Exhibit 99.1
EXECUTION COPY
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NEW CENTURY ALTERNATIVE MORTGAGE LOAN TRUST 2006-ALT2
ASSET-BACKED CERTIFICATES
SERIES 2006-ALT2
TRUST AGREEMENT
among
GS MORTGAGE SECURITIES CORP.,
Depositor,
U.S. BANK NATIONAL ASSOCIATION,
Trustee
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Custodian
Dated as of October 1, 2006
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.........................................................................................9
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.......................................................................36
Section 2.02 Acceptance by the Custodian of the Mortgage Loans..................................................38
Section 2.03 Execution and Delivery of Certificates.............................................................40
Section 2.04 REMIC Matters......................................................................................40
Section 2.05 Representations and Warranties of the Depositor....................................................40
Section 2.06 Representations and Warranties of the Custodian....................................................42
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Excess Reserve Fund Account; Distribution Account..................................................43
Section 3.02 Investment of Funds in the Distribution Account....................................................44
ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution.........................................................................46
Section 4.02 Monthly Statements to Certificateholders...........................................................51
Section 4.03 Allocation of Applied Realized Loss Amounts........................................................54
Section 4.04 Certain Matters Relating to the Determination of LIBOR.............................................54
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates...................................................................................55
Section 5.02 Certificate Register; Registration of Transfer and Exchange of Certificates........................56
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates..................................................61
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Section 5.04 Persons Deemed Owners..............................................................................61
Section 5.05 Access to List of Certificateholders' Names and Addresses..........................................61
Section 5.06 Maintenance of Office or Agency....................................................................61
ARTICLE VI
THE DEPOSITOR
Section 6.01 Liabilities of the Depositor.......................................................................62
Section 6.02 Merger or Consolidation of the Depositor...........................................................62
Section 6.03 Limitation on Liability of the Depositor and Others................................................62
Section 6.04 Servicing Compliance Review........................................................................63
Section 6.05 Option to Purchase Defaulted Mortgage Loans........................................................63
ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default..................................................................................63
Section 7.02 Trustee to Act; Appointment of Successor.............................................................
Section 7.03 Trustee to Act as Servicer.........................................................................65
Section 7.04 Notification to Certificateholders.................................................................65
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIAN
Section 8.01 Duties of the Trustee and the Custodian............................................................65
Section 8.02 Administration of the Servicer.....................................................................66
Section 8.03 Certain Matters Affecting the Trustee and the Custodian............................................67
Section 8.04 Trustee and Custodian Not Liable for Certificates or Mortgage Loans................................68
Section 8.05 Trustee May Own Certificates.......................................................................69
Section 8.06 Trustee's Fees and Expenses........................................................................69
Section 8.07 Eligibility Requirements for the Trustee...........................................................70
Section 8.08 Resignation and Removal of the Trustee.............................................................70
Section 8.09 Successor Trustee..................................................................................71
Section 8.10 Merger or Consolidation of the Trustee or the Custodian............................................71
Section 8.11 Appointment of Co-Trustee or Separate Trustee......................................................72
Section 8.12 Tax Matters........................................................................................73
Section 8.13 [Reserved].........................................................................................76
Section 8.14 Tax Classification of the Excess Reserve Fund Account..............................................76
Section 8.15 Custodial Responsibilities.........................................................................76
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ARTICLE IX
TERMINATION
Section 9.01 Termination upon Liquidation or Purchase of the Mortgage Loans.....................................78
Section 9.02 Final Distribution on the Certificates.............................................................78
Section 9.03 Additional Termination Requirements................................................................80
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment.........................................................................................80
Section 10.02 Recordation of Agreement; Counterparts............................................................82
Section 10.03 Governing Law.....................................................................................83
Section 10.04 Intention of Parties..............................................................................83
Section 10.05 Notices...........................................................................................83
Section 10.06 Severability of Provisions........................................................................84
Section 10.07 Limitation on Rights of Certificateholders........................................................84
Section 10.08 Certificates Nonassessable and Fully Paid.........................................................85
Section 10.09 Waiver of Jury Trial..............................................................................85
ARTICLE XI
EXCHANGE ACT REPORTING
Section 11.01 Filing Obligations................................................................................85
Section 11.02 Form 8-K Filings..................................................................................86
Section 11.03 Form 10-D Filings.................................................................................87
Section 11.04 Form 10-K Filings.................................................................................89
Section 11.05 Form 15 Filing....................................................................................90
Section 11.06 Xxxxxxxx-Xxxxx Certification......................................................................90
Section 11.07 Report on Assessment of Compliance and Attestation................................................91
SCHEDULES
Schedule I Mortgage Loan Schedule
EXHIBITS
Exhibit A Form of Class A, Class M and Class B Certificates
Exhibit B Form of Class P Certificates
Exhibit C Form of Class R, Class RC and Class RX Certificates
Exhibit D Form of Class X Certificate
iii
Exhibit E Form of Initial Certification of Custodian
Exhibit F Form of Document Certification and Exception Report of Custodian
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Back-up Certification (Trustee)
Exhibit K Form of Servicing Criteria to be Addressed in Assessment of Compliance Statement
Exhibit L Form of Request for Release of Documents
Exhibit M Form 8-K Disclosure Information
Exhibit N Additional Form 10-D Disclosure
Exhibit O Additional Form 10-K Disclosure
Exhibit P Flow Mortgage Loan Purchase and Warranties Agreement, dated as of March 1, 2006, between Xxxxxxx
Sachs Mortgage Company, as purchaser and New Century Mortgage Corporation, as seller
Exhibit Q Flow Interim Servicing Agreement, dated as of March 1, 2006, between Xxxxxxx Xxxxx Mortgage
Company, as purchaser and New Century Mortgage Corporation, as interim servicer
Exhibit R Servicing Agreement, dated as of June 30, 2006, between Xxxxx Fargo Bank, National Association, as
servicer and Xxxxxxx Xxxxx Mortgage Company, as owner
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THIS TRUST AGREEMENT, dated as of October 1, 2006 (this
"Agreement"), is hereby executed by and among GS MORTGAGE SECURITIES CORP., a
Delaware corporation (the "Depositor"), U.S. BANK NATIONAL ASSOCIATION ("U.S.
Bank"), as trustee (in such capacity, the "Trustee"), and DEUTSCHE BANK
NATIONAL TRUST COMPANY ("Deutsche Bank"), as custodian (in such capacity, the
"Custodian").
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 on behalf of the Trust shall elect that three
segregated asset pools within the Trust Fund be treated for federal income tax
purposes as comprising three REMICs (each, a "Trust REMIC" or, in the
alternative, the "Lower-Tier REMIC", the "Upper-Tier REMIC" and the "Class X
REMIC", respectively). The Class X Interest and each Class of Principal
Certificates (other than the right of each Class of Principal Certificates to
receive Basis Risk Carry Forward Amounts), represents ownership of a regular
interest in the Upper-Tier REMIC for purposes of the REMIC Provisions. The
Class R Certificates represent ownership of the sole class of residual
interest in the Upper-Tier REMIC, the Class RC Certificates represent
ownership of the sole class of residual interest in the Lower-Tier REMIC and
the Class RX Certificates represent ownership of the sole class of residual
interest in the Class X REMIC for purposes of the REMIC Provisions. The
Startup Day for each REMIC described herein is the Closing Date. The latest
possible maturity date for each Certificate is the latest date referenced in
Section 2.04. The Class X REMIC shall hold as assets the Class X Interest 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 assets described in the definition of "Trust
Fund" herein (other than the Prepayment Premiums and the Excess Reserve Fund
Account). Each Lower-Tier Regular Interest is hereby designated as a regular
interest in the Lower-Tier REMIC. The Class LT-AV-1, Class LT-AF-2, Class
LT-AF-3, Class LT-AF-4, Class LT-AF-5, Class LT-AF-6A, Class LT-AF-6B, Class
LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4, Class LT-B-1, Class LT-B-2
and Class LT-B-3 Interests are hereby designated the LT-Accretion Directed
Classes (the "LT Accretion Directed Classes"). The Class P Certificates
represent beneficial ownership of the Prepayment Premiums, each Class of
Certificates (excluding the Class P, Class X and the Residual Certificates)
represents beneficial ownership of a regular interest in the Upper-Tier REMIC
and the right to receive Basis Risk Carry Forward Amounts and the Class X
Certificates represent beneficial ownership of a regular interest in the Class
X REMIC and the Excess Reserve Fund Account, which portions of the Trust Fund
shall be treated as a grantor trust.
The Lower-Tier REMIC
Corresponding
Lower-Tier Lower-Tier Initial Lower-Tier Upper-Tier
Interest Designation Interest Rate Principal Amount REMIC Class
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Class LT-AV-1 (1) 1/2 initial Class Certificate Balance AV-1
Corresponding
Lower-Tier Lower-Tier Initial Lower-Tier Upper-Tier
Interest Designation Interest Rate Principal Amount REMIC Class
--------------------------------------------------------------------------------------------------
of Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF-2 (1) 1/2 initial Class Certificate Balance of AF-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF-3 (1) 1/2 initial Class Certificate Balance of AF-3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF-4 (1) 1/2 initial Class Certificate Balance of AF-4
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF-5 (1) 1/2 initial Class Certificate Balance of AF-5
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF-6A (1) 1/2 initial Class Certificate Balance of AF-6A
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-AF-6B (1) 1/2 initial Class Certificate Balance of AF-6B
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-1 (1) 1/2 initial Class Certificate Balance of M-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-2 (1) 1/2 initial Class Certificate Balance of M-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-3 (1) 1/2 initial Class Certificate Balance of M-3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-M-4 (1) 1/2 initial Class Certificate Balance of M-4
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-1 (1) 1/2 initial Class Certificate Balance of B-1
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-2 (1) 1/2 initial Class Certificate Balance of B-2
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-B-3 (1) 1/2 initial Class Certificate Balance of B-3
Corresponding Upper-Tier REMIC Regular
Interest
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2
Overcollateralized Amount
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(1) The interest rate with respect to any Distribution Date for these
interests is a per annum variable rate equal to the WAC Cap.
The Lower-Tier REMIC shall hold as assets all of the Lower-Tier
REMIC Regular Interests.
On each Distribution Date, 50% of the increase in the
Overcollateralized Amount will 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 will 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 may 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 shall be allocated (i) 50% to the Class
LT-Accrual Interest and (ii) 50% to the LT-Accretion Directed Classes
(principal payments shall be allocated among such LT-Accretion Directed
Classes in an amount equal to 50% of the principal amounts allocated to their
respective Corresponding Classes), until paid in full. Notwithstanding the
above, principal payments allocated to the Class X Interest that result in the
reduction in the Overcollateralized Amount shall be allocated to the Class
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 its Corresponding Class, and
(ii) the Class LT-Accrual Interest is equal to 50% of the aggregate Stated
Principal Balance of the Mortgage Loans plus 50% of the Overcollateralized
Amount.
In addition to issuing the Lower-Tier Regular Interests, the
Lower-Tier REMIC shall issue the Class LT-R Interest which shall be the sole
class of residual interests in the Lower-Tier REMIC. The Class RC Certificates
will represent ownership of the Class LT-R Interest and will be issued as a
single certificate in definitive form in a principal amount of $100 and shall
have no interest rate. Amounts received by the Class LT-R Interest shall be
deemed paid from the Lower-Tier REMIC.
The Upper-Tier REMIC
The Upper-Tier REMIC shall issue the following classes of
Upper-Tier Regular Interests, and each such interest, other than the Class
UT-R Interest, is hereby designated as a regular interest in the Upper-Tier
REMIC.
Upper-Tier Interest Initial Upper-Tier
Upper-Tier Rate and Principal Amount and Corresponding
Class Designation Corresponding Corresponding Class Class of Certificates
------------------- ---------------------
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Class Pass-Through Rate Certificate Balance
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Class AV-1 (1) $ 186,161,000 Class AV-1(16)
Class AF-2 (2) $ 36,791,000 Class AF-2(16)
Class AF-3 (3) $ 85,815,000 Class AF-3(16)
Class AF-4 (4) $ 31,742,000 Class AF-4(16)
Class AF-5 (5) $ 55,290,000 Class AF-5(16)
Class AF-6A (6) $ 39,580,000 Class AF-6A(16)
Class AF-6B (7) $ 4,398,000 Class AF-6B(16)
Class M-1 (8) $ 6,751,000 Class M-1(16)
Class M-2 (9) $ 3,492,000 Class M-2(16)
Class M-3 (10) $ 2,329,000 Class M-3(16)
Class M-4 (11) $ 3,955,000 Class M-4(16)
Class B-1 (12) $ 2,329,000 Class B-1(16)
Class B-2 (13) $ 2,329,000 Class B-2(16)
Class B-3 (14) $ 2,329,000 Class B-3(16)
Class X (15) (15) Class X(15)
(1) The Class AV-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) LIBOR plus
0.06000% and (ii) the WAC Cap.
(2) The Class AF-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) 5.71239% and (ii)
the WAC Cap.
(3) The Class AF-3 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to the lesser of (i) 5.97235% and (ii)
the WAC Cap.
(4) The Class AF-4 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first
possible Optional Termination Date, the lesser of (i) 6.09350% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.59350% and (ii) the WAC Cap.
(5) The Class AF-5 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first
possible Optional Termination Date, the lesser of (i) 6.21534% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.71534% and (ii) the WAC Cap.
(6) The Class AF-6A Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first
possible Optional Termination Date, the lesser of (i) 5.88734% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.38734% and (ii) the WAC Cap.
(7) The Class AF-6B Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first
possible Optional Termination Date, the lesser of (i) 5.95671% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.45671% and (ii) the WAC Cap.
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(8) The Class M-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first
possible Optional Termination Date, the lesser of (i) 6.09690% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.59690% and (ii) the WAC Cap.
(9) The Class M-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first
possible Optional Termination Date, the lesser of (i) 6.14652% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.64652% and (ii) the WAC Cap.
(10) The Class M-3 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first
possible Optional Termination Date, the lesser of (i) 6.19613% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.69613% and (ii) the WAC Cap.
(11) The Class M-4 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first
possible Optional Termination Date, the lesser of (i) 6.34456% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 6.84456% and (ii) the WAC Cap.
(12) The Class B-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first
possible Optional Termination Date, the lesser of (i) 6.64036% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 7.14036% and (ii) the WAC Cap.
(13) The Class B-2 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first
possible Optional Termination Date, the lesser of (i) 6.84000% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 7.34000% and (ii) the WAC Cap.
(14) The Class B-3 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the first
possible Optional Termination Date, the lesser of (i) 6.84000% and (ii)
the WAC Cap or (b) after the first possible Optional Termination Date,
the lesser of (i) 7.34000% and (ii) the WAC Cap.
(15) The Class X Interest will have a principal balance to the extent of any
Overcollateralized Amount. The Class X Interest will not accrue interest
on such balance but will accrue interest on a notional principal
balance. As of any Distribution Date, the Class X Interest shall have a
notional principal balance equal to the aggregate of the principal
balances of the Lower-Tier Regular Interests as of the first day of the
related Interest Accrual Period. With respect to any Interest Accrual
Period, the Class X Interest shall bear interest at a rate equal to the
excess, if any, of the WAC Cap over the product of (i) 2 and (ii) the
weighted average Lower-Tier Interest Rate of the Lower-Tier Regular
Interests, where the Lower-Tier Interest Rates 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 Pass-Through Rate on its
Corresponding Class. With respect to any Distribution Date, interest
that so accrues on the notional principal balance of the Class X
Interest shall be deferred in an amount equal to any increase in the
Overcollateralized Amount on such Distribution
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Date. Such deferred interest shall not itself bear interest. The Class X
Certificates will represent beneficial ownership of a regular interest
issued by the Class X REMIC and amounts in the Excess Reserve Fund
Account, subject to the obligation to make payments from the Excess
Reserve Fund Account in respect of Basis Risk Carry Forward Amounts. For
federal income tax purposes, Trustee will treat the Class X
Certificateholders' obligation to make payments from the Excess Reserve
Fund Account as payments made pursuant to an interest rate cap contract
written by the Class X Certificateholders in favor of each Class of
Principal Certificates. Such rights of the Class X Certificateholders
and Principal Certificateholders shall be treated as held in a portion
of the Trust Fund that is treated as a grantor trust under subpart E,
Part I of subchapter J of the Code.
(16) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account in respect of any
Basis Risk Carry Forward Amounts. For federal income tax purposes, the
Trustee will treat a Certificateholder's right to receive payments from
the Excess Reserve Fund Account as payments made pursuant to an interest
rate cap contract written by the Class X Certificateholders.
In addition to issuing the Upper-Tier Regular Interests, the
Upper-Tier REMIC shall issue the Class R Certificates, which shall be the sole
class of residual interests in the Upper-Tier REMIC. The Class R Certificates
will be issued as a single certificate in definitive form in a principal
amount of $100 and shall have no interest rate. Amounts received by the Class
R Certificates shall be deemed paid from the Upper-Tier REMIC.
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Class X REMIC
The Class X REMIC shall issue the following classes of interests.
The Class X Certificates shall represent a regular interest in the Class X
REMIC and the Class RX Certificates shall represent the sole class of residual
interest in the Class X REMIC.
Interest Class X REMIC
Class X REMIC Designation Rate Principal Amount
-------------------------- ---- ----------------
Class X Certificates (1) (1)
Class RX Certificates (2) (2)
-----------------
(1) The Class X Certificates are entitled to 100% of the interest and
principal on the Class X Interest on each Distribution Date.
(2) The Class RX Certificates do not have an interest rate or principal
amount.
The foregoing REMIC structure is intended to cause all of the cash
from the Mortgage Loans to flow through to the Upper-Tier REMIC and the Class
X REMIC as cash flow on a REMIC regular interest, without creating any actual
or potential shortfall (other than for credit losses) to any Trust REMIC
regular interest. It is not intended that the Class R, Class RC or Class RX
Certificates be entitled to any cash flow pursuant to this Agreement except as
provided in Section 4.01(a)(ii)(A)(1) hereunder.
For any purpose for which the Pass-Through Rates are calculated,
the interest rate on the Mortgage Loans shall be appropriately adjusted to
account for the difference between the monthly day count convention of the
Mortgage Loans and the monthly day count convention of the regular interests
issued by each of the REMICs. For purposes of calculating the Pass-Through
Rates for each of the interests issued by the Lower-Tier REMIC such rates
shall be adjusted to equal a monthly day count convention based on a 30 day
month for each Due Period and a 360-day year so that the Mortgage Loans and
all regular interests will be using the same monthly day count convention.
The minimum denomination for each Class of the Offered
Certificates will be $50,000 initial Certificate Balance, with integral
multiples of $1 in excess thereof except that one Certificate in each Class
may be issued in a different amount. The minimum denomination for (a) the
Class R and Class RC Certificates will each be $100 and each will be a 100%
Percentage Interest in such Class, (b) the Class RX Certificates will be a
100% Percentage Interest in such Class and (c) the Class P and Class X
Certificates will be a 1% Percentage Interest in each such Class.
7
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....................... The Class AV-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5,
Class AF-6A and Class AF-B Certificates, collectively.
Class B Certificates....................... The Class B-1, Class B-2 and Class B-3 Certificates, collectively.
Class M Certificates....................... The Class M-1, Class M-2, Class M-3 and Class M-4 Certificates,
collectively.
Residual Certificates...................... The Class R, Class RC and Class RX Certificates.
ERISA Restricted
Certificates............................... The Private Certificates, the Physical Certificates and any
Certificate with a rating below the lowest applicable permitted
rating under the Underwriters' Exemption.
Fixed Rate Certificates.................... The Class A Certificates (other than the Class AV-1 Certificates),
the Class M Certificates and the Class B Certificates.
LIBOR Certificates......................... The Class AV-1 Certificates.
Offered Certificates....................... All Classes of Certificates other than the Private Certificates.
Private Certificates....................... The Class P and Class X Certificates.
Physical Certificates...................... The Class R, Class RC, Class RX, Class P and Class X Certificates.
Principal Certificates..................... The Fixed Rate Certificates and LIBOR Certificates.
Rating Agencies............................ Xxxxx'x and S&P.
Regular Certificates....................... All Classes of Certificates other than the Residual Certificates.
Subordinated Certificates.................. The Class M and Class B Certificates.
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Capitalized terms used herein but not
defined herein shall have the meanings given them in the Servicing Agreement
or the Sale Agreement. Whenever used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the following
meanings:
10-K Filing Deadline: As defined in Section 11.04.
60+ Day Delinquent Mortgage Loan: Each Mortgage Loan with respect
to which any portion of a Monthly Payment is, as of the last day of the prior
Due Period, two months or more past due (without giving effect to any grace
period), each Mortgage Loan in foreclosure, all REO Property and each Mortgage
Loan for which the Mortgagor has filed for bankruptcy as reported by the
Servicer to the Trustee.
Account: The Distribution Account or the Excess Reserve Fund
Account. Each such Account shall be a separate Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of Principal Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior
to such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for the related Due
Period allocated to such Class pursuant to Section 4.01.
Additional Form 10-D Disclosure: As defined in Section 11.03.
Additional Form 10-K Disclosure: As defined in Section 11.04.
Additional Servicer: Each affiliate of each servicer that services
any of the Mortgage Loans and each Person who is not an affiliate of the any
servicer, who services 10% or more of the Mortgage Loans. For clarification
purposes, the Trustee is an Additional Servicer.
Adjusted Net Mortgage Interest Rate: As to each Mortgage Loan and
at any time, the per annum rate equal to the Mortgage Interest Rate less the
Expense Fee Rate.
Advance: Any Monthly Advance or Servicing Advance.
Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For
the purposes of this definition, "control" means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement: This Trust Agreement and all amendments or supplements
hereto.
9
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.
Assignment Agreement: The Step 1 Assignment Agreements or the Step
2 Assignment Agreements.
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 (without
duplication) (i) all scheduled installments of interest (net of the related
Expense Fees) and principal due on the Due Date on such Mortgage Loans in the
related Due Period and received on or prior to the related Determination Date,
together with any Monthly Advances in respect thereof; (ii) all Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds received during the
related Principal Prepayment Period (in each case, net of unreimbursed
expenses incurred in connection with a liquidation or foreclosure and
unreimbursed Advances, if any); (iii) all partial or full prepayments
(excluding Prepayment Premiums) on the Mortgage Loans received during the
related Principal Prepayment Period together with all Compensating Interest
paid in connection therewith; (iv) all amounts received with respect to such
Distribution Date in connection with a purchase or repurchase of a Deleted
Mortgage Loan; (v) all amounts received with respect to such Distribution Date
as a Substitution Adjustment Amount received in connection with the
substitution of a Mortgage Loan; and (vi) all proceeds received with respect
to the termination of the Trust Fund pursuant to clause (a) of Section 9.01;
reduced by (y) all amounts in reimbursement for Monthly Advances and Servicing
Advances previously made with respect to the Mortgage Loans, and other amounts
as to which the Servicer, the Depositor, the Trustee (or co-trustee) or the
Custodian are entitled to be paid or reimbursed pursuant to this Agreement or
the Servicing Agreement.
Back-Up Certification: As defined in Section 11.06.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Principal Remittance Amount
for such Distribution Date over (ii) the Excess Overcollateralized Amount, if
any, for such Distribution Date.
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, if any, of (i) the amount
of interest such Class of Certificates would otherwise be entitled to receive
on such Distribution Date had such Pass-Through Rate not been subject to the
WAC Cap, over (ii) the amount of interest that Class of Certificates received
on such Distribution Date taking into account the WAC Cap and (B) the Basis
Risk Carry Forward Amount for such Class of Certificates for all previous
Distribution Dates not previously paid, together with interest thereon
10
at a rate equal to the applicable Pass-Through Rate for such Class of
Certificates for such Distribution Date, without giving effect to the WAC
Cap).
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk Carry Forward Amounts for
such Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for Basis Risk Payments).
Book-Entry Certificates: As specified in the Preliminary
Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of
New York, Minnesota, Maryland or California, (b) with respect to the Servicer,
the State in which the Servicer's servicing operations are located, or (c) the
State in which the Trustee's operations are located, are authorized or
obligated by law or executive order to be closed.
Certificate: Any one of the Certificates executed by the Trustee
in substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Principal
Certificates, at any date, the maximum dollar amount of principal to which the
Holder thereof is then entitled hereunder, such amount being equal to the
Denomination thereof minus all distributions of principal previously made with
respect thereto and in the case of any Subordinated Certificates, reduced by
any Applied Realized Loss Amounts applicable to such Class of Subordinated
Certificates; provided, however, that immediately following the Distribution
Date on which a Subsequent Recovery is distributed, the Class Certificate
Balances of any Class or Classes of Certificates that have been previously
reduced by Applied Realized Loss Amounts will be increased, in order of
seniority, by the amount of the Subsequent Recovery distributed on such
Distribution Date (up to the amount of Applied Realized Loss Amounts allocated
to such Class or Classes). The Class X and Class P Certificates have no
Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purpose of giving any consent pursuant to this Agreement, any Certificate
registered in the name of the Depositor or any affiliate of the Depositor
shall be deemed not to be Outstanding and the Percentage Interest evidenced
thereby 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.
11
Certification Parties As defined in Section 11.06.
Certifying Person: As defined in Section 11.06.
Class: All Certificates bearing the same class designation as set
forth in this Agreement.
Class A Certificates: As specified in the Preliminary Statement.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balance
of the Class A Certificates immediately prior to such Distribution Date over
(ii) the lesser of (A) 88.90% 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 AF-2 Certificates: All Certificates bearing the class
designation of "Class AF-2."
Class AF-3 Certificates: All Certificates bearing the class
designation of "Class AF-3."
Class AF-4 Certificates: All Certificates bearing the class
designation of "Class AF-4."
Class AF-5 Certificates: All Certificates bearing the class
designation of "Class AF-5."
Class AF-6A Certificates: All Certificates bearing the class
designation of "Class AF-6."
Class AF-6A and Class AF-6B Calculation Percentage: With respect
to any Distribution Date, the fraction, expressed as a percentage, the
numerator of which is the aggregate Class Certificate Balance of the Class
AF-6A and Class AF-6B Certificates and the denominator of which is the
aggregate Class Certificate Balance of all of the Class A Certificates, in
each case before giving effect to distribution of principal on that
Distribution Date.
Class AF-6A and Class AF-6B Lockout Distribution Amount. With
respect to any Distribution Date, an amount equal to the product of (i) the
applicable Class AF-6A and Class AF-6B Calculation Percentage for that
Distribution Date, (ii) the Class AF-6A and Class AF-6B Lockout Percentage for
that Distribution Date and (iii) the Class A Principal Distribution Amount for
that Distribution Date. In no event shall the Class AF-6A and Class AF-6B
Lockout Distribution Amount exceed the lesser of the aggregate outstanding
Class Certificate Balance of the Class AF-6A and Class AF-6B Certificates or
the Class A Principal Distribution Amount for the applicable Distribution
Date.
12
Class AF-6A and Class AF-6B Lockout Percentage. For any
Distribution Date, the following:
Class AF-6
Distribution Lockout
Date (Months) Percentage
1 to 36 0%
37 to 60 45%
61 to 72 80%
73 to 84 100%
85 and thereafter 300%
Class AF-6B Certificates: All Certificates bearing the class
designation of "Class AF-B."
Class AV-1 Certificates: All Certificates bearing the class
designation of "Class AV-1."
Class B Certificates: As specified in the Preliminary Statement.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1."
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class Certificate Balance of the Class M-3 Certificates (after taking into
account the distribution of the Class M-3 Principal Distribution Amount on
such Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount on such Distribution Date) and (F) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) the product of (x) 97.00% and
(y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date, and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2."
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution
13
Amount on such Distribution Date), (B) the Class Certificate Balance of the
Class M-1 Certificates (after taking into account the distribution of the
Class M-1 Principal Distribution Amount on such Distribution Date), (C) the
Class Certificate Balance of the Class M-2 Certificates (after taking into
account the distribution of the Class M-2 Principal Distribution Amount on
such Distribution Date), (D) the Class Certificate Balance of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date), (E) the Class
Certificate Balance of the Class M-4 Certificates (after taking into account
the distribution of the Class M-4 Principal Distribution Amount on such
Distribution Date), (F) the Class Certificate Balance of the Class B-1
Certificates (after taking into account the distribution of the Class B-1
Principal Distribution Amount on such Distribution Date) and (G) the Class
Certificate Balance of the Class B-2 Certificates immediately prior to that
Distribution Date over (ii) the lesser of (A) the product of (x) 98.00% and
(y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3."
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class Certificate Balance of the Class M-3 Certificates (after taking into
account the distribution of the Class M-3 Principal Distribution Amount on
such Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account
the distribution of the Class B-1 Principal Distribution Amount on such
Distribution Date), (G) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount on such Distribution Date) and (H) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to that
Distribution Date over (ii) the lesser of (A) the product of 99.00% and (y)
the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class M Certificates: As specified in the Preliminary Statement.
14
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1."
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) the
product of (x) 91.80% and (y) the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over the Overcollateralization Floor.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2."
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) the product of (x) 93.30% and (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over the Overcollateralization Floor.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3."
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount on such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the
Class M-2 Principal Distribution Amount on such Distribution Date) and (D) the
Class Certificate Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (ii) the lesser of (A) the product of (x) 94.30%
and (y) the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over the
Overcollateralization Floor.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4."
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balance of the Class A
15
Certificates (after taking into account the distribution of the Class A
Principal Distribution Amount on such Distribution Date), (B) the Class
Certificate Balance of the Class M-1 Certificates (after taking into account
the distribution of the Class M-1 Principal Distribution Amount on such
Distribution Date), (C) the Class Certificate Balance of the Class M-2
Certificates (after taking into account the distribution of the Class M-2
Principal Distribution Amount on such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account
the distribution of the Class M-3 Principal Distribution Amount on such
Distribution Date) and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser
of (A) the product of (x) 96.00% and (y) the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date and (B) the excess,
if any, of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date over the Overcollateralization Floor.
Class P Certificates: All Certificates bearing the class
designation of "Class P."
Class R Certificates: All Certificates bearing the class
designation of "Class R."
Class RC Certificates: All Certificates bearing the class
designation of "Class RC."
Class RX Certificates: All Certificates bearing the class
designation of "Class RX."
Class X Certificates: All Certificates bearing the class
designation of "Class X."
Class X Distributable Amount: On any Distribution Date, (i) as a
distribution in respect of interest, the amount of interest that has accrued
on the Class X Interest and not applied as an Extra Principal Distribution
Amount on such Distribution Date, plus any such accrued interest remaining
undistributed from prior Distribution Dates, plus, without duplication, (ii)
as a distribution in respect of principal, any portion of the principal
balance of the Class X Interest which is distributable as an
Overcollateralization Reduction Amount, minus (iii) any amounts paid as a
Basis Risk Payment.
Class X Interest: The Upper-Tier Regular Interest as specified and
described in the Preliminary Statement and the related footnote thereto.
Class X REMIC: As defined in the Preliminary Statement.
Closing Date: October 30, 2006.
Code: The Internal Revenue Code of 1986, including any successor
or amendatory provisions.
Commission: The U.S. Securities and Exchange Commission.
Compensating Interest: For any Distribution Date, the lesser of
(a) the Prepayment Interest Shortfall, if any, for the Distribution Date, with
respect to voluntary Principal Prepayments in full or in part by the Mortgagor
(excluding any payments made upon
16
liquidation of the Mortgage Loan) during the related Principal Prepayment
Period, and (b) the aggregate Servicing Fee received for the related
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, to the extent not
required to be released to a Mortgagor in accordance with the terms of the
related Mortgage Loan Documents.
Corporate Trust Office: The principal office of the Trustee at 00
Xxxxxxxxxx Xxxxxx, XX-XX-XX0X, Xx. Xxxx, Xxxxxxxxx 00000, Attention:
Structured Finance - NCAMLT 2006-ALT2, or at such other address as the Trustee
may designate from time to time by notice to the Certificateholders.
Corresponding Class: The Class of interests in one Trust REMIC
created under this Agreement that corresponds to the Class of interests in the
other Trust REMIC or to a Class of Certificates in the manner set out below:
Lower-Tier Upper-Tier Corresponding
Regular Interest Regular Interest Class of Certificates
---------------------------------------------------------------------
Class LT-AV-1 Class AV-1 Class AV-1
Class LT-AF-2 Class AF-2 Class AF-2
Class LT-AF-3 Class AF-3 Class AF-3
Class LT-AF-4 Class AF-4 Class AF-4
Class LT-AF-5 Class AF-5 Class AF-5
Class LT-AF-6A Class AF-6A Class AF-6A
Class LT-AF-6B Class AF-6B Class AF-6B
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
Custodial Account: The separate account or accounts created and
maintained by the Servicer pursuant to the Servicing Agreement.
Custodial File: With respect to each Mortgage Loan, any Mortgage
Loan Document which is delivered to the Custodian or which at any time comes
into the possession of the Custodian.
Custodian: Deutsche Bank.
Cut-off Date: October 1, 2006.
Cut-off Date Pool Principal Balance: The aggregate Stated
Principal Balance of all Mortgage Loans as of the Cut-off Date.
17
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off
Date (after giving effect to payments of principal due on that date, whether
or not received).
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Deleted Mortgage Loan: A Mortgage Loan which is purchased or
repurchased by New Century, the Purchaser or the Depositor in accordance with
the terms of the Sale Agreement, any Assignment Agreement or this Agreement,
as applicable, or which is, in the case of a substitution by New Century or
the Purchaser, as applicable, pursuant to the Sale Agreement, the Assignment
Agreements or this Agreement, replaced or to be replaced with a Substitute
Mortgage Loan.
Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this
Certificate" or the Percentage Interest appearing on the face thereof.
Depositor: GS Mortgage Securities Corp., a Delaware corporation,
and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as the registered Holder of the
Book-Entry Certificates. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code
of the State of New York.
Depository Institution: Any depository institution or trust
company, including the Trustee, that (a) is incorporated under the laws of the
United States of America or any state thereof, (b) is subject to supervision
and examination by federal or state banking authorities and (c) has
outstanding unsecured commercial paper or other short-term unsecured debt
obligations that are rated "P-1" by Moody's and "A-1" by Standard & Poor's.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Determination Date: With respect to each Distribution Date, the
Business Day immediately preceding the related Remittance Date.
Deutsche Bank: Deutsche Bank National Trust Company, a national
banking association, and its successors in interest.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.01(b) in the name of the
Trustee as paying agent for the benefit of the Certificateholders and
designated "U.S. Bank National Association, as paying agent, in trust for
registered holders of New Century Alternative Mortgage Loan Trust 2006-ALT2,
Asset-Backed Certificates, Series 2006-ALT2." Funds in the Distribution
Account shall be held in trust for the Certificateholders for the uses and
purposes set forth in this Agreement.
18
Distribution Date: The 25th day of each month or, if such day is
not a Business Day, the immediately succeeding Business Day, commencing in
November 2006.
Document Certification and Exception Report: The report attached
to Exhibit F hereto.
Due Date: The day of the month on which the Monthly Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in
which that Distribution Date occurs and ending on the first day of the
calendar month in which that Distribution Date occurs.
XXXXX: The Commission's Electronic Data Gathering, Analysis and
Retrieval system.
Eligible Account: Either (i) an account maintained with a federal
or state chartered depository institution or trust company the short-term
unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is a subsidiary of a holding company, the
short-term unsecured debt obligations of such holding company) are rated
"A-1+" by Standard & Poor's, "F1" by Fitch and "P-1" by Moody's (or a
comparable rating if another Rating Agency is specified by the Depositor by
written notice to the Servicer) at the time any amounts are held on deposit
therein, (ii) a trust account or accounts maintained with a federal or state
chartered depository institution or trust company acting in its fiduciary
capacity or (iii) any other account acceptable to each Rating Agency. Eligible
Accounts may bear interest, and may include, if otherwise qualified under this
definition, accounts maintained with the Trustee.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) (or any
successor thereto), or any --- substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Event of Default: As defined in the Servicing Agreement.
Excess Overcollateralized Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralized Amount on such
Distribution Date over (b) the Specified Overcollateralized Amount for such
Distribution Date.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.01(a) in the name of the
Trustee as paying agent for the benefit of the Regular Certificateholders and
designated "U.S. Bank National Association, as paying agent, in trust for
registered holders of New Century Alternative Mortgage Loan Trust 2006-ALT2,
Asset-Backed Certificates, Series 2006-ALT2." Funds in the Excess Reserve Fund
Account shall be held in trust for the Regular Certificateholders for the
19
uses and purposes set forth in this Agreement. Amounts on deposit in the
Excess Reserve Fund Account shall not be invested.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
Exchange Act Filing Obligation: The obligations of the Trustee
under Section 9.04 and Article XI (except Section 11.07) with respect to
notice and information to be provided to the Depositor.
Exchange Act Reports: Any reports on Form 10-D, Form 8-K and Form
10-K required to be filed by the Depositor with respect to the Trust Fund
under the Exchange Act.
Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal
to the sum of the Servicing Fee Rate and, if set forth on the Mortgage Loan
Schedule, the applicable Primary Mortgage Insurance Policy premium rate.
Expense Fees: As to each Mortgage Loan, the fees calculated by
reference to the Expense Fee Rate.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for that
Distribution Date and (y) the related Overcollateralization Deficiency for
such Distribution Date.
Fair Market Value Excess: As defined in Section 9.01.
Xxxxxx Mae: The Federal National Mortgage Association, and its
successors in interest.
Final Scheduled Distribution Date: The Final Scheduled
Distribution Date for each Class of Certificates is the Distribution Date
occurring in October 2036.
Fitch: Fitch, Inc.
Fixed Rate Certificates: As specified in the Preliminary
Statement.
Form 8-K Disclosure Information: As defined in Section 11.02.
Xxxxxxx Mac: The Federal Home Loan Mortgage Corporation, a
corporate instrumentality of the United States created and existing under
Title III of the Emergency Home Finance Act of 1970, as amended, and its
successors in interest.
