Rating"), it will be a
Ratings Downgrade Event if at any time Party A fails to have a
Long-Term Rating of at least "A2" by Moody's and a short-term rating
of at least "P-1" by Moody's (and, in each case, such rating is not
on negative credit watch by Moody's)
or
(ii) with respect to S&P, Party A fails to have a Short-Term Rating of
at least "A-1" by S&P or (ii) if Party A does not have a Short-Term
Rating by S&P, Party A fails to have a Long-Term Rating of at least
"A+" by S&P.
If a Ratings Downgrade Event occurs, then, within ten (10) Business Days
following the Ratings Downgrade Event (unless, within ten (10) Business
Days of such Ratings Event, each of Standard and Poor's, a Division of
XxXxxx-Xxxx Companies, Inc. ("S&P"), and Xxxxx'x Investors Service, Inc.
("Moody's") (each a "Rating Agency") has reconfirmed the rating of the
Certificates which was in effect immediately prior to such Ratings
Event), Party A shall take one of the following three actions:
(a) Replace Itself: Use its good faith efforts to find a party
acceptable to Party B, which acceptance, subject to the Rating
Agency Condition, shall not be unreasonably withheld, to whom all of
Party A's interests and obligations under this Agreement shall be
assigned at no cost to Party B, and following which Party A shall be
released from all further obligations under this Agreement.
(b) Obtain a Guaranty: Obtain a guaranty, subject to the Rating
Agency Condition and at Party A's expense of Party A's obligations
under this Transaction from a third party that meets or exceeds the
Approved Ratings Threshold, in form and substance or
(c) Post Collateral: Post collateral, at Party A's expense, pursuant
to the Credit Support Annex Dated as of a date even herewith and
subject to the Rating Agency Condition.
(d) Other Arrangement with Ratings Agency Approval: Establish any
other arrangement satisfactory to the applicable Rating Agency which
will be sufficient to restore the immediately prior ratings of the
Certificates.
If Party A has failed to take one of the aforementioned actions within
ten (10) Business Days of the Ratings Downgrade Event, then, at the
option of Party B, such failure shall constitute an Additional
Termination Event with Party A as the Affected Party.
For the avoidance of doubt, both parties agree that Party A shall only
be required to post collateral pursuant to the terms of the CSA for the
period (the "Collateral Requirement Period") during which Party A's
Ratings Downgrade Event is continuing or until a replacement or
guarantor, meeting the requirements set forth above, is in place. Once
the Collateral Requirement Period has ended, Counterparty's Custodian
shall return any such Eligible Collateral to Party A as soon as
reasonably practicable and to the extent such Collateral has not already
been applied in accordance with this Agreement, including the Credit
Support Annex.
3. S&P Substitution Event. It shall also be a "S&P Substitution Event"
if Party A or its Credit Support Provider (if applicable) has a
Long-Term Rating of less than "BBB-" or a Short-Term Rating of less
than "A-3," if applicable, by S&P or if either such rating is
withdrawn by S&P. In such case, Party A must within 10 days from
such S&P Substitution Event, Party A, (while collateralizing any
Exposure to Party B), transfer this Agreement and any and all
Transaction hereunder at Party A's sole cost and expense, in whole,
but not in part, to a counterparty that satisfies the Required Swap
Counterparty Rating, subject to satisfaction of the Rating Agency
Condition. Failure to comply with this provision shall be an
Additional Termination Event with Party A as the sole Affected
Party.
4. Moody's Guaranty or Substitution Event. If Moody's lowers Party A's
Long-Term Rating to or below "Baa1" or Party A's Short-Term Rating
to or below "P-3", Party A shall take either of the actions
specified under (a) or (b) directly below (while in the interim
period before the completion of such action posting collateral, at
Party A's expense, under the Credit Support Annex dated as of a date
even herewith):
(a) Replace Itself: Use its good faith efforts to find a party
acceptable to Party B, which acceptance, subject to the Rating
Agency Condition, shall not be unreasonably withheld, to whom all of
Party A's interests and obligations under this Agreement shall be
assigned at no cost to Party B, and following which Party A shall be
released from all further obligations under this Agreement or
(b) Obtain a Guaranty: Obtain a guaranty, subject to the Rating
Agency Condition and at Party A's expense of Party A's obligations
under this Transaction from a third party that meets or exceeds the
Approved Ratings Threshold, in form and substance.
"Rating Agency Condition" means, with respect to any particular proposed
act or omission to act hereunder that the party acting or failing to act
must consult with any of the Rating Agencies then providing a rating of
the Certificates and receive from the Rating Agencies a prior written
confirmation that the proposed action or inaction would not cause a
downgrade or withdrawal of the then-current rating of the Certificates.
(b) Section 3(a) of this Agreement is hereby amended to include the following
additional representations after paragraph 3(a)(v):
(vi) Eligible Contract Participant. It is an "eligible contract participant"
as defined in section 1a(12) of the U.S. Commodity Exchange Act.
(vii) Individual Negotiation. This Agreement and each Transaction hereunder
is subject to individual negotiation by the parties.
(viii) Relationship between Party A and Party B. Subject as provided in Part
5(g), each of Party A and Party B will be deemed to represent to the other
on the date on which it enters into a Transaction or an amendment thereof
that (absent a written agreement between Party A and Party B that expressly
imposes affirmative obligations to the contrary for that Transaction):
(1) Principal. It is acting as principal and not as agent when entering
into this Agreement and each Transaction.
(2) Non-Reliance. Party A is acting for its own account and, with
respect to Party B, the Trustee is acting on behalf of the trust under
the Pooling and Servicing Agreement. Each party has made its own
independent decisions to enter into that Transaction and as to whether
that Transaction is appropriate or proper for it based upon its own
judgment and upon advice from such advisors as it has deemed necessary.
It is not relying on any communication (written or oral) of the other
party as investment advice or as a recommendation to enter into that
Transaction; it being understood that information and explanations
related to the terms and conditions of a Transaction shall not be
considered investment advice or a recommendation to enter into that
Transaction. No communication (written or oral) received from the other
party shall be deemed to be an assurance or guarantee as to the expected
results of that Transaction.
(3) Evaluation and Understanding. It is capable of evaluating and
understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks of
this Agreement and each Transaction hereunder. It is also capable of
assuming, and assumes, all financial and other risks of this Agreement
and each Transaction hereunder.
(4) Status of Parties. The other party is not acting as a fiduciary or
an advisor for it in respect of that Transaction.
(d) Section 1(c). For purposes of Section 1(c) of the Agreement, this
Transaction shall be the sole Transaction under the Agreement.
(e) Transfer.
Neither Party A nor Party B is permitted to assign, novate or transfer
(whether by way of security or otherwise) as a whole or in part any of
its rights, obligations or interests under this Agreement or any
Transaction without the prior written consent of the other party;
provided, however, that (i) Party A may make such a transfer or
assignment of this Agreement pursuant to a consolidation or amalgamation
with, or merger with or into, or transfer of substantially all of its
assets to, another entity, or an incorporation, reincorporation or
reconstitution, and (ii) Party A may transfer or assign this Agreement
to any Person, including, without limitation, another of Party A's
offices, branches or affiliates (any such Person, office, branch or
affiliate, a "Transferee") on at least five Business Days' prior written
notice to Party B and the Trustee; provided that, with respect to clause
(ii), (A) as of the date of such transfer the Transferee will not be
required to withhold or deduct on account of a Tax from any payments
under this Agreement unless the Transferee will be required to make
payments of additional amounts pursuant to Section 2(d)(i)(4) of this
Agreement in respect of such Tax (B) a Termination Event or Event of
Default does not occur under this Agreement as a result of such
transfer; (C) such notice is accompanied by a written instrument
pursuant to which the Transferee acquires and assumes the rights and
obligations of Party A so transferred; and (D) Party A will be
responsible for any costs or expenses incurred in connection with such
transfer. Party B will execute such documentation as is reasonably
deemed necessary by Party A for the effectuation of any such transfer.
Notwithstanding the foregoing, no transfer (including, but not limited
to transfers under Section 7 or otherwise) shall be made unless the
transferring party obtains a written acknowledgment from each of the
Rating Agencies that, notwithstanding such transfer, the then-current
ratings of the Certificates will not be reduced or withdrawn.
Except as specified otherwise in the documentation evidencing a transfer
or assignment, a transfer or assignment of all the obligations of Party
A made in compliance with this Section 7 will constitute an acceptance
and assumption of such obligations (and any related interests so
transferred) by the Transferee, a novation of the transferee in place of
Party A with respect to such obligations (and any related interests so
transferred), and a release and discharge by Party B of Party A from,
and an agreement by Party B not to make any claim for payment,
liability, or otherwise against Party A with respect to, such
obligations from and after the effective date of the transfer.
(f) Trustee Capacity. It is expressly understood and agreed by the parties
hereto that (i) this Agreement is executed and delivered by U.S. Bank
National Association, not individually or personally but solely as trustee
of the trust created pursuant to the Pooling and Servicing Agreement (the
"Trust"), in the exercise of the powers and authority conferred and vested
in it under the Pooling and Servicing Agreement, (ii) each of the
representations, undertakings and agreements herein made on the part of
Party B is made and intended not as personal representations, undertakings
and agreements by U.S. Bank National Association but is made and intended
for the purpose of binding only the Trust, (iii) nothing herein contained
shall be construed as creating any liability on the part of U.S. Bank
National Association, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any,
being expressly waived by the parties hereto and by any Person claiming by,
through or under the parties hereto, and (iv) under no circumstances shall
U.S. Bank National Association be personally liable for the payment of any
indebtedness or expenses of Party B or be liable for the breach or failure
of any obligation, representation, warranty or covenant made or undertaken
by Party B under this Agreement or any other related documents, as to all of
which recourse shall be had solely to the assets of the Trust in accordance
with the terms of the Pooling and Servicing Agreement.
Party B represents that:
(i) Status. U.S. Bank National Association (the "Trustee") is trustee of
the Trust whose appointment is valid and effective both under the laws
of the State of New York and under the Pooling and Servicing Agreement,
and the Trustee has the power to own assets in its capacity as trustee
of the Trust.
(ii) Powers. In its capacity as trustee of the Trust, the Trustee has
power under the Pooling and Servicing Agreement to execute this
Agreement and any other documentation relating to this Agreement to
which the Trustee is party, to deliver this Agreement and any other
documentation relating to this Agreement that it is required by this
Agreement to deliver and to perform its obligations (on behalf of the
Trust) under this Agreement and any obligations (on behalf of the Trust)
it has under any Credit Support Document to which the Trustee is party
and has taken all necessary action to authorize such execution, delivery
and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to the Trustee or the
Trust, any provision of the Pooling and Servicing Agreement, any order
or judgment of any court or other agency of government applicable to the
Trustee, the Trust or any assets of the Trust, or any contractual
restriction binding on or affecting the Trustee, the Trust or any assets
of the Trust;
(iv) Consents. All governmental and other consents that are required
have been obtained by the Trustee with respect to this Agreement or any
Credit Support Document to which the Trustee is party have been obtained
and are in full force and effect and all conditions of such consents
have been complied with; and
(v) Obligations Binding. The obligation of the Trustee under this
Agreement and any Credit Support Document to which the Trustee is party
constitute legal, valid and binding obligations of the Trustee solely in
its capacity as trustee of the Trust, enforceable against the Trust in
accordance with their respective terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws
affecting creditors' rights generally and subject, as to enforceability,
to equitable principles of general application (regardless of whether
enforcement is sought in a proceeding in equity or law)) and no
circumstances are known to the Trustee which would or might prevent the
Trustee from having recourse to the assets of the Trust for the purposes
of meeting such obligations.
(g) Proceedings. Party A shall not institute against or cause any other person
to institute against, or join any other person in instituting against the
Depositor or Party B, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any
federal or state bankruptcy, dissolution or similar law, for a period of one
year and one day, or if longer the applicable preference period then in
effect, following indefeasible payment in full of the Certificates. Nothing
shall preclude, or be deemed to stop, Party A (i) from taking any action
prior to the expiration of the aforementioned one year and one day period,
or if longer the applicable preference period then in effect, in (A) any
case or proceeding voluntarily filed or commenced by Party B or (B) any
involuntary insolvency proceeding filed or commenced by a Person other than
Party A, or (ii) from commencing against Party B or any of the Collateral
any legal action which is not a bankruptcy, reorganization, arrangement,
insolvency, moratorium, liquidation or similar proceeding.
(h) Pooling and Servicing Agreement.
Capitalized terms used in this Agreement that are not defined herein and are
defined in the Pooling and Servicing Agreement shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
(i) Set-off. Notwithstanding any provision of this Agreement or any other
existing or future agreements, each of Party A and Party B irrevocably
waives as to itself any and all contractual rights it may have to set off,
net, recoup or otherwise withhold or suspend or condition its payment or
performance of any obligation to the other party under this Agreement
against any obligation of one party hereto to the other party hereto arising
outside of this Agreement (which Agreement includes without limitation, the
Master Agreement to which this Schedule is attached, this Schedule and the
Confirmation). The provisions for set-off set forth in Section 6(e) of this
Agreement shall not apply for purposes of this Transaction.