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,
(i) with respect to the LIBOR Certificates, the period commencing on the
immediately preceding Distribution Date (or commencing on the Closing Date in
the case of the first Distribution Date) and ending on the
20
day immediately preceding the current Distribution Date and (ii) with respect
to the Fixed Rate Certificates, the calendar month immediately preceding the
month in which such Distribution Date occurs. For purposes of computing
interest accruals on each Class of LIBOR Certificates, each Interest Accrual
Period has the actual number of days in such period and each year is assumed
to have 360 days. For purposes of computing interest accruals on the Fixed
Rate Certificates, each Interest Accrual Period has 30 days in such period and
each year is assumed to have 360 days.
Interest Remittance Amount: With respect to any Distribution Date,
that portion of Available Funds attributable to interest relating to the
Mortgage Loans.
Investment Account: As defined in Section 3.02(a).
Item 1119 Party: The Depositor, the Trustee, the Servicer, any
subservicer, any originator identified in the Prospectus Supplement.
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 deposits of
leading European banks. The establishment of LIBOR by the Trustee and the
Trustee's subsequent calculations based thereon, in the absence of manifest
error, shall be final and binding. Except as otherwise set forth herein,
absent manifest error, the Trustee may conclusively rely on quotations of
LIBOR as such quotations appear on Telerate Screen Page 3750.
LIBOR Certificates: As specified in the Preliminary Statement.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the LIBOR Certificates, the second London Business Day preceding
the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in
the Principal Prepayment Period preceding the month of such Distribution Date
and as to which the Servicer has certified that it has received all amounts it
expects to receive in connection with the liquidation of such Mortgage Loan
including the final disposition of an REO Property.
21
Liquidation Proceeds: Cash received in connection with the
liquidation of a defaulted Mortgage Loan, whether through the sale or
assignment of such Mortgage Loan, trustee's sale, foreclosure sale or
otherwise, or the sale of the related Mortgaged Property if the Mortgaged
Property is acquired in satisfaction of the Mortgage Loan, including any
Subsequent Recoveries.
London Business Day: Any day on which dealings in deposits of
United States dollars are transacted in the London interbank market.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: As described in the Preliminary
Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
Majority Class X Certificateholder: The Holder or Holders of a
majority of the Percentage Interests in the Class X Certificates.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation organized and existing under the laws of the State of Delaware, or
any successor thereto.
MERS Loan: Any Mortgage Loan registered with MERS on the MERS
System.
MERS System: The system of recording transfers of mortgages
electronically maintained by MERS.
Monthly Advance: As defined in the Servicing Agreement.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan.
Monthly Statement: The statement made available to the
Certificateholders pursuant to Section 4.02.
Moody's: Xxxxx'x Investors Service, Inc. If Xxxxx'x is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
10.05(b) the address for notices to Moody's shall be Xxxxx'x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Pass-Through Group, or such other address as Moody's may
hereafter furnish to the Depositor and the Trustee.
Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Interest Rate: The annual rate of interest borne on a
Mortgage Note with respect to each Mortgage Loan.
22
Mortgage Loan: An individual Mortgage Loan which is the subject of
the Servicing Agreement, each Mortgage Loan originally sold and subject to the
Sale Agreement being identified on the Mortgage Loan Schedule, which Mortgage
Loan includes without limitation the Mortgage File, the Servicing File, the
Monthly Payments, Principal Prepayments, Prepayment Premiums, Liquidation
Proceeds, Condemnation Proceeds, Insurance Proceeds, REO Disposition proceeds
and all other rights, benefits, proceeds and obligations arising from or in
connection with such Mortgage Loan.
Mortgage Loan Documents: The mortgage loan documents pertaining to
each Mortgage Loan.
Mortgage Loan Schedule: A schedule of Mortgage Loans annexed
hereto as Schedule I (which shall be delivered to the Custodian in an
electronic format acceptable to the Custodian), such schedule setting forth
the following information with respect to each Mortgage Loan: (1) Responsible
Party's Mortgage Loan number; (2) the address, city, state and zip code of the
Mortgaged Property; (3) a code indicating whether the Mortgagor is
self-employed; (4) a code indicating whether the Mortgaged Property is
owner-occupied, investment property or a second home; (5) a code indicating
whether the Mortgaged Property is a single family residence, two family
residence, three-family residence, four family residence, condominium,
manufactured housing or planned unit development; (6) the purpose of the
Mortgage Loan; (7) the type of Mortgage Loan; (8) the Mortgage Interest Rate
at origination; (9) the current Mortgage Interest Rate; (10) the name of the
Servicer; (11) the applicable Servicing Fee Rate; (12) the current Monthly
Payment; (13) the original term to maturity; (14) the remaining term to
maturity; (15) the principal balance of the Mortgage Loan as of the Cut-off
Date after deduction of payments of principal due on or before the Cut-off
Date whether or not collected; (16) the LTV at origination and if the Mortgage
Loan has a second lien, combined LTV at origination; (17) the actual principal
balance of the Mortgage Loan as of the Cut-off Date; (18) social security
number of the Mortgagor; (19) a code indicating whether the Mortgage Loan had
a second lien at origination; (20) if the Mortgage Loan has a second lien,
combined loan balance as of the Cut-off Date; (21) a code indicating whether
the Mortgaged Property is a leasehold estate; (22) the due date of the
Mortgage Loan; (23) whether the Mortgage Loan is insured by a Primary Mortgage
Insurance Policy and the name of the insurer; (24) the certificate number of
the Primary Mortgage Insurance Policy; (25) the amount of coverage of the
Primary Mortgage Insurance Policy, and if it is a lender-paid Primary Mortgage
Insurance Policy, the premium rate; (26) the type of appraisal; (27) a code
indicating whether the Mortgage Loan is a MERS Loan; (28) documentation type
(including asset and income type); (29) first payment date; (30) the schedule
of the payment delinquencies in the prior 12 months; (31) FICO score; (32) the
Mortgagor's name; (33) the stated maturity date; (34) the original principal
amount of the Mortgage Loan and (35) the name of the Custodian.
Mortgaged Property: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.
Mortgagor: The obligor on a Mortgage Note.
23
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.01(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls exceeds the sum
of the Compensating Interest payments made on such Distribution Date.
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class P and Class X Certificates.
NIM Trustee: The trustee for the NIM Securities.
Non Permitted Transferee: As defined in Section 8.12(e).
Nonrecoverable Monthly Advance: Any Monthly Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO Property
that, in the good faith business judgment of the Servicer (in accordance with
the Servicing Standard set forth in the Servicing Agreement) or any successor
Servicer including the Trustee, as applicable, will not or, in the case of a
proposed Monthly Advance, would not be ultimately recoverable from related
late payments, Insurance Proceeds, Condemnation Proceeds or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in the good faith business judgment of the Servicer (in accordance with
the Servicing Standard set forth in the Servicing Agreement) or any successor
Servicer including the Trustee, as applicable, will not or, in the case of a
proposed Servicing Advance, would not, be ultimately recoverable from related
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise.
Notice of Final Distribution: The notice to be provided pursuant
to Section 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 the Chairman of the
Board or the Vice Chairman of the Board or the President or a Vice President
or an Assistant Vice President and by the Treasurer or the Secretary or one of
the Assistant Treasurers or Assistant Secretaries of the Servicer or the
Responsible Party, and delivered to the Trustee, as required by the Servicing
Agreement or the Sale Agreement or, in the case of any other Person, signed by
an authorized officer of such Person.
Opinion of Counsel: A written opinion of counsel, who may be in
house counsel for the Servicer, reasonably acceptable to the Trustee (and/or
such other Persons as may be set forth herein); provided, that any Opinion of
Counsel relating to (a) qualification of any Trust
24
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 10.00% or less of the Cut-off Date Pool
Principal Balance.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the 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 Loans as
of the Cut-off Date.
Overcollateralization Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess
Overcollateralized Amount and (b) the Net Monthly Excess Cash Flow.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect,
legal or beneficial.
Par Value: means an amount equal to the greater of (a) the sum of
(1) 100% of the unpaid principal balance of the Mortgage Loans (other than
Mortgage Loans related to REO
25
Properties), (2) interest accrued and unpaid on the Mortgage Loans, (3) any
xxxxxxxxxxxx X&X Advances, fees and expenses of the Trustee and (4) with
respect to any REO Property, the lesser of (x) the appraised value of each REO
Property, as determined by the higher of two appraisals completed by two
independent appraisers selected by the Servicer or its designee, and (y) the
unpaid principal balance of each Mortgage Loan related to any REO Property,
and (b) the sum of (1) the aggregate unpaid Class Certificate Balance of each
class of certificates then outstanding, (2) interest accrued and unpaid on the
certificates and (3) any xxxxxxxxxxxx X&X Advances, fees and expenses of the
Servicer and the Trustee.
Pass-Through Rate: For each Class of Certificates and each
Lower-Tier Regular Interest, the per annum rate set forth or calculated in the
manner described in the Preliminary Statement.
Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made on the related
Class, such percentage interest being set forth on the face thereof or equal
to the percentage obtained by dividing the Denomination of such Certificate by
the aggregate of the Denominations of all Certificates of the same Class.
Permitted Investments: Any one or more of the following
obligations or securities acquired at a purchase price of not greater than
par, regardless of whether issued by the Servicer, the Trustee or any of their
respective Affiliates:
(i) direct obligations of, or obligations fully guaranteed as to
timely payment of principal and interest by, the United States or any
agency or instrumentality thereof, provided such obligations are backed
by the full faith and credit of the United States;
(ii) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than ninety (90) days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or a
remaining maturity of more than thirty (30) days) denominated in United
States dollars and issued by any Depository Institution and rated F1+ by
Fitch, P-1 by Moody's and A-1+ by S&P;
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository Institution
(acting as principal);
(iv) securities bearing interest or sold at a discount that are
issued by any corporation incorporated under the laws of the United
States of America or any state thereof and that are rated by each Rating
Agency that rates such securities in its highest long-term unsecured
rating categories at the time of such investment or contractual
commitment providing for such investment;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a
specified date not more than thirty (30) days after the date of
acquisition thereof) that is rated by each Rating Agency that rates such
securities in its highest short-term unsecured debt rating available at
the time of such investment;
26
(vi) units of money market funds, including money market funds
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 "AA" 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 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 not a U.S. Person or a U.S. Person with respect to whom income
from a Residual Certificate is attributable to a foreign permanent
establishment or fixed base (within the meaning of an applicable income tax
treaty) of such Person or any other U.S. Person, (vi) an "electing large
partnership" within the meaning of Section 775 of the Code and (vii) any other
Person so designated by the Depositor based upon an Opinion of Counsel that
the Transfer of an Ownership Interest in a Residual Certificate to such Person
may cause any Trust REMIC to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States," "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions. A corporation will not be treated as an
instrumentality of the United States or of any State or political subdivision
thereof for these purposes if all of its activities are subject to tax and,
with the exception of 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.
27
Prepayment Interest Shortfall: With respect to any Remittance
Date, the sum of, for each Mortgage Loan that was during the related Principal
Prepayment Period the subject of a Principal Prepayment that was applied by
the Servicer to reduce the outstanding principal balance of such Mortgage Loan
on a date preceding the Due Date in the succeeding Principal Prepayment
Period, an amount equal to the product of (a) the Mortgage Interest Rate net
of the applicable Servicing Fee Rate for such Mortgage Loan, (b) the amount of
the Principal Prepayment for such Mortgage Loan, (c) 1/360 and (d) the number
of days commencing on the date on which such Principal Prepayment was applied
and ending on the last day of the related Principal Prepayment Period.
Prepayment Premium: Any prepayment premium, penalty or charge, if
any, required under the terms of the related Mortgage Note to be paid in
connection with a Principal Prepayment, to the extent permitted by law.
Principal Certificates: As specified in the Preliminary Statement.
Principal Distribution Amount: For any Distribution Date, the sum
of (i) the Basic Principal Distribution Amount for such Distribution Date and
(ii) the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan) which is received in advance of its scheduled Due Date,
including any Prepayment Premium, and which is not accompanied by an amount of
interest representing scheduled interest due on any date or dates in any month
or months subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Prepayment Period: With respect to any Distribution
Date, the calendar month preceding the month in which that Distribution Date
occurs (or, in the case of the first Distribution Date, the Cut-off Date).
Principal Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans, the amount equal to the sum of the following amounts
(without duplication): (i) all scheduled payments of principal due on the Due
Date on such Mortgage Loans in the related Due Period and received on or prior
to the related Determination Date, together with any Monthly Advances in
respect thereof; (ii) all Condemnation Proceeds, Insurance Proceeds and
Liquidation Proceeds allocable to principal and received during the related
Principal Prepayment Period; (iii) all Principal Prepayments allocable to
principal and received during the related Principal Prepayment Period; (iv)
all amounts received with respect to such Distribution Date representing the
portion of the purchase price allocable to principal in connection with a
purchase or repurchase of a Deleted Mortgage Loan; (v) principal portion of
all amounts received with respect to such Distribution Date as a Substitution
Adjustment Amount and received in connection with the substitution of a
Mortgage Loan and (vi) the allocable portion of the proceeds received with
respect to the termination of the Trust Fund pursuant to clause (a) of Section
9.01 (to the extent such proceeds relate to principal).
28
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated October
26, 2006, relating to the Offered Certificates.
PTCE: Prohibited Transaction Class Exemption, issued by the U.S.
Department of Labor.
PUD: A planned unit development.
Purchaser: Xxxxxxx Xxxxx Mortgage Company, a New York limited
partnership, and its successors in interest, as purchaser of the Mortgage
Loans under the Sale Agreement.
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(b), the addresses for notices to each Rating Agency
shall be the address specified therefor in the definition corresponding to the
name of such Rating Agency, or such other address as either such Rating Agency
may hereafter furnish to the Depositor and the Trustee.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid
principal balance of such Liquidated Mortgage Loan together with accrued and
unpaid interest thereon exceeds (b) the Liquidation Proceeds with respect
thereto net of the expenses incurred by the Servicer in connection with the
liquidation of such Liquidated Mortgage Loan and net of any amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the last Business Day of the related Interest Accrual Period;
provided, however, that for any Definitive Certificate issued pursuant to
Section 5.02(e), the Record Date shall be the close of business on the last
Business Day of the month immediately preceding the month in which the related
Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended
from time to time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release (Asset-Backed
Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by
the Commission or its staff from time to time.
29
Relief Act Interest Shortfall: With respect to any Distribution
Date and any Mortgage Loan, any reduction in the amount of interest
collectible on such Mortgage Loan for the most recently ended Due Period as a
result of the application of the Servicemembers' Civil Relief Act of 1940 or
any similar state statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Sections
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations promulgated thereunder, as the foregoing may be in
effect from time to time as well as provisions of applicable state laws.
Remittance Advice Date: The 10th day of each calendar month or the
immediately following Business Day if the 10th is not a Business Day.
Remittance Date: With respect to any Distribution Date, the 18th
day (or if such 18th day is not a Business Day, the first Business Day
immediately following such 18th day) of the month in which such Distribution
Date occurs.
REO Disposition: The final sale by the Servicer of any REO
Property.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Reportable Event: As defined in Section 11.02.
Reporting Party: The Depositor, any Originator, the Servicer, any
originator identified in the Prospectus Supplement, any credit enhancement
provider described herein and any other material transaction party (excluding
the Trustee and the Custodian) as may be mutually agreed between the Depositor
and the Trustee from time to time for the purpose of complying with the
requirements of the Commission.
Reporting Servicer: As defined in Section 11.04.
Reporting Subcontractor: With respect to the Trustee, any
Subcontractor determined by such Person to be "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB. References to a
Reporting Subcontractor shall refer only to the Subcontractor of such Person
and shall not refer to Subcontractors generally.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the 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 who at such time shall be officers to whom, with
respect to a particular matter, such matter is referred because of such
officer's knowledge of and familiarity
30
with the particular subject and who shall have direct responsibility for the
administration of this Agreement.
Responsible Party: Each of New Century and the Purchaser.
Rule 144A: Rule 144A under the Securities Act.
Rule 144A Letter: As defined in Section 5.02(b).
Sale Agreement: The Flow Mortgage Loan Purchase and Warranties
Agreement, dated as of March 1, 2006, between the Purchaser and New Century,
as modified by the related Assignment Agreements.
Xxxxxxxx-Xxxxx Certification: As defined in Section 11.06.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate
Class Certificate Balance of the Subordinated Certificates and (ii) the
Overcollateralized Amount (in each case after taking into account the
distributions of the Principal Distribution Amount for such Distribution Date)
by (y) the aggregate Stated Principal Balance of the Mortgage Loans as of the
first day of the month in which such Distribution Date occurs.
Servicer Remittance Report: As defined in Section 4.02(d).
Senior Specified Enhancement Percentage: As of any date of
determination, 11.100%.
Servicer: New Century, in its capacity as interim servicer until
November 1, 2006, under the Flow Interim Servicing Agreement, dated as of
March 1, 2006, between New Century and the Purchaser, and Xxxxx Fargo in its
capacity as servicer under the Servicing Agreement, or any successor servicer
appointed pursuant to the Servicing Agreement.
Servicing Advances: As defined in the Servicing Agreement.
Servicing Agreement: The Servicing Agreement, dated as of June 30,
2006, between Xxxxx Fargo and the Purchaser, as modified by the related
Assignment Agreements.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as the same may be amended from time to time.
Servicing Fee: As defined in the Servicing Agreement.
Servicing Fee Rate: With respect to each Mortgage Loan, the per
annum rate for such Mortgage Loan specified on the Mortgage Loan Schedule.
Servicing File: As defined in the Servicing Agreement.
31
Servicing Function Participant: Any Subservicer, Subcontractor or
any other Person, other than the Servicer, the Trustee and the Custodian, that
is performing activities addressed by the Servicing Criteria.
Sequential Trigger Event: With respect to any Distribution Date
(a) before the 37th Distribution Date, the circumstances in which the
aggregate amount of Realized Losses incurred since the Cut-off Date through
the last day of the related Prepayment Period divided by the aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds 0.400%,
or (b) on or after the 37th Distribution Date, if a Trigger Event is in
effect.
Similar Law: As defined in Section 5.02(b).
Specified Overcollateralized Amount: Prior to the Stepdown Date,
an amount equal to 0.50% of the Cut-off Date Pool Principal Balance. On and
after the Stepdown Date, an amount equal to 1.00% 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 but instead will
remain the same as the prior period's Specified Overcollateralized Amount
until the Distribution Date on which a Trigger Event is no longer occurring.
When the Class Certificate Balance of each Class of Principal Certificates has
been reduced to zero, the Specified Overcollateralized Amount will thereafter
be zero.
Standard & Poor's or S&P: Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. If Standard & Poor's is designated
as a Rating Agency in the Preliminary Statement, for purposes of Section
10.05(b) the address for notices to Standard & Poor's shall be Standard &
Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Residential
Mortgage Surveillance Group - New Century Alternative Mortgage Loan Trust
2006-ALT2, or such other address as Standard & Poor's may hereafter furnish to
the Depositor and the Trustee.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
Determination Date, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before
such date (whether or not received), minus (ii) all amounts previously
remitted to the 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 or advanced prior to the related Remittance
Date and any unscheduled principal payments and other unscheduled principal
collections received during the related Principal Prepayment Period, and the
Stated Principal Balance of any Mortgage Loan that has prepaid in full or has
become a Liquidated Mortgage Loan during the related Principal Prepayment
Period shall be zero.
32
Step 1 Assignment Agreements: Each of (i) the Assignment,
Assumption and Recognition Agreement, dated as of October 30, 2006, among the
Purchaser, Xxxxx Fargo and the Depositor and (ii) the Assignment, Assumption
and Recognition Agreement, dated as of October 30, 2006, between the
Purchaser, New Century and the Depositor.
Step 2 Assignment Agreements: Each of (i) the Assignment,
Assumption and Recognition Agreement, dated as of October 30, 2006, among the
Depositor, the Trustee and Xxxxx Fargo and (ii) the Assignment, Assumption and
Recognition Agreement, dated as of October 30, 2006, among the Depositor, the
Trustee and New Century.
Stepdown Date: The earlier to occur of (a) the date on which the
aggregate Class Certificate Balance of the Class A Certificates has been
reduced to zero and (b) the later to occur of (i) the Distribution Date in
November 2009 and (ii) the first Distribution Date following the Distribution
Date on which the Senior Enhancement Percentage is greater than or equal to
the Senior Specified Enhancement Percentage after giving effect to the
distributions on such Distribution Date.
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 Servicer, any subservicer or the Trustee, as the case may be.
Subordinated Certificates: As specified in the Preliminary
Statement.
Subsequent Recoveries: Amounts received with respect to any
Liquidated Mortgage Loan after it has become a Liquidated Mortgage Loan.
Substitute Mortgage Loan: As defined in the Step 1 Assignment
Agreements or the Sale Agreement, as applicable.
Substitution Adjustment Amount: With respect to a Mortgage Loan
substituted by New Century or the Purchaser, as applicable, an amount of cash
received in connection with a substitution for a Deleted Mortgage Loan.
Tax Matters Person: The Holder of the Class R, Class RC and Class
RX Certificates is designated as "tax matters person" of the Lower-Tier REMIC,
Middle-Tier REMIC and the Upper-Tier REMIC, respectively, in the manner
provided under Treasury Regulations Section 1.806F-4(d) and Treasury
Regulations Section 301.6234(a)(7)-1.
Telerate Page 3750: The display page currently so designated on
the Bridge Telerate Service (or such other page as may replace that page on
that service for displaying comparable rates or prices).
Total Monthly Excess Spread: As to any Distribution Date, an
amount equal to the excess if any, of (i) the interest collected (prior to the
related Remittance Date) or advanced on the Mortgage Loans for Due Dates
during the related Due Period (net of Expense Fees) over (ii) the sum of the
interest payable to the Principal Certificates on such Distribution Date
pursuant to Section 4.01(a)(i).
33
Transaction Documents: This Agreement, the Assignment Agreements
and any other document or agreement entered into in connection with the Trust
Fund, the Certificates or the Mortgage Loans.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c)(ii).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: With respect to any Distribution Date, a Trigger
Event exists if (i) on such Distribution Date the quotient (expressed as a
percentage) of (x) the rolling three month average of the aggregate unpaid
principal balance of 60+ Day Delinquent Mortgage Loans, and (y) the aggregate
unpaid principal balance of the Mortgage Loans as of the last day of the
related Due Period equals or exceeds 50.00% of the Senior Enhancement
Percentage as of the immediately preceding Distribution Date (after giving
effect to distributions on such Distribution Date) or (ii) the quotient
(expressed as a percentage) of (x) the aggregate amount of Realized Losses
incurred since the Cut-off Date through the last day of the related Principal
Prepayment Period divided by (y) the Cut-off Date Pool Principal Balance
exceeds the applicable percentages set forth below with respect to such
Distribution Date:
Distribution Date Occurring In Loss Percentage
---------------------------------------------------------------------------------------------
November 2008 - October 2009 0.150% for the first month, plus an additional 1/12th of
0.250% for each month thereafter (e.g., approximately
0.171% in December 2008)
November 2009 - October 2010 0.400% for the first month, plus an additional 1/12th of
0.300% for each month thereafter (e.g., approximately
0.425% in December 2009)
November 2010 - October 2011 0.700% for the first month, plus an additional 1/12th of
0.250% for each month thereafter (e.g., approximately
0.721% in December 2010)
November 2011 - October 2012 0.950% for the first month, plus an additional 1/12th of
0.200% for each month thereafter (e.g., approximately
0.967% in December 2011)
November 2012 and thereafter 1.150%
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 received on or with
respect thereto after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or before the related Cut-off Date; (ii) the
Excess Reserve Fund Account, the Distribution Account, and all amounts
deposited therein pursuant to the applicable provisions of this Agreement;
(iii) property
34
that secured a Mortgage Loan and has been acquired by foreclosure,
deed-in-lieu of foreclosure or otherwise; (iv) the rights of the Trust under
the Step 2 Assignment Agreements; and (vi) all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing.
Trust REMIC: As specified in the Preliminary Statement.
Trustee: U.S. Bank, and its successors in interest, and, if a
successor trustee is appointed hereunder, such successor.
Trustee Float Period: With respect to the Distribution Date and
the related amounts in the Distribution Account, the period commencing on the
third Business Day immediately preceding such Distribution Date and ending on
such Distribution Date.
Underwriters' Exemption: Any exemption listed in footnote 1 of,
and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or amended by Prohibited Transaction Exemption 2002-19, 67 Fed. Reg.
14979, or any successor exemption.
Unpaid Interest Amount: As of any Distribution Date and any Class
of Certificates, the sum of (a) the portion of the Accrued Certificate
Interest Distribution Amount from Distribution Dates remaining unpaid prior to
the current Distribution Date and (b) interest on the amount in clause (a) at
the applicable Pass-Through Rate (to the extent permitted by applicable law).
U.S. Bank: U.S. Bank National Association, a national banking
association, and its successors in interest.
U.S. Person: (i) A citizen or resident of the United States; (ii)
a corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of
any state thereof, including, for this purpose, the District of Columbia;
(iii) a partnership (or entity treated as a partnership for tax purposes)
organized in the United States or under the laws of the United States or of
any state thereof, including, for this purpose, the District of Columbia
(unless provided otherwise by future Treasury regulations); (iv) an estate
whose income is includible in gross income for United States income tax
purposes regardless of its source; or (v) a trust, if a court within the
United States is able to exercise primary supervision over the administration
of the trust and one or more U.S. Persons have authority to control all
substantial decisions of the trust. Notwithstanding the last clause of the
preceding sentence, to the extent provided in Treasury regulations, certain
trusts in existence on August 20, 1996, and treated as U.S. Persons prior to
such date, may elect to continue to be U.S. Persons.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
35
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), and (c) the remaining Voting Rights shall be allocated among
Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, a per annum rate equal to the product of (A) the weighted average of the
Adjusted Net Mortgage Interest Rates then in effect on the beginning of the
related Due Period on the Mortgage Loans, and (B) 30 divided by the actual
number of days in the related Interest Accrual Period, in the case of the
LIBOR Certificates, and 30 divided by 360, in the case of the Fixed Rate
Certificates.
Xxxxx Fargo: Xxxxx Fargo Bank, National Association, a national
banking association, and its successors in interest.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund.
(b) In connection with the transfer and assignment of each
Mortgage Loan, the Depositor has delivered or caused to be delivered to the
Custodian on behalf of the Trustee for the benefit of the Certificateholders
the following documents or instruments with respect to each applicable
Mortgage Loan so assigned:
(i) the original Mortgage Note, endorsed without recourse in blank
by the last endorsee, including all intervening endorsements showing a
complete chain of endorsement from the originator to the last endorsee;
(ii) The original Assignment of Mortgage in blank unless the
Mortgage Loan is a MERS Loan;
(iii) personal endorsement, surety and/or guaranty agreements
executed in connection with all non individual Mortgage Loans
(corporations, partnerships, trusts, estates, etc. (if any);
(iv) the related original Mortgage and evidence of its recording
or a certified copy of the mortgage with evidence of recording;
(v) originals of any intervening Mortgage assignment or certified
copies in either case necessary to show a complete chain of title from
the original mortgagee to the seller and evidencing recording; provided,
that, the assignment may be in the form of a
36
blanket assignment or assignments, a copy of which with evidence of
recording shall be acceptable;
(vi) originals of all assumption, modification, consolidation or
extension agreements or certified copies thereof, in either case with
evidence of recording if required to maintain the lien of the mortgage
or if otherwise required, or, if recordation is not required, an
original or copy of the agreement;
(vii) if applicable to the files held by the Custodian, an
original or copy of a title insurance policy or evidence of title;
(viii) to the extent applicable, an original power of attorney;
(ix) for each Mortgage Loan (if applicable to the files held by
the Custodian) with respect to which the Mortgagor's name as it appears
on the note does not match the borrower's name on the Mortgage Loan
Schedule, one of the following: the original of the assumption agreement
or a certified copy thereof;
(x) if applicable to the files held by the Custodian, a security
agreement, chattel mortgage or equivalent document executed in
connection with the Mortgage, if any; and
(xi) with respect to each Mortgage Loan, the complete Custodial
File (as defined below) including all items as set forth in the
Servicing Agreement to the extent in the possession of the Depositor or
the Depositor's Agents.
The Depositor shall deliver or cause the applicable Responsible
Party to deliver to the Custodian the applicable recorded document promptly
upon receipt from the respective recording office but in no event later than
120 days from the Closing Date.
From time to time, pursuant to the Sale Agreement, the applicable
Responsible Party may forward to the Custodian additional original documents,
additional documents evidencing an assumption, modification, consolidation or
extension of a Mortgage Loan, in accordance with the terms of the Sale
Agreement or the Assignment Agreement, as applicable. All such mortgage
documents held by the Custodian as to each Mortgage Loan shall constitute the
"Custodial File."
On or prior to the Closing Date, the Depositor shall deliver to
the Custodian Assignments of Mortgages (except in the case of MERS Loans), in
blank, for each applicable Mortgage Loan. On the Closing Date (or, with
respect to any Substitute Mortgage Loan, within thirty (30) days after the
receipt of the Mortgage File by the Custodian), the Depositor shall cause the
Responsible Party to submit the Assignments of Mortgage for recordation, at
the Responsible Party's expense, pursuant to the Sale Agreement. The Custodian
shall deliver the Assignment of Mortgages to be submitted for recordation to
the Responsible Party upon receipt of a written request for release in
standard and customary form as set forth in Exhibit L.
37
On or prior to the Closing Date, the Depositor shall deliver to
the Custodian and the Servicer a copy of the Mortgage Loan Schedule in
electronic, machine readable medium in a form mutually acceptable to the
Depositor, the Custodian, the Servicer and the Trustee.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the Custodian within the time period and in the manner specified in the
Sale Agreement, the Trustee shall take or cause to be taken such remedial
actions under the Sale Agreement against the Responsible Party as may be
permitted to be taken thereunder, including without limitation, if applicable,
the repurchase by the Responsible Party of such Mortgage Loan. The foregoing
repurchase remedy shall not apply in the event that the Responsible Party
cannot deliver such original or copy of any document submitted for recordation
to the appropriate public recording office within the specified period due to
a delay caused by the recording office in the applicable jurisdiction;
provided, that the Responsible Party shall instead deliver a recording receipt
of such recording office or, if such recording receipt is not available, an
Officer's Certificate of an officer of the Responsible Party, confirming that
such document has been accepted for recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses
the original Mortgage or assignment after it has been recorded, the
obligations of the Responsible Party shall be deemed to have been satisfied
upon delivery by the Responsible Party to the Custodian prior to the Closing
Date of a copy of such Mortgage or assignment, as the case may be, certified
(such certification to be an original thereof) by the public recording office
to be a true and complete copy of the recorded original thereof.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "New Century Alternative
Mortgage Loan Trust 2006-ALT2" and U.S. Bank is hereby appointed as Trustee in
accordance with the provisions of this Agreement.
(d) It is the policy and intention of the Trust that none of the
Mortgage Loans included in the Trust is (a) covered by the Home Ownership and
Equity Protection Act of 1994, or (b) considered a "high cost home,"
"threshold," "predatory" or "covered" loan (excluding "covered home loans" as
defined under clause (1) of the definition of "covered home loans" in the New
Jersey Home Ownership Security Act of 2002) under applicable state, federal or
local laws.
Section 2.02 Acceptance by the Custodian of the Mortgage Loans.
The Custodian acknowledges receipt of the documents identified in the Initial
Certification, subject to any exceptions listed on the exception report
attached thereto, in the form annexed hereto as Exhibit E, and declares that
it holds and will hold such documents and the other documents delivered to it
pursuant to Section 2.01, and that it holds or will hold such other assets as
are included in the Trust Fund, in trust for the exclusive use and benefit of
all present and future Certificateholders. Deutsche Bank, as Custodian,
acknowledges that it will maintain possession of the related Mortgage Notes in
the State of California, unless otherwise permitted by the Rating Agencies.
38
Prior to the Closing Date, the Custodian shall deliver via
facsimile (with original to follow the next Business Day) to the Depositor an
Initial Certification prior to the Closing Date, or as the Depositor agrees
to, on the Closing Date, certifying receipt of a Mortgage Note and Assignment
of Mortgage, subject to any exceptions listed on the exception report attached
thereto, for each Mortgage Loan. The Custodian shall not be responsible for
verifying the validity, sufficiency or genuineness of any document in any
Custodial File.
On the Closing Date, the Custodian shall ascertain that all
documents required to be delivered to it on or prior to the Closing Date are
in its possession, subject to any exceptions listed on the exception report
attached thereto, and shall deliver to the Depositor and the Trustee an
Initial Certification, in the form annexed hereto as Exhibit E, and shall
deliver to the Depositor and the Trustee a Document Certification and
Exception Report, in the form annexed hereto as Exhibit F, within ninety (90)
days after the Closing Date (or, with respect to any Substitute Mortgage Loan,
within thirty (30) days after the receipt of the Mortgage File by the
Custodian) to the effect that, as to each applicable Mortgage Loan listed in
the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in such certification as an exception
and not covered by such certification): (i) all documents required to be
delivered to it are in its possession; (ii) such documents have been reviewed
by it and appear regular on their face and relate to such Mortgage Loan; (iii)
based on its examination and only as to the foregoing documents, the
information set forth in items 2, 8, 33, and 34 of the Mortgage Loan Schedule
respecting such Mortgage Loan is correct and (iv) each Mortgage Note has been
endorsed as provided in Section 2.01 of this Agreement. The Custodian shall be
not responsible for verifying the validity, sufficiency or genuineness of any
document in any Custodial File.
The Custodian shall retain possession and custody of each
Custodial File in accordance with and subject to the terms and conditions set
forth herein. The Servicer shall promptly deliver to the Custodian, upon the
execution or receipt thereof, the originals of such other documents or
instruments constituting the Custodial File as come into the possession of the
Servicer from time to time.
The Custodian shall notify the Trustee of any Mortgage Loans that
do not conform to the requirements of Sections 2.01 and 2.02 hereof by
delivery of the Document Certification and Exception Report. In its capacity
as "Assignee" under the Step 2 Assignment Agreements, the Trustee at the
direction of the Depositor shall enforce the obligation of the Responsible
Party to cure or repurchase Mortgage Loans that do not conform to such
requirements as determined in the Custodian's review as required herein, by
notifying the Responsible Party to correct or cure such default. In its
capacity as Assignee under the Step 2 Assignment Agreements, the Trustee shall
enforce the obligation of the Responsible Party under the Step 1 Assignment
Agreements, and to the extent applicable, of the Servicer under the Servicing
Agreement, to cure or repurchase Mortgage Loans for which there is a defect or
a breach of a representation or warranty thereunder of which a Responsible
Officer of the Trustee has actual knowledge, by notifying the applicable party
to correct or cure such default. If the Servicer, the Responsible Party or the
Purchaser, as the case may be, fails or is unable to correct or cure the
defect or breach within the period set forth in the applicable agreement, the
Trustee shall notify the Depositor of such failure to correct or cure. Unless
otherwise directed by the Depositor within five (5) Business Days after
notifying the Depositor of such failure by the
39
applicable party to correct or cure, the Trustee shall notify such party to
repurchase the Mortgage Loan. If, within ten (10) Business Days of receipt of
such notice by such party, such party fails to repurchase such Mortgage Loan,
the Trustee shall notify the Depositor of such failure. The Trustee shall
pursue all legal remedies available to the Trustee against the Servicer, the
Responsible Party and the Purchaser, as applicable, under this Agreement, if
the Trustee has received written notice from the Depositor directing the
Trustee to pursue such remedies.
Section 2.03 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, the Trustee has executed and
delivered to or upon the order of the Depositor, the Certificates in
authorized denominations evidencing directly or indirectly the entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the rights referred to above for the benefit of all present and
future Holders of the Certificates.
Section 2.04 REMIC Matters. The Preliminary Statement sets forth
the designations for federal income tax purposes of all interests created
hereby. The "Startup Day" for purposes of the REMIC Provisions shall be the
Closing Date. The "latest possible maturity date" is October 25, 2036, which
is the Distribution Date following the latest Mortgage Loan maturity date.
Amounts paid to the Class X Certificates (prior to any reduction for any Basis
Risk Payment) shall be deemed paid from the Upper-Tier REMIC to the Class X
REMIC in respect of the Class X Interest and from the Class X REMIC to the
holders of the Class X Certificates prior to distribution of Basis Risk
Payments to the Principal Certificates.
Amounts distributable to the Class X Certificates shall be deemed
paid from the Master REMIC to the Holders of the Class X Certificates prior to
distribution of any Basis Risk Payments to the Principal Certificates.
For federal income tax purposes, any amount distributed on the
Principal Certificates on any such Distribution Date in excess of their Pass
Through Rate shall be treated as having been paid from the Excess Reserve Fund
Account.
Section 2.05 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee that as of
the date of this Agreement or as of such date specifically provided herein:
(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
40
the rights of creditors generally, and by general equity principles
(regardless of whether such enforcement is considered in a proceeding in
equity or at law);
(d) No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court
is required for the execution, delivery and performance of or compliance by
the Depositor with this Agreement or the consummation by the Depositor of any
of the transactions contemplated hereby, except as have been made on or prior
to the Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of,
or constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) any
term, condition or provision of any material indenture, deed of trust,
contract or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound;
(ii) results or will result in a violation of any law, rule, regulation,
order, judgment or decree applicable to the Depositor of any court or
governmental authority having jurisdiction over the Depositor or its
subsidiaries; or (iii) results in the creation or imposition of any lien,
charge or encumbrance which would have a material adverse effect upon the
Mortgage Loans or any documents or instruments evidencing or securing the
Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or investigations of, the Depositor pending, or to the knowledge of the
Depositor, threatened, before any court, administrative agency or other
tribunal, and no notice of any such action, which, in the Depositor's
reasonable judgment, might materially and adversely affect the performance by
the Depositor of its obligations under this Agreement, or the validity or
enforceability of this Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(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 9.04
hereof.
It is understood and agreed that the representations, warranties
and covenants set forth in this Section 2.05 shall survive delivery of the
Custodial Files to the Custodian, and shall inure to the benefit of the
Trustee and to the Certificateholders.
41
Within ninety (90) days of the earlier of either discovery by or
notice to the Depositor of a default or a breach set forth in clause (h) above
that materially and adversely affects the value of any Mortgage Loan or the
interest of the Trustee or the Certificateholders therein, the Depositor shall
use its best efforts to promptly cure such breach in all material respects and
if such defect or breach cannot be remedied, the Depositor shall repurchase
such Mortgage Loan at the Repurchase Price. The Depositor shall repurchase
each such Deleted Mortgage Loan within thirty (30) days of the earlier of
discovery or receipt of notice with respect to each such Deleted Mortgage
Loan. Any such repurchase shall be conducted in the same manner as set forth
in the Sale Agreement or Servicing Agreement, as applicable. The obligations
of the Depositor to cure such breach or to purchase any Mortgage Loan
constitute the sole remedies respecting a material breach of any such
representation or warranty to the Holders of the Certificates and the Trustee.
In the event the Depositor is required to repurchase a Mortgage
Loan pursuant to this Section 2.05, the Trustee shall assign to the Depositor
all rights it has with respect to such Mortgage Loan under the Step 1
Assignment Agreements and, solely to the extent related to such Mortgage Loan,
under the Servicing Agreement.
Section 2.06 Representations and Warranties of the Custodian.
Deutsche Bank, in its capacity as Custodian, hereby represents and warrants to
the Depositor and the Trustee, as of the Closing Date:
(a) The Custodian is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by the Custodian or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in accordance
with the terms thereof.
(b) The Custodian has the full power and authority to execute,
deliver and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary action
on the part of the Custodian the execution, delivery and performance of this
Agreement; and this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of the Custodian, enforceable against the Custodian in
accordance with its terms, except that (i) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by the Custodian,
the consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are in
the ordinary course of business of the Custodian and will not result in a
material breach of any term or provision of the articles of incorporation or
by laws of the Custodian.
42
ARTICLE III
TRUST ACCOUNTS
Section 3.01 Excess Reserve Fund Account; Distribution Account.
(a) The Trustee shall establish and maintain the Excess Reserve Fund Account
to receive any Basis Risk Payment and to secure the limited recourse
obligation to pay to the Principal Certificateholders any Basis Risk Carry
Forward Amounts. On each Distribution Date, the Trustee shall deposit the
amount of any Basis Risk Payment received by it for such date into the Excess
Reserve Fund Account.
On each Distribution Date on which there exists a Basis Risk Carry
Forward Amount on any Class or Classes of Principal Certificates, the Trustee
shall (1) withdraw from the Distribution Account, to the extent of funds
available therefor in the Distribution Account, and deposit in the Excess
Reserve Fund Account, as set forth in Section 4.01(a)(iii)(I), the lesser of
(x) the Class X Distributable Amount (without regard to the reduction in
clause (iii) of the definition thereof with respect to Basis Risk Payments)
(to the extent remaining after the distributions specified in Sections
4.01(a)(iii)(A)-(I)) and (y) the aggregate Basis Risk Carry Forward Amount of
the Principal Certificates 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 related Basis Risk Carry Forward Amount. Such
payments shall be allocated to those Classes based upon the amount of Basis
Risk Carry Forward Amount owed to each such Class and shall be paid in the
priority set forth in Section 4.01(a)(iii)(J).
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 Trust REMIC created pursuant to this
Agreement. The beneficial owners of the Excess Reserve Fund Account are the
Class X Certificateholders. For all federal income tax purposes, amounts
transferred to the Excess Reserve Fund Account shall be treated as
distributions by the Trustee from the Class X REMIC to the Class X
Certificates and then contributed by the Class X Certificateholders to the
Excess Reserve Fund Account.
Any Basis Risk Carry Forward Amounts distributed by the Trustee to
the Principal Certificateholders shall be accounted for by the Trustee, for
federal income tax purposes, as amounts paid first to the Holders of the Class
X Certificates and then to the respective Class or Classes of Principal
Certificates in accordance with the priority of payments in this Section 3.01.
In addition, the Trustee shall account for the Principal Certificateholders'
rights to receive payments of Basis Risk Carry Forward Amounts as rights in a
limited recourse interest rate cap contract written by the Class X
Certificateholders in favor of the Holders of each such Class.
Notwithstanding any provision contained in this Agreement, the
Trustee shall not be required to make any distributions from the Excess
Reserve Fund Account except as expressly set forth in this Section 3.01(a).
Funds in the Excess Reserve Fund Account shall remain uninvested.
43
(b) The Trustee shall establish and maintain the Distribution
Account in the name of the Trustee, as paying agent, on behalf of the
Certificateholders. The amount remitted by the Servicer to the Trustee on each
Remittance Date shall be credited to the Distribution Account within two (2)
Business Days once the amounts are identified as a remittance in connection
with the Trust and reconciled to the reports provided by the Servicer. The
Trustee shall establish and maintain the Distribution Account on behalf of the
Certificateholders. The Trustee shall, promptly upon receipt within two (2)
Business Days received, deposit in the Distribution Account and retain therein
the following:
(i) the aggregate amount remitted by the Servicer pursuant to the
Servicing Agreement; and
(ii) 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 pursuant to the Servicing Agreement, and the Servicer directs
the Trustee in writing to withdraw such amount from the Distribution Account,
the Trustee shall return such funds to the Servicer. 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 4.01.
(c) From time to time, the Trustee may also establish any other
accounts for the purposes of carrying out its duties hereunder.
Section 3.02 Investment of Funds in the Distribution Account. (a)
Other than during the Trustee Float Period, the Depositor shall direct the
investment of funds held in the Distribution Account in one or more Permitted
Investments. Absent such direction, the Trustee may (but shall not be
obligated to) invest funds in the Distribution Account during the Trustee
Float Period (for purposes of this Section 3.02, such Account is referred to
as an "Investment Account"), in one or more Permitted Investments bearing
interest or sold at a discount, and maturing, unless payable on demand, or
maturing on such Distribution Date (in the case of an investment that is an
obligation of U.S. Bank), 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. On or after the Remittance Date and prior to the
Trustee Float Period, the Depositor shall direct the Trustee to invest funds
in the Distribution Account in such Permitted Investments. 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
Trustee. The Trustee 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 Trustee or its agent, together
with any document of transfer necessary to transfer title to such investment
to the Trustee. In the event amounts on deposit in an Investment Account are
at any time invested in a Permitted Investment payable on demand, the Trustee
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
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amounts then payable thereunder and (2) the amount required
to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder that such
Permitted Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit in the
Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the Distribution Account held by the Trustee during the Trustee
Float Period shall be subject to the Trustee's withdrawal in the manner set
forth in Section 9.05. All income and gain realized from the investment of
funds deposited in the Distribution Account held by the Trustee during any
period other than the Trustee Float Period shall be held for the benefit of
the Depositor, as compensation for the duties to be performed by it to the
extent provided under this Agreement, and the Trustee shall distribute such
funds to the Depositor on the next Distribution Date.
(c) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee shall take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate proceedings. Notwithstanding the foregoing, (i) the
Depositor shall be liable to the Trust for any loss on any investment of funds
in the Distribution Account other than during the Trustee Float Period and
(ii) the Trustee shall be liable to the Trust for any such loss on any funds
it has invested under this Section 3.02 only during the Trustee Float Period.
The Depositor or the Trustee, as the case may be, shall deposit funds in the
amount of any such loss in the Distribution Account promptly after such loss
is incurred.
(d) The Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Trustee's economic
self-interest for (i) serving as investment adviser, administrator,
shareholder, servicing agent, custodian or sub-custodian with respect to
certain of the Permitted Investments, (ii) using Affiliates to effect
transactions in certain Permitted Investments and (iii) effecting transactions
in certain Permitted Investments. Such compensation is not payable or
reimbursable under Section 8.06 of this Agreement.
(e) In order to comply with its duties under the USA Patriot Act
of 2001, U.S. Bank, as Trustee, may obtain and verify certain information and
documentation from the other parties to this Agreement including, but not
limited to, each such party's name, address and other identifying information.
(f) In order to comply with laws, rules and regulations applicable
to banking institutions, including those relating to the funding of terrorist
activities and money laundering, Deutsche Bank as Custodian is required to
obtain, verify and record certain information relating to individuals and
entities which maintain a business relationship with Deutsche Bank.
Accordingly, each of the parties agrees to provide to Deutsche Bank upon its
request from time to time such party's complete name, address, tax
identification number and such other identifying information together with
copies of such party's constituting documentation, securities disclosure
documentation and such other identifying documentation as may be available for
such party.
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ARTICLE IV
DISTRIBUTIONS
Section 4.01 Priorities of Distribution. (a) On each Distribution
Date, the Trustee shall make the disbursements and transfers from amounts then
on deposit in the Distribution Account in the following order of priority and
to the extent of the Available Funds remaining:
(i) from the Interest Remittance Amount, to the holders of each
Class of Principal Certificates in the following order of priority:
(A) to the Class A Certificates, their respective Accrued
Certificate Interest Distribution Amount and Unpaid Interest
Amounts (allocated pro rata based on their entitlement to those
amounts);
(B) from any remaining Interest Remittance Amounts to the
Class M Certificates, sequentially, in ascending numerical order,
the Accrued Certificate Interest Distribution Amount for each such
Class; and
(C) from any remaining Interest Remittance Amounts to the
Class B Certificates, sequentially, in ascending numerical order,
the Accrued Certificate Interest Distribution Amount for each such
Class.
(ii) (A) on each Distribution Date (x) prior to the Stepdown Date
or (y) with respect to which a Trigger Event is in effect, to the
holders of the Class or Classes of Principal Certificates and Residual
Certificates then entitled to distributions of principal, from Available
Funds remaining after making distributions pursuant to clause (a)(i)
above, an amount equal to the Principal Distribution Amount in the
following order of priority:
(1) concurrently, to the Class R, Class RC and Class
RX Certificates, pro rata, until their respective Class
Certificate Balances have been reduced to zero;
(2) sequentially,
(a) concurrently, to the Class AF-6A and Class
AF-6B Certificates, allocated pro rata among these
Certificates, an amount equal to the Class AF-6A and
Class AF-6B Lockout Distribution Amount, until their
respective Class Certificate Balances have been
reduced to zero; with the exception that if a
Sequential Trigger Event is in effect, principal
distributions to the Class AF-6A and Class AF-6B
Certificates will be allocated first, to the Class
AF-6A Certificates, until its Class Certificate
Balance has been reduced to zero, and then to the
Class AF-6B Certificates until its Class Certificate
Balance has been reduced to zero;
46
(b) sequentially, to the Class AV-1, Class AF-2,
Class AF-3, Class AF-4 and Class AF-5 Certificates, in
that order, until their respective Class Certificate
Balances have been reduced to zero;
(c) concurrently, to the Class AF-6A and Class
AF-6B Certificates, allocated pro rata among these
Certificates, without regard to the Class AF-6A and
Class AF-6B Lockout Distribution Amount, until their
respective Class Certificate Balances have been
reduced to zero;
(3) the portion of the available Principal
Distribution Amount remaining after making the distributions
set forth in clause (ii)(A)(2) above will be distributed
sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class B-1, Class B-2 and Class B-3 Certificates, in
that order, until their respective Class Certificate
Balances have been reduced to zero;
(B) on each Distribution Date (x) on and after the Stepdown
Date and (y) as long as a Trigger Event is not in effect, to the
holders of the Class or Classes of Principal Certificates then
entitled to distribution of principal from Available Funds
remaining after making distributions pursuant to clause (i) above,
an amount equal to the Principal Distribution Amount in the
following order of priority:
(1) to the Class A Certificates, the lesser of (x) the
Principal Distribution Amount and (y) the Class A Principal
Distribution Amount allocated sequentially as follows:
(a) concurrently, to the Class AF-6A and Class
AF-6B Certificates, allocated pro rata among these
Certificates, an amount equal to the Class AF-6A and
Class AF-6B Lockout Distribution Amount, until their
respective Class Certificate Balances have been
reduced to zero;
(b) sequentially, to the Class AV-1, Class AF-2,
Class AF-3, Class AF-4 and Class AF-5 Certificates, in
that order, until their respective Class Certificate
Balances are reduced to zero;
(c) concurrently, to the Class AF-6
Certificates, allocated pro rata among these
Certificates, without regard to the Class AF-6A and
Class AF-6B Lockout Distribution Amount, until their
respective Class Certificate Balances have been
reduced to zero;
(2) to the Class M-1 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over
(ii) the amount distributed to the Class A Certificates in
clause (ii)(B)(1) above and (y) the Class M-1
47
Principal Distribution Amount, until their Class Certificate
Balance has been reduced to zero;
(3) to the Class M-2 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over
(ii) the amount distributed to the Class A Certificates in
clause (ii)(B)(1) above and to the Class M-1 Certificates in
clause (ii)(B)(2) above and (y) the Class M-2 Principal
Distribution Amount, until their Class Certificate Balance
has been reduced to zero;
(4) to the Class M-3 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over
(ii) the amount distributed to the Class A Certificates in
clause (ii)(B)(1) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above and to the Class M-2 Certificates in
clause (ii)(B)(3) above and (y) the Class M-3 Principal
Distribution Amount, until their Class Certificate Balance
has been reduced to zero;
(5) to the Class M-4 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over
(ii) the amount distributed to the Class A Certificates in
clause (ii)(B)(1) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2 Certificates in
clause (ii)(B)(3) above and to the Class M-3 Certificates in
clause (ii)(B)(4) above and (y) the Class M-4 Principal
Distribution Amount, until their Class Certificate Balance
has been reduced to zero;
(6) to the Class B-1 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over
(ii) the amount distributed to the Class A Certificates in
clause (ii)(B)(1) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2 Certificates in
clause (ii)(B)(3) above, to the Class M-3 Certificates in
clause (ii)(B)(4) above and to the Class M-4 Certificates in
clause (ii)(B)(5) above and (y) the Class B-1 Principal
Distribution Amount, until their Class Certificate Balance
has been reduced to zero;
(7) to the Class B-2 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over
(ii) the amount distributed to the Class A Certificates in
clause (ii)(B)(1) above, to the Class M-1 Certificates in
clause (ii)(B)(2) above, to the Class M-2 Certificates in
clause (ii)(B)(3) above, to the Class M-3 Certificates in
clause (ii)(B)(4) above, to the Class M-4 Certificates in
clause (ii)(B)(5) above and to the Class B-1 Certificates in
clause (ii)(B)(6) above and (y) the Class B-2 Principal
Distribution Amount, until their Class Certificate Balance
has been reduced to zero; and
(8) to the Class B-3 Certificates, the lesser of (x)
the excess of (i) the Principal Distribution Amount over
(ii) the amount distributed to the Class A Certificates in
clause (ii)(B)(1) above, to the Class M-1
48
Certificates in clause (ii)(B)(2) above, to the Class M-2
Certificates in clause (ii)(B)(3) above, to the Class M-3
Certificates in clause (ii)(B)(4) above, to the Class M-4
Certificates in clause (ii)(B)(5) above, to the Class B-1
Certificates in clause (ii)(B)(6) above and to the Class B-2
Certificates in clause (ii)(B)(7) above and (y) the Class
B-3 Principal Distribution Amount, until their Class
Certificate Balance has been reduced to zero;
(iii) from the Available Funds remaining after the distributions
in clauses (a)(i) and (a)(ii) above, the following amounts shall be
distributed in the following order of priority:
(A) if and to the extent that the Interest Remittance
Amounts distributed pursuant to clauses (a)(i) and (a)(ii) above
were insufficient to make full distributions in respect of
interest set forth in such clauses, (x) to the holders of each
Class of Class A Certificates, any unpaid Accrued Certificate
Interest and any Unpaid Interest Amounts, pro rata among such
Classes based on their respective entitlement to those amounts,
and then (y) to the holders of each Class of the Class M and Class
B Certificates, any unpaid Accrued Certificate Interest, in the
order of priority for such classes set forth in clause (i) above;
(B) to the holders of the Class M-1 Certificates, any Unpaid
Interest Amount for such Class;
(C) to the holders of the Class M-2 Certificates, any Unpaid
Interest Amount for such Class;
(D) to the holders of the Class M-3 Certificates, any Unpaid
Interest Amount for such Class;
(E) to the holders of the Class M-4 Certificates, any Unpaid
Interest Amount for such Class;
(F) to the holders of the Class B-1 Certificates, any Unpaid
Interest Amount for such Class;
(G) to the holders of the Class B-2 Certificates, any Unpaid
Interest Amount for such Class;
(H) to the holders of the Class B-3 Certificates, any Unpaid
Interest Amount for such Class;
(I) to the Excess Reserve Fund Account, the amount of any
Basis Risk Payment for such Distribution Date;
(J) from funds on deposit in the Excess Reserve Fund Account
with respect to that Distribution Date, an amount equal to any
Basis Risk Carry Forward Amount with respect to the Principal
Certificates for that Distribution Date in the same order and
priority in which Accrued Certificate Interest is
49
allocated among those Classes of Certificates, with the allocation
to the Class A Certificates being pro rata based on their
respective Class Certificate Balances; provided, however, for any
Distribution Date, after the remaining Basis Risk Carry Forward
Amount for any of the Class A Certificates has been reduced to
zero, any remaining Basis Risk Carry Forward Amount that would
have been allocated to such Class A Certificates for that
Distribution Date will be allocated, pro rata, to the remaining
Class A Certificates based on their respective remaining unpaid
Basis Risk Carry Forward Amounts;
(K) to the holders of the Class X Certificates, the
remainder of the Class X Distributable Amount not distributed
pursuant to Sections 4.01(a)(iii)(A)-(J);
(L) to the holders of the Class R and Class RC Certificates,
pro rata, any remaining amount; and
(M) to the holders of the Class RX Certificates, any
remaining amount, in respect of the Class X REMIC.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive the related
Accrued Certificate Interest Distribution Amount or the related Unpaid
Interest Amount, if any, then that unpaid amount will be recoverable by
the holders of those Classes, with interest thereon, on future
Distribution Dates, as an Unpaid Interest Amount, subject to the
priorities described above. In the event the Class Certificate Balance
of any Class of Principal Certificates has been reduced to zero, that
Class of Certificates shall no longer be entitled to receive any related
unpaid Basis Risk Carry Forward Amounts except to the extent the Class
Certificate Balance is increased as a result of any Subsequent Recovery.
(b) On each Distribution Date, all amounts representing Prepayment
Premiums from the Mortgage Loans received during the related Principal
Prepayment Period shall be distributed by the Trustee to the holders of the
Class P Certificates.
(c) Notwithstanding the foregoing description of allocation of
principal distributions to the Class A Certificates, from and after the
Distribution Date on which the aggregate Class Certificate Balance of the
Subordinated Certificates and the Overcollateralized Amount have been reduced
to zero, any principal distributions allocated to the Class A Certificates are
required to be allocated pro rata to the Class A Certificates, based on their
respective Class Certificate Balances, except that so long as a Sequential
Trigger Event is in effect, (i) principal distributions to the Class AF-6A and
Class AF-6B Certificates will be allocated first to the Class AF-6A
Certificates, until its Class Certificate Balance has been reduced to zero,
and then to the Class AF-6B Certificates, until its Class Certificate Balance
has been reduced to zero.
(d) On any Distribution Date, any shortfalls resulting from the
application of the Servicemembers Civil Relief Act or other similar state
statute and any prepayment interest shortfalls not covered by Compensating
Interest will be allocated first to excess interest on the
50
mortgage loans for the related Distribution Date and thereafter as a reduction
to the Accrued Certificate Interest for the Principal Certificates on a pro
rata basis based on the respective amounts of interest accrued on those
certificates for that Distribution Date. The holders of the Principal
Certificates will not be entitled to reimbursement for the allocation of any
of those shortfalls described in the preceding sentence.
(e) Upon any exercise of the purchase option set forth in Section
9.01, the Trustee shall distribute to the holders of the Class RC Certificates
any amounts required to be distributed on the Class RC Certificates pursuant
to Section 9.02.
Section 4.02 Monthly Statements to Certificateholders. (a) Not
later than each Distribution Date, the Trustee shall make available to each
Certificateholder, the Depositor, the Trustee and each Rating Agency a
statement based, in part, upon the information provided by the 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 and
Liquidation Proceeds included therein;
(ii) the amount thereof allocable to interest, any Unpaid Interest
Amount included in such distribution and any remaining Unpaid Interest
Amount after giving effect to such distribution, any Basis Risk Carry
Forward Amount for such Distribution Date and the amount of all Basis
Risk Carry Forward Amount covered by withdrawals from the Excess Reserve
Fund Account on such Distribution Date;
(iii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the
amount of the shortfall and the allocation thereof as between principal
and interest, including any Basis Risk Carry Forward Amount not covered
by amounts in the Excess Reserve Fund Account;
(iv) the Class Certificate Balance of each Class of Certificates
and the notional amount of the Class P Certificates after giving effect
to the distribution of principal on such Distribution Date;
(v) the aggregate Stated Principal Balance of the Mortgage Loans
for the following Distribution Date;
(vi) the amount of the expenses and fees paid to or retained by
the Servicer and paid to or retained by the Trustee with respect to such
Distribution Date;
(vii) the amount of the Expense Fees (in the aggregate and
separately stated) paid to or retained by the Trustee with respect to
such Distribution Date;
(viii) the Pass-Through Rate for each such Class of Certificates
with respect to such Distribution Date;
51
(ix) the amount of Monthly Advances included in the distribution
on such Distribution Date and the aggregate amount of Monthly Advances
reported by the Servicer (and the Trustee as successor servicer or as
required under Section 8.02) as outstanding as of the close of business
on the Determination Date immediately preceding such Distribution Date;
(x) the number and aggregate Stated Principal Balances of Mortgage
Loans as reported to the Trustee by the applicable Servicer, (i) as to
which the Monthly Payment is delinquent 31 to 60 days, 61 to 90 days and
91 or more days (each to be calculated using the OTS method), (2) that
have become REO Property, (3) that are in foreclosure and (4) that are
in bankruptcy, in each case as of the close of business on the last
Business Day of the immediately preceding month;
(xi) the total number and principal balance of any REO Properties
(and market value, if available) as of the close of business on the
Determination Date preceding such Distribution Date;
(xii) whether a Trigger Event has occurred and is continuing
(including the calculation demonstrating the existence of the Trigger
Event and the aggregate outstanding balance of all 60+ Day Delinquent
Mortgage Loans);
(xiii) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xiv) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xv) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation thereof to the Certificateholders
with respect to Unpaid Interest Amounts;
(xvi) the Overcollateralized Amount and Specified
Overcollateralized Amount;
(xvii) the Prepayment Premiums collected by or paid by the
Servicer;
(xviii) the percentage equal to the aggregate realized losses
divided by the aggregate Stated Principal Balance of the Mortgage Loans
as of the Cut-off Date;
(xix) the amount distributed on the Class X and Class P
Certificates;
(xx) the amount of any Subsequent Recoveries during the related
Due Period;
(xxi) updated Mortgage Loan information, such as weighted average
interest rate, weighted average remaining term and such other
information regarding the Mortgage Loans as may be agreed by the
Depositor and the Trustee;
(xxii) the related Record Date;
52
(xxiii) the related Interest Accrual Period;
(xxiv) the related Determination Date; and
(xxv) the related Distribution Date.
(b) The Trustee's responsibility for providing the above statement
to the Certificateholders, each Rating Agency, the Trustee and the Depositor
is limited to the availability, timeliness and accuracy of the information
derived from the Servicer and the Responsible Party. The Trustee shall provide
the above statement via the Trustee's internet website, currently located at
xxxx://xxx.xxxxxx.xxx/xxx. Assistance in using the website can be obtained by
calling the Trustee's investor relations desk at (000) 000-0000. The Trustee
will also make a paper copy of the above statement available upon request.
(c) Upon request, within a reasonable period of time after the end
of each calendar year, the 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), (a)(iii) and
(a)(vii) of this Section 4.02 aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the Trustee shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Trustee
pursuant to any requirements of the Code as from time to time in effect.
The Trustee shall be entitled to rely on information provided by
third parties for purposes of preparing the foregoing report, but shall not be
responsible for the accuracy of such information.
(d) Pursuant to the Servicing Agreement, the Servicer has agreed
to provide certain monthly information to the Trustee. Pursuant to the
Assignment Agreements, the Servicer shall deliver to the Trustee, on a monthly
basis, no later than each Remittance Advice Date a monthly remittance advice
statement containing the information required by the Trustee to calculate and
provide the reports required by Section 4.02(a) as to the accompanying
remittance and the period ending on the close of business on the last Business
Day of the immediately preceding month (or the last day of the Due Period, as
applicable) (the "Servicer Remittance Report"). On an ongoing basis, the
Trustee may reasonably request the Servicer to provide additional information
to be included in subsequent Servicer Remittance Reports.
On the Closing Date, the Depositor shall request the Servicer to
furnish an individual loan accounting report, as of the last day of the Due
Period of each month, to document Mortgage Loan payment activity on an
individual Mortgage Loan basis. With respect to each month, the Trustee shall
request the Servicer to furnish the corresponding individual loan accounting
report (in electronic format) to be received by the Trustee no later than the
Remittance Advice Date, which report shall contain the following:
(i) with respect to each Monthly Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Premiums, along with a detailed report of interest on principal
prepayment amounts remitted in accordance with the Servicing Agreement);
53
(ii) with respect to each Monthly Payment, the amount of such
remittance allocable to interest;
(iii) the individual and aggregate Stated Principal Balance of the
Mortgage Loans;
(iv) the aggregate of any expenses reimbursed to the Servicer
during the prior distribution period pursuant to the Servicing Agreement;
(v) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent (1) 31 to 60 days, (2) 61 to 90 days, or (3) 91
days or more; (b) as to which foreclosure has commenced; and (c) as to which
REO Property has been acquired; and
(vi) any other information reasonably required by the Trustee to
enable it to prepare the monthly statements referred to in Section 4.02(a).
Section 4.03 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts will be allocated to the most junior Class of
Subordinated Certificates then outstanding in reduction of the Class
Certificate Balance thereof. In the event, Applied Realized Loss Amounts are
allocated to any Class of Certificates, their Class Certificate Balance shall
be reduced by the amount so allocated, and no funds shall be distributed with
respect to the written down amounts or with respect to interest or Basis Risk
Carry Forward Amounts on the written down amounts on that Distribution Date or
any future Distribution Dates, even if funds are otherwise available therefor.
Notwithstanding the foregoing, the Class Certificate Balance of
each Class of Subordinated Certificates that has been previously reduced by
Applied Realized Loss Amounts will be increased, in the order of seniority, by
the amount of the Subsequent Recoveries (but not in excess of the Applied
Realized Loss Amount allocated to the applicable Class of Subordinated
Certificates).
Section 4.04 Certain Matters Relating to the Determination of
LIBOR. LIBOR shall be calculated by the 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.
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
54
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.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral
multiples in excess thereof (except that one Certificate in each Class may be
issued in a different amount) and aggregate denominations per Class set forth
in the Preliminary Statement.
The Depositor hereby directs the Trustee to register the Class X
and Class P Certificates in the name of the Depositor or its designee. On a
date as to which the Depositor notifies the Trustee, the Depositor hereby
directs the Trustee to transfer the Class X and Class P Certificates in the
name of the NIM Trustee or such other name or names as the Depositor shall
request, and to deliver the Class X and Class P Certificates to the NIM
Trustee, or to such other person or persons as the Depositor shall request.
Subject to Section 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 as directed by
that Certificateholder by written wire instructions provided to the Trustee or
(y), in the event that no wire instructions are provided to the Trustee, 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 office at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless authenticated by the 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.
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Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Trustee shall maintain or cause to be
maintained 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. In
the event, the Depositor or an Affiliate transfers the Class X Certificates,
or a portion thereof, to another Affiliate, it shall notify the Trustee in
writing of the affiliated status of the transferee. The Trustee shall have no
liability regarding the lack of notice with respect thereto.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the 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.
Except with respect to (i) the initial transfer of the Class X or Class P
Certificates on the Closing Date, (ii) the transfer of the Class X or Class P
Certificates to the NIM Issuer or the NIM Trustee, or (iii) a transfer of the
Class X or Class P Certificates to the Depositor or any Affiliate of the
Depositor, in the event that a transfer of a Private Certificate which is a
Physical Certificate is to be made in reliance upon an exemption from the
Securities Act and such laws, in order to assure compliance with the
Securities Act and such laws, the Certificateholder desiring to effect such
transfer shall certify to the 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 (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
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desiring to effect such transfer will be deemed to have made as of the
transfer date each of the certifications set forth in the Transferor
Certificate in respect of such Certificate and the transferee will be deemed
to have made as of the transfer date each of the certifications set forth in
the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate. The Depositor shall
provide to any Holder of a Private Certificate and any prospective transferee
designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Trustee
shall cooperate with the Depositor in providing the Rule 144A information
referenced in the preceding sentence, including providing to the Depositor
such information in the Trustee's possession regarding the Certificates, the
Mortgage Loans and other matters regarding the Trust Fund as the Depositor
shall reasonably request to meet its obligation under the preceding sentence.
Each Holder of a Private Certificate desiring to effect such transfer shall,
and does hereby agree to, indemnify the Trustee and the Depositor and the
Servicer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
Except with respect to (i) the initial transfer of the Class X or
Class P Certificates on the Closing Date, (ii) the transfer of the Class X or
Class P Certificates to the NIM Issuer or the NIM Trustee or (iii) a transfer
of the Class X or Class P Certificates to the Depositor or any Affiliate of
the Depositor, no transfer of an ERISA-Restricted Certificate shall be made
unless the 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 G), to the effect that such transferee is
not an employee benefit plan or arrangement subject to Section 406 of ERISA, a
plan subject to Section 4975 of the Code or a plan subject to any Federal,
state or local law ("Similar Law") materially similar to the foregoing
provisions of ERISA or the Code, nor a person acting on behalf of any such
plan or arrangement nor using the assets of any such plan or arrangement to
effect such transfer (each such investor a "Plan"), (ii) in the case of an
ERISA-Restricted Certificate (other than a Residual Certificate) that has been
the subject of an ERISA-Qualifying Underwriting, a representation that the
purchaser is an insurance company that is purchasing such Certificates with
funds contained in an "insurance company general account" (as such term is
defined in Section V(e) of Prohibited Transaction Class Exemption ("PTCE")
95-60) and that the purchase and holding of such Certificates satisfy the
requirements for exemptive relief under Sections I and III of PTCE 95-60 or
(iii) in the case of any ERISA-Restricted Certificate presented for
registration in the name of an employee benefit plan subject to Title I of
ERISA, a plan or arrangement subject to Section 4975 of the Code (or
comparable provisions of any subsequent enactments), or a plan subject to
Similar Law, or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee and the Depositor,
which Opinion of Counsel shall not be an expense of the Trustee, the Depositor
or the Trust Fund, addressed to the Trustee and the Depositor, to the effect
that the purchase and holding of such ERISA-Restricted Certificate will not
constitute or result in a non-exempt prohibited transaction within the meaning
of ERISA, Section 4975 of the Code or any Similar Law and will not subject the
Trustee or the Depositor to any obligation in addition to
57
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. In the event that such representation is
violated, or any attempt is made to transfer to a plan or arrangement subject
to Section 406 of ERISA, a plan subject to Section 4975 of the Code or a plan
subject to Similar Law, or a person acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement, without such
Opinion of Counsel, such attempted transfer or acquisition shall be void and
of no effect.
The Residual Certificates may not be sold to any employee benefit
plan subject to Title I of ERISA, any plan subject to Section 4975 of the
Code, or any plan subject to any Similar Law or any person investing on behalf
of or with plan assets of such plan.
The Trustee shall have no duty to monitor transfers of beneficial
interests in any Book-Entry Certificate and shall not be under liability to
any Person for any registration of transfer of any ERISA Restricted
Certificate that is in fact not permitted by this Section 5.02(b) or for
making any payments due on such Certificate to the Holder thereof or taking
any other action with respect to such Holder under the provisions of this
Agreement so long as the transfer was registered by the Trustee in accordance
with the foregoing requirements.
(c) Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of
such Ownership Interest to have agreed to be bound by the following
provisions, and the rights of each Person acquiring any Ownership Interest in
a Residual Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the 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
I;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee;
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(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
have 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. The
Trustee shall be entitled but not obligated to recover from any Holder
of a Residual Certificate that was in fact not a Permitted Transferee at
the time it became a Holder or, at such subsequent time as it became
other than a Permitted Transferee, all payments made on such Residual
Certificate at and after either such time. Any such payments so
recovered by the 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 not a Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth
in this Section 5.02(c) shall cease to apply (and the applicable portions of
the legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which
Opinion of Counsel shall not be an expense of the Trust Fund or the Trustee,
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 not a Permitted Transferee and (b)
to provide for a means to compel the Transfer of a Residual Certificate which
is held by a Person that is not a Permitted Transferee to a Holder that is a
Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and
at all times: (i) registration of the Certificates may not be transferred by
the 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
59
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, 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. Neither the
Depositor nor 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.
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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 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 protected 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 Trustee, the Depositor and
any agent of the Trustee or the Depositor, may treat the Person in whose name
any Certificate is registered as the owner of such Certificate for the purpose
of receiving distributions as provided in this Agreement and for all other
purposes whatsoever, and none of the Trustee, the Depositor or any agent of
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 the Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten (10) 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 agency or
agencies where Certificates may be surrendered for registration of transfer or
exchange. The Trustee initially designates for such purposes its office
located at 00 Xxxxxxxxxx Xxxxxx, XX-XX-XX0X, Xx. Xxxx, Xxxxxxxxx 00000, Attn:
Transfer Unit/NCAMLT 2006-ALT2. The Trustee will give prompt written notice to
the Certificateholders of any change in such location of any such office or
agency.
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ARTICLE VI
THE DEPOSITOR
Section 6.01 Liabilities of the Depositor. The Depositor shall be
liable in accordance herewith only to the extent of the obligations
specifically and respectively imposed upon and undertaken by it herein.
Section 6.02 Merger or Consolidation of the Depositor. The
Depositor will keep in full effect its existence, rights and franchises as a
corporation or federally chartered savings bank, as the case may be, under the
laws of the United States or under the laws of one of the states thereof and
will each obtain and preserve its qualification to do business as a foreign
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, or any
of the Mortgage Loans and to perform its respective duties under this
Agreement.
Any Person into which the Depositor may be merged or consolidated,
or any Person resulting from any merger or consolidation to which the
Depositor shall be a party, or any person succeeding to the business of the
Depositor, shall be the successor of the Depositor, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 6.03 Limitation on Liability of the Depositor and Others.
Neither the Depositor nor any of its directors, officers, employees or agents
shall be under any liability to the Certificateholders for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor or
any such Person from any liability which would otherwise be imposed by reasons
of willful misfeasance, bad faith or gross negligence in the performance of
duties or by reason of reckless disregard of obligations and duties hereunder.
The Depositor and any director, officer, employee or agent of the Depositor
may rely in good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor and any director, officer, employee or agent of the Depositor
shall be indemnified by the Trust Fund and held harmless against any loss,
liability or expense incurred in connection with any audit, controversy or
judicial proceeding relating to a governmental taxing authority or any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder. The Depositor shall
not be under any obligation to appear in, prosecute or defend any legal action
that is not incidental to its respective duties hereunder and which in its
opinion may involve it in any expense or liability; provided, however, that
the Depositor may in its discretion undertake any such action (or direct the
Trustee to undertake such actions for the benefit of the Certificateholders)
that it may deem necessary or desirable in respect of this Agreement and the
rights and duties of the parties hereto and interests of the Trustee and the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting
62
therefrom shall be expenses, costs and liabilities of the Trust Fund and the
Depositor shall be entitled to be reimbursed therefor out of the Distribution
Account.
Section 6.04 Servicing Compliance Review. Promptly upon receipt
from the Servicer of its annual statement of compliance described in Section
6.04 of the Servicing Agreement and the accountant's report described in
Section 6.05 of the Servicing Agreement, the Trustee shall furnish a copy
thereof to the Depositor. Promptly after the Depositor's receipt thereof, the
Depositor shall review the same and, if applicable, consult with the Servicer
as to the nature of any defaults by the Servicer in the fulfillment of the
Servicer's obligations under the Servicing Agreement.
Section 6.05 Option to Purchase Defaulted Mortgage Loans. The
Depositor shall have the option, but is not obligated, to purchase from the
Trust any Mortgage Loan that is ninety (90) days or more delinquent. The
purchase price therefor shall be 100% of the unpaid principal balance of such
Mortgage Loan, plus all related accrued and unpaid interest, and the amount of
any unreimbursed Servicing Advances made by the Servicer or the Trustee
related to the Mortgage Loan.
ARTICLE VII
SERVICER DEFAULT
Section 7.01 Events of Default. If an Event of Default described
in the Servicing Agreement shall occur with respect to the Servicer, 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 Certificateholders
entitled to 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 the Servicing Agreement and
in and to the Mortgage Loans and the proceeds thereof. The Holders of
Certificates evidencing at least 66% of the Voting Rights of Certificates
affected by an Event of Default may waive such Event of Default; provided,
however, that (a) an Event of Default with respect to the Servicer's
obligation to make Monthly Advances may be waived only by all of the holders
of the Certificates affected by such Event of Default and (b) no such waiver
is permitted that would materially adversely affect any non consenting
Certificateholder. On and after the receipt by the Servicer of such written
notice of termination, all authority and power of the Servicer hereunder or
under the Servicing Agreement, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee. 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.
Except as described in this Section 7.01 and notwithstanding
Section 11.02 of the Servicing Agreement, the Trustee shall not terminate the
Servicer.