(j) Regarding Party A. Party B acknowledges and agrees that Party A has had and
will have no involvement in and, accordingly Party A accepts no
responsibility for: (i) the establishment, structure, or choice of assets of
Party B; (ii) the selection of any person performing services for or acting
on behalf of Party B; (iii) the selection of Party A as the Counterparty;
(iv) the terms of the Certificates; (v) the preparation of or passing on the
disclosure and other information (other than disclosure and information
furnished by Party A) contained in any offering circular for the
Certificates, the Pooling and Servicing Agreement, or any other agreements
or documents used by Party B or any other party in connection with the
marketing and sale of the Certificates; (vi) the ongoing operations and
administration of Party B, including the furnishing of any information to
Party B which is not specifically required under this Agreement; or (vii)
any other aspect of Party B's existence.
(j) Amendments. This Agreement will not be amended unless Party B shall have
received prior written confirmation from each of the Rating Agencies that
such amendment will not cause S&P or Moody's to downgrade or withdraw its
then-current ratings of any outstanding Certificates.
(k) Gross-up. The provisions of Section 2(d)(i)(4) and 2(d)(ii) of this
Agreement shall not apply to Party B and Party B shall not be required to
pay any additional amounts referred to therein.
IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorized officers as of the date hereof.
BARCLAYS BANK PLC
By: /s/ Xxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
Date: April 6, 2006
U.S. BANK NATIONAL ASSOCIATION, NOT INDIVIDUALLY,
BUT SOLELY AS TRUSTEE ON BEHALF OF THE TRUST
CREATED PURSUANT TO THE POOLING AND SERVICING
AGREEMENT (THE "TRUST") WITH RESEPCT TO GS
MORTGAGE SECURITIES CORP., MORTGAGE-BACKED
PASS-THROUGH CERTIFICATES, SERIES 2006-HE2
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President, U.S. Bank National
Association
Date: April 6, 2006
ISDA Master Agreement Schedule Signature page
ISDA(R)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
Elections and Variables
to the ISDA Credit Support Annex
dated as of April 6, 2006
between
BARCLAYS BANK PLC and U.S. BANK NATIONAL ASSOCIATION, NOT
INDIVIDUALLY, BUT SOLELY AS TRUSTEE ON
BEHALF OF THE TRUST CREATED PURSUANT TO
THE POOLING AND SERVICING AGREEMENT
(THE "TRUST") WITH RESEPCT TO GS
MORTGAGE SECURITIES CORP.,
MORTGAGE-BACKED PASS-THROUGH
CERTIFICATES, SERIES 2006-HE2
("Party A") ("Party B")
This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule, the Confirmation (Reference Number 1142419B
(the "Confirmation") and is a Credit Support Document under this Agreement with
respect to each party.
Paragraph 13.
(a) Security Interest for "Obligations". The term "Obligations" as used in
this Annex includes the following additional obligations:
With respect to Party A: None.
With respect to Party B: None.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) "Delivery Amount" has the meaning specified in Paragraph 3(a)
, except that the words "upon a demand made by the Secured
Party on or promptly following a Valuation Date" shall be
deleted and replaced with the words "not later than the close
of business on the next Local Business Day following a
Valuation Date"; and.
(B) "Return Amount" has the meaning specified in Paragraph 3(b).
(C) "Credit Support Amount". shall not have the meaning specified
in Paragraph 3(b) and, instead, will have the following
meaning:
"Credit Support Amount" means, (a) for any Valuation Date on
which a Ratings Event (as defined in the Agreement) has
occurred and is continuing, the Secured Party's Modified
Exposure for that Valuation Date.
(ii) Eligible Credit Support. On any date, the following items will
qualify as "Eligible Credit Support" for each party:
Valuation
Percentage
(A) cash in U.S Dollars 100%
(B) negotiable debt obligations issued after 18 July 1984 by the U.S. 98.0%
Treasury Department having a residual maturity on such date of less
than 1 year (with local and foreign currency issuer ratings of
Moody's Aa2 and S&P AA or above)
(C) negotiable debt obligations issued after 18 July 1984 by the U.S. To Be Determined
Treasury Department having a residual maturity on such date equal to
or greater than 1 year but less than 5 years (with local and foreign
currency issuer ratings of Moody's Aa2 and S&P AA or above)
(D) negotiable debt obligations issued after l8 July 1984 by the U.S. To Be Determined
Treasury Department having a residual maturity on such date equal to
or greater than 5 years but less than 10 years (with local and
foreign currency issuer ratings of Moody's Aa2 and S&P AA or above)
(E) negotiable debt obligations of the Government National Mortgage To Be Determined
Association, the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation, the Student Loan Marketing
Association or a Federal Home Loan Bank (all entities rated Moody's
Aal and S&P AA+ or above) with a residual maturity on such date
equal to or greater than 1 year but less than 3 years.
(F) negotiable debt obligations of the Government National Mortgage To Be Determined
Association, the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation, the Student Loan Marketing
Association or a Federal Home Loan Bank (all entries rated Xxxxx'x
Xx 1 and S&P AA+ or above) with a residual maturity on such date
equal to or greater than 3 years but less than 5 years.
(G) negotiable debt obligations of the Government National Mortgage To Be Determined
Association, the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation, the Student Loan Marketing
Association or a Federal Home Loan Bank (all entries rated Xxxxx'x
Aal and S&P AA+ or above) with a residual maturity on such date
equal to or greater than 5 years but less than 7 years.
(H) negotiable debt obligations of the Government National Mortgage To Be Determined
Association, the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation, the Student Loan Marketing
Association or a Federal Home Loan Bank (all entries rated Xxxxx'x
Aal and S&P AA+ or above) with a residual maturity on such date
equal to or greater than 7 years but less than 10 years.
For the avoidance of doubt, where negotiable debt obligations are rated by only
one of the above relevant rating agencies, the rating applied will be based on
the rating of that agency. Notwithstanding the foregoing, the Eligible
Collateral referenced above may only be posted if S&P has assigned a rating to
such Eligible Collateral.
Where the ratings of the relevant agencies differ with respect to the same
negotiable debt obligation, the lower of the ratings shall apply.
In addition, upon a Ratings Event, Party A shall agree the Valuation Percentage
in relation to (C) through (H) above with the relevant rating agency, which
shall be S&P, Xxxxx'x and Fitch (to the extent such ratings agency has provided
a rating for the underlying Certificates); provided, however, that if Party A is
required to post collateral in accordance with the terms of this Agreement it
shall post only (A) and (B) above until such time as the Valuation Percentages
are agreed.
(iii) Other Eligible Support. Such Other Eligible Support as the Pledgor may
designate; provided, at the expense of the Pledgor, the prior written
consent of the relevant rating agency, which shall be S&P, Xxxxx'x and
Fitch (to the extent such ratings agency has provided a rating for the
underlying Certificates)), shall have been obtained. For the avoidance of
doubt there are no items which qualify as Other Eligible Support as of the
date of this Annex.
(iv) Thresholds.
(A) "Independent Amount" means zero.
(B) "Threshold" means for Party A:
1. infinity, unless (i) a Ratings Event occurs and is continuing
and (ii) Party A has not otherwise complied with Part 5(a) of
this Agreement, then its Threshold shall be zero, or
2. in the event that Party A has otherwise complied with Part
5(a)of this Agreement, its Threshold shall continue to be
infinity.
"Threshold" means, for Party B: infinity
(C) "Minimum Transfer Amount" means USD 100,000, provided, however, with
respect to the Secured Party at any time when the Secured Party is a
Defaulting Party, "Minimum Transfer Amount" means zero.
(D) Rounding: The Delivery Amount and the Return Amount will not be
rounded.
(c) Valuation and Timing.
(i) "Valuation Agent" means Party A. The valuation agent's calculations
shall be made in accordance with market practices using commonly
accepted third party sources such as Bloomberg or Reuters.
(ii) "Valuation Date" means each Local Business Day which, if treated as
a Valuation Date, would result in a Delivery Amount or Return
Amount.
(iii) "Valuation Time" means the close of business in the city of the
Valuation Agent on the Local Business Day before the Valuation Date
or date of calculation, as applicable, provided that the
calculations of Value and Exposure will be made as of approximately
the same time on the same date.
(iv) "Notification Time" means 11:00 a.m., New York time, on a Local
Business Day.
(d) Conditions Precedent and Secured Party's Rights and Remedies. The
following Termination Event will be a "Specified Condition" for the party
specified (that party being the Affected Party if the Termination Event
occurs with respect to that party): None.
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
(ii) Consent. Not applicable.
(f) Dispute Resolution.
(i) "Resolution Time" means 1:00 p.m. New York time on the Local
Business Day following the date on which the notice of the dispute
is given under Paragraph 5.
Value. For the purpose of Paragraphs 5(i)(C) and 5(ii), on any date,
the Value of Eligible Credit Support will be calculated as follows:
For Eligible Credit Support comprised of cash, the amount of such
cash.
For Eligible Collateral comprising securities; the sum of (a)(x) the
last bid price on such date for such securities on the principal
national securities exchange on which such securities are listed,
multiplied by the applicable Valuation Percentage or (y) where any
such securities are not listed on a national securities exchange,
the bid price for such securities quoted as at the close of business
on such date by any principal market maker for such securities
chosen by the Valuation Agent, multiplied by the applicable
Valuation Percentage or (z) if no such bid price is listed or quoted
for such date, the last bid price listed or quoted (as the case may
be), as of the day next preceding such date on which such prices
were available; multiplied by the applicable Valuation Percentage;
plus (b) the accrued interest on such securities (except to the
extent that such interest shall have been paid to the Pledgor
pursuant to Paragraph 6(d)(ii) or included in the applicable price
referred to in subparagraph (a) above) as of such date.
(ii) Alternative. The provisions of Paragraph 5 will apply; provided that
the obligation of the appropriate party to deliver the undisputed
amount to the other party will not arise prior to the time that
would otherwise have applied to the Transfer pursuant to, or deemed
made, under Paragraph 3 if no dispute had arisen.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians.
Party B is not and will not be entitled to hold Posted Collateral.
Party B's Custodian will be entitled to hold Posted Collateral
pursuant to Paragraph 6(b); provided that the Custodian for Party B
shall be the same banking institution that acts as Indenture Trustee
for the Notes (as defined in the Indenture) for Party B.
Initially, the Custodian for Party B is : to be advised in writing
by Party B to Party A.
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c) will not
apply to Party B; therefore, Party B will not have any of the rights
specified in Paragraph 6(c)(i) or 6 (c)(ii); provided, however, that
the Trustee shall invest Cash Posted Credit Support in such
investments as designated by Party A, with losses (net of gains)
incurred in respect of such investments to be for the account of
Party A. The Secured Party is authorized to liquidate any Posted
Credit Support pursuant to written instructions from Party A.
(h) Distributions and Interest Amount.
(i) Interest Rate. The "Interest Rate" will be the rate earned on Cash
Posted Credit Support pursuant to clause (g)(ii) above.
(ii) Transfer of Interest Amount. The Transfer of the Interest Amount
will be made on each Distribution Date.
(iii) Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii)
will not apply.
(i) Additional Representation(s).
There are no additional representations by either party.
(j) Other Eligible Support and Other Posted Support.
(i) "Value" with respect to Other Eligible Support and Other Posted
Support shall have such meaning as the parties shall agree in
writing from time to time.
(ii) "Transfer" with respect to Other Eligible Support and Other Posted
Support shall have such meaning as the parties shall agree in
writing from time to time.
(k) Demands and Notices.
All demands, specifications and notices under this Annex will be made
pursuant to the Notices Section of this Agreement, save that any demand,
specification or notice:
(i) shall be given to or made at the following addresses:
If to Party A:
0 Xxx Xxxxx Xxxxxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX, England
Attention: Swaps Documentation
Facsimile No.: 0000-000-0000/6858
Telephone No.: 0000-000-0000/6904
with a copy to:
General Counsel's Office
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Notices to Party A shall not be deemed effective unless delivered to the
London address set forth above.
If to Party B:
As set forth in part 4(a) of the Schedule
or at such other address as the relevant party may from time to time
designate by giving notice (in accordance with the terms of this
paragraph) to the other party;
(ii) shall (unless otherwise stated in this Annex) be deemed to be
effective at the time such notice is actually received unless such
notice is received on a day which is not a Local Business Day or
after the Notification Time on any Local Business Day in which event
such notice shall be deemed to be effective on the next succeeding
Local Business Day.
(l) Address for Transfers.
Party B: To be notified by Party B to Party A at the time of the request
for Transfer
(m) Other Provisions.
(i) Additional Definitions. As used in this Annex:
"Local Business Day" means: (i) any day on which commercial banks
are open for business (including dealings in foreign exchange and
foreign currency deposits) in London, New York and the location of
the Trustee, and (ii) in relation to a Transfer of Eligible Credit
Support, a day on which the clearance system agreed between the
parties for the delivery of Eligible Credit Support is open for
acceptance and execution of settlement instructions (or in the case
of a Transfer of Cash or other Eligible Credit Support for which
delivery is contemplated by other means, a day on which commercial
banks are open for business (including dealings for foreign exchange
and foreign deposits) in New York and such other places as the
parties shall agree).