Section 7.02 Trustee to Act; Appointment of Successor. Within 120
days after the time the Trustee gives, and the Servicer receives a notice of
termination pursuant to Section
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7.01, the Trustee shall, subject to and to the extent provided in Section
7.03, and subject to the rights of the Depositor to appoint a successor
Servicer pursuant to this Section 7.02, be the successor to the Servicer in
its capacity as servicer under the Servicing Agreement and the transactions
set forth or provided for herein and in the Servicing Agreement and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions of the Servicing Agreement
and applicable law including the obligation to make Monthly Advances or
Servicing Advances pursuant to the Servicing Agreement (it being understood
and agreed that if the Servicer fails to make an Advance, the Trustee shall do
so as successor servicer unless a determination has been made that such
Advance would constitute a Nonrecoverable Monthly Advance or a Nonrecoverable
Servicing Advance). 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 Custodial Account if the Servicer had continued to
act under the Servicing Agreement including, if the Servicer was receiving the
Servicing Fee, the Servicing Fee and the income on investments or gain related
to the Custodial 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 Monthly
Advances and Servicing Advances pursuant to the Servicing Agreement or if it
is otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution
the appointment of which does not adversely affect the then current rating of
the Certificates by each Rating Agency, as the successor to the Servicer under
the Servicing Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Servicer under the Servicing
Agreement. 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 $25,000,000, 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 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 7.03, 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. The Trustee shall be entitled to reimbursement for its out-of-pocket
expenses incurred in connection with any such servicing transition
contemplated by this paragraph. Such amount will be paid out of the Trust Fund
to the extent not paid by the outgoing Servicer. 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 to the 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
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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.
Any successor to the 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
the Servicing Agreement.
The Trustee shall require any successor to the Servicer to agree
that it shall not invest any funds in the Custodial Account, to the extent
permitted by the Servicing Agreement, unless such investments are Permitted
Investments.
Notwithstanding anything to the contrary contained in this
Agreement, the Depositor shall have the right to appoint a successor to the
Servicer upon termination of the servicing pursuant to Section 7.01. Any such
successor Servicer shall be required to satisfy the requirements of a
successor Servicer under this Section 7.02.
Section 7.03 Trustee to Act as Servicer. In the event that the
Servicer shall for any reason no longer be the Servicer pursuant to Section
7.01 (including by reason of an Event of Default), the Trustee or its
successor shall, subject to the rights of the Depositor to appoint a successor
Servicer pursuant to Section 7.02, thereupon assume all of the rights and
obligations of the Servicer hereunder arising thereafter (except that the
Trustee shall not be (i) liable for investment losses of the predecessor
Servicer pursuant to the Servicing Agreement or any acts or omissions of the
predecessor Servicer thereunder, (ii) obligated to effectuate repurchases of
Mortgage Loans under the Servicing Agreement, (iii) responsible for expenses
of the predecessor Servicer under the Servicing Agreement or (iv) deemed to
have made any representations and warranties of the Servicer under the
Servicing Agreement).
Section 7.04 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 to each
Rating Agency.
(b) Promptly after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders and each Rating
Agency notice of each such Event of Default hereunder known to the Trustee,
unless such Event of Default shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE AND THE CUSTODIAN
Section 8.01 Duties of the Trustee and the Custodian. 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.
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The Trustee and the Custodian, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee or the Custodian, as applicable, that are
specifically required to be furnished pursuant to any provision of this
Agreement shall examine them to determine whether on their face they are in
the form required by this Agreement, or with respect to the documents in the
respective Custodial Files whether they satisfy the review criteria set forth
in Section 2.02. Neither the Trustee nor the Custodian shall be responsible
for the accuracy or content of any resolution, certificate, statement,
opinion, report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee or the Custodian from liability for its own negligent action, its own
negligent failure to act or its own bad faith or willful misfeasance;
provided, however, that:
(a) unless an Event of Default of which a Responsible Officer of
the Trustee obtains actual knowledge has occurred and is continuing, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable except
for the performance of the duties and obligations specifically set forth in
this Agreement, no implied covenants or obligations shall be read into this
Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believed in good
faith to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts;
(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;
and
(d) with respect to any action required by the Trustee, in its
capacity as successor to the Purchaser under the Servicing Agreement, the
Trustee shall take such action solely at the direction of the Depositor.
Section 8.02 Administration of the Servicer. The Trustee shall (i)
enforce the obligations of the Servicer to service the Mortgage Loans as set
forth in Section 7.01 and (ii) as successor Servicer under Section 7.02, make
or cause to be made Servicing Advances or Monthly Advances in accordance with
the Servicing Agreement in the event the Servicer fails to do so.
Notwithstanding the foregoing, the Trustee, as successor Servicer or otherwise
shall not be required to make any Nonrecoverable Servicing Advance or
Nonrecoverable Monthly Advance. The Trustee shall furnish to the Servicer any
powers-of-attorney in standard form used by the Trustee or other such
documentation (as may be provided from time to time and in form
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acceptable to the Trustee), necessary and appropriate to enable the Servicer
to service and administer the related Mortgage Loans and REO Property.
Section 8.03 Certain Matters Affecting the Trustee and the
Custodian. Except as otherwise provided in Section 8.01:
(a) the Trustee and the Custodian may request and rely upon and
shall be protected in acting or refraining from acting upon any resolution,
Officer's Certificate, Opinion of Counsel, certificate of auditors or any
other certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or parties
and the Trustee and the Custodian shall have no responsibility to ascertain or
confirm the genuineness of any signature of any such party or parties;
(b) before taking any action under this Agreement, the Trustee and
the Custodian may consult with counsel, financial advisers or accountants, and
the advice of any such counsel, financial advisers or accountants and any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(c) the Trustee and the Custodian shall not be liable for any
action taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond
or other paper or document, unless requested in writing so to do by Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to
each Class of Certificates; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of
the Trustee, not assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require indemnity satisfactory to the
Trustee against such cost, expense or liability as a condition to taking any
such action. The reasonable expense of every such examination shall be paid by
the Servicer or, if paid by the Trustee, shall be repaid by the Servicer upon
demand from the Servicer's own funds;
(e) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,
accountants or attorneys, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;
(f) neither the Trustee nor the Custodian shall be required to
risk or expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not assured to it;
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(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment
security and except with respect to the investment of funds in the
Distribution Account not made at the direction of the Depositor during the
Trustee Float Period);
(h) unless a Responsible Officer of the Trustee has actual
knowledge of the occurrence of an Event of Default described in the Servicing
Agreement (including failure by the Servicer to remit funds on the Remittance
Date to the Trustee or to make Monthly Advances), 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;
(i) the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant to this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against the
costs, expenses and liabilities which may be incurred therein or thereby;
(j) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act;
(k) the Trustee shall not be required to give any bond or surety
in respect of the execution of the Trust Fund created hereby or the powers
granted hereunder;
(l) notwithstanding anything to the contrary in the Servicing
Agreement, the Trustee shall not consent to the Servicer's request of
assigning the Servicing Agreement or the servicing rights thereunder to any
other party;
(m) the Trustee and the Custodian shall not be accountable and
shall have no liability for any acts or omissions by any other party hereto;
and
(n) in no event shall Deutsche Bank, in its capacity as Custodian
hereunder, be liable for special, indirect or consequential damages.
Section 8.04 Trustee and Custodian Not Liable for Certificates or
Mortgage Loans. The recitals contained herein and in the Certificates shall be
taken as the statements of the Depositor, and neither the Trustee nor the
Custodian assumes any responsibility for their correctness. The Trustee and
the Custodian make 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, the Trustee's execution and
countersignature of the Certificates. Neither the Trustee nor the Custodian
shall 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 Custodial Account or the
Distribution Account by the Depositor or the Servicer.
The Trustee shall have no responsibility (i) for filing or
recording any financing or continuation statement in any public office at any
time or to otherwise perfect or maintain the
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perfection of any security interest or lien granted to it hereunder (unless
the Trustee shall have become and remains the successor Servicer) (ii) to see
to any insurance (unless the Trustee shall have become the successor
Servicer), or (iii) to confirm or verify the contents of any reports or
certificates of the Servicer delivered to the Trustee pursuant to this
Agreement believed by the Trustee to be genuine and to have been signed or
presented by the proper party or parties.
The 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 8.05 Trustee May Own Certificates. The Trustee in its
individual or any other capacity may become the owner or pledgee of
Certificates with the same rights as it would have if it were not the Trustee.
Section 8.06 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee shall be entitled to, and may
withdraw from the Distribution Account on each Distribution Date, the
investment income earned on amounts in the Distribution Account during the
Trustee Float Period. The Trustee and any director, officer, employee, agent
or "control person" within the meaning of the Securities Act of 1933, as
amended, and the Securities Exchange of 1934, as amended ("Control Person"),
of the Trustee shall be indemnified by the Trust and held harmless against any
loss, liability or expense (including reasonable attorney's fees) (i) incurred
in connection with any claim or legal action relating to (a) this Agreement,
(b) the Mortgage Loans or (c) the Certificates, other than any loss, liability
or expense incurred by reason of willful misfeasance, bad faith or negligence
in the performance of any of the Trustee's duties hereunder, (ii) incurred in
connection with the performance of any of the Trustee's duties hereunder,
other than any loss, liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any of the
Trustee's duties hereunder or (iii) incurred by reason of any action of the
Trustee taken at the direction of the Certificateholders, provided that any
such loss, liability or expense constitutes an "unanticipated expense incurred
by the REMIC" within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(ii). Such indemnity shall survive the termination of this
Agreement or the resignation or removal of the Trustee hereunder. Without
limiting the foregoing, and except for any such expense, disbursement or
advance as may arise from the Trustee's negligence, bad faith or willful
misconduct, or which would not be an "unanticipated expense" within the
meaning of the second preceding sentence, the Trustee shall be reimbursed by
the Trust for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of this Agreement
with respect to: (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance
of the Certificates, (B) the reasonable compensation, expenses and
disbursements of any accountant, engineer, appraiser or other agent that is
not regularly employed by the Trustee, to the extent that the Trustee must
engage such Persons to perform acts or services hereunder and (C) printing and
engraving expenses in connection with preparing any Definitive Certificates.
The Trust shall fulfill its obligations under this paragraph from amounts on
deposit from time to time in the Distribution Account.
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The Trustee may retain or withdraw from the Distribution Account,
(i) the investment income earned on amounts in the Distribution Account during
the Trustee Float Period, (ii) amounts necessary to reimburse it or the
Servicer for any previously unreimbursed Advances and any Advances the
Servicer deems to be non-recoverable from the related Mortgage Loan proceeds,
(iii) an aggregate annual amount to indemnify the Servicer and itself for
amounts due in accordance with this Agreement, and (iv) any other amounts
which it or the Servicer is entitled to receive hereunder for reimbursement,
indemnification or otherwise, including the amount to which the Trustee is
entitled pursuant to Section 3.02 hereof. The Trustee shall be required to pay
all expenses incurred by it in connection with its activities hereunder and
shall not be entitled to reimbursement therefor except as provided in this
Agreement.
Section 8.07 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation, banking association or other
association organized and doing business under the laws of a state or the
United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by federal or state authority and the
appointment of which would not cause any of the Rating Agencies to reduce or
withdraw their respective then current ratings of the Certificates (or having
provided such security from time to time as is sufficient to avoid such
reduction) as evidenced in writing by each Rating Agency. If such corporation
or association publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 8.07 the combined capital and
surplus of such corporation or association shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with this Section 8.07, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.08. The entity serving as
Trustee may have normal banking and trust relationships with the Depositor and
its affiliates or with the Servicer and its affiliates; provided, however,
that such entity cannot be an affiliate of the Depositor or of the Servicer
other than the Trustee in its role as successor to the Servicer.
Section 8.08 Resignation and Removal of the Trustee. The Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice of resignation to the Depositor, the Servicer and each
Rating Agency not less than sixty (60) days before the date specified in such
notice, when, subject to Section 8.09, such resignation is to take effect, and
acceptance by a successor trustee in accordance with Section 8.09 meeting the
qualifications set forth in Section 8.07. If no successor trustee meeting such
qualifications shall have been so appointed and have accepted appointment
within thirty (30) days after the giving of such notice or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.
If at any time (i) the Trustee shall cease to be eligible in
accordance with Section 8.07 and shall fail to resign after written request
thereto by the Depositor, (ii) the Trustee shall become incapable of acting,
or shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or
of its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, (iii)(A) a tax is imposed with
respect to the Trust Fund by any state in which the
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Trustee or the Trust Fund is located and (B) the imposition of such tax would
be avoided by the appointment of a different trustee, or (iv) the Trustee
fails to comply with its obligations under Article XI and such failure is not
remedied within the lesser of ten (10) calendar days or such period in which
the applicable Exchange Act Report can be timely filed (without taking into
account any extensions), then, in the case of clauses (i) through (iv), the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which shall be delivered to the Trustee
and one copy to the successor trustee.
The Holders of Certificates entitled to a majority of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in duplicate, signed by such Holders or
their attorneys in fact duly authorized, one complete set of which shall be
delivered to the Trustee so removed and one complete set to the successor so
appointed. The successor trustee shall notify each Rating Agency of any
removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.08 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section
8.09.
Section 8.09 Successor Trustee. Any successor trustee appointed as
provided in Section 8.08 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor and the
predecessor trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for more fully and certainly
vesting and confirming in the successor trustee all such rights, powers,
duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.09 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.07 and its appointment does not adversely affect the
then current rating of the Certificates and has provided to the Depositor in
writing and in form and substance reasonably satisfactory to the Depositor,
all information reasonably requested by the Depositor in order to comply with
its reporting obligation under Item 6.02 of Form 8-K with respect to a
replacement Trustee.
Upon acceptance of appointment by a successor trustee as provided
in this Section 8.09, the Depositor shall mail notice of the succession of
such trustee hereunder to all Holders of Certificates and the Custodian. If
the Depositor fails to mail such notice within ten (10) days after acceptance
of appointment by the successor trustee, the successor trustee shall cause
such notice to be mailed at the expense of the Depositor.
Section 8.10 Merger or Consolidation of the Trustee or the
Custodian. Any corporation into which the Trustee or the Custodian, as
applicable, 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 or the Custodian, as applicable, shall be a party, or any
corporation succeeding to the business of the Trustee or the Custodian, as
applicable, shall be the successor of the Trustee or the Custodian, as
applicable, hereunder; provided, that such
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corporation shall be eligible under Section 8.07 without the execution or
filing of any paper or further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 8.11 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing any Mortgage Note may at the time
be located, the Trustee shall have the power and shall execute and deliver all
instruments to appoint one or more Persons to act as co-trustee or co-trustees
jointly with the Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such
capacity and for the benefit of the Certificateholders, such title to the
Trust Fund or any part thereof, whichever is applicable, and, subject to the
other provisions of this Section 8.11, such powers, duties, obligations,
rights and trusts as the Trustee may consider appropriate. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility
as a successor trustee under Section 8.09 and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required
under Section 8.09.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(a) To the extent necessary to effectuate the purposes of this
Section 8.11, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee (as successor
Servicer) 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 Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees,
when and as effectively as if given to
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each of them. Every instrument appointing any separate trustee or co-trustee
shall refer to this Agreement and the conditions of this Article VIII. Each
separate trustee and co-trustee, upon its acceptance of the trusts conferred,
shall be vested with the estates or property specified in its instrument of
appointment, either jointly with the Trustee or separately, as may be provided
therein, subject to all the provisions of this Agreement, specifically
including every provision of this Agreement relating to the conduct of,
affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee and a copy thereof given to
the 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.
The Trustee shall execute and deliver to the Servicer, upon its
request, any court pleadings, requests for trustee's sale or other documents
necessary or desirable to (i) the foreclosure or trustee's sale with respect
to a Mortgaged Property; (ii) any legal action brought to obtain judgment
against any Mortgagor on the Mortgage Note or Mortgage; (iii) obtain a
deficiency judgment against the Mortgagor; or (iv) enforce any other rights or
remedies provided by the Mortgage Note or Mortgage or otherwise available at
law or equity.
Section 8.12 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be
made, as set forth in the Preliminary 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 REMIC described in the
Preliminary Statement and that in such capacity it shall:
(a) prepare and file, in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare and file
with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with
respect to each Trust REMIC containing such information and at the times and
in the manner as may be required by the Code or state or local tax laws,
regulations, or rules, and furnish to Certificateholders the schedules,
statements or information at such times and in such manner as may be required
thereby;
(b) within thirty (30) days of the Closing Date, apply for an
employer identification number from the Internal Revenue Service via Form SS-4
or any other acceptable method for all tax entities created hereunder 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;
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(c) make an election that each Trust REMIC be treated as a REMIC
on the federal tax return for its first taxable year (and, if necessary, under
applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any
original issue discount using the prepayment assumption (as described in the
Prospectus Supplement);
(e) provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is not a
Permitted Transferee (a "Non Permitted Transferee"), or an agent (including a
broker, nominee or other middleman) of a Non Permitted Transferee, or a pass
through entity in which a Non Permitted Transferee is the record holder of an
interest (the reasonable cost of computing and furnishing such information may
be charged to the Person liable for such tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so
as to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
(h) pay, from the sources specified in the penultimate paragraph
of this Section 8.12, the amount of any federal or state tax, including
prohibited transaction taxes as described below, imposed on any Trust REMIC
before its termination when and as the same shall be due and payable (but such
obligation shall not prevent the 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, if required by applicable tax law, the
Trustee or such other person as may be required to sign such returns by the
Code or state or local laws, regulations or rules;
(j) maintain records relating to each of the Trust REMICs,
including the income, expenses, assets, and liabilities thereof on a calendar
year basis and on the accrual method of accounting and the fair market value
and adjusted basis of the assets determined at such intervals as may be
required by the Code, as may be necessary to prepare the foregoing returns,
schedules, statements or information; and
(k) as and when necessary and appropriate, represent each Trust
REMIC in any administrative or judicial proceedings relating to an examination
or audit by any governmental taxing authority, request an administrative
adjustment as to any taxable year of each Trust REMIC, enter into settlement
agreements with any governmental taxing agency, extend any statute of
limitations relating to any tax item of any Trust REMIC, and otherwise act on
behalf of each Trust REMIC in relation to any tax matter or controversy
involving it.
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The Holder of the largest Percentage Interest of the Class R,
Class RC and Class RX Certificates shall act as Tax Matters Person for the
Lower-Tier REMIC and the Middle-Tier REMIC, the Upper-Tier REMIC and the Class
X REMIC, respectively, within the meaning of Treasury Regulations Section
1.860F-4(d), and the 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 each Trust REMIC in any administrative or judicial
proceedings relating to an examination or audit by any governmental taxing
authority, request an administrative adjustment as to any taxable year of each
Trust REMIC, enter into settlement agreements with any governmental taxing
agency, extend any statute of limitations relating to any tax item of any
Trust REMIC, and otherwise act on behalf of each Trust REMIC in relation to
any tax matter or controversy involving it.
The Trustee shall treat the rights of the Class P
Certificateholders to receive Prepayment Premiums, the rights of the Class X
Certificateholders to receive amounts in the Excess Reserve Fund Account
(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 calculated in the Preliminary Statement) as the beneficial
ownership interests in a grantor trust and not as an obligations of any REMIC
created hereunder, for federal income tax purposes. The Trustee shall file or
cause to be filed with the Internal Revenue Service Form 1041 or such other
form as may be applicable and shall furnish or cause to be furnished, to the
Class X Certificateholders, the Class P Certificateholders and the Principal
Certificateholders, the respective amounts described above that are received,
in the time or times and in the manner required by the Code.
To enable the Trustee to perform its duties under this Agreement,
the Depositor shall provide to the Trustee within ten (10) 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,
if any, to each Class of Certificates of the right to receive Basis Risk Carry
Forward Amounts from the Excess Reserve Fund Account. 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. 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, or to cause to be provided, accurate information or data
to the Trustee on a timely basis.
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Lower-Tier REMIC as defined in Section 860G(c) of
the Code, on any contribution to any Trust REMIC after the Startup Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed,
including any minimum tax imposed on any Trust REMIC pursuant to Sections
23153 and 24874 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, the tax shall be paid by (i) the Trustee, if
such tax arises out of or results from negligence
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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 the Servicing Agreement, (iii) the Responsible
Party if such tax arises out of or results from the Responsible Party's
obligation to repurchase a Mortgage Loan pursuant to the Sale Agreement or
(iv) in all other cases, or if the Trustee, the Servicer or the Responsible
Party fails to honor its obligations under the preceding clause (i), (ii), or
(iii), any such tax will be paid with amounts otherwise to be distributed to
the Certificateholders, as provided in Section 4.01(a).
For as long as each Trust REMIC shall exist, the Trustee shall act
as specifically required herein, and the Trustee shall comply with any
directions of the Depositor or the Servicer stating that such directions are
being given to assure such continuing treatment. In particular, the Trustee
shall not (a) sell or authorize the sale of all or any portion of the Mortgage
Loans or of any investment of deposits in an Account unless such sale is as a
result of a purchase or repurchase of the Mortgage Loans pursuant to this
Agreement or (b) accept any contribution to any Trust REMIC after the Startup
Day, in each case without receipt of an Opinion of Counsel that such action
described in clause (a) or (b) will not result in the imposition of a tax on
any Trust REMIC or cause any Trust REMIC to fail to qualify as a REMIC at any
time that any Certificates are outstanding.
Section 8.13 [Reserved]
Section 8.14 Tax Classification of the Excess Reserve Fund
Account. For federal income tax purposes, the Trustee shall treat the Excess
Reserve Fund Account as beneficially owned by the holder of the Class X
Certificates and shall treat such portion of the Trust Fund as a grantor trust
under subpart E, Part I of subchapter J of the Code. The 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 as
rights to receive payments under an interest rate cap contract written by the
Class X Certificateholders in favor of each Class. Accordingly, each Class of
Principal Certificates will comprise two components--a regular interest in the
Upper-Tier REMIC and an interest in an interest rate cap contract, and the
Class X Certificates will be comprised of two components--a regular interest
in the Class X REMIC and an interest in the Excess Reserve Fund Account
subject to the obligation to pay Basis Risk Xxxx Forward Amounts. The Trustee
shall allocate the issue price for a Class of Certificates among these
components for purposes of determining the issue price of the Upper-Tier
Regular Interest component based on information received from the Depositor.
Unless otherwise advised by the Depositor in writing, for federal income tax
purposes, the Trustee is hereby directed to assign a value of zero to the
right of each Holder of a Principal Certificate to receive the related Basis
Risk Carry Forward Amount for purposes of allocating the purchase price of an
initial Principal Certificateholder between such right and the related
Upper-Tier Regular Interest.
Section 8.15 Custodial Responsibilities. The Custodian shall
provide access to the Mortgage Loan documents in its possession regarding the
related Mortgage Loans and REO Property and the servicing thereof to the
Trustee, the Certificateholders, the FDIC, and the supervisory agents and
examiners of the FDIC, such access being afforded only upon two (2) Business
Days prior written request and during normal business hours at the office of
the
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Custodian; provided, however, that, unless otherwise required by law or any
regulatory or administrative agency (including the FDIC), the Custodian shall
not be required to provide access to such records and documentation if the
provision thereof would violate the legal right to privacy of any Mortgagor.
The Custodian shall allow representatives of the above entities to photocopy
any of the records and documentation and shall provide equipment for that
purpose at the expense of the Trust that covers the Custodian's actual costs.
Upon receipt of a request for release by the Servicer
substantially in the form of Exhibit L hereto, the Custodian shall release
within five (5) Business Days the related Mortgage File to the Servicer and
the Trustee shall execute and deliver to the Servicer, without recourse, a
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage (furnished by
the Servicer), together with the Mortgage Note.
The Custodian may resign at any time or may be terminated by the
Trustee with cause, in each case, upon sixty (60) days written notice to the
Servicer and the Depositor, in which event the Depositor will be obligated to
appoint a successor. If no successor has been appointed and has accepted
appointment within sixty (60) days after the resignation or termination of the
Custodian, the Custodian may petition any court of competent jurisdiction for
appointment of a successor.
The Trustee, pursuant to a separate agreement, shall compensate
from its own funds the Custodian for its activities under this Agreement. The
Custodian shall have no lien on the Trust Fund for the payment of such fees.
The Custodian shall be entitled to be reimbursed, from funds on deposit in the
Distribution Account, amounts sufficient to indemnify and hold harmless the
Custodian and any director, officer, employee, or agent of the Custodian
against any loss, liability, or expense (including reasonable attorneys' fees)
incurred in connection with any claim or legal action relating to:
(a) this Agreement;
(b) the Certificates; or
(c) the performance of any of the Custodian'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 the Servicing
Agreement for which the Servicer has performed its obligation to indemnify the
Custodian pursuant to the Servicing Agreement, (ii) resulting from any breach
of the Responsible Party's obligations in connection with the Sale Agreement
for which the Responsible Party has performed its obligation to indemnify the
Custodian pursuant to such Sale Agreement, or (iii) incurred because of
willful misfeasance, bad faith, or negligence in the performance of any of the
Custodian's duties under this Agreement. This indemnity shall survive the
termination of this Agreement or the earlier resignation or removal of the
Custodian.
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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 and the Trustee created hereby with respect to the Trust Fund
shall terminate upon the earlier of: (a) the purchase, on or after the
Optional Termination Date and at the Depositor's request, by the Servicer or
its designee of the Mortgage Loans and all other Property of the Trust Fund on
a non-recourse basis with no representations or warranties of any nature
whatsoever. The Servicer shall accommodate such request at its sole
discretion. The purchase price for the Mortgage Loans and other Property of
the Trust Fund will be equal to the greater of (i) the Par Value as certified
by the Depositor and (ii) the aggregate fair market value of each Mortgage
Loan and any REO Property, as determined by the highest bid received by the
Servicer from closed bids solicited by the Depositor or its designee from at
least two recognized broker/dealers (one of which may be an affiliate of the
Depositor) that deal in similar assets as of the close of business on the
third Business Day preceding the date upon which a Notice of Final
Distribution is furnished to Certificateholders pursuant to Section 9.02, plus
accrued and unpaid interest on the Mortgage Loans at the applicable Mortgage
Interest Rate. Such purchase price shall be deposited with the Trustee prior
to the Distribution Date following the month in which such value is
determined; and (b) the later of (i) the maturity or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund and the disposition of all REO Property and (ii) the distribution to
Certificateholders of all amounts required to be distributed to them pursuant
to this Agreement. In no event shall the trusts created hereby continue beyond
the expiration of 21 years from the death of the survivor of the descendants
of Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of
St. James's, living on the date hereof.
The proceeds of the purchase of such assets of the Trust pursuant
to the sale described in this Section 9.01 (other than, with respect to any
mortgage loan and the related property, an amount equal to the excess, if any,
of the amount in Section 9.01(a)(ii) over the sum of the amount in Section
9.01(a)(i) (such excess, the "Fair Market Value Excess")) will be distributed
to the holders of the Certificates in accordance with Section 4.01. Any Fair
Market Value Excess received in connection with the purchase of the Mortgage
Loans and REO Properties will be distributed to the holders of the Class RC
Certificates.
Except to the extent provided above with regard to allocating any
Fair Market Value Excess to the holders of the Class RC Certificates, the
proceeds of such a sale will be treated as a prepayment of the Mortgage Loans
for purposes of distributions to Certificateholders. Accordingly, the sale of
the Mortgage Loans and the REO Properties as a result of the sale described
above will result in the final distribution on the Certificates on that
Distribution Date.
Section 9.02 Final Distribution on the Certificates. If, on any
Remittance Date, the Servicer notifies the Trustee that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund
other than the funds in the Custodial Account, the Trustee shall promptly send
a Notice of Final Distribution to the applicable Certificateholders. If the
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Depositor exercises its option to request that the Servicer terminate the
Trust Fund pursuant to Section 9.01, the Servicer, pursuant to the Step 2
Assignment Agreements and by no later than the tenth (10th) day of the month
of final distribution, shall notify the Trustee of the final Distribution Date
and of the applicable sale price of the Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date
on which Certificateholders may surrender their Certificates for payment of
the final distribution and cancellation, shall be given promptly by the
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 the Mortgage Loans (and REO Properties) and all
rights and obligations under the Servicing Agreement are sold pursuant to
Section 9.01 and pursuant to the Step 2 Assignment Agreements, the Servicer is
required thereunder to remit to the Trustee the applicable Termination Price
on the applicable Remittance Date immediately preceding the applicable final
Distribution Date. Upon such final deposit with respect to the Trust Fund and
the receipt by the Trustee and the Custodian of a request for release therefor
in the form of Exhibit L hereto, as applicable, the Trustee shall direct the
Custodian to release and the Custodian shall promptly release to the Trustee
or its designee 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 the Depositor, the Trustee and the Custodian
hereunder), in each case on the final Distribution Date and in the order set
forth in Section 4.01, in proportion to their respective Percentage Interests,
with respect to Certificateholders of the same Class, an amount up to an
amount equal to (i) as to each Class of Regular Certificates (except the Class
X Certificates), the Certificate Balance thereof plus for each such Class and
the Class X Certificates accrued interest thereon in the case of an
interest-bearing Certificate and all other amounts to which such Classes are
entitled pursuant to Section 4.01, and (ii) as to the Residual Certificates,
the amount, if any, which remains on deposit in the Distribution Account after
application pursuant to clause (i) above (other than the amounts retained to
meet claims). The foregoing provisions are intended to distribute to each
Class of Regular Certificates any accrued and unpaid interest and principal to
which they are entitled based on the Pass-Through Rates and actual Class
Certificate Balances or notional principal balances set forth in the
Preliminary Statement upon liquidation of the Trust Fund.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Trustee shall give a
second written notice to the remaining Certificateholders to surrender
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their Certificates for cancellation and receive the final distribution with
respect thereto. If within six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
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 elects to purchase the Mortgage Loans as provided in Section 9.01,
the Trust Fund shall be terminated in accordance with the following additional
requirements, unless the Trustee has been supplied with an Opinion of Counsel,
at the expense of the Depositor, 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:
(a) The Trustee shall sell all of the assets of the Trust Fund to
the Servicer or its designee and, by the next Distribution Date after such
sale, shall distribute to the Certificateholders the proceeds of such sale in
complete liquidation of each of the Trust REMICs; and
(b) The 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 ninety (90) day
liquidation period for each such Trust REMIC was the date on which the Trustee
sold the assets of the Trust Fund to the Servicer or its designee.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Amendment. This Agreement may be amended from time
to time by the Depositor, the Custodian and the Trustee (and the Depositor may
request an amendment or the Trustee may consent to any amendment of the
Servicing Agreement as directed by the Depositor) without the consent of any
of the Certificateholders (i) to cure any ambiguity or mistake, (ii) to cause
the provisions herein to conform to or be consistent with or in furtherance of
the statements made with respect to the Certificates, the Trust Fund or this
Agreement in the Prospectus Supplement, or to correct or supplement any
provision herein which may be inconsistent with any other provisions herein or
with the provisions of the Sale Agreement or Servicing Agreement, (iii) to
correct any defective provision herein or in the Servicing Agreement, as
applicable, or to supplement any provision in this Agreement which may be
inconsistent with any other provision herein, in the Prospectus Supplement or
in the Servicing Agreement, (iv) to add to the duties of the Depositor, the
Trustee (or with respect to the Servicing Agreement, of the Servicer) or the
Custodian, (v) to add any other provisions with respect to matters or
questions arising hereunder or under the Servicing Agreement, or (vi) to
modify, alter, amend, add to or rescind any of the terms or provisions
contained in this
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Agreement or in the Servicing Agreement; provided that any action pursuant to
clause (v) or (vi) above shall not, as evidenced by an Opinion of Counsel
(which Opinion of Counsel shall be an expense of the requesting party, but in
any case shall not be an expense of the Trustee, the Custodian or the Trust
Fund and shall be addressed to the foregoing entities), adversely affect in
any material respect the interests of any Certificateholder; provided,
further, that the amendment shall not be deemed to adversely affect in any
material respect the interests of the Certificateholders if the Person
requesting the amendment obtains a letter from each Rating Agency stating that
the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates; it being understood and
agreed that any such letter in and of itself will not represent a
determination as to the materiality of any such amendment and will represent a
determination only as to the credit issues affecting any such rating. The
Trustee, the Depositor and the Custodian also may at any time and from time to
time amend this Agreement (and if necessary, the Depositor shall direct the
Trustee to request that the Servicer amend the Servicing Agreement), without
the consent of the Certificateholders, to modify, eliminate or add to any of
its provisions to such extent as shall be necessary or helpful to (i) maintain
the qualification of each Trust REMIC under the REMIC Provisions, (ii) avoid
or minimize the risk of the imposition of any tax on any Trust REMIC pursuant
to the Code that would be a claim at any time prior to the final redemption of
the Certificates or (iii) comply with any other requirements of the Code;
provided, that the Trustee 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 Custodian and the Trustee (and the Trustee shall consent to any
amendment to the Servicing Agreement as directed by the Depositor) with the
consent of the Holders of Certificates evidencing Percentage Interests
aggregating not less than 66?% of each Class of Certificates affected thereby
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Certificates; provided, however, that no
such amendment shall (i) reduce in any manner the amount of, or delay the
timing of, payments required to be distributed on any Certificate without the
consent of the Holder of such Certificate, (ii) adversely affect in any
material respect the interests of the Holders of any Class of Certificates in
a manner other than as described in clause (i), without the consent of the
Holders of Certificates of such Class evidencing, as to such Class, Percentage
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 or the Servicing
Agreement unless (i) each 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 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
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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 under the Servicing Agreement, any
Certificate beneficially owned by the Depositor or any of its Affiliates or by
the Responsible Party or any of its Affiliates shall be deemed not to be
outstanding (and shall not be considered when determining the percentage of
Certificateholders consenting or when calculating the total number of
Certificates entitled to consent) for purposes of determining if the requisite
consents of Certificateholders under this Section 10.01 have been obtained.
Promptly after the execution of any amendment to this Agreement or
the Servicing 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.
Nothing in this Agreement shall require the Trustee or the
Custodian to enter into an amendment which modifies its obligations or
liabilities without its consent and in all cases without receiving an Opinion
of Counsel (which Opinion shall not be an expense of the Trustee, the
Custodian or the Trust Fund), satisfactory to the Trustee or the Custodian, as
applicable, that (i) such amendment is permitted and is not prohibited by this
Agreement or the Servicing Agreement and that all requirements for amending
this Agreement or the Servicing Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to
this Section 10.01.
Notwithstanding the Trustee's consent to any amendment of the
Servicing Agreement pursuant to the terms of this Section 10.01, the Servicing
Agreement cannot be amended without the consent of the Servicer. The Trustee
shall not be responsible for any failure by the Servicer to consent to any
amendment to the Servicing Agreement.
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 properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such
recordation shall be caused to be effected by the Depositor at the expense of
the Trust, but only if an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Certificateholders is delivered to the Depositor.
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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, or if for any other
reason this Agreement is held or deemed to create a security interest in
either of such assets, then (i) this Agreement shall be deemed to be a
security agreement within the meaning of the Uniform Commercial Code of the
State of New York and (ii) the conveyances provided for in this Agreement
shall be deemed to be an assignment and a grant by the Depositor to the
Trustee, for the benefit of the Certificateholders, of a security interest in
all of the assets transferred, whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall,
to the extent consistent with this Agreement, take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Trust Fund, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Depositor shall
arrange for 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:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been
cured;
(iii) The resignation or termination of the Servicer or the
Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
this Agreement, the Assignment Agreement, the Servicing Agreement or the
Sale Agreements; and
(v) The final payment to Certificateholders.
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(b) In addition, the Trustee shall promptly make available on its
internet website to each Rating Agency copies of the following:
(i) Each report to Certificateholders described in Section 4.02;
and
(ii) The Servicer's annual statement of compliance and the
accountant's report described in Sections 6.04 and 6.05, respectively,
of the Servicing Agreement in each year the Trust Fund files a Form
10-K.
(b) All directions, demands and notices hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in
the case of the Depositor or the Purchaser, to Xxxxxxx, Xxxxx & Co., 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Principal Finance
Group/Xxxxxxxxxxx X. Xxxxxxx and Asset Management Group/Senior Asset Manager,
or such other address as may be hereafter furnished to the Trustee by the
Depositor in writing; (b) in the case of the Trustee to its Corporate Trust
Office, or such other address as the Trustee may hereafter furnish to the
Depositor; (c) in the case of the Custodian, to Deutsche Bank National Trust
Company, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention:
Mortgage Custody - GS06PC; (d) in the case of Xxxxx Fargo as the Servicer,
Xxxxx Fargo Bank, National Association, 0000 Xxx Xxxxxxx Xxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: NCAMT 2006-ALT2, or such other address as may be
hereafter furnished to the Depositor and the Trustee by Xxxxx Fargo in
writing; and (e) 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.
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No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this
Agreement, unless such Holder previously shall have given to the Trustee a
written notice of an Event of Default and of the continuance thereof, as
herein provided, and unless the Holders of Certificates evidencing not less
than 25% of the Voting Rights evidenced by the Certificates shall also have
made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs,
expenses, and liabilities to be incurred therein or thereby, and the Trustee,
for sixty (60) days after its receipt of such notice, request and offer of
indemnity shall have neglected or refused to institute any such action, suit
or proceeding; it being understood and intended, and being expressly
covenanted by each Certificateholder with every other Certificateholder and
the Trustee, that no one or more Holders of Certificates shall have any right
in any manner whatever by virtue or by availing itself or themselves of any
provisions of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of the Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder or to enforce any right
under this Agreement, except in the manner herein provided and for the common
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section 10.07, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 10.08 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully paid.
Section 10.09 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
ARTICLE XI
EXCHANGE ACT REPORTING
Section 11.01 Filing Obligations.
The Trustee and the Custodian shall reasonably cooperate with the
Depositor in connection with the satisfaction of the Depositor's reporting
requirements under the Exchange Act with respect to the Trust Fund. In
addition to the information specified below, if so requested by the Depositor
in writing for the purpose of satisfying its reporting obligation under the
Exchange Act, the Trustee and the Custodian shall provide the Depositor with
(a) such information which is available to such Person without unreasonable
effort or expense and within such timeframe as may be reasonably requested by
the Depositor to comply with the Depositor's
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reporting obligations under the Exchange Act and (b) to the extent such Person
is a party (and the Depositor is not a party) to any agreement or amendment
required to be filed, copies of such agreement or amendment in
XXXXX-compatible form.
In the event that the Trustee becomes aware that it will be unable
to timely file with the Commission all or any required portion of any Form
8-K, 10-D or 10-K required to be filed by this Agreement because required
disclosure information was either not delivered to it or delivered to it after
the delivery deadlines set forth in this Agreement or for any other reason,
the Trustee will promptly notify the Depositor. In the case of Form 10-D and
10-K, the parties to this Agreement will cooperate and the Depositor will
cause the Servicer or Servicing Function Participants, as applicable, to
cooperate, to prepare and file a Form 12b-25 and a 10-DA and 10-KA as
applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case of Form
8-K, the Trustee will, upon receipt of all required Form 8-K Disclosure
Information and upon the approval and direction of the Depositor, include such
disclosure information on the next Form 10-D unless directed by the Depositor
to file a Form 8-K with such Form 8-K Disclosure Information. In the event
that any previously filed Form 8-K, Form 10-D or Form 10-K needs to be
amended, the Trustee shall notify the Depositor and prepare any necessary Form
8-KA, Form 10-DA or Form 10-KA. Any Form 15, Form 12b-25 or any amendment to
Form 8-K, Form 10-K or Form 10-D shall be signed by a duly authorized
representative of the Depositor. The parties to this Agreement acknowledge
that the performance by the Trustee of its duties under this Section 11.01
related to the timely preparation and filing of Form 15, a Form 12b-25 or any
amendment to Form 8-K, Form 10-D or Form 10-K is contingent upon each such
party performing its duties under this Section. The Trustee shall have no
liability for any loss, expense, damage or claim arising out of or with
respect to any failure to properly prepare and/or timely file any such Form
15, Form 12b-25 or any amendments to Form 8-K, Form 10-D or Form 10-K, where
such failure results from the Trustee's inability or failure to receive on a
timely basis, any information from or on behalf of any other party hereto
needed to prepare, arrange for execution or file such Form 15, Form 12b-25 or
any amendments to Forms 8-K, 10-D or 10-K, not resulting from its own
negligence, bad faith or willful misconduct.
The Depositor shall be responsible for any no-action letter
requests or other exemptive relief from the Commission that the Depositor
deems necessary or appropriate with respect to the Certificates. The Trustee
shall cooperate with such efforts. In no event shall the Trustee have any
liability for the execution or content of any document required to be filed by
the 1934 Act. The Depositor agrees to promptly furnish to the Trustee, from
time to time upon request, such further information, reports, and financial
statements within its control related to this Agreement and the Mortgage Loans
as the Depositor reasonably deems appropriate to prepare and file all
necessary reports with the Commission.
Section 11.02 Form 8-K Filings.
The Depositor shall prepare or cause to be prepared the initial
current report on Form 8-K. Thereafter within four (4) Business Days after the
occurrence of an event requiring disclosure in a current report on Form 8-K
(each such event, a "Reportable Event"), the Depositor shall sign and the
Trustee shall prepare and file with the Commission any Form 8-K, as required
by the Exchange Act. Any disclosure or information related to a Reportable
Event or that is otherwise required to be included on Form 8-K ("Form 8-K
Disclosure Information") shall
86
be determined and prepared by and at the direction of the Depositor pursuant
to this Section 11.02, and the Trustee shall have no duty or liability for any
failure hereunder to determine or prepare any Form 8-K Disclosure Information
or any Form 8-K, except as set forth in this Section 11.02.
As set forth on Exhibit M hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than the end of
business on the second Business Day after the occurrence of a Reportable Event
each of the Trustee, the Custodian and the Depositor shall be required to
provide to the Trustee and Depositor, to the extent known, in XXXXX-compatible
form, or in such other form as otherwise agreed upon by the Trustee and such
party, the form and substance of any Form 8-K Disclosure Information, if
applicable and (ii) the Depositor shall approve, as to form and substance, or
disapprove, as the case may be, the inclusion of the Form 8-K Disclosure
Information. The Depositor shall be responsible for any reasonable fees and
expenses assessed or incurred by the Trustee in connection with including any
Form 8-K Disclosure Information on Form 8-K pursuant to this paragraph.
After preparing the Form 8-K, the Trustee shall forward
electronically a draft copy of the Form 8-K to the Depositor for review. No
later than 12:00 noon New York City time on the fourth (4th) Business Day
after the Reportable Event, a duly authorized representative of the Depositor
shall sign the Form 8-K and return such signed Form 8-K to the Trustee, and no
later than 5:30 p.m. New York City time on such Business Day the Trustee shall
file such Form 8-K with the Commission. If a Form 8-K cannot be filed on time
or if a previously filed Form 8-K needs to be amended, the Trustee will follow
the procedures set forth in Section 11.01. Promptly, but no later than the
later of (x) one (1) Business Day after filing with the Commission and (y) one
(1) Business Day after the filing deadline for such Form 8-K, the Trustee
will, make available on its internet website (located at
xxxx://xxx.xxxxxx.xxx/xxx) a final executed copy of each Form 8-K prepared by
the Trustee. The Trustee can be contacted at 00 Xxxxxxxxxx Xxxxxx, XX-XX-XX0X,
Xx. Xxxx, Xxxxxxxxx 00000, Attention: Structured Finance - NCAMT 2006-ALT2, by
e-mail at xxxxxxxxxxxxx@xxxx.xxx or by facsimile at (000) 000-0000. The
parties to this Agreement acknowledge that the performance by the Trustee of
its duties under this Section 11.02 related to the timely preparation and
filing of Form 8-K is contingent upon such parties strictly observing all
applicable deadlines in the performance of their duties under this Section
11.02. The Trustee shall have no liability for any loss, expense, damage,
claim arising out of or with respect to any failure to properly prepare and/or
timely file such Form 8-K, where such failure results from the Trustee's
inability or failure to receive on a timely basis, any information from any
other party hereto needed to prepare, arrange for execution or file such Form
8-K, not resulting from its own negligence, bad faith or willful misconduct.
Section 11.03 Form 10-D Filings.
Within fifteen days after each Distribution Date (subject to
permitted extensions under the Exchange Act and until a Form 15 is filed
pursuant to Section 11.05), the Trustee shall prepare and file with the
Commission, and the Depositor shall sign any distribution report on Form 10-D
required by the Exchange Act, in form and substance as required by the
Exchange Act. The Trustee shall file each Form 10-D with a copy of the related
Monthly Statement attached thereto. Any disclosure in addition to the monthly
statement that is required to be included on Form 10-D ("Additional Form 10-D
Disclosure") shall be determined and prepared
87
by and at the direction of the Depositor pursuant to the following paragraph,
and the Trustee will have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-D Disclosure, except as set forth
in this Section 11.03.
As set forth on Exhibit N hereto, within five (5) calendar days
after the related Distribution Date, (i) certain parties to the New Century
Alternative Mortgage Loan Trust 2006-ALT2 Asset-Backed Certificates
transaction shall be required to provide to the Trustee and the Depositor, to
the extent known, in XXXXX-compatible form, or in such other form as otherwise
agreed upon by the Trustee and such party, the form and substance of any
Additional Form 10-D Disclosure, if applicable, and (ii) the Depositor will
approve, as to form and substance, or disapprove, as the case may be, the
inclusion of the Additional Form 10-D Disclosure on Form 10-D. The Depositor
shall be responsible for any reasonable fees and expenses assessed or incurred
by the Trustee in connection with any Additional Form 10-D Disclosure on Form
10-D pursuant to this Section 11.03.
After preparing the Form 10-D, the Trustee shall forward
electronically a draft copy of the Form 10-D to the Depositor for review. No
later than two (2) Business Days following the tenth (10th) calendar day after
the related Distribution Date, a duly authorized representative of the
Depositor shall sign the Form 10-D and return such signed Form 10-D to the
Trustee, and no later than 5:30 p.m. New York City time on the fifteenth
(15th) calendar day after the related Distribution Date, the Trustee shall
file such Form 10-D with the Commission. If a Form 10-D cannot be filed on
time or if a previously filed Form 10-D needs to be amended, the Trustee will
follow the procedures set forth in Section 11.01. Promptly, but no later than
the later of (x) one (1) Business Day after filing with the Commission and (y)
one (1) Business Day after the filing deadline for such Form 10-D, the Trustee
will make available on its internet website (located at
xxxx://xxx.xxxxxx.xxx/xxx) a final executed copy of each Form 10-D prepared by
the Trustee. The Trustee can be contacted at 00 Xxxxxxxxxx Xxxxxx, XX-XX-XX0X,
Xx. Xxxx, Xxxxxxxxx 00000, Attention: Structured Finance - NCAMT 2006-ALT2, by
e-mail at xxxxxxxxxxxxx@xxxx.xxx or by facsimile at (000) 000-0000. Each party
to this Agreement acknowledges that the performance by the Trustee of its
duties under this Section 11.03 related to the timely preparation and filing
of Form 10-D is contingent upon such parties strictly observing all applicable
deadlines in the performance of their duties under this Section 11.03. The
Trustee shall have no liability for any loss, expense, damage or claim arising
out of or with respect to any failure to properly prepare and/or timely file
such Form 10-D, where such failure results from the Trustee's inability or
failure to receive on a timely basis, any information from any other party
hereto needed to prepare, arrange for execution or file such Form 10-D, not
resulting from its own negligence, bad faith or willful misconduct.
Form 10-D requires the registrant to indicate (by checking "yes"
or "no") that it "(1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days." The
Depositor shall notify the Trustee in writing, no later than the fifth
calendar day after the related Distribution Date with respect to the filing of
a report on Form 10-D if the answer to the questions should be "no." The
Trustee shall be entitled to rely on such representations in preparing,
executing and/or filing any such report.
88
Section 11.04 Form 10-K Filings.
Within 90 days after the end of each fiscal year of the Trust or
such earlier date as may be required by the Exchange Act (the "10-K Filing
Deadline") (it being understood that the fiscal year for the Trust ends on
December 31 of each year), commencing in March 2007 and continuing until the
Trust has been deregistered with the Commission, the Trustee shall prepare and
file on behalf of the Depositor an annual report on Form 10-K, in form and
substance as required by the Exchange Act. Each such Form 10-K shall include
the following items, in each case to the extent they have been delivered to
the Trustee within the applicable time frames set forth in this Agreement and
the Servicing Agreement: (i) an annual compliance statement for the Servicer
and each Additional Servicer (each such party, a "Reporting Servicer") as
described below, (ii)(A) the annual reports on assessment of compliance with
servicing criteria for each Reporting Servicer, as described under this
Section 11.04 and Section 11.07, and (B) if a Reporting Servicer's report on
assessment of compliance with servicing criteria described under Section 11.04
and Section 11.07 identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if a Reporting
Servicer's report on assessment of compliance with servicing criteria
described under Section 11.04 and Section 11.07 is not included as an exhibit
to such Form 10-K, disclosure that such report is not included and an
explanation why such report is not included, (iii)(A) the registered public
accounting firm attestation report for each Reporting Servicer, as described
under Section 11.07, and (B) if any registered public accounting firm
attestation report described under Section 11.07 identifies any material
instance of noncompliance, disclosure identifying such instance of
noncompliance, or if any such registered public accounting firm attestation
report is not included as an exhibit to such Form 10-K, disclosure that such
report is not included and an explanation why such report is not included, and
(iv) a Xxxxxxxx-Xxxxx Certification as described in Section 11.06. Any
disclosure or information in addition to the disclosure or information
specified in items (i) through (iv) above that is required to be included on
Form 10-K ("Additional Form 10-K Disclosure") shall be determined and prepared
by and at the direction of the Depositor pursuant to the following paragraph,
and the Trustee shall have no duty or liability for any failure hereunder to
determine or prepare any Additional Form 10-K Disclosure, except as set forth
in this Section 11.04.
The Trustee, at the direction of the Depositor, shall cause the
Servicer, in accordance with and to the extent set forth in the Servicing
Agreement, to deliver to the Trustee an annual statement of compliance within
the time frame set forth in, and in such form and substance as may be required
pursuant to, the Servicing Agreement
As set forth on Exhibit O hereto, no later than March 15 of each
year that the Trust is subject to the Exchange Act reporting requirements,
commencing in 2007 and continuing until the Trust has been deregistered with
the Commission, (i) certain parties to the New Century Alternative Mortgage
Loan Trust 2006-ALT2 Asset-Backed Certificates transaction shall be required
to provide to the Trustee and the Depositor, to the extent known, in
XXXXX-compatible form, or in such other form as otherwise agreed upon by the
Trustee and such party, the form and substance of any Additional Form 10-K
Disclosure, if applicable, and (ii) the Depositor shall approve, as to form
and substance, or disapprove, as the case may be, the inclusion of the
Additional Form 10-K Disclosure on Form 10-K. The Depositor shall be
responsible for any reasonable fees and expenses assessed or incurred by the
Trustee in connection with including any Additional Form 10-K Disclosure on
Form 10-K pursuant to this Section 11.04.
89
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 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 10-K Filing Deadline, any comments to such Form
10-K template. After preparing the Form 10-K, the Trustee shall forward
electronically a draft copy of the Form 10-K to the Depositor for review. No
later than 12:00 noon New York City time on the fourth Business Day prior to
the 10-K Filing Deadline, a senior officer of the Depositor shall sign the
Form 10-K and return such signed Form 10-K to the Trustee. If a Form 10-K
cannot be filed on time or if a previously filed Form 10-K needs to be
amended, the Trustee will follow the procedures set forth in Section 11.01.
Promptly, but no later than the later of (x) one (1) Business Day after filing
with the Commission and (y) one (1) Business Day after the Form 10-K Filing
Deadline, the Trustee will make available on its internet website located at
(located at xxxx://xxx.xxxxxx.xxx/xxx) a final executed copy of each Form 10-K
prepared by the Trustee. The parties to this Agreement acknowledge that the
performance by the Trustee of its duties under this Section 11.04 related to
the timely preparation and filing of Form 10-K is contingent upon such parties
(and any Additional Servicer or Servicing Function Participant) strictly
observing all applicable deadlines in the performance of their duties under
this Section 11.04, Section 11.06, Section 11.01 and Section 11.07. The
Trustee shall have no liability for any loss, expense, damage, claim arising
out of or with respect to any failure to properly prepare and/or timely file
such Form 10-K, where such failure results from the Trustee's inability or
failure to receive on a timely basis, any information from any other party
hereto needed to prepare, arrange for execution or file such Form 10-K, not
resulting from its own negligence, bad faith or willful misconduct.
Form 10-K requires the registrant to indicate (by checking "yes"
or "no") that it "(1) has filed all reports required to be filed by Section 13
or 15(d) of the Exchange Act during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days." The
Depositor shall notify the Trustee in writing, no later than March 1st if the
answer to the questions should be "no." The Trustee shall be entitled to rely
on such representations in preparing, executing and/or filing any such report.
Section 11.05 Form 15 Filing.
Prior to January 30 of the first year in which the Trustee is able
to do so under applicable law, the Trustee shall prepare, sign and file a Form
15 relating to the automatic suspension of reporting in respect of the Trust
Fund under the Exchange Act.
Section 11.06 Xxxxxxxx-Xxxxx Certification.
Each Form 10-K shall include a certification, (the "Xxxxxxxx-Xxxxx
Certification") required to be included therewith under the Exchange Act
(pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and
regulations of the Commission promulgated thereunder). Pursuant to the
Servicing Agreement, the Servicer has agreed to cause any Servicing Function
Participant engaged by it to provide to the Person who signs the
Xxxxxxxx-Xxxxx Certification (the "Certifying Person"), and pursuant to this
Section 11.06, the Trustee agrees to provide to the Certifying Person, by
March 15 of each year in which the Trust is
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subject to the reporting requirements of the Exchange Act and otherwise within
a reasonable period of time upon request, a certification (each, a "Back-Up
Certification"), in the form attached hereto as Exhibit J, upon which the
Certifying Person, the entity for which the Certifying Person acts as an
officer, and such entity's officers, directors and Affiliates (collectively
with the Certifying Person, "Certification Parties") can reasonably rely. The
Depositor shall serve as the Certifying Person on behalf of the Trust. In the
event that prior to the filing date of the Form 10-K in March of each year,
the Trustee has actual knowledge of information material to the Xxxxxxxx-Xxxxx
Certification, the Trustee shall promptly notify the Depositor. The respective
parties hereto agree to cooperate with all reasonable requests made by any
Certifying Person or Certification Party in connection with such Person's
attempt to conduct any due diligence that such Person reasonably believes to
be appropriate in order to allow it to deliver any Xxxxxxxx-Xxxxx
Certification or portion thereof with respect to the Trust Fund. In the event
the Trustee or any Servicing Function Participant engaged by parties is
terminated or resigns pursuant to the terms of this Agreement, or any
applicable sub-servicing agreement, as the case may be, such party shall
provide a Back-Up Certification to the Certifying Person pursuant to this
Section 11.06 with respect to the period of time it was subject to this
Agreement or any applicable sub-servicing agreement, as the case may be.
The Trustee, at the direction of the Depositor, shall enforce any
obligation of the Servicer, to the extent set forth in the Servicing
Agreement, in the event of any failure to deliver to the Trustee any
certifications, documentation and other such information required to be
delivered pursuant to the Servicing Agreement.
Section 11.07 Report on Assessment of Compliance and Attestation.
(a) On or before March 15th of each calendar year, commencing in
2007:
(1) Each of the Trustee and the Custodian shall deliver to the
Depositor and the Trustee a report regarding the Trustee's or Custodian's, as
applicable, assessment of compliance with the Servicing Criteria applicable to
it during the immediately preceding calendar year, as required under Rules
13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB;
provided, however, the Trustee and Custodian shall deliver such report until a
Form 15 is filed pursuant to Section 11.06. Such report shall be signed by an
authorized officer of such Person and shall address each of the Servicing
Criteria applicable to it identified in Exhibit K hereto delivered to the
Depositor concurrently with the execution of this Agreement. To the extent any
of the Servicing Criteria so specified are not applicable to such Person, with
respect to asset-backed securities transactions taken as a whole involving
such Person and that are backed by the same asset type backing the
Certificates, such report shall include such a statement to that effect. The
Depositor and its respective officers and directors shall be entitled to rely
on upon each such servicing criteria assessment.
(2) Each of the Trustee and the Custodian shall deliver to the
Depositor and the Trustee a report of a registered public accounting firm that
attests to, and reports on, the assessment of compliance made by the Trustee
or the Custodian, as applicable, and delivered pursuant to the preceding
paragraphs; provided, however, the Trustee and Custodian shall deliver such
report until a Form 15 is filed pursuant to Section 11.06. 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
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Exchange Act, including, without limitation that in the event that an overall
opinion cannot be expressed, such registered public accounting firm shall
state in such report why it was unable to express such an opinion. Such report
must be available for general use and not contain restricted use language. To
the extent any of the Servicing Criteria are not applicable to such Person,
with respect to asset-backed securities transactions taken as a whole
involving such Person and that are backed by the same asset type backing the
Certificates, such report shall include such a statement to that effect.
(3) The Depositor shall cause the Servicer and any Reporting
Subcontractor to deliver to the Depositor an assessment of compliance and
accountant's attestation as and when provided in paragraphs (a) and (b) of
this Section 11.07.
(4) The Trustee shall cause each Reporting Subcontractor under its
employ, if any, to deliver to the Depositor an assessment of compliance and
accountant's attestation as and when provided in paragraphs (a) and (b) of
this Section.
(b) Each assessment of compliance provided by the Trustee or the
Custodian pursuant to Section 11.07(a)(2) shall address each of the Servicing
Criteria applicable to it specified on a Exhibit K hereto delivered to the
Depositor concurrently with the execution of this Agreement or, in the case of
a trustee or custodian subsequently appointed as such, on or prior to the date
of such appointment. An assessment of compliance provided by a Subcontractor
pursuant to Section 11.07(a)(3) or (4) need not address any elements of the
Servicing Criteria other than those specified pursuant to Section 11.07(a)(1).
* * * * * * *
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IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
GS MORTGAGE SECURITIES CORP.
By: /s/ Xxxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxxx Xxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION, solely
in its capacity as Trustee and not in its
individual capacity
By: /s/ Xxxxxxx X.Xxxxx
--------------------------------------
Name: Xxxxxxx X.Xxxxx
Title: Vice President
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Custodian
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxxx Xxxx
--------------------------------------
Name: Xxxxxx Xxxx
Title: Associate
Trust Agreement
SCHEDULE I
Mortgage Loan Schedule
[On File with the Trustee as provided by the Depositor]
S-I-1
EXHIBIT A
FORM OF CLASS AV-1, CLASS AF-2, CLASS AF-3, CLASS AF-4, CLASS AF-5,
CLASS AF-6A, CLASS AF-6B, CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4,
CLASS B-1, CLASS B-2 AND CLASS B-3 CERTIFICATES
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.
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.
Certificate No. :
Cut-off Date : October 1, 2006
First Distribution Date : November 27, 2006
Initial Certificate Balance of
this Certificate
("Denomination") :
Initial Certificate Balances of
all Certificates of this Class : _________________ _________________
CUSIP
ISIN
A-1
GS MORTGAGE SECURITIES CORP.
New Century Alternative Mortgage Loan Trust 2006-ALT2
Asset-Backed Certificates, Series 2006-ALT2
[Class AV-1][Class AF-2][Class
AF-3][Class AF-4][Class AF-5] [Class
AF-6A][Class AF-6B][Class M-1][Class M-2]
[Class M-3][Class M-4]
[Class B-1][Class B-2][Class B-3]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly
as set forth herein. Accordingly, the Certificate Balance at any time may be
less than the Certificate Balance as set forth herein. This Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor 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 Trust Agreement dated as of the Cut-off
Date specified above (the "Agreement") among GS Mortgage Securities Corp., as
depositor (the "Depositor"), U.S. Bank National Association, as trustee (the
"Trustee"), and Deutsche Bank National Trust Company, as custodian. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
A-2
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
A-3
GS MORTGAGE SECURITIES CORP.
New Century Alternative Mortgage Loan Trust 2006-ALT2
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as New Century Alternative Mortgage Loan Trust 2006-ALT2
Asset-Backed Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement, and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
for each Distribution Date is the last Business Day of the applicable Interest
Accrual Period for the related Distribution Date; provided, however, that for
any Definitive Certificates, the Record Date shall be the last Business Day of
the month immediately preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank
or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
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 Trustee and the other
A-4
parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future 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 office 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 Trustee and the Depositor and any agent of the Trustee or the
Depositor may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor or 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 Person specified in Section 9.01 of the Agreement
will have the option to effectuate the purchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined and in the manner as provided in
the Agreement. The obligations and responsibilities created by this Agreement
will terminate as provided in Section 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.
A-5
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
A-6
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number _________, or, if mailed by check, to ________________________.
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________________________________,
the assignee named above, or ________________________________________________,
as its agent.
A-7
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 (THE
"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 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 AND THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING
UNDERWRITING, A REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS
GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE SATISFY
THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND III OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL SATISFACTORY TO
THE TRUSTEE AND THE DEPOSITOR, TO THE EFFECT THAT THE PURCHASE AND HOLDING OF
THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY
SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE OR THE DEPOSITOR TO ANY
OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR TO
ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
B-1
Certificate No. : 1
Cut-off Date : October 1, 2006
First Distribution Date : November 27, 2006
Percentage Interest of this
Certificate
("Denomination") : [_____]%
CUSIP :
ISIN :
B-2
GS MORTGAGE SECURITIES CORP.
New Century Alternative Mortgage Loan Trust 2006-ALT2
Asset-Backed Certificates, Series 2006-ALT2
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 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 Xxxxxxx, Xxxxx & 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 Trust Agreement dated as of the Cut-off
Date specified above (the "Agreement") among GS Mortgage Securities Corp., as
depositor (the "Depositor"), U.S. Bank National Association, as trustee (the
"Trustee"), and Deutsche Bank National Trust Company, as custodian. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the
Trust will be made only upon presentment and surrender of this Certificate at
the office designated by the Trustee for such purposes or the office or agency
maintained by the Trustee.
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
Agreement) and deliver either (i) a Rule 144A Letter (in substantially the
form attached to the Agreement), or (ii) a written Opinion of Counsel to the
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 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 subject to Section 406 of ERISA or Section 4975 of the
Code or any materially similar
B-3
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, or (ii) if the
transferee is an insurance company and the certificate has been the subject of
an ERISA-Qualifying Underwriting, a representation letter that it is
purchasing such Certificates with the assets of its general account and that
the purchase and holding of such Certificates satisfy the requirements for
exemptive relief under Sections I and III of PTCE 95-60, or (iii) in the case
of a Certificate presented for registration in the name of an employee benefit
plan subject to ERISA, or a plan or arrangement subject to Section 4975 of the
Code (or comparable provisions of any subsequent enactments) or a plan subject
to Similar Law, or a trustee of any such plan or any other person acting on
behalf of any such plan or arrangement or using such plan's or arrangement's
assets, an Opinion of Counsel satisfactory to the Trustee, which Opinion of
Counsel shall not be an expense of the Trustee, the Depositor or the Trust
Fund, addressed to the Trustee and the Depositor to the effect that the
purchase and holding of such Certificate will not constitute or result in a
non-exempt prohibited transaction within the meaning of ERISA, Section 4975 of
the Code or any Similar Law and will not subject the Trustee to any obligation
in addition to those expressly undertaken in this Agreement or to any
liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
B-4
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
B-5
GS MORTGAGE SECURITIES CORP.
New Century Alternative Mortgage Loan Trust 2006-ALT2
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as New Century Alternative Mortgage Loan Trust 2006-ALT2
Asset-Backed Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement, and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing
on the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
for each Distribution Date is the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank
or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
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 Trustee and the other parties to the Agreement with the
consent of the Holders of Certificates affected by such amendment evidencing
the requisite Percentage Interest, as provided in the Agreement. Any such
consent by the Holder of this Certificate shall be conclusive and binding on
such Holder and upon all future
B-6
Holders of this Certificate and of any Certificate issued upon the transfer
hereof or in exchange therefor or in lieu hereof whether or not notation of
such consent is made upon this Certificate. The Agreement also permits the
amendment thereof, in certain limited circumstances, without the consent of
the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the office 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 Trustee and the Depositor and any agent of the Trustee or the
Depositor may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Trustee or the Depositor,
nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to effectuate the purchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined and in the manner as provided in
the Agreement. The obligations and responsibilities created by this Agreement
will terminate as provided in Section 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.
B-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the 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
B-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________________________________________,
_____________________________________________________________________________,
for the account of __________________________________________________________,
account number ________, or, if mailed by check, to _________________________,
Applicable statements should be mailed to ___________________________________,
_____________________________________________________________________________.
This information is provided by _________,
the assignee named above, or,
as its agent.
B-9
EXHIBIT C
FORM OF CLASS R, CLASS RC AND CLASS RX CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE 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 AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO
SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF
APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR AN OPINION OF COUNSEL AS
DESCRIBED IN THE AGREEMENT. IN THE EVENT THAT SUCH REPRESENTATION IS VIOLATED,
OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO SECTION
406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO
SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR
USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT WITHOUT AN OPINION OF COUNSEL
AS DESCRIBED IN THE AGREEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE
VOID AND OF NO EFFECT.
Certificate No. : [R][RC][RX]
Cut-off Date : October 1, 2006
First Distribution Date : November 27, 2006
Initial Certificate Balance of this
Certificate ("Denomination") : $100
------------
Initial Certificate Balance of all
Certificates of this Class: : $100
CUSIP :
ISIN :
C-1
GS MORTGAGE SECURITIES CORP.
New Century Alternative Mortgage Loan Trust 2006-ALT2
Asset-Backed Certificates, Series 2006-ALT2
Class [R][RC][RX]
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly
as set forth herein. Accordingly, the Certificate Balance at any time may be
less than the Certificate Balance as set forth herein. This Certificate does
not evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [____________] is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class [R][RC][RX] Certificates pursuant to a Trust Agreement dated as of the
Cut-off Date specified above (the "Agreement") among GS Mortgage Securities
Corp., as depositor (the "Depositor"), U.S. Bank National Association, as
trustee (the "Trustee"), and Deutsche Bank National Trust Company, as
custodian. To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class
[R][RC][RX] Certificate at the office designated by the Trustee for such
purposes.
No transfer of a Class [R][RC][RX] 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 or
using the assets of any such plan or arrangement to effect such transfer,
which representation letter shall not be an expense of the Trustee or the
Trust Fund, or, alternatively, an opinion of counsel as described in the
Agreement. In the event that such representation is violated, or any attempt
is made to transfer to a plan or arrangement subject to Section 406 of ERISA
or a plan subject to Section 4975 of the Code or a plan subject to Similar
Law, or a person acting on behalf of any such plan or arrangement or using the
assets of any such plan or arrangement, without an opinion of counsel as
described in the Agreement, such attempted transfer or acquisition shall be
void and of no effect.
C-2
Each Holder of this Class [R][RC][RX] Certificate shall be deemed
by the acceptance or acquisition an Ownership Interest in this Class
[R][RC][RX] Certificate to have agreed to be bound by the following
provisions, and the rights of each Person acquiring any Ownership Interest in
this Class [R][RC][RX] Certificate are expressly subject to the following
provisions: (i) each Person holding or acquiring any Ownership Interest in
this Class [R][RC][RX] Certificate shall be a Permitted Transferee and shall
promptly notify the Trustee of any change or impending change in its status as
a Permitted Transferee, (ii) no Ownership Interest in this Class [R][RC][RX]
Certificate may be registered on the Closing Date or thereafter transferred,
and the 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][RC][RX] Certificate shall agree (A)
to obtain a Transfer Affidavit from any other Person to whom such Person
attempts to Transfer its Ownership Interest this Class [R][RC][RX]
Certificate, (B) to obtain a Transfer Affidavit from any Person for whom such
Person is acting as nominee, trustee or agent in connection with any Transfer
of this Class [R][RC][RX] Certificate, (C) not to cause income with respect to
the Class [R][RC][RX] Certificate to be attributable to a foreign permanent
establishment or fixed base, within the meaning of an applicable income tax
treaty, of such Person or any other U.S. Person and (D) not to Transfer the
Ownership Interest in this Class [R][RC][RX] Certificate or to cause the
Transfer of the Ownership Interest in this Class [R][RC][RX] Certificate to
any other Person if it has actual knowledge that such Person is not a
Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class [R][RC][RX] Certificate in violation of the
provisions herein shall be absolutely null and void and shall vest no rights
in the purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
C-3
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
C-4
GS MORTGAGE SECURITIES CORP.
New Century Alternative Mortgage Loan Trust 2006-ALT2
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as New Century Alternative Mortgage Loan Trust 2006-ALT2
Asset-Backed Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement, and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on
the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
for each Distribution Date is the last Business Day of the month immediately
preceding the month in which such Distribution Date occurs.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank
or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
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 Trustee and the other parties to the Agreement
with the consent of the Holders of Certificates affected by such amendment
evidencing the requisite Percentage Interest, as provided in the Agreement.
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder
C-5
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange therefor or in lieu hereof whether or
not notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register of the Trustee upon surrender of this Certificate for
registration of transfer at the office 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 Trustee, the Depositor and any agent of the Trustee or the
Depositor may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Depositor or 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 Person specified in Section 9.01 of the Agreement
will have the option to effectuate the purchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined and in the manner as provided in
the Agreement. The obligations and responsibilities created by this Agreement
will terminate as provided in Section 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.
C-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the 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
C-7
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ____________, or, if mailed by check, to ______________________,
Applicable statements should be mailed to ____________________________________,
______________________________________________________________________________.
This information is provided by ________________________________________,
the assignee named above, or____________________________________________,
as its agent.
C-8
EXHIBIT D
FORM OF CLASS X CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER ASSETS
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR CERTIFICATE (THE
"TRANSFEROR CERTIFICATE") IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED
TO HEREIN AND EITHER (I) THE TRUSTEE RECEIVES A RULE 144A LETTER (THE "RULE
144A LETTER") IN THE FORM OF EXHIBIT I 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 AND THE CERTIFICATE HAS BEEN THE SUBJECT OF AN ERISA-QUALIFYING
UNDERWRITING, A REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS
GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE SATISFY
THE REQUIREMENTS FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND III OF PROHIBITED
TRANSACTION CLASS EXEMPTION 95-60, OR AN OPINION OF COUNSEL SATISFACTORY TO
THE TRUSTEE AND THE DEPOSITOR, TO THE EFFECT THAT THE PURCHASE AND HOLDING OF
THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR ANY
SIMILAR LAW AND WILL NOT SUBJECT THE TRUSTEE OR THE DEPOSITOR TO ANY
OBLIGATION IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THIS AGREEMENT OR TO
ANY LIABILITY. NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY
PURPORTED TRANSFER OF THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT
PLAN SUBJECT TO TITLE I OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW
WITHOUT THE REPRESENTATION LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE
TRUSTEE AS DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
D-1
Certificate No. : X-1
Cut-off Date : October 1, 2006
First Distribution Date : November 27, 2006
Percentage Interest of this Certificate
("Denomination") : 100%
CUSIP :
ISIN :
D-2
GS MORTGAGE SECURITIES CORP.
New Century Alternative Mortgage Loan Trust 2006-ALT2
Asset-Backed Certificates, Series 2006-ALT2
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality.
This certifies that [_______________________] is the registered
owner of the Percentage Interest evidenced by this Certificate (obtained by
dividing the denomination of this Certificate by the aggregate of the
denominations of all Certificates of the Class to which this Certificate
belongs) in certain monthly distributions pursuant to a Trust Agreement dated
as of the Cut-off Date specified above (the "Agreement") among GS Mortgage
Securities Corp., as depositor (the "Depositor"), U.S. Bank National
Association, as trustee (the "Trustee"), and Deutsche Bank National Trust
Company, as custodian. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the
Trust will be made only upon presentment and surrender of this Certificate at
the office designated by the Trustee for such purposes or the office or agency
maintained by the Trustee.
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
Agreement) and deliver either (i) a Rule 144A Letter (in substantially the
form attached to the Agreement), or (ii) a written Opinion of Counsel to the
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 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
D-3
plan subject to Section 406 of ERISA or Section 4975 of the Code or any
materially similar provisions of applicable federal, state or local law
("Similar Law") or a person acting on behalf of or investing plan assets of
any such plan, which representation letter shall not be an expense of the
Trustee, or (ii) if the transferee is an insurance company and the certificate
has been the subject of an ERISA-Qualifying Underwriting, a representation
letter that it is purchasing such Certificates with the assets of its general
account and that the purchase and holding of such Certificates satisfy the
requirements for exemptive relief under Sections I and III of PTCE 95-60, or
(iii) in the case of a Certificate presented for registration in the name of
an employee benefit plan subject to ERISA, or a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments) or a plan subject to Similar Law, or a trustee of any such plan or
any other person acting on behalf of any such plan or arrangement or using
such plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Trustee, which Opinion of Counsel shall not be an expense of the Depositor,
the Trustee or the Trust Fund, addressed to the Trustee and the Depositor to
the effect that the purchase and holding of such Certificate will not
constitute or result in a non-exempt prohibited transaction within the meaning
of ERISA, Section 4975 of the Code or any Similar Law and will not subject the
Trustee to any obligation in addition to those expressly undertaken in this
Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Trustee.
* * *
D-4
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
D-5
GS MORTGAGE SECURITIES CORP.
New Century Alternative Mortgage Loan Trust 2006-ALT2
Asset-Backed Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as New Century Alternative Mortgage Loan Trust 2006-ALT2
Asset-Backed Certificates, of the Series specified on the face hereof (herein
collectively called the "Certificates"), and representing a beneficial
ownership interest in the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Distribution
Account for payment hereunder and that the Trustee is not liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
This Certificate does not purport to summarize the Agreement, and
reference is made to the Agreement for the interests, rights and limitations
of rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee and the other parties to the Agreement.
Pursuant to the terms of the Agreement, a distribution will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (the "Distribution Date"), commencing
on the first Distribution Date specified on the face hereof, to the Person in
whose name this Certificate is registered at the close of business on the
applicable Record Date in an amount equal to the product of the Percentage
Interest evidenced by this Certificate and the amount required to be
distributed to Holders of Certificates of the Class to which this Certificate
belongs on such Distribution Date pursuant to the Agreement. The Record Date
for each Distribution Date is the last Business Day of the month immediately
preceding the month of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer
of immediately available funds to the account of the Holder hereof at a bank
or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee in writing at least five
(5) Business Days prior to the related Record Date and such Certificateholder
shall satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the office designated by the
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 Trustee and the other parties to the Agreement with the
consent of the Holders of Certificates affected by such amendment evidencing
the requisite Percentage Interest, as provided in the Agreement. Any such
consent by
D-6
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 office 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 Trustee, the Depositor and any agent of the Trustee or the
Depositor may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and none of the Trustee or the Depositor,
nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, the Person specified in Section 9.01 of the Agreement
will have the option to effectuate the purchase, in whole, from the Trust Fund
all remaining Mortgage Loans and all property acquired in respect of the
Mortgage Loans at a purchase price determined and in the manner as provided in
the Agreement. The obligations and responsibilities created by this Agreement
will terminate as provided in Section 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.
D-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _____________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to
assignee on the Certificate Register of the Trust Fund.
I (We) further direct the 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
D-8
DISTRIBUTION INSTRUCTIONS
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________________________________________,
______________________________________________________________________________,
for the account of ___________________________________________________________,
account number ________, or, if mailed by check, to __________________________.
Applicable statements should be mailed to ____________________________________,
______________________________________________________________________________.
This information is provided by __________________________________,
the assignee named above, or _________________________________________________,
as its agent.
D-9
EXHIBIT E
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
[Depositor]
[Trustee]
_____________________
_____________________
Re: Trust Agreement, dated as of October 1, 2006 (the
"Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), U.S. Bank National Association,
as trustee (the "Trustee"), and Deutsche Bank National Trust
Company, as custodian.
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Trust
Agreement (the "Trust Agreement"), the undersigned, as Custodian, for each
Mortgage Loan listed in the Mortgage Loan Schedule for which the undersigned
is specified as the Custodian (other than any Mortgage Loan listed in the
attached exception report), it has received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse"; and
(ii) except with respect to a MERS Loan, an executed Assignment of
Mortgage (which may be included in a blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Trust Agreement. The Custodian makes no representations as to: (i) the
validity, legality, sufficiency, enforceability, recordability or genuineness
of any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, or (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan or the
perfection or priority of any Mortgage. Notwithstanding anything herein to the
contrary, the Custodian has made no determination and makes no representations
as to whether (i) any endorsement is sufficient to 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.