(ii) Holding Collateral. The Secured Party shall cause any Custodian
appointed hereunder to open and maintain a segregated account and to
hold, record and identify all the Posted Collateral in such
segregated account and, subject to Paragraph 8(a), such Posted
Collateral shall at all times be and remain the property of the
Pledgor and shall at no time constitute the property of, or be
commingled with the property of, the Secured Party or the Custodian.
(iii) Agreement as to Single Secured Party and Pledgor. Party A and Party
B agree that, notwithstanding anything to the contrary in this
Annex, (a) the term "Secured Party" as used in this Annex means only
Party B, (b) the term "Pledgor" as used in this Annex means only
Party A, (c) only Party A makes the pledge and grant in Paragraph 2,
the acknowledgement in the final sentence of Paragraph 8(a) and the
representations in Paragraph 9 and (d) Party A shall have no
obligations under this Annex other than during a Collateral
Requirement Period.
(iv) Form of Annex. The parties hereby agree that the text of the body of
this Annex is intended to be the printed form of ISDA Credit Support
Annex (Bilateral Form - ISDA Agreements Subject to New York Law
version) as published and copyrighted by the International Swaps and
Derivatives Association, Inc.
(v) Exposure. The Parties agree that in the event of a Ratings Event
relating to an action taken by S&P, the Valuation Agent shall verify
its calculation of the Secured Party's Exposure on a weekly basis
but shall verify such valuation by seeking two quotations from
Reference Market-makers at the end of each quarter. For the
avoidance of doubt, the Valuation Agent must (i) obtain at least 2
Market Quotations (as stated above) and (ii) may not obtain the
quotations referred to above from the same Reference Market-maker in
excess of four times during any 12 month period. Furthermore, the
Exposure valuations should reflect the higher of two bids from
Reference Market-makers that would be eligible and willing to
provide the market quoation in the absence of the current provider.
The collateral requirement should be based on the greater of the
internal and external market quoations. In the event the
verification procedures set forth above indicate that there is a
deficiency in the amount of Eligible Collateral that has been posted
to the Secured Party, the Pledgor shall post the amount of Eligible
Collateral necessary to cure such deficiency to the Secured Party
within three Local Business Days.
(vi) Expenses. Notwithstanding Paragraph 10, the Pledgor will be
responsible for, and will reimburse the Secured Party for, all
transfer and other taxes and other costs involved in the transfer of
Eligible Collateral.
(vii) Trustee Capacity. It is expressly understood and agreed by the
parties hereto that (i) this Agreement is executed and delivered by
U.S. Bank National Association, not individually or personally but
solely as trustee of the trust created pursuant to the Pooling and
Servicing Agreement (the "Trust"), in the exercise of the powers and
authority conferred and vested in it under the Pooling and Servicing
Agreement, (ii) each of the representations, undertakings and
agreements herein made on the part of Party B is made and intended
not as personal representations, undertakings and agreements by U.S.
Bank National Association but is made and intended for the purpose
of binding only the Trust, (iii) nothing herein contained shall be
construed as creating any liability on the part of U.S. Bank
National Association, individually or personally, to perform any
covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and
by any Person claiming by, through or under the parties hereto, and
(iv) under no circumstances shall U.S. Bank National Association be
personally liable for the payment of any indebtedness or expenses of
Party B or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by Party B
under this Agreement or any other related documents, as to all of
which recourse shall be had solely to the assets of the Trust in
accordance with the terms of the Pooling and Servicing Agreement.
Party B represents that:
(a) Status. U.S. Bank National Association (the "Trustee") is
trustee of the Trust whose appointment is valid and effective
both under the laws of the State of New York and under the
Pooling and Servicing Agreement, and the Trustee has the power
to own assets in its capacity as trustee of the Trust.
(b) Powers. In its capacity as trustee of the Trust, the Trustee
has power under the Pooling and Servicing Agreement to execute
this Agreement and any other documentation relating to this
Agreement to which the Trustee is party, to deliver this
Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and
to perform its obligations (on behalf of the Trust) under this
Agreement and any obligations (on behalf of the Trust) it has
under any Credit Support Document to which the Trustee is
party and has taken all necessary action to authorize such
execution, delivery and performance;
(c) No Violation or Conflict. Such execution, delivery and
performance do not violate or conflict with any law applicable
to the Trustee or the Trust, any provision of the Pooling and
Servicing Agreement, any order or judgment of any court or
other agency of government applicable to the Trustee, the
Trust or any assets of the Trust, or any contractual
restriction binding on or affecting the Trustee, the Trust or
any assets of the Trust;
(d) Consents. All governmental and other consents that are
required have been obtained by the Trustee with respect to
this Agreement or any Credit Support Document to which the
Trustee is party have been obtained and are in full force and
effect and all conditions of such consents have been complied
with; and
(e) Obligations Binding. The obligation of the Trustee under this
Agreement and any Credit Support Document to which the Trustee
is party constitute legal, valid and binding obligations of
the Trustee solely in its capacity as trustee of the Trust,
enforceable against the Trust in accordance with their
respective terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws
affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding
in equity or law)) and no circumstances are known to the
Trustee which would or might prevent the Trustee from having
recourse to the assets of the Trust for the purposes of
meeting such obligations.
(viii) Additional Definitions. As used in this Annex:
"Ratings Event" means a "Ratings Event " (as defined in the
Agreement).
"Modified Exposure" means, for any Valuation Date, an amount equal
to the greater of (a) the sum of Secured Party's Exposure for that
Valuation Date plus (the Notional Volatility Buffer multiplied by
the Notional Amount) and (b) zero.
"Notional Volatility Buffer" as determined by the Valuation Agent
for any date, means the the relevant percentage for such date as set
out in the table below on such date.
Less than Less than or equal
or equal to to 10 years but
5 years to greater than 5
Party A S&P Rating Termination years to
on Date of the Termination Date of
such date Transaction the Transaction
-------------------- ----------- -------------------
S-T Rating of A-2 3.25% 4.00%
S-T Rating of A-3 4.00% 5.00%
L-T Rating of BB+ or 4.50% 5.75%
lower
IN WITNESS WHEREOF, the parties have executed this Annex by their duly
authorized representatives as of the date of the Agreement.
BARCLAYS BANK PLC U.S. BANK NATIONAL ASSOCIATION, NOT
INDIVIDUALLY, BUT SOLELY AS TRUSTEE ON
BEHALF OF THE TRUST CREATED PURSUANT TO THE
POOLING AND SERVICING AGREEMENT
(THE "TRUST") WITH RESEPCT TO GS MORTGAGE
SECURITIES CORP., MORTGAGE-BACKED
PASS-THROUGH CERTIFICATES, SERIES 2006-HE2
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------- -----------------------------------------
Name: Xxxxx Xxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director Title: Vice President, U.S. Bank
Date: April 6, 2006 National Association
Date: April 6, 2006
Xxxxxxx Capital
5 Xxx Xxxxx Xxxxxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
Tel x00 (0)00 0000 0000
To: U.S. BANK NATIONAL ASSOCIATION, NOT INDIVIDUALLY, BUT SOLELY AS
TRUSTEE ON BEHALF OF THE TRUST CREATED PURSUANT TO THE POOLING AND
SERVICING AGREEMENT (THE "TRUST") WITH RESEPCT TO GS MORTGAGE
SECURITIES CORP., MORTGAGE-BACKED PASS-THROUGH CERTIFICATES, SERIES
2006-HE2 ("Counterparty" or "Party B")
Attn: c/o U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-Xx0x
Xx. Xxxx, XX 00000
Facsimile: (000) 000-0000
Phone: (000) 000-0000
From: BARCLAYS BANK PLC (LONDON HEAD OFFICE) ("Barclays" or "Party A")
Date: April 6, 2006
Reference: 1142419B
The purpose of this facsimile (this "Confirmation") is to confirm the terms and
conditions of the Transaction entered into between us on the Trade Date
specified below (the "Transaction").
The definitions and provisions contained in the 2000 ISDA Definitions (the "2000
Definitions"), as published by the International Swaps and Derivatives
Association, Inc. ("ISDA") are incorporated into this Confirmation. In the event
of any inconsistency between the 2000 Definitions and this Confirmation, this
Confirmation will govern for the purposes of the Transaction. References herein
to a "Transaction" shall be deemed to be references to a "Swap Transaction" for
the purposes of the 2000 Definitions. Capitalized terms used in this
Confirmation and not defined in this Confirmation or the 2000 Definitions shall
have the respective meaning assigned in the Agreement. Each party hereto agrees
to make payment to the other party hereto in accordance with the provisions of
this Confirmation and of the Agreement. In this Confirmation, "Party A" means
Barclays and "Party B" means the Counterparty.
1. This Confirmation supplements, forms part of, and is subject to, the ISDA
Master Agreement dated as of April 6, 2006, as amended and supplemented from
time to time (the "Agreement"), between you and us. All provisions contained in
the Agreement govern this Confirmation except as expressly modified below. Other
capitalized terms used herein and not otherwise defined shall have the meanings
given them in the Pooling and Servicing Agreement.
(a) Non-Reliance. It is acting for its own account, and it has made its own
independent decisions to enter into the Transaction and as to whether
the Transaction is appropriate or proper based upon its own judgement
and upon advice from such advisers as it has deemed necessary. It is
not relying on any communication (written or oral) of the other party
as investment advice or as a recommendation to enter into the
Transaction: it being understood that information and explanations
related to the terms and conditions of the Transaction shall not be
considered investment advice or a recommendation to enter into the
Transaction. No communication (written or oral) received from the other
party shall be deemed to be an assurance or guarantee as to the
expected results of the Transaction.
(b) Assessment and Understanding. It is capable of assessing the merits of
and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of the Transaction. It is also capable of
assuming, and assumes, the risks of the Transaction.
(c) Status of Parties. The other party is not acting as a fiduciary for or
an adviser to it in respect of the Transaction.
(d) Purpose. It is entering into the Transaction for the purposes of
hedging its assets or liabilities or in connection with a line of
business.
In the event of any inconsistency between the provisions of the
Agreement and this Confirmation, this Confirmation will prevail for purposes of
this Swap Transaction.
The terms of the particular Transaction to which this Confirmation relates are
as follows:
Notional Amount: The Notional Amount, which shall
initially be USD576,713,195, subject to
adjustment as set out in Schedule A
attached hereto.
Trade Date: April 6, 2006
Effective Date: Xxxxx 0, 0000
Xxxxxxxxxxx Date: March 25, 2011
Fixed Rate Payer: Counterparty
Fixed Rate Payer Upfront Fee: USD 297,000
Fixed Rate Payer Period End Dates: The 25 day of each month, commencing
April 25, 2006, through and including
the Termination Date, subject to
adjustment in accordance with the
Following Business Day Convention
Fixed Rate Payer Payment Dates: The 25th day of each month, commencing
April 25, 2006, through and including
the Termination Date, subject to
adjustment in accordance with the
Following Business Day Convention.
Fixed Amounts: The Fixed Amount payable by Counterparty
shall be an amount equal to (i) the
Notional Amount for such Fixed Rate
Payer Payment Date * (ii) Fixed Rate *
(iii) Fixed Rate Day Count Fraction
Fixed Rate: 5.10%
Fixed Rate Day Count Fraction: Actual/360
Floating Amounts:
Floating Rate Payer and Floating Rate Barclays
Upfront Fee Payer:
Floating Rate Payer Period End Dates: The 25th day of each month, commencing
April 25, 2006, through and including
the Termination Date, subject to
adjustment in accordance with the
Following Business Day Convention.
Floating Rate Payer Payment Dates: The 25th day of each month, commencing
April 25, 2006, through and including
the Termination Date, subject to
adjustment in accordance with the
Following Business Day Convention.
Limited Early Payment: Early Payment shall be applicable to the
extent described in this provision. For
each Calculation Period, if Floating
Rate Payment exceeds the Fixed Rate
Payment, the Floating Rate Payer Payment
Date shall be the first Business Day
prior to the related Floating Rate Payer
Period End Date. Otherwise, Early
Payment shall not be applicable (i.e. if
the Fixed Payer Payment exceeds the
Floating Rate Payer Payment, Early
Payment shall not be applicable).
Floating Amounts: The Floating Amount payable by Barclays
shall be an amount equal to (i) the
Notional Amount for such Floating Rate
Payer Payment Date * (ii) Floating Rate
Option * (iii) Floating Rate Day Count
Fraction.
Floating Rate Option: USD-LIBOR-BBA.
Designated Maturity: 1 month. For the avoidance of doubt,
there will be no interpolation for the
first Calculation Period.
Spread: None
Initial Floating Rate: 4.8375%
Floating Rate Day Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period
Compounding: Inapplicable
Calculation Agent: Party A
Business Days:
(a) for purposes of Payments: New York and Los Angeles
(b) For purposes of Reset Dates: London
Account Details: Account Details for Barclays:
Correspondent: BARCLAYS BANK PLC NEW
YORK FEED: 000000000
Beneficiary: BARCLAYS SWAPS
Beneficiary Account: 000-00000-0
Account Details for Counterparty:
U.S. Bank N.A.