E-1
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Trust Agreement.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual capacity, but
solely as Custodian
By:_________________________________
Name:_______________________________
Title:________________________________
E-2
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION
AND EXCEPTION REPORT OF CUSTODIAN
[date]
[Depositor]
[Trustee]
_____________________
_____________________
Re: Trust Agreement, dated as of October 1, 2006 (the
"Agreement"), among GS Mortgage Securities Corp., as
depositor (the "Depositor"), U.S. Bank National Association,
as trustee (the "Trustee"), and Deutsche Bank National Trust
Company, as custodian.
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Trust
Agreement (the "Trust Agreement"), the undersigned, as Custodian, hereby
certifies, subject to any exceptions listed on the exception report attached
hereto, that as to each Mortgage Loan listed in the Mortgage Loan Schedule for
which the undersigned is specified as the Custodian (other than any Mortgage
Loan paid in full or listed on the attached exception report) it has received:
(a) the original Mortgage Note, endorsed without recourse in blank
by the last endorsee, including all intervening endorsements showing a
complete chain of endorsement from the originator to the last endorsee;
(b) the original Assignment of Mortgage in blank, unless the
Mortgage Loan is a MERS Loan;
(c) personal endorsement and/or guaranty agreements executed in
connection with all non individual Mortgage Loans (corporations,
partnerships, trusts, estates, etc. (if provided);
(d) the related original Mortgage and evidence of its recording or
a certified copy of the mortgage with evidence of recording;
(e) except with respect to a MERS Loan, originals of any
intervening Mortgage assignment or certified copies in either case
evidencing recording; provided that the assignment may be in the form of
a blanket assignment or assignments, a copy of which with evidence of
recording shall be acceptable;
F-1
(f) if provided, originals of all assumption, modification,
agreements or certified copies thereof, in either case with evidence of
recording if required to maintain the lien of the mortgage or if
otherwise required, or, if recordation is not required, an original or
copy of the agreement;
(g) an original or copy of a title insurance policy, a certificate
of title, or attorney's opinion of title and abstract of title;
(h) to the extent applicable, (1) an original power of attorney,
or a certified copy thereof, in either case with evidence of recordation
if the document to which such power of attorney relates is recorded, and
(2) if provided, an original or copy of any surety agreement or guaranty
agreement;
(i) for each Mortgage Loan with respect to which the Mortgagor's
name as it appears on the note does not match the borrower's name on the
mortgage loan schedule, one of the following: the original of the
assumption agreement or a certified copy thereof;
(j) a security agreement, chattel mortgage or equivalent document
executed in connection with the mortgage, if provided.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items 2, 8, 33 and 34 of
the Mortgage Loan Schedule accurately reflects information set forth in the
Custodial File.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Trust Agreement. The Custodian makes no
representations as to: (i) the validity, legality, sufficiency, enforceability
or genuineness of any of the documents contained in each Mortgage File of any
of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the
collectability, insurability, effectiveness or suitability of any such
Mortgage Loan or the perfection or priority of any Mortgage. Notwithstanding
anything herein to the contrary, the Custodian has made no determination and
makes no representations as to whether (i) any endorsement is sufficient to
transfer all right, title and interest of the party so endorsing, as
noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Trust Agreement.
DEUTSCHE BANK NATIONAL TRUST
COMPANY, not in its individual capacity,
but solely as Custodian
By:_________________________________
Name:_______________________________
Title:________________________________
F-2
EXHIBIT G
FORM OF RESIDUAL TRANSFER AFFIDAVIT
New Century Alternative Mortgage Loan Trust 2006-ALT2,
Asset-Backed Certificates, Series 2006-ALT2
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is an officer of ___________________, the
proposed Transferee of an Ownership Interest in a Class [R][RC][RX]
Certificate (the "Certificate") issued pursuant to the Trust Agreement, dated
as of October 1, 2006 (the "Agreement"), among GS Mortgage Securities Corp.,
as depositor (the "Depositor"), U.S. Bank National Association, as trustee
(the "Trustee"), and Deutsche Bank National Trust Company, as custodian.
Capitalized terms used, but not defined herein, shall have the meanings
ascribed to such terms in the Agreement. The Transferee has authorized the
undersigned to make this affidavit on behalf of the Transferee for the benefit
of the Depositor and the Trustee.
2. The Transferee is, as of the date hereof, and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificate for its own account. The Transferee
has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are not
Permitted Transferees; (ii) such tax will be imposed on the transferor, or, if
such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is not a Permitted Transferee, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability
for the tax if the subsequent Transferee furnished to such Person an affidavit
that such subsequent Transferee is a Permitted Transferee and, at the time of
Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass through entity a Person that is not a
Permitted Transferee is the record holder of an interest in such entity. The
Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass through entity an
affidavit that such record holder is a Permitted Transferee and the pass
through entity does not have actual knowledge that such affidavit is false.
(For this purpose, a "pass through entity" includes a regulated investment
company, a real estate investment trust or common trust fund, a 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.)
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5. The Transferee has reviewed the provisions of Section 5.02(c)
of the Agreement and understands the legal consequences of the acquisition of
an Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by
and to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in
the Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Trustee a certificate substantially in the
form set forth as Exhibit H to the Agreement (a "Transferor Certificate") to
the effect that such Transferee has no actual knowledge that the Person to
which the Transfer is to be made is not a Permitted Transferee.
7. The Transferee has historically paid its debts as they have
come due, intends to pay its debts as they come due in the future, and
understands that the taxes payable with respect to the Certificate may exceed
the cash flow with respect thereto in some or all periods and intends to pay
such taxes as they become due. The Transferee does not have the intention to
impede the assessment or collection of any tax legally required to be paid
with respect to the Certificate.
8. The Transferee's taxpayer identification number is __________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with
respect to the income on such residual interest, unless no significant purpose
of the transfer was to impede the assessment or collection of tax.
11. The Transferee will not cause income from the Certificate to
be attributable to a foreign permanent establishment or fixed base, within the
meaning of an applicable income tax treaty, of the Transferee or any other
U.S. person.
12. Check one of the following:
/ / The present value of the anticipated tax liabilities associated
with holding the Certificate, as applicable, does not exceed the sum of:
(i) the present value of any consideration given to the Transferee
to acquire such Certificate;
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(ii) the present value of the expected future distributions on
such Certificate; and
(iii) the present value of the anticipated tax savings associated
with holding such Certificate as the related REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of
the highest rate specified in Section 11(b) of the Code if the Transferee has
been subject to the alternative minimum tax under Section 55 of the Code in
the preceding two years and will compute its taxable income in the current
taxable year using the alternative minimum tax rate) and (ii) present values
are computed using a discount rate equal to the short-term Federal rate
prescribed by Section 1274(d) of the Code for the month of the transfer and
the compounding period used by the Transferee.
/ / The transfer of the Certificate complies with U.S. Treasury
Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly,
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income from
the Certificate will only be taxed in the United States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding any
obligation of a person related to the Transferee within the meaning of U.S.
Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of $100 million and
net assets in excess of $10 million;
(iii) the Transferee will transfer the Certificate only to another
"eligible corporation," as defined in U.S. Treasury Regulations Section
1.860E-1(c)(6)(i), in a transaction that satisfies the requirements of
Sections 1.860E-1(c)(4)(i), (ii) and (iii) and Section 1.860E-1(c)(5) of the
U.S. Treasury Regulations; and
(iv) the Transferee determined the consideration paid to it to
acquire the Certificate based on reasonable market assumptions (including, but
not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other factors
specific to the Transferee) that it has determined in good faith.
/ / None of the above.
13. The Transferee is not an employee benefit plan that is subject
to Title I of ERISA or a plan that is subject to Section 4975 of the Code or a
plan subject to any federal, state or local law that is substantially similar
to Title I of ERISA or Section 4975 of the Code, and the Transferee is not
acting on behalf of or investing plan assets of such a plan.
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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__
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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
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Transfer Xxxx - XXXXXX 0000-XXX0
Re: New Century Alternative Mortgage Loan Trust 2006-ALT2,
Asset-Backed Certificates Series 2006-ALT2, Class [___]
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the above Certificates we
certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being
disposed by us in a transaction that is exempt from the registration
requirements of the Act, (b) we have not offered or sold any Certificates to,
or solicited offers to buy any Certificates from, any person, or otherwise
approached or negotiated with any person with respect thereto, in a manner
that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act and (c) to the extent we are disposing of a
Residual Certificate, (A) we have no knowledge the Transferee is not a
Permitted Transferee and (B) after conducting a reasonable investigation of
the financial condition of the Transferee, we have no knowledge and no reason
to believe that the Transferee will not pay all taxes with respect to the
Residual Certificates as they become due and (C) we have no reason to believe
that the statements made in paragraphs 7, 10 and 11 of the Transferee's
Residual Transfer Affidavit are false.
Very truly yours,
________________________________________
Print Name of Transferor
By: ____________________________________
Authorized Officer
H-1
EXHIBIT I
FORM OF RULE 144A LETTER
____________, 20__
GS Mortgage Securities Corp.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
XX-XX-XX0X
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Transfer Xxxx - XXXXXX 0000-XXX0
Re: New Century Alternative Mortgage Loan Trust 2006-ALT2,
Asset-Backed Certificates, Series 2006-ALT2, Class [__]
-------------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above Certificates we
certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws and are being transferred to us in a transaction that is
exempt from the registration requirements of the Act and any such laws, (b) we
have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) either we are purchasing a Class
AV-1, Class AF-2, Class AF-3, Class AF-4, Class AF-5, Class AF-6A, Class
AF-6B, Class M-1, Class M-2, Class M-3, Class M-4, Class B-1, Class B-2 or a
Class B-3 Certificate, or we are not an employee benefit plan that is subject
to Title I of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or a plan or arrangement that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or a plan subject to
any federal, state or local law materially similar to the foregoing provisions
of ERISA or the Code, nor are we acting on behalf of any such plan or
arrangement or using the assets of any such plan or arrangement to effect such
acquisition, or, with respect to a Class X Certificate or Class P Certificate
that has been the subject of an ERISA-Qualifying Underwriting, the purchaser
is an insurance company that is purchasing this certificate with funds
contained in an "insurance company general account" (as such term is defined
in Section V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE
95-60")) and the purchase and holding of such Certificates satisfy the
requirements for exemptive relief under Sections I and III of PTCE 95-60, (e)
we have not, nor has anyone acting on our behalf offered, transferred,
pledged, sold or otherwise disposed of the Certificates, any
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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.
I-2
ANNEX 1 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because (i) the Buyer owned
and/or invested on a discretionary basis $___________(1) in securities (except
for the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance with Rule
144A and (ii) the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a bank, savings
and loan association or similar institution), Massachusetts or similar
business trust, partnership, or charitable organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the
business of which is substantially confined to banking and is supervised by
the State or territorial banking commission or similar official or is a
foreign bank or equivalent institution, and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial statements, a
copy of which is attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association or
similar institution, which is supervised and examined by a State or Federal
authority having supervision over any such institutions or is a foreign
savings and loan association or equivalent institution and (b) has an audited
net worth of at least $25,000,000 as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
____ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision
by the insurance commissioner or a similar official or agency of a State,
territory or the District of Columbia.
---------
Buyer must own and/or invest on a discretionary basis at
least $100,000,000 in securities unless Buyer is a dealer, and, in that case,
Buyer must own and/or invest on a discretionary basis at least $10,000,000 in
securities.
I-3
____ State or Local Plan. The Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the
State or its political subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor registered under
the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small business investment
company licensed by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958.
____ Business Development Company. Buyer is a business development company as
defined in Section 202(a)(22) of the Investment Advisors Act of 1940.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned
but subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used
the cost of such securities to the Buyer and did not include any of the
securities referred to in the preceding paragraph, except (i) where the Buyer
reports its securities holdings in its financial statements on the basis of
their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market. Further, in
determining such aggregate amount, the Buyer may have included securities
owned by subsidiaries of the Buyer, but only if such subsidiaries are
consolidated with the Buyer in its financial statements prepared in accordance
with generally accepted accounting principles and if the investments of such
subsidiaries are managed under the Buyer's direction. However, such securities
were not included if the Buyer is a majority-owned, consolidated subsidiary of
another enterprise and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934, as amended.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the
Certificates are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of
any changes in the information and conclusions herein. Until such notice is
given, the Buyer's purchase of the Certificates will constitute a
reaffirmation of this certification as of the date of such purchase. In
addition, if the Buyer is a bank or savings and loan is provided above, the
Buyer agrees that it will furnish to such parties updated annual financial
statements promptly after they become available.
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_______________________________________
Print Name of Transferee
By: ____________________________________
Name:
Title:
Date: __________________________________
I-5
ANNEX 2 TO EXHIBIT I
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A"), because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities
(other than the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year. For purposes of determining the amount of
securities owned by the Buyer or the Buyer's Family of Investment Companies,
the cost of such securities was used, except (i) where the Buyer or the
Buyer's Family of Investment Companies reports its securities holdings in its
financial statements on the basis of their market value, and (ii) no current
information with respect to the cost of those securities has been published.
If clause (ii) in the preceding sentence applies, the securities may be valued
at market.
____ The Buyer owned $___________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule
144A).
____ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $__________ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue
of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed
by the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii)
currency, interest rate and commodity swaps.
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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:______________________________
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EXHIBIT J
FORM OF BACK-UP CERTIFICATION
(Trustee)
Re: Trust Agreement, dated as of October 1, 2006 (the "Agreement"),
among GS Mortgage Securities Corp., as depositor (the
"Depositor"), U.S. Bank National Association, as trustee (the
"Trustee"), and Deutsche Bank National Trust Company, as
custodian.
I, ________________________________, the _______________________
of [NAME OF COMPANY] (the "Company"), certify to the Depositor, and its
officers, with the knowledge and intent that they will rely upon this
certification, that:
(1) I have reviewed the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the
"Attestation Report"), all reports on Form 10-D containing statements to
certificateholders filed in respect of the period included in the year
covered by the annual report of the Trust Fund (collectively, the
"Distribution Date Statements");
(2) Assuming the accuracy and completeness of the information
delivered to the Company by the Servicer as provided in the Agreement
and subject to paragraph (4) below, the distribution information
determined by the Company and set forth in the Distribution Date
Statements contained in all Form 10-D's included in the year covered by
the annual report of such Trust on Form 10-K for the calendar year 200[
], is complete and does not contain any material misstatement of fact as
of the last day of the period covered by such annual report;
(3) Based solely on the information delivered to the Company by
the Servicer as provided in the Agreement, (i) the distribution
information required under the Agreement to be contained in the Trust
Fund's Distribution Date Statements and (ii) the servicing information
required to be provided by the Servicer to the Trustee for inclusion in
the Trust Fund's Distribution Date Statements, to the extent received by
the Trustee from the Servicer in accordance with the Agreement, is
included in such Distribution Date Statements;
(4) The Company is not certifying as to the accuracy, completeness
or correctness of the information which it received from the Servicer
and did not independently verify or confirm the accuracy, completeness
or correctness of the information provided by the Servicer; and
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(5) The Servicing Assessment and Attestation Report required to be
provided by the Company pursuant to the Agreement, have been provided to
the Depositor. Any material instances of noncompliance described in such
reports have been disclosed to the Depositor. Any material instance of
noncompliance with the Servicing Criteria has been disclosed in such
reports.
Date: _______________________________
By: _______________________________
Name:
Title:
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EXHIBIT K
FORM OF SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
STATEMENT
The assessment of compliance to be delivered by the [Trustee]
[Custodian] shall address, at a minimum, the criteria identified as below as
"Applicable Servicing Criteria":
-------------------------------------------------------------------------------- ------------------- ---------------
Servicing Criteria Trustee Custodian
-------------------------------------------------------------------------------- ------------------- ---------------
Reference Criteria
------------------------ ------------------------------------------------------- ------------------- ---------------
General Servicing Considerations
------------------------ ------------------------------------------------------- ------------------- ---------------
Policies and procedures are instituted to monitor any
performance or other triggers and events of default
1122(d)(1)(i) in accordance with the transaction agreements. X
------------------------ ------------------------------------------------------- ------------------- ---------------
If any material servicing activities are outsourced
to third parties, policies and procedures are
instituted to monitor the third party's performance
1122(d)(1)(ii) and compliance with such servicing activities.
------------------------ ------------------------------------------------------- ------------------- ---------------
Any requirements in the transaction agreements to
maintain a back-up servicer for the mortgage loans
1122(d)(1)(iii) are maintained.
------------------------ ------------------------------------------------------- ------------------- ---------------
A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the
amount of coverage required by and otherwise in
accordance with the terms of the transaction
1122(d)(1)(iv) agreements.
------------------------ ------------------------------------------------------- ------------------- ---------------
Cash Collection and Administration
------------------------ ------------------------------------------------------- ------------------- ---------------
Payments on mortgage loans are deposited into the
appropriate custodial bank accounts and related bank
clearing accounts no more than two business days
following receipt, or such other number of days
1122(d)(2)(i) specified in the transaction agreements. X
------------------------ ------------------------------------------------------- ------------------- ---------------
Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
1122(d)(2)(ii) personnel. X
------------------------ ------------------------------------------------------- ------------------- ---------------
K-1
-------------------------------------------------------------------------------- ------------------- ---------------
Servicing Criteria Trustee Custodian
-------------------------------------------------------------------------------- ------------------- ---------------
Reference Criteria
------------------------ ------------------------------------------------------- ------------------- ---------------
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
1122(d)(2)(iii) transaction agreements.
------------------------ ------------------------------------------------------- ------------------- ---------------
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
1122(d)(2)(iv) cash) as set forth in the transaction agreements. X
------------------------ ------------------------------------------------------- ------------------- ---------------
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 X
requirements of Rule 13k-1(b)(1) of the Securities
1122(d)(2)(v) Exchange Act.
------------------------ ------------------------------------------------------- ------------------- ---------------
Unissued checks are safeguarded so as to prevent
1122(d)(2)(vi) unauthorized access.
------------------------ ------------------------------------------------------- ------------------- ---------------
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 X
resolved within 90 calendar days of their original
identification, or such other number of days
1122(d)(2)(vii) specified in the transaction agreements.
------------------------ ------------------------------------------------------- ------------------- ---------------
K-2
-------------------------------------------------------------------------------- ------------------- ---------------
Servicing Criteria Trustee Custodian
-------------------------------------------------------------------------------- ------------------- ---------------
Reference Criteria
------------------------ ------------------------------------------------------- ------------------- ---------------
Investor Remittances and Reporting
------------------------ ------------------------------------------------------- ------------------- ---------------
Reports to investors, including those to be filed
with the Commission, are maintained in accordance
with the transaction agreements and applicable
Commission requirements. Specifically, such reports
(A) are prepared in accordance with timeframes and
other terms set forth in the transaction agreements;
(B) provide information calculated in accordance with
the terms specified 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 X
principal balance and number of mortgage loans
1122(d)(3)(i) serviced by the Servicer.
------------------------ ------------------------------------------------------- ------------------- ---------------
Amounts due to investors are allocated and remitted
in accordance with timeframes, distribution priority
and other terms set forth in the transaction X
1122(d)(3)(ii) agreements.
------------------------ ------------------------------------------------------- ------------------- ---------------
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
1122(d)(3)(iii) transaction agreements. X
------------------------ ------------------------------------------------------- ------------------- ---------------
Amounts remitted to investors per the investor
reports agree with cancelled checks, or other form of
1122(d)(3)(iv) payment, or custodial bank statements. X
------------------------ ------------------------------------------------------- ------------------- ---------------
Pool Asset Administration
------------------------ ------------------------------------------------------- ------------------- ---------------
Collateral or security on mortgage loans is X
maintained as required by the transaction agreements
1122(d)(4)(i) or related mortgage loan documents.
------------------------ ------------------------------------------------------- ------------------- ---------------
Mortgage loan and related documents are safeguarded
1122(d)(4)(ii) as required by the transaction agreements. X
------------------------ ------------------------------------------------------- ------------------- ---------------
Any additions, removals or substitutions to the asset
1122(d)(4)(iii) pool are made, reviewed and
-------------------------------------------------------------------------------- ------------------- ---------------
K-3
-------------------------------------------------------------------------------- ------------------- ---------------
Servicing Criteria Trustee Custodian
-------------------------------------------------------------------------------- ------------------- ---------------
Reference Criteria
------------------------ ------------------------------------------------------- ------------------- ---------------
approved in accordance with any conditions or
requirements in the transaction agreements.
------------------------ ------------------------------------------------------- ------------------- ---------------
Payments on mortgage loans, including any payoffs,
made in accordance with the related mortgage loan
documents are posted to the Servicer's obligor
records maintained no more than two business days
after receipt, or such other number of days specified
in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in
1122(d)(4)(iv) accordance with the related mortgage loan documents.
------------------------ ------------------------------------------------------- ------------------- ---------------
The Servicer's records regarding the mortgage loans
agree with the Servicer's records with respect to an
1122(d)(4)(v) obligor's unpaid principal balance.
------------------------ ------------------------------------------------------- ------------------- ---------------
Changes with respect to the terms or status of an
obligor's mortgage loans (e.g., loan modifications or
re-agings) are made, reviewed and approved by
authorized personnel in accordance with the
transaction agreements and related pool asset
1122(d)(4)(vi) documents.
------------------------ ------------------------------------------------------- ------------------- ---------------
Loss mitigation or recovery actions (e.g.,
forbearance plans, modifications and deeds in lieu of
foreclosure, foreclosures and repossessions, as
applicable) are initiated, conducted and concluded in
accordance with the timeframes or other requirements
1122(d)(4)(vii) established by the transaction agreements.
------------------------ ------------------------------------------------------- ------------------- ---------------
Records documenting collection efforts are maintained
during the period a mortgage loan is delinquent in
accordance with the transaction agreements. Such
records are maintained on at least a monthly basis,
or such other period specified in the transaction
agreements, and describe the entity's activities in
monitoring delinquent mortgage loans including, for
1122(d)(4)(viii) example, phone calls,
-------------------------------------------------------------------------------- ------------------- ---------------
K-4
-------------------------------------------------------------------------------- ------------------- ---------------
Servicing Criteria Trustee Custodian
-------------------------------------------------------------------------------- ------------------- ---------------
Reference Criteria
------------------------ ------------------------------------------------------- ------------------- ---------------
letters and payment rescheduling plans in cases where
delinquency is deemed temporary (e.g., illness or
unemployment).
------------------------ ------------------------------------------------------- ------------------- ---------------
Adjustments to interest rates or rates of return for
mortgage loans with variable rates are computed based
1122(d)(4)(ix) on the related mortgage loan documents.
------------------------ ------------------------------------------------------- ------------------- ---------------
Regarding any funds held in trust for an obligor
(such as escrow accounts): (A) such funds are
analyzed, in accordance with the obligor's mortgage
loan documents, on at least an annual basis, or such
other period specified in the transaction agreements;
(B) interest on such funds is paid, or credited, to
obligors in accordance with applicable mortgage loan
documents and state laws; and (C) such funds are
returned to the obligor within 30 calendar days of
full repayment of the related mortgage loans, or such
other number of days specified in the transaction
1122(d)(4)(x) agreements.
------------------------ ------------------------------------------------------- ------------------- ---------------
Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments,
provided that such support has been received by the
servicer at least 30 calendar days prior to these
dates, or such other number of days specified in the
1122(d)(4)(xi) transaction agreements.
------------------------ ------------------------------------------------------- ------------------- ---------------
Any late payment penalties in connection with any
payment to be made on behalf of an obligor are paid
from the servicer's funds and not charged to the
obligor, unless the late payment was due to the
1122(d)(4)(xii) obligor's error or omission.
------------------------ ------------------------------------------------------- ------------------- ---------------
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
1122(d)(4)(xiii) days specified in the
------------------------ ------------------------------------------------------- ------------------- ---------------
K-5
-------------------------------------------------------------------------------- ------------------- ---------------
Servicing Criteria Trustee Custodian
-------------------------------------------------------------------------------- ------------------- ---------------
Reference Criteria
------------------------ ------------------------------------------------------- ------------------- ---------------
transaction agreements.
------------------------ ------------------------------------------------------- ------------------- ---------------
Delinquencies, charge-offs and uncollectible accounts
are recognized and recorded in accordance with the
1122(d)(4)(xiv) transaction agreements.
------------------------ ------------------------------------------------------- ------------------- ---------------
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 X
1122(d)(4)(xv) transaction agreements.
------------------------ ------------------------------------------------------- ------------------- ---------------
K-6
EXHIBIT L
FORM OF REQUEST FOR RELEASE OF DOCUMENTS
To: Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx,
Xxxxx Xxx, Xxxxxxxxxx 00000
RE: Trust Agreement, dated as of October 1, 2006 (the "Agreement"), among GS
Mortgage Securities Corp., as depositor (the "Depositor"), U.S. Bank
National Association, as trustee (the "Trustee"), and Deutsche Bank
National Trust Company, as custodian.
In connection with and pursuant to Section____________, of the agreement, we
request the release and acknowledge of the custodial file for the mortgage
loan described below, for the reason indicated below. Further, any payments
received by the Servicer listed below in connection with this request for
release have been deposited into the Distribution Account for the benefit of
the Trust.
FROM: Servicer:________________________________________________________,
City/State______________
SERVICER LOAN #: ___________________________,
DEUTSCHE BANK #_____________________________________,
Deal Name: ____________________,
Mortgagor's Name: _______________________________________________ Original
loan amount: ________
Property Address: ________________________________________________ Payment
amount: ____________
City/State/Zip: __________________________________________________ Interest
rate: ________________
REASON FOR REQUESTING DOCUMENTS (check one)
________1. Loan paid in full
________2. Loan in foreclosure
________3. Loan being substituted
________4. Loan being liquidated by company
________5. Other (please explain)
_________________________________________________________
L-1
If box 1 or 4 above is checked, and if all or part of the Custodial File was
previously released to us, then please provide a copy of the previous release
request (RR) to us as well as any additional documents in your possession
relating to the above specified mortgage loan.
If box 2 or 5 above is checked, then upon our return to you as custodian, all
of the documents for the above specified mortgage loan, please acknowledge
your receipt by signing in the space indicated below, and returning this form
to us.
COMPANY NAME:_____________________________________PHONE#________________________
AUTHORIZED SIGNER: _____________________________________________________________
NAME(TYPED):_______________________________________________DATE:________________
PHONE #:_____________________________________________________
DATE:_____________
--------------------------------------------------------------------------------
PLEASE MAIL DOCUMENTS BACK TO:
________________________________________________________________________________
________________________________________________________________________________
_________________________________
--------------------------------------------------------------------------------
L-2
EXHIBIT M
Form 8-K Disclosure Information
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
-------------------------------------------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 1.01- Entry into a Material Definitive The party to this Agreement entering into such
Agreement material definitive agreement (excluding the
Trustee)
Disclosure is required regarding entry into or
amendment of any definitive agreement that is
material to the securitization, even if depositor is
not a party.
Examples: servicing agreement, custodial
agreement.
Note: disclosure not required as to definitive
agreements that are fully disclosed in the
prospectus
---------------------------------------------------------- --------------------------------------------------------
Item 1.02- Termination of a Material The party to this Agreement entering into such
Definitive Agreement material definitive agreement (excluding the
Trustee)
Disclosure is required regarding termination of
any definitive agreement that is material to the
securitization (other than expiration in
accordance with its terms), even if depositor is
not a party.
Examples: servicing agreement, custodial
agreement.
---------------------------------------------------------- --------------------------------------------------------
Item 1.03- Bankruptcy or Receivership
Disclosure is required regarding the bankruptcy
or receivership, with respect to any of the
following:
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Depositor/Sponsor (Seller)
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Affiliated Servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Other Servicer servicing 20% or more of the pool Servicer
assets at the time of the report
---------------------------------------------------------- --------------------------------------------------------
o Other material servicers Servicer
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Significant Obligor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Credit Enhancer (10% or more) Depositor
---------------------------------------------------------- --------------------------------------------------------
o Derivative Counterparty Depositor
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
M-1
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
-------------------------------------------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 2.04- Triggering Events that Trustee
Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-
Balance Sheet Arrangement
Includes an early amortization, performance
trigger or other event, including event of default,
that would materially alter the payment
priority/distribution of cash flows/amortization
schedule.
Disclosure will be made of events other than
waterfall triggers which are disclosed in the
monthly statements to the certificateholders.
---------------------------------------------------------- --------------------------------------------------------
Item 3.03- Material Modification to Rights Trustee
of Security Holders
Disclosure is required of any material
modification to documents defining the rights of
Certificateholders, including the Trust
Agreement.
---------------------------------------------------------- --------------------------------------------------------
Item 5.03- Amendments of Articles of (i) Trustee with respect to the Trust Agreement
Incorporation or Bylaws; Change of Fiscal and (ii) Depositor with respect to any information
Year relating to the Depositor
Disclosure is required of any amendment "to the
governing documents of the issuing entity".
---------------------------------------------------------- --------------------------------------------------------
Item 6.01- ABS Informational and Depositor
Computational Material
---------------------------------------------------------- --------------------------------------------------------
Item 6.02- Change of Servicer or Trustee Trustee/
Servicer
Requires disclosure of any removal, replacement,
substitution or addition of any affiliated servicer,
other servicer servicing 10% or more of pool
assets at time of report, other material servicers
or trustee.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new servicer is also Servicer/ Depositor
required.
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new Trustee is also successor Trustee
required.
---------------------------------------------------------- --------------------------------------------------------
Item 6.03- Change in Credit Enhancement Depositor and Trustee
or External Support
Covers termination of any enhancement in
manner other than by its terms, the addition of an
enhancement, or a material change in the
enhancement provided. Applies to external
credit enhancements as well as derivatives.
---------------------------------------------------------- --------------------------------------------------------
M-2
-------------------------------------------------------------------------------------------------------------------
FORM 8-K DISCLOSURE INFORMATION
-------------------------------------------------------------------------------------------------------------------
Item on Form 8-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Reg AB disclosure about any new enhancement Depositor
provider is also required.
---------------------------------------------------------- --------------------------------------------------------
Item 6.04- Failure to Make a Required Trustee
Distribution
---------------------------------------------------------- --------------------------------------------------------
Item 6.05- Securities Act Updating Depositor
Disclosure
If any material pool characteristic differs by 5%
or more at the time of issuance of the securities
from the description in the final prospectus,
provide updated Reg AB disclosure about the
actual asset pool.
---------------------------------------------------------- --------------------------------------------------------
If there are any new servicers or originators Depositor
required to be disclosed under Regulation AB as
a result of the foregoing, provide the information
called for in Items 1108 and 1110 respectively.
---------------------------------------------------------- --------------------------------------------------------
Item 7.01- Reg FD Disclosure All parties (excluding the Trustee and any
Custodian)
---------------------------------------------------------- --------------------------------------------------------
Item 8.01- Other Events Depositor
Any event, with respect to which information is
not otherwise called for in Form 8-K, that the
registrant deems of importance to
certificateholders.
---------------------------------------------------------- --------------------------------------------------------
Item 9.01- Financial Statements and Responsible party for reporting/disclosing the
Exhibits financial statement or exhibit
---------------------------------------------------------- --------------------------------------------------------
M-3
EXHIBIT N
Additional Form 10-D Disclosure
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 1: Distribution and Pool
Performance Information
---------------------------------------------------------- --------------------------------------------------------
Information included in the Monthly Statement Servicer and Trustee
---------------------------------------------------------- --------------------------------------------------------
Any information required by 1121 which is NOT Depositor
included on the Monthly Statement
---------------------------------------------------------- --------------------------------------------------------
Item 2: Legal Proceedings
Any legal proceeding pending against the
following entities or their respective property,
that is material to Certificateholders, including
any proceedings known to be contemplated by
governmental authorities:
---------------------------------------------------------- --------------------------------------------------------
o Issuing Entity (Trust Fund) Trustee and Depositor
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Seller (if a party to the Trust Agreement) or Depositor
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
o 1110(b) Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
o Any 1108(a)(2) Servicer (other than Trustee) Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 3: Sale of Securities and Use of Depositor (with respect to the Closing Date)
Proceeds
Information from Item 2(a) of Part II of Form 10-
Q:
With respect to any sale of securities by the
sponsor, depositor or issuing entity, that are
backed by the same asset pool or are otherwise
issued by the issuing entity, whether or not
registered, provide the sales and use of proceeds
information in Item 701 of Regulation S-K.
Pricing information can be omitted if securities
were not registered.
---------------------------------------------------------- --------------------------------------------------------
Item 4: Defaults Upon Senior Securities Trustee
Information from Item 3 of Part II of Form 10-Q:
-------------------------------------------------------------------------------------------------------------------
N-1
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Report the occurrence of any Event of Default
(after expiration of any grace period and
provision of any required notice)
---------------------------------------------------------- --------------------------------------------------------
Item 5: Submission of Matters to a Vote Trustee
of Security Holders
Information from Item 4 of Part II of Form 10-Q
---------------------------------------------------------- --------------------------------------------------------
Item 6: Significant Obligors of Pool Depositor
Assets
Item 1112(b) - Significant Obligor Financial
Information*
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the
Form 10-D for the distribution period in which
updated information is required pursuant to the
Item.
---------------------------------------------------------- --------------------------------------------------------
Item 7: Significant Enhancement
Provider Information
Item 1114(b)(2) - Credit Enhancement Provider
Financial Information*
---------------------------------------------------------- --------------------------------------------------------
o Determining applicable disclosure threshold Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information Depositor
(including any required accountants' consent
to the use thereof) or effecting incorporation
by reference
---------------------------------------------------------- --------------------------------------------------------
o Item 1115(b) - Derivative Counterparty
Financial Information*
---------------------------------------------------------- --------------------------------------------------------
o Determining current maximum probable Depositor
exposure
---------------------------------------------------------- --------------------------------------------------------
o Determining current significance percentage Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information Depositor
(including any required accountants' consent
to the use thereof) or effecting incorporation
by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the
Form 10-D for the distribution period in which
updated information is required pursuant to the
Items.
---------------------------------------------------------- --------------------------------------------------------
Item 8: Other Information Any party responsible for the applicable
disclosure items on Form 8-K
Disclose any information required to be reported
on Form 8-K during the period covered by the
Form 10-D but not reported
---------------------------------------------------------- --------------------------------------------------------
Item 9: Exhibits
---------------------------------------------------------- --------------------------------------------------------
Monthly Statement to Certificateholders Trustee
---------------------------------------------------------- --------------------------------------------------------
N-2
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-D DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-D Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Exhibits required by Item 601 of Regulation S-K, Depositor
such as material agreements
---------------------------------------------------------- --------------------------------------------------------
N-3
EXHIBIT O
Additional Form 10-K Disclosure
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Item 1B: Unresolved Staff Comments Depositor
---------------------------------------------------------- --------------------------------------------------------
Item 9B: Other Information Any party responsible for disclosure items on
Disclose any information required to be reported Form 8-K
on Form 8-K during the fourth quarter covered
by the Form 10-K but not reported
---------------------------------------------------------- --------------------------------------------------------
Item 15: Exhibits, Financial Statement (i) As to the Trust Agreement, Trustee/Depositor,
Schedules as to the Servicing Agreement, the Depositor and
(ii) as to financial statements, Reporting Parties
(as to themselves)
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1112(b): Significant
Obligors of Pool Assets
---------------------------------------------------------- --------------------------------------------------------
Significant Obligor Financial Information* Depositor
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the
Form 10-D for the distribution period in which
updated information is required pursuant to the
Item.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1114(b)(2): Credit
Enhancement Provider Financial
Information
---------------------------------------------------------- --------------------------------------------------------
o Determining applicable disclosure threshold Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information Depositor
(including any required accountants' consent
to the use thereof) or effecting incorporation
by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the
Form 10-D for the distribution period in which
updated information is required pursuant to the
Items.
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1115(b): Derivative
Counterparty Financial Information
---------------------------------------------------------- --------------------------------------------------------
o Determining current maximum probable Depositor
exposure
---------------------------------------------------------- --------------------------------------------------------
o Determining current significance percentage Depositor
---------------------------------------------------------- --------------------------------------------------------
o Requesting required financial information Depositor
(including any required accountants' consent
to the use thereof) or effecting inc orporation
by reference
---------------------------------------------------------- --------------------------------------------------------
*This information need only be reported on the
Form 10-D for the distribution period in which
updated information is required pursuant to the
Items.
O-1
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1117: Legal Proceedings
Any legal proceeding pending against the
following entities or their respective property,
that is material to Certificateholders, including
any proceedings known to be contemplated by
governmental authorities:
---------------------------------------------------------- --------------------------------------------------------
o Issuing Entity (Trust Fund) Trustee and Depositor
---------------------------------------------------------- --------------------------------------------------------
o Sponsor (Seller) Seller (if a party to the Trust Agreement) or
Depositor
---------------------------------------------------------- --------------------------------------------------------
o Depositor Depositor
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
o 1110(b) Originator Depositor
---------------------------------------------------------- --------------------------------------------------------
o Any 1108(a)(2) Servicer (other than the Servicer
Trustee)
---------------------------------------------------------- --------------------------------------------------------
o Any other party contemplated by 1100(d)(1) Depositor
---------------------------------------------------------- --------------------------------------------------------
Reg AB Item 1119: Affiliations and
Relationships
---------------------------------------------------------- --------------------------------------------------------
Whether (a) the Sponsor (Seller), Depositor or Depositor as to (a)
Issuing Entity is an affiliate of the following Sponsor/Seller as to (a)
parties, and (b) to the extent known and material,
any of the following parties are affiliated with
one another:
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Custodian Custodian
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL FORM 10-K DISCLOSURE
-------------------------------------------------------------------------------------------------------------------
Item on Form 10-K Party Responsible
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
Whether there are any "outside the ordinary Depositor as to (a)
course business arrangements" other than would Sponsor/Seller as to (a)
be obtained in an arm's length transaction
between (a) the Sponsor (Seller), Depositor or
Issuing Entity on the one hand, and (b) any of the
following parties (or their affiliates) on the other
hand, that exist currently or within the past two
years and that are material to a
Certificateholder's understanding of the
Certificates:
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
O-2
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
Whether there are any specific relationships Depositor as to (a)
involving the transaction or the pool assets Sponsor/Seller as to (a)
between (a) the Sponsor (Seller), Depositor or
Issuing Entity on the one hand, and (b) any of the
following parties (or their affiliates) on the other
hand, that exist currently or within the past two
years and that are material:
---------------------------------------------------------- --------------------------------------------------------
o Trustee Trustee
---------------------------------------------------------- --------------------------------------------------------
o Any other 1108(a)(3) servicer Servicer
---------------------------------------------------------- --------------------------------------------------------
o Any 1110 Originator Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1112(b) Significant Obligor Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1114 Credit Enhancement Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any 1115 Derivate Counterparty Provider Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
o Any other 1101(d)(1) material party Depositor/Sponsor
---------------------------------------------------------- --------------------------------------------------------
O-3
EXHIBIT P
Flow Mortgage Loan Purchase and Warranties Agreement, dated as of March 1,
2006, between Xxxxxxx Xxxxx Mortgage Company, as purchaser and New Century
Mortgage Corporation, as seller
[See Attached]
P-1
EXHIBIT P TO EX-99.1
EXECUTION COPY
================================================================================
FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
---------------------
XXXXXXX SACHS MORTGAGE COMPANY,
Purchaser
NEW CENTURY MORTGAGE CORPORATION,
Seller
---------------------
Dated as of March 1, 2006
Conventional,
Fixed and Adjustable Rate, First and Second Residential Mortgage Loans
(originated by Home123 Corporation)
(Servicing Released)
================================================================================
TABLE OF CONTENTS
Page
----
SECTION 1 DEFINITIONS.....................................................................................1
SECTION 2 AGREEMENT TO PURCHASE..........................................................................14
SECTION 3 MORTGAGE SCHEDULES.............................................................................14
SECTION 4 PURCHASE PRICE.................................................................................14
SECTION 5 EXAMINATION OF MORTGAGE FILES..................................................................15
SECTION 6 CONVEYANCE FROM SELLER TO PURCHASER............................................................16
Subsection 6.01 Conveyance of Mortgage Loans..........................................................16
Subsection 6.02 Books and Records.....................................................................16
Subsection 6.03 Delivery of Mortgage Loan Documents...................................................17
Subsection 6.04 Quality Control Procedures............................................................17
SECTION 7 SERVICING OF THE MORTGAGE LOANS................................................................18
SECTION 8 TRANSFER OF SERVICING..........................................................................18
SECTION 9 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLER; REMEDIES FOR BREACH...................21
Subsection 9.01 Representations and Warranties Regarding the Seller...................................21
Subsection 9.02 Representations and Warranties Regarding Individual Mortgage Loans....................24
Subsection 9.03 Remedies for Breach of Representations and Warranties.................................39
Subsection 9.04 Repurchase of Mortgage Loans With First Payment Defaults..............................41
SECTION 10 CLOSING........................................................................................41
SECTION 11 CLOSING DOCUMENTS..............................................................................42
SECTION 12 COSTS..........................................................................................43
SECTION 13 COOPERATION OF SELLER WITH A RECONSTITUTION....................................................43
SECTION 14 THE SELLER.....................................................................................46
Subsection 14.01 Additional Indemnification by the Seller; Third Party Claims..........................46
Subsection 14.02 Merger or Consolidation of the Seller.................................................46
SECTION 15 FINANCIAL STATEMENTS...........................................................................46
SECTION 16 MANDATORY DELIVERY; GRANT OF SECURITY INTEREST.................................................47
SECTION 17 NOTICES........................................................................................47
SECTION 18 SEVERABILITY CLAUSE............................................................................48
SECTION 19 COUNTERPARTS...................................................................................48
SECTION 20 GOVERNING LAW..................................................................................48
SECTION 21 INTENTION OF THE PARTIES.......................................................................49
SECTION 22 SUCCESSORS AND ASSIGNS; ASSIGNMENT OF PURCHASE AGREEMENT.......................................49
SECTION 23 WAIVERS........................................................................................49
SECTION 24 EXHIBITS.......................................................................................49
SECTION 25 GENERAL INTERPRETIVE PRINCIPLES................................................................49
SECTION 26 REPRODUCTION OF DOCUMENTS......................................................................50
SECTION 27 FURTHER AGREEMENTS.............................................................................50
SECTION 28 RECORDATION OF ASSIGNMENTS OF MORTGAGE.........................................................50
SECTION 29 NO SOLICITATION................................................................................50
SECTION 30 WAIVER OF TRIAL BY JURY........................................................................51
SECTION 31 SUBMISSION TO JURISDICTION; WAIVERS............................................................51
SECTION 32 CONFIDENTIAL INFORMATION.......................................................................51
SECTION 33 COMPLIANCE WITH REGULATION AB..................................................................52
Subsection 33.01 Intent of the Parties; Reasonableness.................................................53
Subsection 33.02 Additional Representations and Warranties of the Seller...............................53
Subsection 33.03 Information to Be Provided by the Seller..............................................56
Subsection 33.04 Indemnification; Remedies.............................................................31
-2-
EXHIBITS
EXHIBIT A CONTENTS OF EACH MORTGAGE FILE
EXHIBIT B CONTENTS OF EACH CREDIT FILE
EXHIBIT C FORM OF SELLER'S OFFICER'S CERTIFICATE
EXHIBIT D FORM OF OPINION OF COUNSEL TO THE SELLER
EXHIBIT E FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT F FORM OF SECURITY RELEASE CERTIFICATION
EXHIBIT G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT H INTENTIONALLY OMITTED
EXHIBIT I FORM OF ASSIGNMENT AND CONVEYANCE
EXHIBIT J ORIGINATOR'S UNDERWRITING GUIDELINES
EXHIBIT K MORTGAGE LOAN SCHEDULE
EXHIBIT L [RESERVED]
EXHIBIT M NEW JERSEY STIPULATIONS
EXHIBIT N FORM OF INDEMNIFICATION AGREEMENT
-3-
FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT
This FLOW MORTGAGE LOAN PURCHASE AND WARRANTIES AGREEMENT (the
"Agreement"), dated as of March 1, 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 "Purchaser") and New Century Mortgage Corporation,
a California corporation, having an office at 00000 Xxx Xxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxxxx 00000 (the "Seller").
W I T N E S S E T H:
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 related 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 some or all of the Mortgage Loans to one
or more purchasers as a whole loan transfer or a public or private, rated or
unrated mortgage pass-through transaction;
NOW, THEREFORE, in consideration of the premises and mutual
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Purchaser 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.
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.
Agency Transfer: A Xxxxxx Xxx Transfer or a Xxxxxxx Mac Transfer.
Agreement: This Flow 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 (a) the State of New
York, (b) the state in which the Servicer's servicing operations are located or
(c) or (iii) the State in which the Custodian's operations are located, are
authorized or obligated by law or executive order to be closed.
Closing Date: The date or dates set forth on the related Purchase
Price and Terms Agreement on which the Purchaser from time to time shall
purchase and the Seller from time to time shall sell, the Mortgage Loans listed
on the related Mortgage Loan Schedule
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.
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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.
Custodial Account: The separate account or accounts created and
maintained pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein).
Custodial Agreement: The agreement between the Purchaser and the
Custodian governing the retention of the originals of each Mortgage Note,
Mortgage, Assignment of Mortgage and other documents constituting the Mortgage
Files.
Custodian: Deutsche Bank National Trust Company, or its successor in
interest or permitted assigns, or any successor to the Custodian under the
Custodial Agreement as therein provided.
Cut-off Date: With respect to each Mortgage Loan in a Mortgage Loan
Package, the date set forth on the related Purchase Price and Terms Agreement.
Deemed Material Breach Representation: Each representation and
warranty identified as such in Subsection 9.02.
Depositor: The depositor, as such term is defined in Regulation
AB, with respect to any Securitization Transaction.
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.
Determination Date: The 20th day of each calendar month.
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.
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Escrow Account: The separate account or accounts created and
maintained pursuant to the Interim Servicing Agreement (with respect to each
Mortgage Loan, for an interim period, as specified therein).
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 Guides: The Xxxxxx Xxx Selling Guide and the Xxxxxx Mae
Servicing Guide and all amendments or additions thereto.
Xxxxxx Xxx Transfer: As defined in Section 13 hereof.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Fitch: Fitch, Inc., or its successor in interest.
FHA: The Federal Housing Administration, an agency within the United
States Department of Housing and Urban Development, or any successor thereto and
including the Federal Housing Commissioner and the Secretary of Housing and
Urban Development where appropriate under the FHA Regulations.
FHA Approved Mortgagee: A corporation or institution approved as a
mortgagee by the FHA under the Act, and applicable HUD regulations, and eligible
to own and service mortgage loans such as the FHA mortgage loans.
FHA Loan: A Mortgage Loan which is the subject of an FHA Mortgage
Insurance contract.
FHA Mortgage Insurance: Mortgage insurance authorized under the
National Housing Act, as amended from time to time, and provided by the FHA.
FHA Regulations: The regulations promulgated by the Department of
Housing and Urban Development under the National Housing Act, as amended from
time to time and codified in 24 Code of Federal Regulations, and other
Department of Housing and Urban Development issuances relating to FHA Loans,
including the related handbooks, circulars, notices and mortgagee letters.
Fixed Rate Mortgage Loan: A fixed rate mortgage loan purchased
pursuant to this Agreement.
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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 ("HOEPA"), (b) with an "annual percentage
rate" or total "points and fees" payable by the related Mortgagor (as each such
term is calculated under HOEPA) that exceed the thresholds set forth by HOEPA
and its implementing regulations, including 12 C.F.R. ss. 226.32(a)(1)(i) and
(ii), (c) classified as a "high cost home," "threshold," "covered," "high risk
home," "predatory" or similar loan under any other applicable state, federal or
local law (or a 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
(d) a Mortgage Loan 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 categorized as Home Loan pursuant to Appendix
E of Standard & Poor's Glossary.
HUD: The Department of Housing and Urban Development, or any federal
agency or official thereof which may from time to time succeed to the functions
thereof with regard to FHA Mortgage Insurance. The term "HUD," for purposes of
this Agreement, is also deemed to include subdivisions thereof such as the FHA
and Government National Mortgage Association.
Index: With respect to each Adjustable Rate Mortgage Loan, a rate
per annum as specified in the related 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 Only Mortgage Loan: A Mortgage Loan where the related
Mortgage Note provides for Monthly Payments of interest only.
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 Servicing Agreement: That certain Interim Servicing
Agreement, dated as of the date hereof, by and between the Purchaser and the
Servicer.
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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.
Monthly Payment: The scheduled monthly payment of principal and
interest on a Mortgage Loan, or, with respect to an Interest Only Mortgage Loan,
the scheduled monthly payment of interest.
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 related Mortgage Loan Schedule, which Mortgage Loan
includes without limitation the
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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 Package: A pool of Mortgage Loans sold to the
Purchaser by the Seller on a Closing Date.
Mortgage Loan Schedule: The schedule of Mortgage Loans, with respect
to each Mortgage Loan Package, attached as Exhibit 1 to the related Assignment
and Conveyance, setting forth certain information with respect to each Mortgage
Loan in the related Mortgage Loan Package, which must include at a minimum: (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 related
Cut-off Date; (9) the date on which the Monthly Payment was due on the Mortgage
Loan and, if such date is not consistent with the Due Date currently in effect,
such Due Date; (10) the stated maturity date; (11) the amount of the Monthly
Payment as of the related Cut-off Date; (12) the last payment date on which a
Monthly Payment was actually applied to pay interest and/or the outstanding
principal balance; (13) the original principal amount of the Mortgage Loan; (14)
the principal balance of the Mortgage Loan as of the close of business on the
related Cut-off Date, after deduction of payments of principal due and collected
on or before the related Cut-off Date; (15) with respect to Adjustable Rate
Mortgage Loans, the Interest Rate Adjustment Date; (16) with respect to
Adjustable Rate Mortgage Loans, the Gross Margin; (17) with respect to
Adjustable Rate Mortgage Loans, the Lifetime Rate Cap under the terms of the
Mortgage Note; (18) with respect to Adjustable Rate Mortgage Loans, a code
indicating the type of Index; (19) with respect to Adjustable Rate Mortgage
Loans, the Periodic Rate Cap under the terms of the Mortgage Note; (20) with
respect to Adjustable Rate Mortgage Loans, the Periodic Rate Floor under the
terms of the Mortgage Note; (21) the type of Mortgage Loan (i.e., Fixed Rate,
Adjustable Rate, First Lien, Second Lien); (22) a code indicating the purpose of
the loan (i.e., purchase, rate and term refinance, equity take-out refinance);
(23) a code indicating the documentation style (i.e., full, alternative or
reduced); (24) the loan credit classification (as described in the Underwriting
Guidelines); (25) whether such Mortgage Loan provides for a Prepayment Penalty;
(26) the Prepayment Penalty period of such Mortgage Loan, if applicable; (27) a
description of the Prepayment Penalty, if applicable; (28) the Mortgage Interest
Rate as of origination; (29) the credit risk score (FICO score) at origination;
(30) the date of origination; (31) the Mortgage Interest Rate adjustment period;
(32) the Mortgage Interest Rate adjustment percentage; (33) the Mortgage
Interest Rate floor; (34) the Mortgage Interest Rate calculation method (i.e.,
30/360, simple interest, other); (35) a code indicating whether the Mortgage
Loan is a Section 32
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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; (45) a field indicating
if the Mortgage Loan is an Interest Only Mortgage Loan; (46) a code indicating
if the Mortgage Loan is a High Cost Loan as such terms are defined in the then
current Standard & Poor's LEVELS(R) Glossary; (47) a code indicating whether the
Mortgage Loan is covered by a PMI Policy and, if so, identifying the PMI Policy
provider; (48) the certificate number of the PMI Policy, if applicable; (49) the
amount of coverage of the PMI Policy, if applicable; (50) Points and Fees
compliance (Pass/Fail - enter Y/N); and (51) with respect to each Option ARM
Mortgage Loan, (a) a detailed transaction history indicating how all payments
were applied, (b) the total negative amortization amount as of the Closing Date
(c) the maximum negative amortization percentage, (d) the recast period, and (e)
all adjustable rate change histories. With respect to the Mortgage Loans in the
Mortgage Loan Package in the aggregate, the Mortgage Loan Schedule shall set
forth the following information, as of the related Cut-off Date: (1) the number
of Mortgage Loans; (2) the current 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.
Officer's Certificate: A certificate signed by the Chairman of the
Board or the Vice Chairman of the Board or a President or a Vice President and
by the Treasurer or the Secretary or one of the Assistant Treasurers or
Assistant Secretaries of the Seller, and delivered to the Purchaser as required
by this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be counsel
for the Seller, reasonably acceptable to the Purchaser, provided that any
Opinion of Counsel relating to (a) the qualification of any account required to
be maintained pursuant to this Agreement as an Eligible Account, (b)
qualification of the Mortgage Loans in a REMIC or (c) compliance with the REMIC
Provisions, must be (unless otherwise stated in such Opinion of Counsel) an
opinion of counsel who (i) is in fact independent of the Seller and any master
servicer of the Mortgage Loans, (ii) does not have any material direct or
indirect financial interest in the Seller or any master servicer of the Mortgage
Loans or in an Affiliate of either and (iii) is not connected with the Seller or
any master servicer of the Mortgage Loans as an officer, employee, director or
person performing similar functions.
Option ARM Mortgage Loan: An adjustable rate Mortgage Loan that
gives the related Mortgagor four different payment options each month, which
include: (i) a minimum
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monthly payment option, (ii) an interest-only payment option, (iii) a full
principal and interest option which amortizes over 30 years or less or (iv) a
full principal and interest option which amortizes over 15 years or less.
Originator: Home123 Corporation.
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.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Points and Fees: No Mortgagor was charged "points and fees" (whether
or not financed) in an amount greater than (i) $1,000, or (ii) 5% of the
principal amount of such Mortgage Loan, whichever is greater. For purposes of
this representation, such 5% limitation is calculated in accordance with Xxxxxx
Mae's anti-predatory lending requirements as set forth in the Xxxxxx Mae Guides
and "points and fees" (x) include origination, underwriting, broker and finder
fees and charges that the mortgagee imposed as a condition of making the
Mortgage Loan, whether they are paid to the mortgagee or a third party, and (y)
exclude bona fide discount points, fees paid for actual services rendered in
connection with the origination of the Mortgage Loan (such as attorneys' fees,
notaries fees and fees paid for property appraisals, credit reports, surveys,
title examinations and extracts, flood and tax certifications, and home
inspections), the cost of mortgage insurance or credit-risk price adjustments,
the costs of title, hazard, and flood insurance policies, state and local
transfer taxes or fees, escrow deposits for the future payment of taxes and
insurance premiums, and other miscellaneous fees and charges that, in total, do
not exceed 0.25% of the principal amount of such Mortgage Loan.
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.
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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 related Closing Date by the
Purchaser to the Seller in exchange for the Mortgage Loans in the related
Mortgage Loan Package as calculated in Section 4 of this Agreement.
Purchase Price and Terms Agreement: With respect to each purchase of
a Mortgage Loan Package hereunder, 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: Xxxxxxx Xxxxx Mortgage Company, a New York limited
partnership, 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 one hundred eighty (180) days after origination; (iii) either
(x) the Designated Guidelines were, at the time such Mortgage Loans were
originated, used by the Seller in origination of mortgage loans of the same type
as the Mortgage Loans for the Seller's own account or (y) the Designated
Guidelines were, at the time such Mortgage Loans were underwritten, designated
by the Seller on a consistent basis for use by lenders in originating mortgage
loans to be purchased by the Seller; and (iv) the Seller employed, at the time
such Mortgage Loans were acquired by the Seller, pre-purchase or post-purchase
quality assurance procedures (which may involve, among other things, review of a
sample of mortgage loans purchased during a particular time period or through
particular channels) designed to ensure that Persons from which it purchased
mortgage loans properly applied the underwriting criteria designated by the
Seller.
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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
Mae 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 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, Xxxxx'x or Standard & Poor's, or their
respective successors designated by the Purchaser.
Reconstitution: Any Securitization Transaction, Agency Transfer or
Whole Loan Transfer.
Reconstitution Agreements: The agreement or agreements entered into
by the Seller and the Purchaser and/or certain third parties on the
Reconstitution Date or Dates with respect to any or all of the Mortgage Loans
sold hereunder, in connection with a Whole Loan Transfer, Agency Transfer or a
Securitization Transaction pursuant to Section 13, including, but not limited
to, a seller's warranties and servicing agreement with respect to a Whole Loan
Transfer, and a pooling and servicing agreement and/or seller/servicer
agreements and related custodial/trust agreement and documents with respect to a
Securitization Transaction.
Reconstitution Date: As defined in Section 13.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. xx.xx. 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.
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REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law relating
to a REMIC, which appear at Section 860A through 860G of Subchapter M of Chapter
1, Subtitle A of the Code, and related provisions and regulations, rulings or
pronouncements promulgated thereunder, as the foregoing may be in effect from
time to time.
Remittance Date: The date specified in the Interim Servicing
Agreement (with respect to each Mortgage Loan, as specified therein).
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, plus the amount of any outstanding advances
owed to any servicer, and plus all costs and expenses incurred by the Purchaser
or any servicer arising out of or based upon such breach, including without
limitation (i) costs and expenses incurred in the enforcement of the Seller's
repurchase obligation hereunder and (ii) any costs and damages incurred by the
Purchaser in connection with any violation by such Mortgage Loan of any
predatory lending law or abusive lending law.
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: New Century Mortgage Corporation, its successors in interest
and assigns.
Seller Information: As defined in Subsection 33.04(a).
Servicer: New Century Mortgage Corporation, its successors in
interest and assigns.
Servicing Fee: With respect to each Mortgage Loan subject to the
Interim Servicing Agreement, a fee payable monthly equal to one-twelfth of the
product of (a) the Servicing Fee Rate and (b) the outstanding principal balance
as of the beginning of the month of such Mortgage Loan. Such fee shall be
payable monthly and shall be pro-rated for any portion
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of a month during which the Mortgage Loan is serviced by the Servicer under the
Interim Servicing Agreement. The obligation of the Purchaser to pay the
Servicing Fee is limited to, and the Servicing Fee is payable solely from, the
interest portion (including recoveries with respect to interest from Liquidation
Proceeds, Condemnation Proceeds and Insurance Proceeds, to the extent permitted
by this Agreement) of such Monthly Payment collected by the Servicer, or as
otherwise provided under this Agreement.
Servicing Fee Rate: An amount per annum as set forth in the Interim
Servicing Agreement.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals of all documents in the
Mortgage File which are not delivered to the Purchaser or the Custodian and
copies of the Mortgage Loan Documents set forth in as provided in Section 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 or Servicer 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.
Sponsor: The sponsor, as such term is defined in Regulation AB, with
respect to any Securitization Transaction.
Standard & Poor's: Standard & Poor's Rating Services, a division of
The XxXxxx-Xxxx Companies Inc., and its successors in interest.
Stated Principal Balance: As to each Mortgage Loan, (i) the
principal balance of the Mortgage Loan at the related Cut-off Date after giving
effect to payments of principal due on or before such date, whether or not
received, minus (ii) all amounts previously distributed to the Purchaser with
respect to the related Mortgage Loan representing payments or recoveries of
principal or advances in lieu thereof.
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 Subsections 8 and 9.03 which is entitled to the benefits of the
indemnifications set forth in Subsections 9.03 and 14.01.
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Third-Party Originator: Each Person, other than a Qualified
Correspondent, that originated Mortgage Loans acquired by the Seller.
Thirty-day Delinquency: The failure of the Mortgagor to make any
Monthly Payment due under the Mortgage Note on or prior to the date which is 30
days after such payment's Due Date.
Transfer Date: With respect to each Mortgage Loan, (a) on or before
the date set forth in the related 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 Home123
Corporation, a copy of which is attached hereto as Exhibit J.
VA Approved Lender: Those lenders which are approved by the VA to
act as a lender in connection with the origination of VA mortgage loans.
Whole Loan Agreement: Any Reconstitution Agreement in respect of a
Whole Loan Transfer.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
SECTION 2. Agreement to Purchase. The Seller, on each related
Closing Date, agrees to sell, and the Purchaser agrees to purchase, Mortgage
Loans having an aggregate principal balance on the related Cut-off Date in an
amount as set forth in the related Purchase Price and Terms Agreement, or in
such other amount as agreed by the Purchaser and the Seller as evidenced by the
aggregate scheduled principal balance of the Mortgage Loans accepted by the
Purchaser on the related Closing Date.
SECTION 3. Mortgage Schedules. The Seller shall provide the
Purchaser with certain information constituting a preliminary listing of the
Mortgage Loans in a Mortgage Loan Package to be purchased on the related Closing
Date in accordance with the related Purchase Price and Terms Agreement and this
Agreement (a "Preliminary Mortgage Schedule").
On the date which is two days prior to the related Closing Date (the
"Schedule Delivery Date"), the Seller shall deliver to the Purchaser a schedule
of the Mortgage Loans to be purchased by the Purchaser on the related Closing
Date (the "Mortgage Loan Schedule") which shall be the Preliminary Mortgage
Schedule excluding (a) any mortgage loans which have prepaid in full during the
period from the related Cut-off Date to the related Schedule Delivery Date
("Prepaid Mortgage Loans") and (b) those Mortgage Loans which have not been
funded prior to the related Closing Date. The Purchaser shall have no obligation
to purchase such Prepaid Mortgage Loans.
SECTION 4. Purchase Price. The Purchase Price for each Mortgage Loan
in a Mortgage Loan Package shall be the percentage of par as stated in the
related Purchase Price
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and Terms Agreement (subject to adjustment as provided therein), multiplied by
the aggregate principal balance, as of the related Cut-off Date, of the Mortgage
Loans listed on the related Closing Schedule, after application of payments of
principal actually received on or before the related Cut-off Date.
The initial principal amount of the Mortgage Loans in a Mortgage
Loan Package shall be the aggregate principal balance of the related Mortgage
Loans, so computed as of the related Cut-off Date as set forth on the related
Mortgage Loan Schedule. If so provided in the related Purchase Price and Terms
Agreement, portions of the Mortgage Loans shall be priced separately.
In addition to the Purchase Price as described above, the Purchaser
shall pay to the Seller, at closing, accrued interest on the current principal
amount of the Mortgage Loans in the related Mortgage Loan Package as of the
related Cut-off Date at the weighted average the weighted average Mortgage
Interest Rate of such Mortgage Loans (net of the Servicing Fee Rate) from the
date to which interest was last paid through the day prior to the related
Closing Date, inclusive. 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 recoveries of principal
collected after the related Cut-off Date, and (2) all payments of interest on
the Mortgage Loans received on and after the related Closing Date. The principal
balance of each Mortgage Loan as of the related Cut-off Date is determined after
application of payments of principal due on or before the related Cut-off Date
whether or not collected. Therefore, payments of scheduled principal and
interest prepaid for a due date beyond the related Cut-off Date shall not be
applied to the principal balance as of the related Cut-off Date. Such prepaid
amounts (minus interest at the Servicing Fee Rate) shall be the property of the
Purchaser. The Seller shall deposit any such prepaid amounts into the Custodial
Account, which account is established for the benefit of the Purchaser for
subsequent remittance by the Seller to the Purchaser.
SECTION 5. Examination of Mortgage Files. No later than five (5)
Business Days after the date of the related Purchase Price and Terms Agreement,
the Seller shall deliver to the Custodian the Mortgage File, including a copy of
the Assignment of Mortgage, pertaining to each Mortgage Loan.
At least ten (10) Business Days prior to the related Closing Date,
with respect to each Mortgage Loan to be purchased in the related Mortgage Loan
Package, the Seller shall make the agreed upon number of Servicing Files
(including payment histories) and Credit Files, as set forth in the related
Purchase Price and Terms Agreement, available to the Purchaser for examination
at a mutually agreed upon location.
Such examination of the Mortgage Files may be made by the Purchaser
or its designee at any reasonable time before or after the related Closing Date.
If the Purchaser makes such examination prior to the related Closing Date and
determines, in its sole discretion, that any Mortgage Loan is unacceptable to
the Purchaser for any reason, such Mortgage Loan shall be deleted from the
related Mortgage Loan Schedule, and may be replaced by a Qualified Substitute
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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.
In the event that the Seller fails to deliver the Credit Files with
respect to any Mortgage Loan after the related Closing Date, the Seller shall,
upon the request of the Purchaser, repurchase such Mortgage Loan at the price
and in the manner specified in Subsection 9.03.
SECTION 6. Conveyance from Seller to Purchaser.
Subsection 6.01 Conveyance of Mortgage Loans. The Seller, by
execution and delivery of the related Assignment and Conveyance on each related
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
right, title and interest of the Seller in and to the Mortgage Loans in the
related Mortgage Loan Package and the related Mortgage Files and all rights and
obligations arising under the documents contained therein.
Subsection 6.02 Books and Records. Record title to each Mortgage as
of the related Closing Date shall be in the name of 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
or the Servicer after the related 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 or the Servicer in trust
for the benefit of the Purchaser or the appropriate designee of the Purchaser,
as the case may be, as the owner of the Mortgage Loans pursuant to the terms of
this Agreement.
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.
The Seller shall be responsible for maintaining, and shall maintain,
a complete set of books and records for each Mortgage Loan which shall be marked
clearly to reflect the ownership of each Mortgage Loan by the Purchaser. In
particular, the Seller shall maintain in its possession, available for
inspection by the Purchaser, and shall deliver to the Purchaser upon demand,
evidence of compliance with all federal, state and local laws, rules and
regulations, and requirements of Xxxxxx Xxx or Xxxxxxx Mac, including but not
limited to documentation as to the method used in determining the applicability
of the provisions of the National Flood Insurance Act of 1968, as amended, to
the Mortgaged Property, documentation evidencing insurance coverage and periodic
inspection reports, as required by the Xxxxxx Mae Guides. To the extent that
original documents are not required for purposes of realization of Liquidation
Proceeds or Insurance Proceeds, documents maintained by the Seller may be in the
form of microfilm or microfiche so long as the Seller complies with the
requirements of the Xxxxxx Xxx Guides.
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Subsection 6.03 Delivery of Mortgage Loan Documents. The Seller
shall deliver and release to the Custodian no later than five (5) Business Days
prior to the related Closing Date the Mortgage Files with respect to each
Mortgage Loan in the related Mortgage Loan Package.
The Custodian shall certify its receipt of all such Mortgage Loan
Documents required to be delivered pursuant to the Custodial Agreement for the
related Closing Date, as evidenced by the Initial Certification of the Custodian
in the form annexed to the Custodial Agreement.
The Seller shall or shall cause the Servicer to forward to the
Custodian, 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 Custodian, or to such other Person as the Purchaser shall designate
in writing, with a certified true 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
certified by the appropriate public recording office to be a true and complete
copy of the original within ninety days of its submission for recordation.
In the event any document listed on Exhibit A as constituting a part
of the Mortgage Files and required to be delivered to the Custodian pursuant to
this Subsection 6.03, including an original or copy of any document submitted
for recordation to the appropriate public recording office, is not so delivered
to the Custodian, or to such other Person as the Purchaser shall designate in
writing, on the related Closing Date (other than with respect to the Assignments
of Mortgage which shall be delivered to the Custodian in blank on or prior to
the related Closing Date and recorded subsequently by the Purchaser or its
designee or documents submitted for recordation to the appropriate public
recording office), and in the event that the Seller does not cure such failure
within 30 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 Subsection 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; provided that (i) the Seller shall instead deliver a recording
receipt of such recording office or, if such recording receipt is not available,
an officer's certificate of an officer of the Seller, confirming that such
documents have been accepted for recording; provided that, upon request of the
Purchaser and delivery by the Purchaser to the Seller of a schedule of the
Mortgage Loans, the Seller shall reissue and deliver to the Purchaser or its
designee said officer's certificate and (ii) such document is delivered within
twelve (12) months of the related Closing Date.
The Purchaser or the Purchaser's designee shall be responsible for
recording the Assignments of Mortgage at the Purchaser's expense.
Subsection 6.04 Quality Control Procedures. The Originator shall
have an internal quality control program that verifies, on a regular basis, the
existence and accuracy of
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the legal documents, credit documents, property appraisals, and underwriting
decisions. The program shall include evaluating and monitoring the overall
quality of the Originator's loan production and the servicing activities of the
Servicer. The program is to ensure that the Mortgage Loans are originated and
serviced in accordance with Accepted Servicing Standards and the Underwriting
Guidelines; guard against dishonest, fraudulent, or negligent acts; and guard
against errors and omissions by officers, employees, or other authorized
persons.
SECTION 7. Servicing of the Mortgage Loans. The Mortgage Loans in
each Mortgage Loan Package 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 related Servicing Rights.
The Purchaser shall retain the Servicer as contract servicer of the
Mortgage Loans for an interim period pursuant to and in accordance with the
terms and conditions contained in the Interim Servicing Agreement (with respect
to each Mortgage Loan, for an interim period, as specified therein). The
Purchaser and Servicer shall execute the Interim Servicing Agreement on the
initial Closing Date. Pursuant to the Interim Servicing Agreement, the Servicer
shall begin servicing the Mortgage Loans on behalf of the Purchaser and shall be
entitled to the Servicing Fee with respect to such Mortgage Loans from the
related Closing Date until the termination of the Interim Servicing Agreement as
set forth therein.
SECTION 8. Transfer of Servicing. On the related Transfer Date, the
Purchaser, or its designee, shall assume all servicing responsibilities related
to, and the Servicer shall cease all servicing responsibilities related to the
Mortgage Loans. The Transfer Date with respect to the Mortgage Loans in each
Mortgage Loan Package shall be the date set forth in the related Mortgage Loan
Purchase Price and Terms Agreement (with respect to each Mortgage Loan, for an
interim period, as specified therein).
On or prior to the related Transfer Date, the Seller shall, at its
sole cost and expense, take, or cause the Servicer to take, such steps as may be
necessary or appropriate to effectuate and evidence the transfer of the
servicing of the related Mortgage Loans to the Successor Servicer, including but
not limited to the following:
(a) Notice to Mortgagors. The Seller shall, or shall cause the
Servicer to, mail to the Mortgagor of each related Mortgage Loan a letter
advising such Mortgagor of the transfer of the servicing of the related Mortgage
Loan to the Purchaser, or its designee, in accordance with the Xxxxxxxx Xxxxxxxx
National Affordable Housing Act of 1990; provided, however, the content and
format of the letter shall have the prior approval of the Purchaser. The Seller
shall, or shall cause the Servicer to, provide the Purchaser with copies of all
such related notices no later than the related Transfer Date.
(b) Notice to Taxing Authorities and Insurance Companies. The Seller
shall, or shall cause the Servicer to, transmit to the applicable taxing
authorities and insurance companies (including primary mortgage insurance policy
insurers, if applicable) and/or agents, notification of the transfer of the
servicing to the Purchaser, or its designee, and instructions to deliver all
notices, tax bills and insurance statements, as the case may be, to the
Purchaser or its
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designee from and after the related Transfer Date. The Seller shall, or shall
cause the Servicer to, provide the Purchaser or its designee with copies of all
such notices no later than the related Transfer Date.
(c) Delivery of Servicing Records. The Seller shall, or shall cause
the Servicer to, forward to the Purchaser, or its designee, all servicing
records and the Servicing File in the Seller's or Servicer's possession relating
to each related Mortgage Loan including the information enumerated in the
Interim Servicing Agreement (with respect to each such Mortgage Loan, for an
interim period, as specified therein).
(d) Escrow Payments. The Seller shall, or shall cause the Servicer
to, provide the Purchaser, or its designee, with immediately available funds by
wire transfer in the amount of the net Escrow Payments and suspense balances and
all loss draft balances associated with the related Mortgage Loans. The Seller
shall, or shall cause the Servicer to, provide the Purchaser with an accounting
statement of Escrow Payments and suspense balances and loss draft balances
sufficient to enable the Purchaser to reconcile the amount of such payment with
the accounts of the Mortgage Loans. Additionally, the Seller shall, or shall
cause the Servicer to, wire transfer to the Purchaser the amount of any agency,
trustee or prepaid Mortgage Loan payments and all other similar amounts held by
the Seller or the Servicer.
(e) Payoffs and Assumptions. The Seller shall, or shall cause the
Servicer to, provide to the Purchaser, or its designee, copies of all assumption
and payoff statements generated by the Seller or the Servicer on the related
Mortgage Loans from the related Cut-off Date to the related Transfer Date.
(f) Mortgage Payments Received Prior to the Related Transfer Date.
Prior to the related Transfer Date all payments received by the Seller or the
Servicer on each related Mortgage Loan shall be properly applied to the account
of the particular Mortgagor.
(g) Mortgage Payments Received after Transfer Date. The amount of
any related Monthly Payments received by the Seller or the Servicer after the
related Transfer Date shall be forwarded to the Purchaser by overnight mail on
or prior to the date which is one Business Day after the date of receipt. The
Seller shall, or shall cause the Servicer to, notify the Purchaser of the
particulars of the payment, which notification requirement shall be satisfied if
the Seller or the Servicer forwards with its payment sufficient information to
permit appropriate processing of the payment by the Purchaser. The Seller shall,
or shall cause the Servicer to, assume full responsibility for the necessary and
appropriate legal application of such Monthly Payments received by the Seller or
the Servicer after the related Transfer Date with respect to related Mortgage
Loans then in foreclosure or bankruptcy; provided, for purposes of this
Agreement, necessary and appropriate legal application of such Monthly Payments
shall include, but not be limited to, endorsement of a Monthly Payment to the
Purchaser with the particulars of the payment such as the account number, dollar
amount, date received and any special Mortgagor application instructions and the
Seller shall, or shall cause the Servicer to, comply with the foregoing
requirements with respect to all Monthly Payments received by the it after the
related Transfer Date.
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(h) Misapplied Payments. Misapplied payments shall be processed as
follows:
(1) All parties shall cooperate in correcting misapplication
errors;
(2) The party receiving notice of a misapplied payment
occurring prior to the related Transfer Date and discovered after
the related Transfer Date shall immediately notify the other party;
(3) If a misapplied payment which occurred prior to the
related Transfer Date cannot be identified and said misapplied
payment has resulted in a shortage in a Custodial Account or Escrow
Account, the Seller shall, or shall cause the Servicer to, be liable
for the amount of such shortage. The Seller shall, or shall cause
the Servicer to, reimburse the Purchaser for the amount of such
shortage within thirty (30) days after receipt of written demand
therefor from the Purchaser;
(4) If a misapplied payment which occurred prior to the
related Transfer Date has created an improper Purchase Price as the
result of an inaccurate outstanding principal balance, a check shall
be issued to the party shorted by the improper payment application
within five (5) Business Days after notice thereof by the other
party; and
(5) Any check issued under the provisions of this Section 8(h)
shall be accompanied by a statement indicating the corresponding
Seller and/or the Purchaser Mortgage Loan identification number and
an explanation of the allocation of any such payments.
(i) Books and Records. On the related Transfer Date, the books,
records and accounts of the Seller with respect to the related Mortgage Loans
shall be in accordance with all Accepted Servicing Practices.
(j) Reconciliation. The Seller shall, or shall cause the Servicer
to, on or before the related Transfer Date, reconcile principal balances and
make any monetary adjustments necessary to accurately and correctly reconcile
all servicing activities with respect to such Mortgage Loan, including all
payments received and all advances made relating to such Mortgage Loan. Any such
monetary adjustments will be transferred between the Seller and the Purchaser as
appropriate.
(k) IRS Forms. The Seller shall, or shall cause the Servicer to,
file all IRS Forms 1099, 1099A, 1098 or 1041 and K-1 which are required to be
filed on or before the Transfer Date in relation to the servicing and ownership
of the related Mortgage Loans. The Seller shall, or shall cause the Servicer to,
provide copies of such forms to the Purchaser upon request and shall reimburse
the Purchaser for any costs or penalties incurred by the Purchaser due to the
Seller's failure to comply with this paragraph.
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SECTION 9. Representations, Warranties and Covenants of the Seller;
Remedies for Breach.
Subsection 9.01 Representations and Warranties Regarding the Seller.