ABA: 000000000
DDA: 173103322058
Ref: GSAMP 2006-HE2
Attn: Xxxx Xxxxxxxx
Trustee Capacity. It is expressly understood and agreed by the parties hereto
that (i) this Confirmation is executed and delivered by U.S. Bank National
Association, not individually or personally but solely as trustee of the trust
created pursuant to the Pooling and Servicing Agreement (the "Trust"), in the
exercise of the powers and authority conferred and vested in it under the
Pooling and Servicing Confirmation, (ii) each of the representations,
undertakings and agreements herein made on the part of Party B is made and
intended not as personal representations, undertakings and agreements by U.S.
Bank National Association but is made and intended for the purpose of binding
only the Trust, (iii) nothing herein contained shall be construed as creating
any liability on the part of U.S. Bank National Association, individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by any Person claiming by, through or under the parties hereto, and (iv)
under no circumstances shall U.S. Bank National Association be personally liable
for the payment of any indebtedness or expenses of Party B or be liable for the
breach or failure of any obligation, representation, warranty or covenant made
or undertaken by Party B under this Agreement or any other related documents, as
to all of which recourse shall be had solely to the assets of the Trust in
accordance with the terms of the Pooling and Servicing Agreement.
The time of dealing will be confirmed by Barclays upon written request. Barclays
is regulated by the Financial Services Authority. Barclays is acting for its own
account in respect of this Transaction.
Please confirm that the foregoing correctly sets forth all the terms and
conditions of our agreement with respect to the Transaction by responding within
three (3) Business Days by promptly signing in the space provided below and both
(i) faxing the signed copy to Incoming Transaction Documentation, Barclays
Capital Global OTC Transaction Documentation & Management, Global Operations,
Fax x(00) 00-0000-0000/6857, Tel x(00) 00-0000-0000/6904/6965, and (ii) mailing
the signed copy to Barclays Bank PLC, 5 Xxx Xxxxx Xxxxxxxxx, Xxxxxx Xxxxx,
Xxxxxx X00 0XX, Attention of Incoming Transaction Documentation, Barclays
Capital Global OTC Transaction Documentation & Management, Global Operation.
Your failure to respond within such period shall not affect the validity or
enforceability of the Transaction against you. This facsimile shall be the only
documentation in respect of the Transaction and accordingly no hard copy
versions of this Confirmation for this Transaction shall be provided unless the
Counterparty requests.
For and on behalf of For and on behalf of U.S. BANK NATIONAL
BARCLAYS BANK PLC ASSOCIATION, NOT INDIVIDUALLY, BUT
SOLELY AS TRUSTEE ON BEHALF OF THE TRUST
CREATED PURSUANT TO THE POOLING AND
SERVICING AGREEMENT (THE "TRUST") WITH
RESEPCT TO GS MORTGAGE SECURITIES CORP.,
MORTGAGE-BACKED PASS-THROUGH
CERTIFICATES, SERIES 2006-HE2
----------------------------------- ----------------------------------------
Name: Name: Xxxxxxx X. Xxxxxxxx
Title: Title: Vice President, U.S. Bank
Date: April 6, 2006 National Association
Date: April 6, 2006
Barclays Bank PLC and its Affiliates, including Barclays Capital Inc., may share
with each other information, including non-public credit information, concerning
its clients and prospective clients. If you do not want such information to be
shared, you must write to the Director of Compliance, Barclays Bank PLC, 000
Xxxx Xxxxxx, Xxx Xxxx, XX 00000.
Schedule A to the Confirmation dated as of April 6, 2006
Re: Reference Number 1142419B
From and including To but excluding Notional Amount (USD):
6-Apr-06 25-Apr-06 576,713,195
25-Apr-06 25-May-06 566,453,260
25-May-06 25-Jun-06 554,314,731
25-Jun-06 25-Jul-06 540,331,263
25-Jul-06 25-Aug-06 524,553,933
25-Aug-06 25-Sep-06 507,049,996
25-Sep-06 25-Oct-06 487,904,529
25-Oct-06 25-Nov-06 467,220,821
25-Nov-06 25-Dec-06 445,118,200
25-Dec-06 25-Jan-07 422,122,076
25-Jan-07 25-Feb-07 400,059,714
25-Feb-07 25-Mar-07 378,917,586
25-Mar-07 25-Apr-07 358,775,236
25-Apr-07 25-May-07 339,585,083
25-May-07 25-Jun-07 321,301,820
25-Jun-07 25-Jul-07 303,882,311
25-Jul-07 25-Aug-07 287,285,800
25-Aug-07 25-Sep-07 271,472,825
25-Sep-07 25-Oct-07 256,406,146
25-Oct-07 25-Nov-07 242,035,425
25-Nov-07 25-Dec-07 228,345,094
25-Dec-07 25-Jan-08 210,435,410
25-Jan-08 25-Feb-08 173,876,200
25-Feb-08 25-Mar-08 143,263,459
25-Mar-08 25-Apr-08 118,522,604
25-Apr-08 25-May-08 108,115,713
25-May-08 25-Jun-08 98,562,543
25-Jun-08 25-Jul-08 93,139,651
25-Jul-08 25-Aug-08 93,139,651
25-Aug-08 25-Sep-08 93,139,651
25-Sep-08 25-Oct-08 93,139,651
25-Oct-08 25-Nov-08 93,139,651
25-Nov-08 25-Dec-08 89,941,082
25-Dec-08 25-Jan-09 85,171,771
25-Jan-09 25-Feb-09 80,665,492
25-Feb-09 25-Mar-09 76,407,304
25-Mar-09 25-Apr-09 72,383,734
25-Apr-09 25-May-09 68,580,848
25-May-09 25-Jun-09 64,986,159
25-Jun-09 25-Jul-09 61,588,084
25-Jul-09 25-Aug-09 58,375,422
25-Aug-09 25-Sep-09 55,337,634
25-Sep-09 25-Oct-09 52,464,960
25-Oct-09 25-Nov-09 49,748,042
25-Nov-09 25-Dec-09 47,178,139
25-Dec-09 25-Jan-10 44,747,018
25-Jan-10 25-Feb-10 42,446,947
25-Feb-10 25-Mar-10 40,270,574
25-Mar-10 25-Apr-10 38,211,004
25-Apr-10 25-May-10 36,261,733
25-May-10 25-Jun-10 34,416,630
25-Jun-10 25-Jul-10 32,669,915
25-Jul-10 25-Aug-10 31,016,139
25-Aug-10 25-Sep-10 29,450,160
25-Sep-10 25-Oct-10 27,967,132
25-Oct-10 25-Nov-10 26,562,483
25-Nov-10 25-Dec-10 25,231,900
25-Dec-10 25-Jan-11 23,971,190
25-Jan-11 25-Feb-11 22,774,798
25-Feb-11 25-Mar-11 21,641,112
EXHIBIT R
--------------------------------------------------------------------------------
U.S. BANK NATIONAL ASSOCIATION
as Trustee for the
Mortgage Pass-Though Certificates, Series 2006-HE2
and
XXXXXX LOAN SERVICING LP,
as Servicer
and
THE BANK OF NEW YORK
as Custodian
CUSTODIAL AGREEMENT
dated as of April 1, 2006
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Section 1. Definitions................................................
Section 2. Delivery of Custodial Files................................
Section 3. Custodian as Bailee........................................
Section 4. Acknowledgement of Receipt; Trust Receipts.................
Section 5. Obligations of the Custodian...............................
Section 6. Initial and Final Certifications...........................
Section 7. Representations and Warranties of the Custodian............
Section 8. Future Defects.............................................
Section 9. Release for Servicing......................................
Section 10. RESERVED..................................................
Section 11. Release for Payment.......................................
Section 12. Fees of Custodian.........................................
Section 13. Removal of Custodian......................................
Section 14. Transfer of Custodial Files Upon Termination..............
Section 15. Examination of Custodial Files............................
Section 16. Insurance of Custodian....................................
Section 17. Counterparts..............................................
Section 18. Periodic Statements.......................................
Section 19. GOVERNING LAW.............................................
Section 20. Copies of Mortgage Documents..............................
Section 21. No Adverse Interest of Custodian..........................
Section 22. Termination by Custodian..................................
Section 23. Term of Agreement.........................................
Section 24. Notices...................................................
Section 25. Successors and Assigns....................................
Section 26. Concerning the Custodian..................................
Section 27. Reliance of Custodian.....................................
Section 28. Transmission of Custodial Files...........................
Section 29. Authorized Representatives................................
Section 30. Reproduction of Documents.................................
Section 31. Limitations on the Responsibilities of the Custodian......
Section 32. WAIVER OF JURY TRIAL......................................
Section 33. Regulation AB.............................................
Section 34. Third-Party Beneficiary...................................
EXHIBITS
EXHIBIT 1 FORM OF ACKNOWLEDGEMENT OF RECEIPT
EXHIBIT 2A FORM OF TRUST RECEIPT AND INITIAL CERTIFICATION
EXHIBIT 2B FORM OF TRUST RECEIPT AND FINAL CERTIFICATION
EXHIBIT 3 FORM OF REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
EXHIBIT 4 AUTHORIZED REPRESENTATIVES OF SERVICER
EXHIBIT 5 AUTHORIZED REPRESENTATIVES OF TRUSTEE
EXHIBIT 6 MORTGAGE LOAN SCHEDULE
EXHIBIT 7 FORM OF ANNUAL CERTIFICATION
THIS CUSTODIAL AGREEMENT (the "Custodial Agreement"), dated as of
April 1, 2006, by and among U.S. Bank National Association, a national banking
association having an address 00 Xxxxxxxxxx Xxxxxx, XX-XX-XX0X, Xx. Xxxx,
Xxxxxxxxx 00000-0000, Attention: Structured Finance-GSAMP 2006-HE2, not
individually, but solely as trustee for Mortgage Pass-Through Certificates,
Series 2006-HE2 (the "Trustee"), Xxxxxx Loan Servicing LP, a Delaware limited
partnership having an address at 0000 Xxxx Xxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000,
as servicer (the "Servicer"), and The Bank of New York, a New York banking
corporation having an address at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
as custodian (the "Custodian").
W I T N E S S E T H:
WHEREAS, GS Mortgage Securities Corp. (the "Depositor") has agreed
to purchase certain one-to-four family, adjustable-rate and fixed-rate mortgage
loans secured by first and second liens on residential real properties
(together, the "Mortgage Loans") from Credit-Based Asset Servicing and
Securitization LLC (the "Seller"), pursuant to the terms and conditions of a
Mortgage Loan Purchase Agreement, dated as of April 1, 2006 between the
Depositor and the Seller (the "Purchase Agreement"); and
WHEREAS, the Servicer is to service the Mortgage Loans pursuant to
the terms and conditions of a Pooling and Servicing Agreement, of even date
herewith among the Depositor, the Seller, the Servicer and the Trustee (the
"Pooling and Servicing Agreement"), and the Trustee will retain record title to
the Mortgage Loans; and
WHEREAS, the Custodian is a New York banking corporation and is
otherwise authorized to act as Custodian pursuant to this Custodial Agreement;
and
NOW THEREFORE, in consideration of the mutual undertakings herein
expressed, the parties hereto hereby agree as follows:
Section 1. Definitions.
Capitalized terms used but not defined herein shall have the
meanings assigned to them in the Pooling and Servicing Agreement.
Acknowledgment of Receipt: A trust receipt and acknowledgment as to
each Mortgage Loan, which Acknowledgment of Receipt is delivered to the Trustee
by the Custodian in the form annexed hereto as Exhibit 1.
Adjustment Date: With respect to each Adjustable Rate Mortgage Loan,
the date set forth in the related Mortgage Note on which the Mortgage Interest
Rate on the Mortgage Loan is adjusted in accordance with the terms of the
Mortgage Note.
Adjustable Rate Mortgage Loan: A Mortgage Loan that provides for the
adjustment of the Mortgage Interest Rate payable in respect thereof.
Agreement: This Custodial Agreement and all amendments, attachments
and supplements hereto.
ALTA: American Land Title Association or any successor thereto.
Appraised Value: With respect to any Mortgage Loan, the value of the
related Mortgaged Property based upon the appraisal made for the originator at
the time of origination of the Mortgage Loan or the sale price of the Mortgaged
Property at such time of origination (whichever is less; provided, however, that
in the case of a Refinanced Mortgage Loan, such value is based solely upon the
appraisal made at the time of origination of such Refinanced Mortgage Loan).
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form, sufficient under the laws
of the jurisdiction wherein the related Mortgaged Property is located to
reflect, when recorded, the sale of the Mortgage to the Trust, which assignment,
notice of transfer or equivalent instrument may be in the form of one or more
blanket assignments covering the Mortgage Loans secured by Mortgaged Properties
located in the same jurisdiction, if permitted by law and acceptable for
recording in the applicable recording office.
Business Day: Any day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York and the State of Texas are
authorized or obligated by law or executive order to be closed.
Closing Date: April 6, 2006.
Commission. The United States Securities and Exchange Commission.
Custodian: The Bank of New York, or its successor in interest or
assigns, or any successor to the Custodian under this Custodial Agreement as
herein provided.
Custodial File: As to each Mortgage Loan, any mortgage loan
documents which are delivered to the Custodian or which at any time come into
the possession of the Custodian as set forth in Section 2 of this Custodial
Agreement.
Cut-off Date: April 1, 2006.
Delivery Date: The date which occurs five (5) Business Days prior to
the Closing Date or such other date as mutually agreed upon by the Trustee, the
Custodian and the Servicer.
Eligible Substitute Mortgage Loans: As defined in the Pooling and
Servicing Agreement.
Xxxxxx Xxx: Formerly known as the Federal National Mortgage
Association, or any successor organization.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, or any
successor organization.
Gross Margin: With respect to any Adjustable Rate Mortgage Loan, the
fixed percentage amount set forth in the related Mortgage Note and the related
Mortgage Loan Schedule that is added to the Index on each Adjustment Date in
accordance with the terms of the related Mortgage Note to determine the new
Mortgage Interest Rate for such Mortgage Loan.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum to which the Gross Margin is added on each Adjustment Date to
determine the new Mortgage Interest Rate for such Mortgage Loan.
Maximum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, an interest rate that is set forth on the related Mortgage Loan
Schedule and in the related Mortgage Note and that is the maximum interest rate
to which the Mortgage Interest Rate on such Mortgage Loan may be increased on
any Adjustment Date.
Minimum Mortgage Interest Rate: With respect to each Adjustable Rate
Mortgage Loan, an interest rate that is set forth on the related Mortgage Loan
Schedule and in the related Mortgage Note and that is the minimum interest rate
to which the Mortgage Interest Rate on such Mortgage Loan may be decreased on
any Adjustment Date.
Mortgage: The mortgage, deed of trust or other instrument securing a
Mortgage Note, which creates a first or second lien on Mortgaged Property
securing the Mortgage Note.
Mortgage Interest Rate: With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate, as of
the Cut-off Date, shall be the rate set forth in the related Mortgage Loan
Schedule as the Mortgage Interest Rate.
Mortgage Loan: Each mortgage loan sold, assigned or transferred
pursuant to this Custodial Agreement and identified on the Mortgage Loan
Schedule attached hereto as Exhibit 6.
Mortgage Loan Schedule: The schedule of Mortgage Loans identified in
the Pooling and Servicing Agreement to be delivered to the Custodian on the
Delivery Date and to be annexed hereto as Exhibit 6.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.
Mortgaged Property: With respect to each Mortgage Loan, the
Mortgagor's real property securing repayment of the debt evidenced by a Mortgage
Note, consisting of a fee simple interest in a single or contiguous parcel of
real property.
Mortgagor: The obligor on a Mortgage Note, the owner of the
Mortgaged Property and the grantor or mortgagor named in the related Mortgage
and such grantor's or mortgagor's successors in title to the Mortgaged Property.
Officer's Certificate: A certificate signed by the Chairman of the
Board or Vice Chairman of the Board, or the President, Senior Vice President,
Vice President, Assistant Vice President, Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary of the Person delivering such certificate.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company, limited partnership, government or any agency or political
subdivision thereof.
Primary Insurance Policy: Each policy of primary mortgage guaranty
insurance in effect with respect to any Mortgage Loan, or any replacement policy
therefor obtained by the Servicer issued by a Qualified Insurer, as required by
Section 3.08 of the Pooling and Servicing Agreement with respect to certain
Mortgage Loans.
Qualified Insurer: Any insurance company acceptable to Xxxxxx Xxx or
Xxxxxxx Mac.
Refinanced Mortgage Loan: A Mortgage Loan that was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan.
Regulation AB. Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or
by the staff of the Commission, or as may be provided by the Commission or its
staff from time to time.
Servicer: Xxxxxx Loan Servicing LP, or its successor in interest or
assigns, or any successor to the Servicer under the Pooling and Servicing
Agreement as therein provided.
Servicing Criteria. The "servicing criteria" set forth in Items
1122(d)(1)(ii), 1122(d)(4)(i) and 1122(d)(4)(ii) of Regulation AB, as such may
be amended from time to time.
Subcustodian: Bank of New York Trust Company, N.A. having an address
at 0000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
Subcontractor: Any vendor, subcontractor or other Person that is not
responsible for the overall servicing (as "servicing" is commonly understood by
participants in the mortgage-backed securities market) of Mortgage Loans but
performs one or more discrete functions identified in Item 1122(d) of Regulation
AB with respect to Mortgage Loans under the direction or authority of the
Company or a Subservicer.
Subservicer: Any Person that services Mortgage Loans on behalf of
the Company or any Subservicer and is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed by the Company under
this Agreement or any Reconstitution Agreement that are identified in Item
1122(d) of Regulation AB.
Trust Receipt: Either an Acknowledgment of Receipt, Trust Receipt
and Initial Certification or a Trust Receipt and Final Certification.
Trust Receipt and Final Certification: A trust receipt and final
certification as to each Mortgage Loan, which Trust Receipt and Final
Certification is delivered to the Trustee by the Custodian in the form annexed
hereto as Exhibit 2B.
Trust Receipt and Initial Certification: A trust receipt and initial
certification as to each Mortgage Loan, which Trust Receipt and Initial
Certification is delivered to the Trustee by the Custodian in the form annexed
hereto as Exhibit 2A.
Trustee: U.S. Bank National Association, as Trustee for the Mortgage
Pass-Through Certificates, Series 2006-HE2, or its successor in interest or
assigns.
Section 2. Delivery of Custodial Files.
(a) The Servicer will deliver and release to the Custodian or the
Subcustodian on the Delivery Date the following original documents pertaining to
each of the Mortgage Loans identified in the Mortgage Loan Schedule:
(i) the original Mortgage Note, endorsed either (A) in blank
or (B) in the following form: "Pay to the order of U.S. Bank
National Association, as Trustee for the GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2, without
recourse," or with respect to any lost Mortgage Note, an original
lost note affidavit stating that the original mortgage note was
lost, misplaced or destroyed, together with a copy of the related
Mortgage Note;
(ii) the original Mortgage including any riders thereto with
evidence of recording thereon, and the original recorded power of
attorney, if the Mortgage was executed pursuant to a power of
attorney, with evidence of recording thereon or, if such Mortgage or
power of attorney has been submitted for recording but has not been
returned from the applicable public recording office, has been lost
or is not otherwise available, a copy of such Mortgage or power of
attorney, as the case may be, certified to be a true and complete
copy of the original submitted for recording;
(iii) an original Assignment of Mortgage, in form and
substance acceptable for recording. The Mortgage shall be assigned
either (A) in blank or (B) to "U.S. Bank National Association, as
Trustee for the GSAMP Trust 2006-HE2 Mortgage Pass-Through
Certificates, Series 2006-HE2, without recourse";
(iv) an original or a certified copy of any intervening
assignment of Mortgage showing a complete chain of assignments;
(v) the original or a certified copy of the lender's title
insurance policy; and
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any.
(b) In the event that any Mortgage Note is endorsed in blank as of
the Closing Date, promptly following the Closing Date the Custodian or Servicer
shall cause to be completed such endorsements in the following form: "Pay to the
order of U.S. Bank National Association, as Trustee for the GSAMP Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2, without recourse."
(c) From time to time, the Servicer shall forward to the Custodian
additional original documents, additional documents evidencing an assumption,
modification, consolidation or extension of a Mortgage Loan approved by the
Servicer, in accordance with the terms of the Pooling and Servicing Agreement.
All such mortgage documents held by the Custodian or the Subcustodian as to each
Mortgage Loan shall constitute the "Custodial File".
(d) The Servicer shall promptly but in no event later than thirty
(30) days after the Closing Date, submit for recording, in the appropriate
public office for real property records, each assignment referred to in Section
2(a)(iii) and 2(a)(iv) above. In the event that any such assignment is lost or
returned unrecorded because of a defect therein, the Servicer shall promptly
prepare a substitute assignment to cure such defect and thereafter cause each
such assignment to be duly executed and recorded. The Custodian shall maintain a
copy of each such assignment in the Custodial File.
(e) At least twenty-four (24) hours prior to delivery of the
Mortgage Loans, the Servicer will provide or cause to provide to the Custodian,
via electronic transmission, a list of all the Mortgage Loans and their related
data fields including loan ID, Mortgagor name, mortgaged property address,
mortgage rate, maturity date, and original principal balance of each such
Mortgage Loan. This data shall be delivered to the Custodian in an acceptable
format that can be easily uploaded to the Custodian's system. A hard copy of the
Mortgage Loan Schedule will be delivered to the Custodian at the time of
delivery to the Custodian of such documents related to the Mortgage Loans
identified in such Mortgage Loan Schedule.
(f) Not later than ten (10) Business Days after the receipt by the
Custodian thereof, the Custodian shall review the related Mortgage File for each
Eligible Substitute Mortgage Loan and all documents related thereto, as
specified in Sections 2.01 and 2.02 of the Pooling and Servicing Agreement, and
shall deliver to the Servicer and the Trustee a certification, substantially in
the form of Exhibit F-2 to the Pooling and Servicing Agreement, with respect to
such Eligible Substitute Mortgage Loan, with any applicable exceptions noted
thereon. Within one (1) year of the date of substitution, the Custodian shall
deliver to the Servicer and the Trustee a certification, in the form of Exhibit
F-2 to the Pooling and Servicing Agreement, with respect to each Eligible
Substitute Mortgage Loan, with any applicable exceptions noted thereon.
Section 3. Custodian as Bailee.
The Custodian hereby acknowledges that it is, and agrees to act as
agent and bailee for the Trustee and is holding each Custodial File delivered to
it on behalf of the Trustee.
Section 4. Acknowledgement of Receipt; Trust Receipts.
(a) No later than 11:00 a.m. New York Time on the Closing Date, the
Custodian shall deliver to the Trustee an Acknowledgment of Receipt certifying,
subject to any exceptions noted thereon, as to each Mortgage Loan on the
Mortgage Loan Schedule, (i) receipt of the original Mortgage Note (with any
exceptions noted) and (ii) the Mortgage Note has been reviewed by the Custodian
and appears regular on its face and relates to such Mortgage Loan.
(b) Upon the written directions of the Trustee, and upon the prior
tender by the Trustee of an applicable trust receipt or trust receipts
(including any related Trust Receipt and Final Certification that has been
issued), the Custodian shall deliver all or any portion of the related Custodial
Files held by it pursuant to such Trust Receipt to the Trustee, or to such other
party designated by the Trustee in such written direction, and to the place
indicated in any such written direction from the Trustee. If such delivery is
for less than all of the Custodial Files held by the Custodian with respect to
such Trust Receipt (and a Trust Receipt and Final Certification has been
issued), the Custodian shall deliver to the Trustee a new Trust Receipt and
Final Certification with respect to the related Custodial Files retained by the
Custodian. Each Trust Receipt (including any Trust Receipt and Final
Certification) surrendered shall be canceled by the Custodian.
Section 5. Obligations of the Custodian.
With respect to the Mortgage Note, the Mortgage and the Assignment
of Mortgage and other documents constituting each Custodial File which is
delivered to the Custodian or which come into the possession of the Custodian,
the Custodian is the custodian for the Trustee exclusively. The Custodian shall
hold all mortgage documents received by it constituting the Custodial File for
the exclusive use and benefit of the Trustee, and shall make disposition thereof
only in accordance with this Custodial Agreement and the instructions furnished
by the Trustee. The Custodian shall segregate and maintain continuous custody of
all mortgage documents constituting the Custodial File in secure and
fire-resistant facilities in accordance with customary standards for such
custody. The Custodian shall not be responsible to verify (i) the validity,
legality, enforceability, sufficiency, due authorization or genuineness of any
document in the Custodial File or of any Mortgage Loans or (ii) the
collectability, insurability, effectiveness including the authority or capacity
of any Person to execute or issue any document in the Custodial File, or
suitability of any Mortgage Loan unless specified otherwise in this Custodial
Agreement. The Custodian shall promptly report to the Trustee any failure on its
part to hold the Custodial Files and maintain its accounts, records and computer
systems as herein provided and promptly take appropriate action to remedy such
failure.
Section 6. Initial and Final Certifications.
(a) Within sixty (60) days after the Closing Date, the Custodian
shall ascertain that all documents specified in Sections 2(a)(i)-(vi) of this
Custodial Agreement are in its possession, and shall deliver to the Trustee a
Trust Receipt and Initial Certification certifying, subject to any exceptions
noted thereon 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): (i) all documents required to be delivered to it pursuant to
Sections 2(a)(i)-(vi) of this Custodial Agreement are in its possession; (ii)
such documents have been reviewed by it; and have not been mutilated, damaged or
torn and relate to such Mortgage Loan and (iii) based on its examination and
only as to the foregoing, the information set forth in the Mortgage Loan
Schedule relating to the Mortgage Loan identifying number, the city, state, and
zip code of the Mortgaged Property, the type of Residential Dwelling
constituting the Mortgaged Property or a designation that the Mortgaged Property
is a multi-family property, the original months to maturity, the Mortgage
Interest Rate of the Mortgage Loan as of the Cut-off Date, and whether the
Mortgage Loan has a prepayment penalty accurately reflects information set forth
in the Mortgage File; (iv) all Assignments of Mortgage or intervening
assignments of mortgage, as applicable, have been submitted for recording; and
(v) each Mortgage Note has been endorsed as provided in Section 2(a)(i) of this
Custodial Agreement and each Mortgage has been assigned in accordance with
Section 2(a)(iii) of this Custodial Agreement.
(b) Prior to the first anniversary date of this Custodial Agreement
the Custodian shall deliver to the Depositor, the Trustee and the Servicer a
Trust Receipt and Final Certification in the form annexed hereto as Exhibit 2B
evidencing the completeness of the Mortgage Files, with any applicable
exceptions noted thereon.
Section 7. Representations and Warranties of the Custodian.
The Custodian hereby represents and warrants to, and covenants that,
as of the date hereof:
(a) Each of the Custodian and the Subcustodian is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and satisfies the requirements for acting as a Xxxxxx Xxx/Xxxxxxx
Mac custodian, and has full corporate power and authority to own its properties
and conduct its business as currently conducted.
(b) The Custodian has all requisite corporate power and authority to
enter into and perform its obligations under this Custodial Agreement and to
consummate the transactions contemplated hereby. The execution and delivery by
the Custodian of this Custodial Agreement and the consummation by the Custodian
of the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of the Custodian. This Custodial
Agreement has been duly and validly executed and delivered by the Custodian and
constitutes a legal, valid and binding obligation of the Custodian, enforceable
against the Custodian, in accordance with its terms, subject to bankruptcy,
reorganization, insolvency, moratorium and similar laws of general applicability
relating to or affecting creditors rights and to general principles of equity.
(c) Neither the execution and delivery by the Custodian of this
Custodial Agreement, nor the consummation by the Custodian of any of the
transactions contemplated hereby, nor the fulfillment by the Custodian of the
terms hereof, will conflict with, or violate, result in a material breach of or
constitute a material default (with or without notice or lapse of time, or both)
under (i) any term or provision of the Certificate of Incorporation or By-laws
of the Custodian or (ii) any term or provision of any indenture or other
material agreement or instrument, to which the Custodian is a party or by which
the Custodian is bound. The execution, delivery and performance of this
Custodial Agreement by the Custodian or the consummation by the Custodian of the
transactions contemplated hereby will not require the authorization, consent or
approval of any governmental authority or agency having jurisdiction over and
regulating the activities of the Custodian.
(d) The Custodian shall perform its obligations under this Custodial
Agreement in accordance with the standards incorporated by Xxxxxx Mae or Xxxxxxx
Mac; the Custodian shall at all times maintain accurate and complete records in
connection with the performance of its obligations under this Custodial
Agreement.
(e) The Custodian does not use any Subservicers or Subcontractors.
Section 8. Future Defects.
During the term of this Custodial Agreement, if the Custodian
discovers any defect with respect to the Custodial File, the Custodian shall
give written specification of such defect to the Servicer and the Trustee.
Section 9. Release for Servicing.
From time to time and as appropriate for the foreclosure or
servicing of any of the Mortgage Loans, the Custodian is hereby authorized, upon
written receipt from the Servicer of a request for release of documents and
receipt in the form annexed hereto as Exhibit 3, to release to the Servicer the
related Custodial File or the documents set forth in such request and receipt to
the Servicer. All documents so released to the Servicer shall be held by the
Servicer in trust for the benefit of the Trustee in accordance with the terms of
the Pooling and Servicing Agreement. The Servicer shall return to the Custodian
the Custodial File or other such documents when the Servicer's need therefor in
connection with such foreclosure or servicing no longer exists, unless the
Mortgage Loan shall be liquidated in which case, upon receipt of an additional
request for release of documents and receipt certifying such liquidation from
the Servicer to the Custodian in the form annexed hereto as Exhibit 3, the
Servicer's request and receipt submitted pursuant to the first sentence of this
Section 9 shall be released by the Custodian to the Servicer. The Servicer shall
indemnify the Trust Fund and the Trustee and each of their officers, directors
and agents for any and all liabilities, obligations, losses, compensatory
damages, payments, costs or expenses of any kind whatsoever that may be imposed
on, incurred by or asserted against the Trust Fund or the Trustee as a result of
the release of any Mortgage Loans or Custodial Files to the Servicer or the
retention of the Mortgage Loans and Custodial Files by the Servicer or any of
its Affiliates; provided, however, the Servicer shall not be liable to any of
the foregoing Persons for any amount and any portion of any such amount
resulting from the willful misfeasance, bad faith or negligence of such Person.
The provisions of this Section 9 shall survive the termination of this Custodial
Agreement and the termination or resignation of the Trustee.
Section 10. RESERVED.
Section 11. Release for Payment.
Upon receipt by the Custodian of the Servicer's request for release
of documents and receipt in the form annexed hereto as Exhibit 3 (which
certification shall include a statement to the effect that all amounts received
in connection with such payment or repurchase have been credited to the
Custodial Account as provided in the Pooling and Servicing Agreement), the
Custodian shall promptly release the related Custodial File to the Servicer.
Section 12. Fees of Custodian.
The Custodian shall charge such fees for its services under this
Custodial Agreement as are set forth in a separate agreement between the
Custodian and the Servicer, the payment of which fees, together with the
Custodian's expenses in connection herewith, shall be solely the obligation of
the Servicer.
Section 13. Removal of Custodian.
The Trustee, with or without cause (at the direction of the
Servicer), may upon at least sixty (60) days' notice remove and discharge the
Custodian from the performance of its duties under this Custodial Agreement by
written notice from the Trustee to the Custodian, with a copy to the Servicer.
Having given notice of such removal, the Servicer, with the consent of the
Trustee, promptly shall appoint a successor Custodian (which may be the Trustee
or an affiliate of the Trustee) to act on behalf of the Trustee by written
instrument, one original counterpart of which instrument shall be delivered to
the Trustee, with a copy to the Servicer and an original to the successor
Custodian. In the event of any such removal, the Custodian shall promptly
transfer to the successor Custodian, as directed, all Custodial Files being
administered under this Custodial Agreement. In the event of any such
appointments the Servicer shall be responsible for the fees and expenses of the
existing and successor Custodian. If the Trustee (at the direction of the
Servicer) removes the Custodian without cause, the Servicer shall be responsible
for payment of all expenses incurred in the transmission of the Custodial Files
to the successor Custodian and for all applicable release fees of the Custodian.
If the Servicer removes the Custodian, the Servicer shall be responsible for
payment of all expenses incurred in the transmission of the Custodial Files to
the successor Custodian and for all applicable release fees of the Custodian.
Section 14. Transfer of Custodial Files Upon Termination.
Upon written request of the Trustee, the Custodian shall release to
such Persons as the Trustee shall designate the Custodial Files relating to such
Mortgage Loans as the Trustee shall request.
Section 15. Examination of Custodial Files.
Upon reasonable prior notice to the Custodian but not less than two
(2) Business Days notice, the Trustee and its agents, accountants, attorneys,
auditors and designees will be permitted during normal business hours to examine
the Custodial Files, documents, records and other papers in the possession of or
under the control of the Custodian relating to any or all of the Mortgage Loans.
The Custodial Files shall be maintained at the Subcustodian's facility located
at Bank of New York Trust Company, N.A., 0000 Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx 00000 or at such other location as the Custodian may designate in
writing to the Trustee and the Servicer.
Section 16. Insurance of Custodian.
At its own expense, the Custodian shall maintain at all times during
the existence of this Custodial Agreement and keep in full force and effect such
insurance in amounts, with standard coverage and subject to deductibles, all as
is customary for insurance typically maintained by banks which act as custodian.
The minimum coverage under any such bond and insurance policies shall be at
least equal to the corresponding amounts required by Xxxxxx Mae in the Xxxxxx
Xxx Servicing Guide or by Xxxxxxx Mac in the Xxxxxxx Mac Seller/Servicer Guide.
Upon request, the Trustee shall be entitled to receive evidence satisfactory to
the Trustee that such insurance is in full force and effect.
Section 17. Counterparts.
For the purpose of facilitating the execution of this Custodial
Agreement as herein provided and for other purposes, this Custodial Agreement
may be executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and such counterparts shall
constitute and be one and the same instrument.
Section 18. Periodic Statements.
Within ten (10) days of each anniversary of the date of this
Custodial Agreement, or upon the request of the Trustee at any other time, the
Custodian shall provide to the Trustee a list of all the Mortgage Loans for
which the Custodian holds a Custodial File pursuant to this Custodial Agreement.
Such list may be in the form of a copy of the Mortgage Loan Schedule with manual
deletions to specifically denote any Mortgage Loans paid off, repurchased or
sold since the date of this Custodial Agreement.
Section 19. GOVERNING LAW.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT REGARD TO
CONFLICT OF LAWS PROVISIONS (EXCEPT FOR SECTION 5-1401 OF NEW YORK GENERAL
OBLIGATIONS LAW WHICH SHALL GOVERN).
Section 20. Copies of Mortgage Documents.
Upon the request of the Trustee and at the cost and expense of the
Trust, the Custodian shall provide the Trustee with copies of the Mortgage
Notes, Mortgages, Assignments of Mortgage and other documents relating to one or
more of the Mortgage Loans.
Section 21. No Adverse Interest of Custodian. By execution of this
Custodial Agreement, the Custodian represents and warrants that it currently
holds, and during the existence of this Custodial Agreement shall hold, no
interest adverse to the Trustee, by way of security or otherwise, in any
Mortgage Loan, and hereby waives and releases any such interest which it may
have in any Mortgage Loan as of the date hereof.
Section 22. Termination by Custodian.
The Custodian may terminate its obligations under this Custodial
Agreement upon at least sixty (60) days' prior written notice to the Servicer
and the Trustee. In the event of such termination, the Servicer shall appoint a
successor Custodian. The payment of such successor Custodian's fees and expenses
shall be solely the responsibility of the Servicer. Upon such appointment, the
Custodian shall promptly transfer to the successor Custodian, as directed, all
Custodial Files being administered under this Custodial Agreement.
Section 23. Term of Agreement.
Unless terminated pursuant to Section 13 or Section 22 hereof, this
Custodial Agreement shall terminate upon the final payment or other liquidation
(or advance with respect thereto) of the last Mortgage Loan or the disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan, and the final remittance of all funds due under the Pooling and
Servicing Agreement. In such event all documents remaining in the Custodial
Files shall be released in accordance with the written instructions of the
Trustee.
Section 24. Notices.
All demands, notices and communications hereunder shall be in
writing and shall be deemed to have been duly given when received by the
recipient party at the addresses shown on the first page hereof, and in the case
of the Trustee, to U.S. Bank National Association, 00 Xxxxxxxxxx Xxxxxx,
XX-XX-XX0X, Xx. Xxxx, Xxxxxxxxx 00000-0000, Attention: Structured Finance-GSAMP
2006-HE2, in the case of the Servicer, to the attention of Xxxxx X. Xxxxxx, Xx.,
in the case of the Custodian, to the attention of Xxxxx Xxxxxxxx, and in the
case of the Depositor, to GS Mortgage Securities Corp., 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Principal Finance Group/Xxxxxxxxxxx X. Xxxxxxx
and Asset Management Group/Senior Asset Manager, or at such other addresses as
may hereafter be furnished to the other parties by like notice. Any such demand,
notice or communication hereunder shall be deemed to have been received on the
date delivered to or received at the premises of the addressee (as evidenced, in
the case of registered or certified mail, by the date noted on the return
receipt).
Section 25. Successors and Assigns.
This Custodial Agreement shall inure to the benefit of the
successors and assigns of the parties hereto. Any person into which the
Custodian may be merged or converted or with which the Custodian may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything to the contrary herein
notwithstanding. Any assignee shall forward a list of authorized representatives
to each party to this Custodial Agreement pursuant to Section 29 of this
Custodial Agreement.
Section 26. Concerning the Custodian.
Neither the Custodian nor any of its directors, affiliates,
officers, agents, or employees, shall be liable for any action taken or omitted
to be taken by it or them hereunder or in connection herewith in good faith and
believed by it or them to be within the purview of this Custodial Agreement,
except for its or their own gross negligence, bad faith or willful misconduct.
In no event shall the Custodian or its directors, affiliates, officers, agents,
or employees be held liable for any special, indirect or consequential damages
resulting from any action taken or omitted to be taken by it or them hereunder
or in connection herewith, even if advised of the possibility of such damages.
The Servicer agrees to indemnify, from the Servicer's own funds, and
hold the Custodian and its directors, affiliates, officers, agents, and
employees harmless against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
of any kind or nature whatsoever, including reasonable attorneys' fees, that may
be imposed on, incurred by or asserted against it or them in any way relating to
or arising out of liabilities, obligations, judgments, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements other
than those which were imposed on, incurred by or asserted against the Custodian,
because of the breach by the Custodian of its obligations hereunder, which
breach was caused by negligence, bad faith, or willful misconduct on the part of
the Custodian or any of its directors, affiliates, officers, agents, or
employees. The indemnification set forth in this section shall survive any
termination of this Custodial Agreement and the termination and removal of the
Custodian.
Section 27. Reliance of Custodian.
In the absence of negligence or bad faith on the part of the
Custodian, the Custodian may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any data
communications, magnetic tape, request, instructions, certificate, opinion or
other document furnished to the Custodian, reasonably believed by the Custodian
to be genuine and to have been signed or presented by the proper party or
parties and conforming to the requirements of this Custodial Agreement; but in
the case of any loan document or other request, instruction, document or
certificate which by any provision hereof is specifically required to be
furnished to the Custodian, the Custodian shall be under a duty to examine the
same in accordance with the requirements of this Custodial Agreement.
Section 28. Transmission of Custodial Files.
Written instructions as to the method of shipment and shipper(s) the
Custodian is directed to utilize in connection with transmission of mortgage
files and loan documents in the performance of the Custodian's duties hereunder
shall be delivered by the Servicer to the Custodian prior to any shipment of any
mortgage files and loan documents hereunder. The Servicer will arrange for the
provision of such services at its sole cost and expense (or, at the Custodian's
option, reimburse the Custodian for all costs and expenses incurred by the
Custodian consistent with such instructions) and will maintain such insurance
against loss or damage to mortgage files and loan documents as the Servicer
deems appropriate.
Section 29. Authorized Representatives.
Each individual designated as an authorized representative of the
Servicer and the Trustee, respectively (an "Authorized Representative"), is
authorized to give and receive notices, requests and instructions and to deliver
certificates and documents in connection with this Custodial Agreement on behalf
of the Servicer or the Trustee, as the case may be, and the specimen signature
for each such Authorized Representative of the Servicer and each such Authorized
Representative of the Trustee initially authorized hereunder, is set forth on
Exhibits 4 and 5 hereof, respectively. From time to time, the Servicer and the
Trustee may, by delivering to each other and to the Custodian a revised exhibit,
change the information previously given pursuant to this Section 29, but each of
the parties hereto shall be entitled to rely conclusively on the then current
exhibit until receipt of a superseding exhibit.
Section 30. Reproduction of Documents.
This Custodial Agreement and all documents relating thereto except
with respect to the Custodial File, including, without limitation, (a) consents,
waivers and modifications which may hereafter be executed, and (b) certificates
and other information previously or hereafter furnished, may be reproduced by
any photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding, whether or not the original is in existence and whether or not such
reproduction was made by a party in the regular course of business, and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
Section 31. Limitations on the Responsibilities of the Custodian.
(a) The Custodian shall not be liable for any action or omission to
act hereunder except for its own gross negligence, bad faith or willful
misconduct. The obligations of the Custodian shall be determined solely by the
express provisions of this Custodial Agreement. No representation, warranty,
covenant, agreement, obligation or duty of the Custodian shall be implied with
respect to this Custodial Agreement or the Custodian's services.
(b) The Custodian shall not be responsible for preparing or filing
any reports or returns relating to federal, state or local income taxes with
respect to this Custodial Agreement other than for the Custodian's compensation
or for reimbursement of expenses hereunder.
(c) The Custodian shall not be responsible or liable for, and makes
no representation or warranty with respect to, the validity, recordation,
adequacy or perfection of any lien upon or security interest in any Custodial
File.
(d) Any other provision of this Custodial Agreement to the contrary
notwithstanding, the Custodian shall have no notice of and shall not be bound by
any of the terms and conditions of any other document or agreement executed or
delivered in connection with, or intended to control any part of, the
transactions anticipated by or referred to in this Custodial Agreement unless
the Custodian is a signatory party to that document or agreement.
Notwithstanding the foregoing sentence, the Custodian shall be deemed to have
notice of the terms and conditions (including without limitation definitions not
otherwise set forth in full in this Custodial Agreement) of other documents and
agreements executed or delivered in connection with, or intended to control any
part of, the transactions anticipated by or referred to in this Custodial
Agreement to the extent such terms and provisions are referenced or incorporated
by reference into this Custodial Agreement, only as long as the Custodian shall
have been provided a copy of any such document or agreement.
(e) The duties and obligations of the Custodian shall only be as
much as are expressly set forth in this Custodial Agreement or as set forth in a
written amendment to this Custodial Agreement executed by the parties hereto or
their successors and assigns. In the event that any provision of this Custodial
Agreement implies or requires that action or forbearance from action be taken by
a party but is silent as to which party has the duty to act or refrain from
acting, the parties hereto agree that the Custodian shall not be the party
required to take the action or refrain from acting. In no event shall the
Custodian have any responsibility to ascertain or take action except as
expressly provided herein.
(f) Nothing in this Custodial Agreement shall be deemed to impose on
the Custodian any duty to qualify to do business in any jurisdiction other than
(i) any jurisdiction where any Custodial File is or may be held by the Custodian
from time to time hereunder, and (ii) any jurisdiction where its ownership of
property or conduct of business requires such qualification and where failure to
qualify could have a material adverse effect on the Custodian or its property or
business or on the ability of the Custodian to perform its duties hereunder.
(g) Custodian may consult with counsel selected by the Custodian and
the advice or the opinion of such counsel shall be full and complete
authorization and protection in respect of any action reasonably taken, omitted
or suffered by the Custodian in good faith and in accordance herewith.
(h) No provision of this Custodial Agreement shall require the
Custodian to expend or risk its own funds or otherwise incur any financial
liability in the performance of its duties hereunder or in the exercise of any
of its rights and powers (other than with respect to any expense incurred by the
Custodian in accordance with its regular duties as custodian hereunder), if, in
its sole judgment, it believes that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it.
(i) The Custodian shall have no duty to ascertain whether or not any
amount or payment required to be received by the Trustee, the Servicer or any
third person has been received by the Trustee, the Servicer or any third person.
(j) The Custodian may perform its duties hereunder by or through
agents, attorneys, subcustodians or independent contractors and shall have no
liability for the acts or omissions of such agents, attorneys, subcustodians or
independent contractors appointed by the Custodian with due care; provided,
however, that such appointment of a subcustodian shall not limit the liability
of the Custodian with respect to its obligations under this Custodial Agreement.
The Trustee and the Servicer hereby consent to the appointment of the
Subcustodian to act as subcustodian hereunder.
Section 32. WAIVER OF JURY TRIAL.
EACH OF THE TRUSTEE, THE SERVICER, AND THE CUSTODIAN WAIVES ANY
RIGHT TO TRIAL BY JURY IN ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, BETWEEN OR AMONG ANY OF THE TRUSTEE, THE SERVICER OR THE CUSTODIAN
ARISING OUT OF OR RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS CUSTODIAL
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. ANY OF THE TRUSTEE, THE SERVICER, OR THE CUSTODIAN MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS CUSTODIAL AGREEMENT WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
Section 33. Regulation AB.
Subsection 33.01. Report on Assessment of Compliance and
Attestation.
On or before March 1 of each calendar year, commencing in 2007, the
Custodian shall:
(i) deliver to the Servicer, the Trustee and the Depositor a report
regarding the Custodian's assessment of compliance with the applicable
Servicing Criteria (as more fully discussed below), during the immediately
preceding calendar year, as required under Rules 13a-18 and 15d-18 of the
Exchange Act and Item 1122 of Regulation AB. Such report shall be
addressed to the Servicer, the Trustee and the Depositor and signed by an
authorized officer of the Custodian, and shall address each of the
applicable Servicing Criteria;
(ii) deliver to the Servicer, the Trustee and the Depositor a report
of a registered public accounting firm reasonably acceptable to the
Servicer, the Trustee and the Depositor that attests to, and reports on,
the assessment of compliance made by the Custodian and delivered pursuant
to the preceding paragraph. Such attestation shall be in accordance with
Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act
and the Exchange Act; and
(iii) if requested by the Servicer or the Depositor not later than
February 1 of the calendar year in which such certification is to be
delivered, deliver to the Servicer, the Depositor and any other Person
that will be responsible for signing the certification (a "Sarbanes
Certification") required by Rules 13a-14(d) and 15d-14(d) under the
Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002) a
certification substantially in the form attached hereto as Exhibit 7 (or
as otherwise mutually agreed upon).
The Custodian acknowledges that the parties identified in clause
(a)(iii) above may rely on the certification provided by the Custodian
pursuant to such clause in signing a Sarbanes Certification and filing
such with the Commission. Neither the Servicer nor the Depositor will
request delivery of a certification under clause (a)(iii) above unless a
Depositor is required under the Exchange Act to file an annual report on
Form 10-K with respect to an issuing entity whose asset pool includes the
Mortgage Loans.
Subsection 33.02. Additional Information to Be Provided by the
Custodian. For so long as the Certificates are outstanding, for the
purpose of satisfying the Depositor's reporting obligation under the
Exchange Act with respect to any class of Certificates, the Custodian
shall (a) notify the Depositor in writing of any material litigation or
governmental proceedings pending against the Custodian that would be
material to Certificateholders, and (b) provide to the Company a written
description of such proceedings. Any notices and descriptions required
under this Subsection 33.02 shall be given no later than five (5) Business
Days prior to the Determination Date following the month in which the
Custodian has knowledge of the occurrence of the relevant event. As of the
date the Depositor or Servicer files each Report on Form 10-D or Form
10-K, as applicable, with respect to the Certificates, the Custodian will
be deemed to represent that any information previously provided under this
Subsection 33.02, if any, is materially correct and does not have any
material omissions unless the Custodian has provided an update to such
information.
Subsection 33.03. Indemnification; Remedies.
(a) The Custodian shall indemnify the Servicer, each affiliate of
the Servicer, and each of the following parties: Credit-Based Asset
Servicing and Securitization LLC, as the sponsor, the issuing entity, the
Depositor, the Trustee, and each Person who controls any of such parties
(within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act); and the respective present and former directors,
officers, employees and agents of each of the foregoing, and shall hold
each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments,
and any other costs, fees and expenses (other than punitive, special or
consequential damages) that any of them may sustain arising out of or
based upon any negligent failure by the Custodian to deliver any
information, report, certification, accountants' letter or other material
when and as required under this Section 33.
(b) In the case of any negligent failure of performance described in
clause (a) of this Subsection, the Custodian shall promptly reimburse the
Servicer, the Trustee, the Depositor, as applicable, and each Person
responsible for the preparation, execution or filing of any report
required to be filed with the Commission with respect to the GSAMP Trust
2006-HE2 transaction, or for execution of a certification pursuant to Rule
13a-14(d) or Rule 15d-14(d) under the Exchange Act with respect to the
GSAMP Trust 2006-HE2 transaction, for all costs reasonably incurred by
each such party in order to obtain the information, report, certification,
accountants' letter or other material not delivered as required by the
Custodian.
Section 34. Third-Party Beneficiary.
The parties hereto agree that the Depositor shall be a third-party
beneficiary to this Agreement.
IN WITNESS WHEREOF, the Servicer, the Trustee and the Custodian have
caused their names to be duly signed hereto by their respective officers
thereunto duly authorized, all as of the date first above written.
U.S. BANK NATIONAL ASSOCIATION, not in its
individual capacity but solely as Trustee for
the Mortgage Pass-Through Certificates, Series
2006-HE2
By: /s/ X. Xxxxxxxxxxxxxx
---------------------------------------------
Name: X. Xxxxxxxxxxxxxx
Title: Vice President
XXXXXX LOAN SERVICING LP,
as Servicer
By: /s/ Xxxxxx XxXxxxx
---------------------------------------------
Name: Xxxxxx XxXxxxx
Title: Senior Vice President
THE BANK OF NEW YORK
as Custodian
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
EXHIBIT 1
---------
ACKNOWLEDGMENT OF RECEIPT
April __, 2006
U.S. Bank National Association
as Trustee for the C Mortgage Pass-Through Certificates,
Series 2006-HE2
00 Xxxxxxxxxx Xxxxxx, XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Structured Finance-GSAMP 2006-HE2
Re: Custodial Agreement, dated as of April 1, 2006, among U.S. Bank
National Association, as Trustee, Xxxxxx Loan Servicing LP, as
Servicer, and The Bank of New York, as Custodian
Ladies and Gentlemen:
In accordance with the provisions of Section 4 of the
above-referenced Custodial Agreement, the undersigned, as the Custodian, hereby
certifies as to each Mortgage Loan in the Mortgage Loan Schedule that (i) it has
received the original Mortgage Note with respect to each Mortgage Loan
identified on the Mortgage Loan Schedule attached hereto as Exhibit 7 and (ii)
such Mortgage Note has been reviewed by it and appears regular on its face and
relates to such Mortgage Loan. The Custodian makes no representations as to (i)
the validity, legality, enforceability, sufficiency, due authorization or
genuineness of any of the documents contained in each Custodial File or of any
of the Mortgage Loans or (ii) the collectability, insurability, effectiveness or
suitability of any such Mortgage Loan.
The Custodian hereby confirms that it is holding each such Mortgage
Note as agent and bailee of, and custodian for the exclusive use and benefit,
and subject to the sole direction, of the Trustee pursuant to the terms and
conditions of the Custodial Agreement.
This Acknowledgment of Receipt is not divisible or negotiable.
The Custodian will accept and act on instructions with respect to
the Mortgage Loans subject hereto upon surrender of this Trust Receipt and
Initial Certification at the office of the Subcustodian at Bank of New York
Trust Company, N.A., 0000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxxxxx Xxxxxx.
Capitalized terms used herein shall have the meaning ascribed to
them in the Custodial Agreement.
THE BANK OF NEW YORK
as Custodian
By:
---------------------------------------------
Name:
Title:
EXHIBIT 2A
----------
TRUST RECEIPT AND INITIAL CERTIFICATION
Trust Receipt #__________
Cut-off Date Principal Balance $__________
U.S. Bank National Association
as Trustee for the C Mortgage Pass-Through Certificates,
Series 2006-HE2
00 Xxxxxxxxxx Xxxxxx, XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Structured Finance-GSAMP 2006-HE2
Re: Custodial Agreement, dated as of April 1, 2006, among U.S. Bank
National Association, as Trustee, Xxxxxx Loan Servicing LP, as
Servicer, and The Bank of New York, as Custodian
Ladies and Gentlemen:
In accordance with the provisions of Section 6 of the
above-referenced Custodial Agreement, the undersigned, as the Custodian, hereby
certifies that as to each Mortgage Loan listed on the Mortgage Loan Schedule
(other than any Mortgage Loan paid in full or any Mortgage Loan listed on the
attachment hereto) it has reviewed the Custodial Files and has determined that:
(i) all documents required to be delivered to it pursuant to Sections
2(a)(i)-(vi) of the Custodial Agreement are in its possession; (ii) such
documents have been reviewed by it; and have not been mutilated, damaged or torn
and relate to such Mortgage Loan (iii) based on its examination and only as to
the foregoing, the information set forth in the Mortgage Loan Schedule relating
to the Mortgage Loan identifying number, the city, state, and zip code of the
Mortgaged Property, the type of Residential Dwelling constituting the Mortgaged
Property or a designation that the Mortgaged Property is a multi-family
property, the original months to maturity, the Mortgage Interest Rate of the
Mortgage Loan as of the Cut-off Date, and whether the Mortgage Loan has a
prepayment penalty accurately reflects information set forth in the Mortgage
File; (iv) all Assignments of Mortgage or intervening assignments of mortgage,
as applicable, have been submitted for recording; and (v) each Mortgage Note has
been endorsed as provided in Section 2(a)(i) of the Custodial Agreement and each
Mortgage has been assigned in accordance with Section 2(a)(iii) of the Custodial
Agreement. The Custodian makes no representations as to (i) the validity,
legality, enforceability, sufficiency, due authorization or genuineness of any
of the documents contained in each Custodial File or of any of the Mortgage
Loans or (ii) the collectability, insurability, effectiveness or suitability of
any such Mortgage Loan.
The Custodian hereby confirms that it is holding each such Custodial
File as agent and bailee of, and custodian for the exclusive use and benefit,
and subject to the sole direction, of Trustee pursuant to the terms and
conditions of the Custodial Agreement.
This Trust Receipt and Initial Certification is not divisible or
negotiable.
The Custodian will accept and act on instructions with respect to
the Mortgage Loans subject hereto upon surrender of this Trust Receipt and Final
Certification at the office of the Subcustodian at Bank of New York Trust
Company, N.A., 0000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxxxxx Xxxxxx.
Capitalized terms used herein shall have the meaning ascribed to
them in the Custodial Agreement.
THE BANK OF NEW YORK
as Custodian
By:
---------------------------------------------
Name:
Title:
EXHIBIT 2B
----------
TRUST RECEIPT AND FINAL CERTIFICATION
Trust Receipt #___________
Cut-off Date Principal Balance $____________
U.S. Bank National Association
as Trustee for the C Mortgage Pass-Through Certificates,
Series 2006-HE2
00 Xxxxxxxxxx Xxxxxx, XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Structured Finance-GSAMP 2006-HE2
Re: Custodial Agreement, dated as of April 1, 2006, among U.S. Bank
National Association, as Trustee, Xxxxxx Loan Servicing LP, as
Servicer, and The Bank of New York, as Custodian
Ladies and Gentlemen:
In accordance with Section 6(b) of the Custodial Agreement, the
undersigned, as Custodian, 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 Schedule I hereto) it has received the applicable documents listed in
Section 2(a) of the Custodial Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in the Mortgage Loan Schedule is
correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Custodial Agreement. This Certificate is
qualified in all respects by the terms of said Custodial Agreement.
THE BANK OF NEW YORK,
as Custodian
By:
---------------------------------------------
Name:
Title:
EXHIBIT 3
---------
REQUEST FOR RELEASE OF DOCUMENTS AND RECEIPT
To: [Address]
Re: Custodial Agreement, dated as of April 1, 2006, among U.S. Bank
National Association, as Trustee, Xxxxxx Loan Servicing LP, as
Servicer, and The Bank of New York, as Custodian
In connection with the administration of the Mortgage Loans held by
you as the Custodian on behalf of the Trustee, we request the release, and
acknowledge receipt, of the (Custodial File/[specify documents]) for the
Mortgage Loan described below, for the reason indicated.
Mortgagor's Name Address & Zip Code:
Mortgage Loan Number:
Reason for Requesting Documents (check one)
_____ 1. Mortgage Loan Paid in Full. (The Servicer hereby certifies
that all amounts received in connection therewith have been
credited to the account of the Trustee.)
_____ 2. Mortgage Loan Liquidated By (The Servicer hereby certifies
that all proceeds of foreclosure, insurance, condemnation or
other liquidation have been finally received and credited to
the account of the Trustee.)
_____ 3. Mortgage Loan in Foreclosure
_____ 4. Other (explain)______________________________________________
If box 1 or 2 above is checked, and if all or part of the Custodial
File was previously released to us, please release to us our previous request
and receipt on file with you, as well as any additional documents in your
possession relating to the specified Mortgage Loan.
If box 3 or 4 above is checked, upon our return of all of the above
documents to you as the Custodian, please acknowledge your receipt by signing in
the space indicated below, and returning this form.
XXXXXX LOAN SERVICING LP,
as Servicer
By:
---------------------------------------------
Name:
Title:
Date:
-------------------------------------------
Acknowledgment of Documents returned to the Custodian:
THE BANK OF NEW YORK, as Custodian
By:
---------------------------------------------
Name:
Title:
Date:
-------------------------------------------
EXHIBIT 4
---------
AUTHORIZED REPRESENTATIVES OF SERVICER
NAME SPECIMEN SIGNATURE
---- ------------------
-------------------------- ----------------------------
-------------------------- ----------------------------
-------------------------- ----------------------------
-------------------------- ----------------------------
-------------------------- ----------------------------
EXHIBIT 5
---------
AUTHORIZED REPRESENTATIVES OF TRUSTEE
NAME SPECIMEN SIGNATURE
---- ------------------
-------------------------- ----------------------------
-------------------------- ----------------------------
-------------------------- ----------------------------
-------------------------- ----------------------------
-------------------------- ----------------------------
EXHIBIT 6
---------
SCHEDULE OF MORTGAGE LOANS
[Attached as Exhibit D to the Pooling and Servicing Agreement]
EXHIBIT 7
FORM OF ANNUAL CERTIFICATION (unless otherwise mutually agreed)
The Custodial Agreement, (the "Agreement") dated as of April 1, 2006,
among U.S. Bank National Association, as Trustee, Xxxxxx Loan Servicing LP, as
Servicer, and The Bank of New York, as Custodian.
I, ________________________________, the _______________________ of The
Bank of New York, certify to Xxxxxx Loan Servicing LP, GS Mortgage Securities
Corp. and U.S. Bank National Association, and their officers, with the knowledge
and intent that they will rely upon this certification, that:
(1) I have reviewed the report on assessment of the Custodian's compliance
with the servicing criteria set forth in Items 1122(d)(1)(ii), 1122(d)(1)(iv),
1122(d)(4)(i) and 1122(d)(4)(ii) of Regulation AB (the "Servicing Criteria"),
provided in accordance with Rules 13a-18 and 15d-18 under Securities Exchange
Act of 1934, as amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's attestation
report provided in accordance with Rules 13a-18 and 15d-18 under the Exchange
Act and Section 1122(b) of Regulation AB (the "Attestation Report")
(collectively, the "Custodian Servicing Information");
(2) Based on my knowledge, the Custodian Servicing Information, taken as a
whole, does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in the light of the
circumstances under which such statements were made, not misleading with respect
to the period of time covered by the Custodian Servicing Information;
(3) Based on my knowledge, all of the Custodian Servicing Information
required to be provided by the Custodian under the Agreement has been provided
to Xxxxxx Loan Servicing LP, GS Mortgage Securities Corp. and U.S. Bank National
Association;
(4) I am responsible for reviewing the activities performed by the
Custodian under the Agreement, and based on my knowledge and the compliance
review conducted in preparing the Compliance Statement and except as disclosed
in the Servicing Assessment or the Attestation Report, the Custodian has
fulfilled its obligations under the Agreement in all material respects; and
(5) The Servicing Assessment and Attestation Report required to be
provided by the Custodian pursuant to the Agreement, have been provided to
Xxxxxx Loan Servicing LP, GS Mortgage Securities Corp. and U.S. Bank National
Association. Any material instances of noncompliance described in such reports
have been disclosed to Xxxxxx Loan Servicing LP, GS Mortgage Securities Corp.
and U.S. Bank National Association. Any material instance of noncompliance with
the Servicing Criteria has been disclosed in such reports.
Date:
---------------------------------------
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EXHIBIT S
FORM 8-K DISCLOSURE
--------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
--------------------------------------------------------------------------------
*Item 1.01- Entry into a Material All parties as to themselves
Definitive Agreement
*Item 1.02- Termination of a Material All parties as to themselves
Definitive Agreement
Item 1.03- Bankruptcy or Receivership All parties as to themselves
Item 2.04- Triggering Events that N/A
Accelerate or Increase a Direct
Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement
*Item 3.03- Material Modification to Covered in Item 1.01
Rights of Security Holders
Item 5.03- Amendments of Articles of Depositor
Incorporation or Bylaws; Change of
Fiscal Year
Item 6.01- ABS Informational and N/A
Computational Material
*Item 6.02- Change of Servicer or Servicer (as to Servicer or each
Trustee Subservicer it engages), Trustee (as
to Trustee or any Subcontractor it
engages)
*Item 6.03- Change in Credit Enhancement Depositor
or External Support
*Item 6.04- Failure to Make a Required Trustee
Distribution
Item 6.05- Securities Act Updating Depositor
Disclosure
Item 7.01- Reg FD Disclosure Depositor
Item 8.01 - Other Events All parties as to themselves
Item 9.01 - Financial Statements and All parties as it relates to their
Exhibits own agreements
--------------------------------------------------------------------------------
EXHIBIT T
FORM 10-D DISCLOSURE
--------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
--------------------------------------------------------------------------------
Item 1: Distribution and Pool Trustee
Performance Information
Material breaches of Mortgage Loan Servicer
Representations
Material breaches of covenants under Servicer, Trustee and Depositor (each
this Agreement as to itself and with respect to other
parties, as to which it obtains actual
notice)
Item 2: Legal Proceedings per Item All parties to the Pooling and
1117 of Reg AB Servicing Agreement (as to
themselves), the Sponsor, or GSMC, with
respect to Mortgage Loans sold to the
Sponsor, as applicable, as to the
originator and the custodian, the
trustee as to the issuing entity
Item 3: Sale of Securities and Use of Depositor
Proceeds
Item 4: Defaults Upon Senior Trustee
Securities
Item 5: Submission of Matters to Trustee
a Vote of Security Holders
Item 6: Significant Obligors of Pool N/A
Assets 1112(b)-
Item 7: Significant Enhancement Sponsor
Provider Information
Item 1114(b)(2)-Credit Enhancement N/A
Provider Financial
Information
Item 1115(b)-Derivative Counterparty Depositor
Financial Information
Item 8: Other Information Depositor, Sponsor, Trustee and any
other party responsible for disclosure
items on Form 8-K
Item 9: Exhibits Trustee (as to monthly
payment/distribution reports only),
Depositor, Sponsor
EXHIBIT U
FORM 10-K DISCLOSURE
-------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
-------------------------------------------------------------------------------
Item 1B: Unresolved Staff Comments Depositor
*Item 9B: Other Information Depositor, Trustee and any other
party responsible for disclosure
items on Form 8-K
*Item 15: Exhibits, Financial Trustee/Servicer/
Statement Schedules Depositor
*Additional Item: N/A
Disclosure per Item 1112(b) of
Reg AB
*Additional Item: N/A
Disclosure per Item 1114(b)(2)
of Reg AB
*Additional Item: Depositor
Disclosure per Item 1115(b)
of Reg AB
*Additional Item: All parties to the Pooling and
Disclosure per Item 1117 of Reg AB Servicing Agreement (as to
themselves), the Sponsor, or GSMC, with
respect to Mortgage Loans sold to the
Sponsor, as applicable, as to the
originator, the trustee as to the
issuing entity
*Additional Item: All parties to the Pooling and
Disclosure per Item 1119 of Reg AB Servicing Agreement
Additional Item: Servicer and Subservicer, Trustee and
Disclosure per Item 1122 of Reg AB Subcontractor and Custodian
Additional Item: Servicer and Subservicer, Trustee and
Disclosure per Items 1123 of Reg AB Subcontractor and Custodian