The Seller represents, warrants and covenants to the Purchaser, its successors
and assigns and the Successor Servicer that as of the date hereof and as of each
Closing Date:
(a) Due Organization and Authority. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
California and has all licenses necessary to carry on its business as now being
conducted and is licensed, qualified and in good standing in each state wherein
it owns or leases any material properties or where a Mortgaged Property is
located, if the laws of such state require licensing or qualification in order
to conduct business of the type conducted by the Seller, and in any event the
Seller is in compliance with the laws of any such state to the extent necessary
to ensure the enforceability of the related Mortgage Loan in accordance with the
terms of this Agreement; the Seller has the full corporate power, authority and
legal right to hold, transfer and convey the Mortgage Loans and to execute and
deliver this Agreement and to perform its obligations hereunder; the execution,
delivery and performance of this Agreement (including all instruments of
transfer to be delivered pursuant to this Agreement) by the Seller and the
consummation of the transactions contemplated hereby have been duly and validly
authorized; this Agreement and all agreements contemplated hereby have been duly
executed and delivered and constitute the valid, legal, binding and enforceable
obligations of the Seller, regardless of whether such enforcement is sought in a
proceeding in equity or at law; and all requisite corporate action has been
taken by the Seller to make this Agreement and all agreements contemplated
hereby valid and binding upon the Seller in accordance with their terms;
(b) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Seller, and 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 or any similar statutory provisions in effect
in any applicable jurisdiction;
(c) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage Loans by the Seller,
the sale of the Mortgage Loans to the Purchaser, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, will conflict with or result in a breach
of any of the terms, conditions or provisions of the Seller's charter or by-laws
or any legal restriction or any agreement or instrument to which the Seller is
now a party or by which it is bound, or constitute a default or result in an
acceleration under any of the foregoing, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Seller or its property
is subject, or result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its properties
pursuant to the terms of any mortgage, contract, deed of trust or other
instrument, or impair the ability of the Purchaser to realize on the Mortgage
Loans, impair the value of the Mortgage Loans, or impair the ability of the
Purchaser to realize the full amount of any insurance benefits accruing pursuant
to this Agreement;
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(d) Ability to Perform; Solvency. The Seller does not believe, nor
does it have any reason or cause to believe, that it cannot perform each and
every covenant contained in this Agreement. The Seller is solvent and the sale
of the Mortgage Loans will not cause the Seller to become insolvent. The sale of
the Mortgage Loans is not undertaken with the intent to hinder, delay or defraud
any of Seller's creditors;
(e) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or threatened against the Seller, before any court,
administrative agency or other tribunal asserting the invalidity of this
Agreement, seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one instance or in the
aggregate, may result in any material adverse change in the business,
operations, financial condition, properties or assets of the Seller, or in any
material impairment of the right or ability of the Seller to carry on its
business substantially as now conducted, or in any material liability on the
part of the Seller, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Seller contemplated herein, or which
would be likely to impair materially the ability of the Seller to perform under
the terms of this Agreement. There is no action, suit, proceeding or
investigation pending against the Seller with respect to the Mortgage Loans
relating to fraud, predatory lending, servicing or closing practices;
(f) No Consent Required. No consent, approval, authorization or
order of, or registration or filing with, or notice to any court or governmental
agency or body including HUD, the FHA or the VA is required for the execution,
delivery and performance by the Seller of or compliance by the Seller with this
Agreement or the Mortgage Loans, the delivery of a portion of the Mortgage Files
to the Custodian or the sale of the Mortgage Loans or the consummation of the
transactions contemplated by this Agreement, or if required, such approval has
been obtained prior to the related Closing Date;
(g) Selection Process. The Mortgage Loans were selected from among
the outstanding one- to four-family mortgage loans in the Seller's portfolio at
the related Closing Date as to which the representations and warranties set
forth in Subsection 9.02 could be made and such selection was not made in a
manner so as to affect adversely the interests of the Purchaser;
(h) Delivery to the Custodian. The Mortgage Note, the Mortgage, the
Assignment of Mortgage and any other documents required to be delivered with
respect to each Mortgage Loan pursuant to the Custodial Agreement, and any other
documents required to be delivered with respect to each Mortgage Loan pursuant
to Subsection 6.03 hereof, shall be delivered to the Custodian. With respect to
each Mortgage Loan, the Seller will be in possession of a complete Mortgage File
in compliance with Exhibit A hereto, except for such documents as will be
delivered to the Custodian;
(i) Mortgage Loan Characteristics. The characteristics of the
Mortgage Loans in each Mortgage Loan Package are as set forth on the description
of the pool characteristics for the Mortgage Loans delivered as a schedule to
the related Assignment and Conveyance in the form attached as Exhibit 2 to the
Assignment and Conveyance;
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(j) No Untrue Information. Neither this Agreement nor any
information, statement, tape, diskette, report, form, or other document
furnished or to be furnished pursuant to this Agreement or any Reconstitution
Agreement or in connection with the transactions contemplated hereby (including
any Securitization Transaction, Whole Loan Transfer or Agency Transfer) contains
or will contain any untrue statement of fact or omits or will omit to state a
fact necessary to make the statements contained herein or therein not
misleading;
(k) Financial Statements. The Seller has delivered to the Purchaser
financial statements as to its last three complete fiscal years and any later
quarter ended more than 60 days prior to the execution of this Agreement. All
such financial statements fairly present the pertinent results of operations and
changes in financial position for each of such periods and the financial
position at the end of each such period of the Seller and its subsidiaries and
have been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as set forth in the
notes thereto. There has been no change in the business, operations, financial
condition, properties or assets of the Seller since the date of the Seller's
financial statements that would have a material adverse effect on its ability to
perform its obligations under this Agreement. The Seller has completed any forms
requested by the Purchaser in a timely manner and in accordance with the
provided instructions;
(l) Loan Experience. The Seller has made available information on
its web page as to its loan gain and loss experience in respect of foreclosures,
its loan delinquency experience for the immediately preceding three-year period,
prepayment speed and individual loan loss severities and delinquency histories
for at least the immediately preceding year, in each case with respect to
mortgage loans owned by it and such mortgage loans serviced for others during
such period, and all such information so delivered shall be true and correct in
all material respects;
(m) No Brokers. The Seller has not dealt with any broker, investment
banker, agent or other person that may be entitled to any commission or
compensation in connection with the sale of the Mortgage Loans;
(n) Sale Treatment. The Seller intends to reflect the transfer of
the Mortgage Loans as a sale on the books and records of the Seller and the
Seller has determined that the disposition of the Mortgage Loans pursuant to
this Agreement will be afforded sale treatment for tax and accounting purposes;
(o) Reasonable Purchase Price. The Seller deems the consideration
received upon the sale of the Mortgage Loans under this Agreement to be fair
consideration and reasonably equivalent value for the Mortgage Loans;
(p) Seller's Origination. The Originator's decision to originate any
mortgage loan or to deny any mortgage loan application is an independent
decision based upon Originator's underwriting guidelines, and is in no way made
as a result of Purchaser's decision to purchase, or not to purchase, or the
price Purchaser may offer to pay for, any such mortgage loan, if originated; and
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(q) Owner of Record. The Seller is the owner of record of each
Mortgage and the indebtedness evidenced by each Mortgage Note, except for the
Assignments of Mortgage which have been sent for recording, and upon recordation
the Seller will be the owner of record of each Mortgage and the indebtedness
evidenced by each Mortgage Note.
Subsection 9.02 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 related Closing Date for such Mortgage Loan; provided that the
application and interpretation of the representations and warranties in this
Section in respect of Second Lien Mortgage Loans shall be deemed to be modified
only to the extent that a specific requirement or guideline addressed in the
Originator's Underwriting Guidelines for the origination of second lien mortgage
loans differs from the comparable requirement or guideline addressed in the
Originator's underwriting guidelines for the origination of first lien mortgage
loans:
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule is complete, true and correct;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage Note,
other than payments for which the related due date was not thirty or more days
prior to the related Closing Date, have been made and credited. No Mortgage Loan
has a Thirty-day Delinquency nor has the Mortgage Loan had a Thirty-day
Delinquency at any time since the origination of the Mortgage Loan. The first
Monthly Payment shall be made with respect to the Mortgage Loan on its Due Date
or within the grace period, all in accordance with the terms of the related
Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments, insurance
premiums, water, sewer and municipal charges, leasehold payments or ground rents
which previously became due and owing have been paid, or an escrow of funds has
been established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable. The
Seller has not advanced funds, or induced, solicited or knowingly received any
advance of funds by a party other than the Mortgagor, directly or indirectly,
for the payment of any amount required under the Mortgage Loan, except for
interest accruing from the date of the Mortgage Note or date of disbursement of
the Mortgage Loan proceeds, whichever is earlier, to the day which precedes by
one (1) month the Due Date of the first Monthly Payment;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any respect,
from the date of origination except by a written instrument which has been
recorded, if necessary to protect the interests of the Purchaser, and which has
been delivered to the Custodian or to such other Person as the Purchaser shall
designate in writing, and the terms of which are reflected in the related
Mortgage Loan Schedule. No Mortgage Loan has been modified so as to restructure
the payment obligations or re-age the Mortgage Loan. The substance of any such
waiver, alteration or modification has been approved by the issuer of any
related PMI Policy and the title insurer, if any, to the extent required by the
policy, and its terms are reflected on the related Mortgage Loan Schedule, if
applicable. No Mortgagor has been released, in whole or in part, except in
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connection with an assumption agreement, approved by the issuer of any related
PMI Policy and the title insurer, to the extent required by the policy, and
which assumption agreement is part of the Mortgage Loan File delivered to the
Custodian or to such other Person as the Purchaser shall designate in writing
and the terms of which are reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation the
defense of usury, nor will the operation of any of the terms of the Mortgage
Note or the Mortgage, or the exercise of any right thereunder, render either the
Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to
any right of rescission, set-off, counterclaim or defense, including without
limitation the defense of usury, and no such right of rescission, set-off,
counterclaim or defense has been asserted with respect thereto, and no Mortgagor
was a debtor in any state or Federal bankruptcy or insolvency proceeding at the
time the Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by a
generally acceptable insurer against loss by fire, hazards of extended coverage
and such other hazards as are provided for in the Xxxxxx Xxx Guides or by
Xxxxxxx Mac, as well as all additional requirements set forth in Section 2.10 of
the Servicing Agreement. If required by the National Flood Insurance Act of
1968, as amended, each Mortgage Loan is covered by a flood insurance policy
meeting the requirements of the current guidelines of the Federal Insurance
Administration is in effect which policy conforms to Xxxxxx Xxx and Xxxxxxx Mac,
as well as all additional requirements set forth in Section 2.10 of the
Servicing Agreement. All individual insurance policies contain a standard
mortgagee clause naming the Seller and its successors and assigns as mortgagee,
and all premiums thereon have been paid. The Mortgage obligates the Mortgagor
thereunder to maintain the hazard insurance policy at the Mortgagor's cost and
expense, and on the Mortgagor's failure to do so, authorizes the holder of the
Mortgage to obtain and maintain such insurance at such Mortgagor's cost and
expense, and to seek reimbursement therefor from the Mortgagor. Where required
by state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy is not
a "master" or "blanket" hazard insurance policy covering a condominium, or any
hazard insurance policy covering the common facilities of a planned unit
development. The hazard insurance policy is the valid and binding obligation of
the insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Purchaser upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged in, and
has no knowledge of the Mortgagor's or any servicer's having engaged in, any act
or omission which would impair the coverage of any such policy, the benefits of
the endorsement provided for herein, or the validity and binding effect of such
policy, without limitation, no unlawful fee, commission, kickback or other
unlawful compensation or value of any kind has been or will be received,
retained or realized by any attorney, firm or other person or entity, and no
such unlawful items have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit protection,
predatory, abusive and fair lending laws, equal credit opportunity and
disclosure laws or unfair and deceptive practices laws applicable to the
Mortgage Loan including, without limitation, any provisions relating to
prepayment
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penalties, have been complied with, the consummation of the transactions
contemplated hereby will not involve the violation of any such laws or
regulations, and the Seller shall maintain in its possession, available for the
Purchaser's inspection, and shall deliver to the Purchaser upon demand, evidence
of compliance with all such requirements. This representation and warranty is a
Deemed Material Breach Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage, in whole
or in part, nor has any instrument been executed that would effect any such
release, cancellation, subordination or rescission. The Seller has not waived
the performance by the Mortgagor of any action, if the Mortgagor's failure to
perform such action would cause the Mortgage Loan to be in default, nor has the
Seller waived any default resulting from any action or inaction by the
Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is located in the state identified in the Mortgage Loan Schedule and consists of
real property with a detached single family residence erected thereon, or a two-
to four-family dwelling, or an individual condominium unit in a low-rise
condominium project, or an individual unit in a planned unit development or a de
minimis planned unit development which is in each case four stories or less,
provided, however, that any mobile home (double wide only) or manufactured
dwelling shall conform with the applicable Xxxxxx Mae and Xxxxxxx Mac
requirements regarding such dwellings and that no Mortgage Loan is secured by a
single parcel of real property with a cooperative housing corporation, a log
home or, except as described in Exhibit I, a mobile home erected thereon or by a
mixed-use property, a property in excess of 10 acres, or other unique property
types. As of the date of origination, no portion of the Mortgaged Property was
used for commercial purposes, and since the date of origination, no portion of
the Mortgaged Property has been used for commercial purposes; provided, that
Mortgaged Properties which contain a home office shall not be considered as
being used for commercial purposes as long as the Mortgaged Property has not
been altered for commercial purposes and is not storing any chemicals or raw
materials other than those commonly used for homeowner repair, maintenance
and/or household purposes. With respect to any Mortgage Loan secured by a
Mortgaged Property improved by manufactured housing, (i) the related
manufactured housing unit is permanently affixed to the land, (ii) the related
manufactured housing unit and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming the Seller
as mortgagee, (iii) the related Mortgaged Property is not located in the state
of New Jersey and (iv) as of the origination date of the related Mortgage Loan,
the related manufactured housing unit that secures such Mortgage Loan either:
(x) was the principal residence of the Mortgagor or (y) was classified as real
property under applicable state law. This representation and warranty is a
Deemed Material Breach Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first or second lien (as applicable) on the Mortgaged
Property, including all buildings and improvements on the Mortgaged Property and
all installations and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings, and all additions,
alterations and replacements made at any time with respect to the foregoing. The
lien of the Mortgage is subject only to:
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(1) the lien of current real property taxes and assessments
not yet due and payable;
(2) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (a) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (b) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal;
(3) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property;
and
(4) with respect to Second Lien Mortgage Loans, the lien of
the first mortgage on the Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document
related to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting, enforceable and perfected (A) first lien and first
priority security interest with respect to each first lien mortgage loan, or (B)
second lien and second priority security interest with respect to each Second
Lien Mortgage Loan, in either case, on the property described therein and Seller
has full right to sell and assign the same to Purchaser.
The Mortgaged Property with respect to any Second Lien Mortgage Loan
is not subject to a first lien mortgage loan which is not a Mortgage Loan;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid and
binding obligation of the maker thereof enforceable in accordance with its terms
(including, without limitation, any provisions therein relating to Prepayment
Penalties). All parties to the Mortgage Note, the Mortgage and any other such
related agreement had legal capacity to enter into the Mortgage Loan and to
execute and deliver the Mortgage Note, the Mortgage and any such agreement, and
the Mortgage Note, the Mortgage and any other such related agreement have been
duly and properly executed by other such related parties. No fraud, error,
omission, misrepresentation, negligence or similar occurrence with respect to a
Mortgage Loan has taken place on the part of any Person, including without
limitation, the Mortgagor, any appraiser, any builder or developer, or any other
party involved in the origination or servicing of the Mortgage Loan. The Seller
has reviewed all of the documents constituting the Servicing File and has made
such inquiries as it deems necessary to make and confirm the accuracy of the
representations set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there is no
requirement for future advances thereunder, and any and all requirements as to
completion of any on-site or
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off-site improvement and as to disbursements of any escrow funds therefor have
been complied with. All costs, fees and expenses incurred in making or closing
the Mortgage Loan and the recording of the Mortgage were paid, and the Mortgagor
is not entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note. The
Mortgage Loan is not assigned or pledged, and the Seller has good, indefeasible
and marketable title thereto, and has full right to transfer and sell the
Mortgage Loan to the Purchaser free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest, and
has full right and authority subject to no interest or participation of, or
agreement with, any other party, to sell and assign each Mortgage Loan pursuant
to this Agreement and following the sale of each Mortgage Loan, the Purchaser
will own such Mortgage Loan free and clear of any encumbrance, equity,
participation interest, lien, pledge, charge, claim or security interest. The
Seller intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the related Closing Date, the Seller will have no right to
modify or alter the terms of the sale of the Mortgage Loan and the Seller will
have no obligation or right to repurchase the Mortgage Loan or substitute
another Mortgage Loan, except as provided in this Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are (or,
during the period in which they held and disposed of such interest, were) (1) in
compliance with any and all applicable licensing requirements of the laws of the
state wherein the Mortgaged Property is located, and (2) either (i) organized
under the laws of such state, or (ii) qualified to do business in such state, or
(iii) a federal savings and loan association, a savings bank or a national bank
having a principal office in such state, or (3) not doing business in such
state;
(o) CLTV, LTV, PMI Policy. No Mortgage Loan that is a Second Lien
Mortgage Loan has a CLTV in excess of 100%. Any Mortgage Loan that had at the
time of origination an LTV in excess of 80% is insured as to payment defaults by
a PMI Policy. Any PMI Policy in effect covers the related Mortgage Loan for the
life of such Mortgage Loan. All provisions of such PMI Policy have been and are
being complied with, such policy is in full force and effect, and all premiums
due thereunder have been paid. No action, inaction, or event has occurred and no
state of facts exists that has, or will result in the exclusion from, denial of,
or defense to coverage. Any Mortgage Loan subject to a PMI Policy obligates the
Mortgagor thereunder to maintain the PMI Policy and to pay all premiums and
charges in connection therewith;
(p) Title Insurance. The 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 and each such title insurance policy is
issued by a title insurer acceptable to Xxxxxx Mae or Xxxxxxx Mac and qualified
to do business in the jurisdiction where the Mortgaged Property is located,
insuring the Seller, its successors and assigns, as to the first priority lien
(with respect to first lien Mortgage Loans) or second priority lien (with
respect to Second Lien Mortgage Loans) of the Mortgage in the original principal
amount of the Mortgage Loan, subject only to the exceptions contained in
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clauses (1), (2), (3) and (4) of paragraph (j) of this Subsection 9.02, and in
the case of adjustable rate Mortgage Loans, against any loss by reason of the
invalidity or unenforceability of the lien resulting from the provisions of the
Mortgage providing for adjustment to the Mortgage Interest Rate and Monthly
Payment. Where required by state law or regulation, the Mortgagor has been given
the opportunity to choose the carrier of the required mortgage title insurance.
Additionally, such lender's title insurance policy affirmatively insures ingress
and egress, and against encroachments by or upon the Mortgaged Property or any
interest therein. The title policy does not contain any special exceptions
(other than the standard exclusions) for zoning and uses and has been marked to
delete the standard survey exceptions or to replace the standard survey
exception with a specific survey reading. The Seller, its successor and assigns,
are the sole insureds of such lender's title insurance policy, and such lender's
title insurance policy is valid and remains in full force and effect and will be
in force and effect upon the consummation of the transactions contemplated by
this Agreement. No claims have been made under such lender's title insurance
policy, and no prior holder of the related Mortgage, including the Seller, has
done, by act or omission, anything which would impair the coverage of such
lender's title insurance policy, including without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind has
been or will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained or
realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note and no event
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach, violation or event which
would permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach, violation
or event which would permit acceleration. With respect to each Second Lien
Mortgage Loan, (i) the prior mortgage is in full force and effect, (ii) there is
no default, breach, violation or event of acceleration existing under such prior
mortgage or the related mortgage note, (iii) as of the related Closing Date, no
event which, with the passage of time or with notice and the expiration of any
grace or cure period, would constitute a default, breach, violation or event of
acceleration thereunder, and either (A) the prior mortgage contains a provision
which allows or (B) applicable law requires, the mortgagee under the Second Lien
Mortgage Loan to receive notice of, and affords such mortgagee an opportunity to
cure any default by payment in full or otherwise under the prior mortgage;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to such liens) affecting the related
Mortgaged Property which are or may be liens prior to, or equal or coordinate
with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines of the
Mortgaged Property, and no improvements on adjoining properties encroach upon
the Mortgaged Property. No improvement located on or being part of the Mortgaged
Property is in violation of any applicable zoning law or regulation;
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(t) Origination; Payment Terms. Either (a) 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, or (b) the following requirements have been met
with respect to the Mortgage Loan: the Seller meets the requirements set forth
in clause (a), and (i) such Mortgage Loan was underwritten in accordance with
standards established by the Seller, using application forms and related credit
documents approved by the Seller, (ii) the Seller approved each application and
the related credit documents before a commitment by the correspondent was
issued, and no such commitment was issued until the Seller agreed to fund such
Mortgage Loan, (iii) the closing documents for such Mortgage Loan were prepared
on forms approved by the Seller, and (iv) such Mortgage Loan was actually funded
by the Seller and was purchased by the Seller at closing or soon thereafter. The
documents, instruments and agreements submitted for loan underwriting were not
falsified and contain no untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the information
and statements therein not misleading. No Mortgage Loan contains terms or
provisions which would result in negative amortization other than an Option ARM
Mortgage Loan. Except with respect to Interest Only Mortgage Loans, principal
payments on the Mortgage Loan commenced no more than sixty days after funds were
disbursed in connection with the Mortgage Loan. The Mortgage Interest Rate as
well as the Lifetime Rate Cap and the Periodic Cap, are as set forth on the
related Mortgage Loan Schedule. Except with respect to Interest Only Mortgage
Loans and Option ARM Mortgage Loans, the Mortgage Note is payable in equal
monthly installments of principal and interest, with interest calculated and
payable in arrears, sufficient to amortize the Mortgage Loan fully by the stated
maturity date, over an original term of not more than thirty years from
commencement of amortization. With respect to Adjustable Rate Mortgage Loans,
such installments of interest are subject to change due to the adjustments to
the Mortgage Interest Rate on each Interest Rate Adjustment Date. Unless
otherwise specified on the description of pool characteristics attached as
Exhibit I hereto, the Mortgage Loan is payable on the first day of each month.
There are no Convertible Mortgage Loans which contain a provision allowing the
Mortgagor to convert the Mortgage Note from an adjustable interest rate Mortgage
Note to a fixed interest rate Mortgage Note. No Mortgage Loan is a balloon
mortgage loan that has an original stated maturity of less than seven (7) years;
(u) Customary Provisions. The Mortgage contains customary and
enforceable provisions such as to render the rights and remedies of the holder
thereof adequate for the realization against the Mortgaged Property of the
benefits of the security provided thereby, including, (i) in the case of a
Mortgage designated as a deed of trust, by trustee's sale, and (ii) otherwise by
judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and
foreclosure on, or trustee's sale of, the Mortgaged Property pursuant to the
proper procedures, the holder of the Mortgage Loan will be able to deliver good
and merchantable title to the Mortgaged Property. There is no homestead or other
exemption available to a Mortgagor which would interfere with the right to sell
the Mortgaged Property at a trustee's sale or the right to foreclose the
Mortgage, subject to applicable federal and state laws and judicial precedent
with respect to bankruptcy and right of redemption or similar law;
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(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting Guidelines (a
copy of which is attached hereto as Exhibit J). The Mortgage Note and Mortgage
are on forms acceptable to Xxxxxxx Mac or Xxxxxx Mae and the Seller has not made
any representations to a Mortgagor that are inconsistent with the mortgage
instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied portions of the Mortgaged Property and, with respect to
the use and occupancy of the same, including but not limited to certificates of
occupancy and fire underwriting certificates, have been made or obtained from
the appropriate authorities;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding Mortgage and
the security interest of any applicable security agreement or chattel mortgage
referred to in clause (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to serve as
such, has been properly designated and currently so serves and is named in the
Mortgage, and no fees or expenses are or will become payable by the Purchaser to
the trustee under the deed of trust, except in connection with a trustee's sale
after default by the Mortgagor;
(z) Acceptable Investment. There are no circumstances or conditions
with respect to the Mortgage, the Mortgaged Property, the Mortgagor, the
Mortgage File or the Mortgagor's credit standing that can reasonably be expected
to cause private institutional investors who invest in sub-prime mortgage loans
to regard the Mortgage Loan as an unacceptable investment, cause the Mortgage
Loan to become delinquent, or adversely affect the value or marketability of the
Mortgage Loan, or cause the Mortgage Loans to prepay during any period
materially faster or slower than the mortgage loans originated by the Seller
generally;
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents constituting the
Mortgage File for each Mortgage Loan have been delivered to the Custodian. The
Seller is in possession of a complete, true and accurate Mortgage File in
compliance with Exhibit A hereto, except for such documents the originals of
which have been delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a de
minimis planned unit development) such condominium or planned unit development
project such Mortgage Loan was originated in accordance with, and the Mortgaged
Property meets the guidelines set forth in the Originator's Underwriting
Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage with
respect to each Mortgage Loan is in recordable form and is acceptable for
recording under the laws of the jurisdiction in which the Mortgaged Property is
located. The transfer, assignment and
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conveyance of the Mortgage Notes and the Mortgages by the Seller are not subject
to the bulk transfer or similar statutory provisions in effect in any applicable
jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the payment
of the unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written consent of
the mortgagee thereunder, and to the best of the Seller's knowledge, such
provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first Interest
Rate Adjustment Date, a related Mortgage Loan may only be assumed if the party
assuming such Mortgage Loan meets certain credit requirements stated in the
Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any separate
account established by the Seller, the Mortgagor, or anyone on behalf of the
Mortgagor, or paid by any source other than the Mortgagor nor does it contain
any other similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage Loan
does not have a shared appreciation or other contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the related Cut-off Date have been consolidated with the
outstanding principal amount secured by the Mortgage, and the secured principal
amount, as consolidated, bears a single interest rate and single repayment term.
The lien of the Mortgage securing the consolidated principal amount is expressly
insured as having first or second lien priority (as applicable) by a title
insurance policy, an endorsement to the policy insuring the mortgagee's
consolidated interest or by other title evidence acceptable to Xxxxxx Xxx and
Xxxxxxx Mac. The consolidated principal amount does not exceed the original
principal amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is undamaged by
waste, fire, earthquake or earth movement, windstorm, flood, hurricane, tornado
or other casualty so as to affect adversely the value of the Mortgaged Property
as security for the Mortgage Loan or the use for which the premises were
intended and each Mortgaged Property is in good repair. There have not been any
condemnation proceedings with respect to the Mortgaged Property and the Seller
has no knowledge of any such proceedings in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by the
Servicer, the Seller, and any prior servicer with respect to the Mortgage Loan
have been in all respects in compliance 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. With respect to
escrow deposits and Escrow Payments, all such payments are in the possession of,
or under the
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control of, the Servicer or the Seller and there exist no deficiencies in
connection therewith for which customary arrangements for repayment thereof have
not been made. All Escrow Payments have been collected in full compliance with
state and federal law and the provisions of the related Mortgage Note and
Mortgage. An escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains unpaid
and has been assessed but is not yet due and payable. No escrow deposits or
Escrow Payments or other charges or payments due the Seller have been
capitalized under the Mortgage or the Mortgage Note. All Mortgage Interest Rate
adjustments have been made in strict compliance with state and federal law and
the terms of the related Mortgage and Mortgage Note on the related Interest Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note, another index
was selected for determining the Mortgage Interest Rate, the same index was used
with respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage Note.
The Seller executed and delivered any and all notices required under applicable
law and the terms of the related Mortgage Note and Mortgage regarding the
Mortgage Interest Rate and the Monthly Payment adjustments. Any interest
required to be paid pursuant to state, federal and local law has been properly
paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage Loan;
(kk) Other Insurance Policies. No action, inaction or event has
occurred and no state of facts exists or has existed that has resulted or will
result in the exclusion from, denial of, or defense to coverage under any
applicable, special hazard insurance policy, PMI Policy or bankruptcy bond,
irrespective of the cause of such failure of coverage. In connection with the
placement of any such insurance, no commission, fee, or other compensation has
been or will be received by the Seller or by any officer, director, or employee
of the Seller or any designee of the Seller or any corporation in which the
Seller or any officer, director, or employee had a financial interest at the
time of placement of such insurance;
(ll) No Violation of Environmental Laws. The Mortgaged Property is
free from any and all toxic or hazardous substances and there exists no
violation of any local, state or federal environmental law, rule or regulation.
There is no pending action or proceeding directly involving the Mortgaged
Property in which compliance with any environmental law, rule or regulation is
an issue; there is no violation of any environmental law, rule or regulation
with respect to the Mortgage Property; and nothing further remains to be done to
satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. 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;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage Loan
application by a Qualified Appraiser, duly appointed by the related originator,
who had no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose
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compensation is not affected by the approval or disapproval of the Mortgage
Loan, and the appraisal and appraiser both satisfy the requirements of Xxxxxx
Xxx or Xxxxxxx Mac and Title XI of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 and the regulations promulgated thereunder, all as
in effect on the date the Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials required by,
and the Originator has complied with, all applicable law with respect to the
making of the Mortgage Loans. The Seller shall maintain such statement in the
Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction or rehabilitation of
a Mortgaged Property or facilitating the trade-in or exchange of a Mortgaged
Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely affect the
value or the marketability of any Mortgaged Property or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or slower
than similar mortgage loans held by the Seller generally secured by properties
in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. The Seller has caused or will
cause to be performed any and all acts required to preserve the rights and
remedies of the Purchaser in any insurance policies applicable to the Mortgage
Loans including, without limitation, any necessary notifications of insurers,
assignments of policies or interests therein, and establishments of coinsured,
joint loss payee and mortgagee rights in favor of the Purchaser. No action has
been taken or failed to be taken, no event has occurred and no state of facts
exists or has existed on or prior to the related Closing Date (whether or not
known to the Seller on or prior to such date) which has resulted or will result
in an exclusion from, denial of, or defense to coverage under any primary
mortgage insurance (including, without limitation, any exclusions, denials or
defenses which would limit or reduce the availability of the timely payment of
the full amount of the loss otherwise due thereunder to the insured) whether
arising out of actions, representations, errors, omissions, negligence, or fraud
of the Seller, the related Mortgagor or any party involved in the application
for such coverage, including the appraisal, plans and specifications and other
exhibits or documents submitted therewith to the insurer under such insurance
policy, or for any other reason under such coverage, but not including the
failure of such insurer to pay by reason of such insurer's breach of such
insurance policy or such insurer's financial inability to pay;
(ss) Escrow Analysis. With respect to each Mortgage, the Seller or
the Servicer has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so that,
assuming all required payments are timely made, any deficiency will be
eliminated on or before the first anniversary of such analysis, or any overage
will be refunded to the Mortgagor, in accordance with RESPA and any other
applicable law;
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(tt) Prior Servicing. Each Mortgage Loan has been serviced in strict
compliance with Accepted Servicing Practices;
(uu) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit information
furnished by the Seller to the Purchaser, that Seller has full right and
authority and is not precluded by law or contract from furnishing such
information to the Purchaser and the Purchaser is not precluded by the terms of
the Mortgage Loan Documents from furnishing the same to any subsequent or
prospective purchaser of such Mortgage. The Seller shall hold the Purchaser
harmless from any and all damages, losses, costs and expenses (including
attorney's fees) arising from disclosure of credit information in connection
with the Purchaser's secondary marketing operations and the purchase and sale of
mortgages. The Seller has or has caused the related servicer to, for each
Mortgage Loan, 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. This representation and warranty is a Deemed Material Breach
Representation;
(vv) Leaseholds. If the Mortgage Loan is secured by a long-term
residential lease, (1) the lessor under the lease holds a fee simple interest in
the land; (2) the terms of such lease expressly permit the mortgaging of the
leasehold estate, the assignment of the lease without the lessor's consent and
the acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(ww) Prepayment Penalty. The Mortgage Loan is subject to a
Prepayment Penalty as provided in the related Mortgage Note except as set forth
on the related Mortgage Loan Schedule. With respect to each Mortgage Loan that
has a Prepayment Penalty feature, each such Prepayment Penalty is enforceable
and will be enforced by the Seller for the benefit of the Purchaser, and each
Prepayment Penalty is permitted pursuant to federal, state and local law. Each
such Prepayment Penalty is in an amount not more than the maximum amount
permitted under applicable law and no such Prepayment Penalty may provide for a
term in excess of five (5) years with respect to Mortgage Loans originated prior
to October, 1, 2002. With respect to Mortgage Loans originated on or after
October 1, 2002, the duration of the Prepayment Penalty period shall not exceed
three (3) years from the date of the Mortgage Note unless the Mortgage Loan was
modified to reduce the Prepayment Penalty period to no more than three (3) years
from the date of such Mortgage Loan and the Mortgagor was notified in writing of
such reduction in
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Prepayment Penalty period. With respect to any Mortgage Loan that contains a
provision permitting imposition of a penalty upon a prepayment prior to
maturity: (i) the Mortgage Loan provides some benefit to the Mortgagor (e.g., a
rate or fee reduction) in exchange for accepting such Prepayment Penalty, (ii)
the Mortgage Loan's originator had a written policy of offering the Mortgagor or
requiring third-party brokers to offer the Mortgagor, the option of obtaining a
mortgage loan that did not require payment of such a penalty and (iii) the
Prepayment Penalty was adequately disclosed to the Mortgagor in the mortgage
loan documents pursuant to applicable state, local and federal law. This
representation and warranty is a Deemed Material Breach Representation;
(xx) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act. No Mortgage Loan is covered by the Home Ownership and Equity Protection Act
of 1994 and no Mortgage Loan is in violation of any comparable state or local
law. The Mortgaged Property is not located in a jurisdiction where a breach of
this representation with respect to the related Mortgage Loan may result in
additional assignee liability to the Purchaser, as determined by Purchaser in
its reasonable discretion. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to the
ability of the Mortgagor to repay and the extension of credit which has no
apparent benefit to the Mortgagor, were employed in the origination of the
Mortgage Loan. Each Mortgage Loan is in compliance with the anti-predatory
lending eligibility for purchase requirements of Xxxxxx Mae's Selling Guide.
This representation and warranty is a Deemed Material Breach Representation;
(yy) Single-premium Credit Life Insurance Policy. In connection with
the origination of any Mortgage Loan, no proceeds from any Mortgage Loan were
used to finance or acquire a single-premium credit life insurance policy. No
Mortgagor was required to purchase any single premium credit insurance policy
(e.g., life, disability, accident, unemployment or property insurance product)
or debt cancellation agreement as a condition of obtaining the extension of
credit. No Mortgagor obtained a prepaid single premium credit insurance policy
(e.g., life, disability, accident, unemployment or property insurance policy) in
connection with the origination of the Mortgage Loan; no proceeds from any
Mortgage Loan were used to purchase single premium credit insurance policies or
debt cancellation agreements as part of the origination of, or as a condition to
closing, such Mortgage Loan. This representation and warranty is a Deemed
Material Breach Representation;
(zz) Tax Service Contract; Flood Certification Contract. Each
Mortgage Loan is covered by a paid in full, life of loan, tax service contract
and a paid in full, life of loan, flood certification contract and each of these
contracts is assignable to the Purchaser;
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code;
(bbb) Regarding the Mortgagor. The Mortgagor is one or more natural
persons and/or trustees for an Illinois land trust or a trustee under a "living
trust" and such "living trust" is in compliance with Xxxxxx Mae guidelines for
such trusts;
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(ccc) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment to
the Purchaser) have been recorded in the appropriate jurisdictions wherein such
recordation is necessary to perfect the lien thereof as against creditors of the
Seller, or is in the process of being recorded;
(ddd) FICO Scores. Each Mortgagor has a non-zero FICO score. No
Mortgage Loan has a Mortgagor with a FICO score of less than 500;
(eee) Compliance with Anti-Money Laundering Laws. The Seller has
complied with all applicable anti-money laundering laws and regulations,
including without limitation the USA PATRIOT Act of 2001 (collectively, the
"Anti-Money Laundering Laws"); the Seller has established an anti-money
laundering compliance program as required by the Anti-Money Laundering Laws, has
conducted the requisite due diligence in connection with the origination of each
Mortgage Loan for purposes of the Anti-Money Laundering Laws, including with
respect to the legitimacy of the applicable Mortgagor and the origin of the
assets used by the said Mortgagor to purchase the property in question, and
maintains, and will maintain, sufficient information to identify the applicable
Mortgagor for purposes of the Anti-Money Laundering Laws;
(fff) [Reserved];
(ggg) [Reserved];
(hhh) Origination Practices. The Mortgagor was not encouraged or
required to select a Mortgage Loan product offered by the Mortgage Loan's
originator which is a higher cost product designed for less creditworthy
borrowers, unless at the time of the Mortgage Loan's origination, such Mortgagor
did not qualify taking into account such facts as, without limitation, the
Mortgage Loan's requirements and the Mortgagor's credit history, income, assets
and liabilities and debt-to-income ratios for a lower-cost credit product then
offered by the Mortgage Loan's originator or any affiliate of the Mortgage
Loan's originator. For a Mortgagor who seeks financing through a Mortgage Loan
originator's higher-priced subprime lending channel, the Mortgagor was directed
towards or offered the Mortgage Loan originator's standard mortgage line if the
Mortgagor was able to qualify for one of the standard products. This
representation and warranty is a Deemed Material Breach Representation;
(iii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan does not rely on the extent of
the Mortgagor's equity in the collateral as the principal determining factor in
approving such extension of credit. The methodology employed objective criteria
that related such facts as, without limitation, the Mortgagor's credit history,
income, assets or liabilities, to the proposed mortgage payment and, based on
such methodology, the Mortgage Loan's originator made a reasonable determination
that at the time of origination the Mortgagor had the ability to make timely
payments on the Mortgage Loan. Such underwriting methodology confirmed that at
the time of origination (application/approval) the Mortgagor had a reasonable
ability to make timely payments on the Mortgage Loan. This representation and
warranty is a Deemed Material Breach Representation;
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(jjj) Points and Fees. No Mortgagor was charged "points and fees"
(whether or not financed) in an amount greater than (i) $1,000, or (ii) 5% of
the principal amount of such Mortgage Loan, whichever is greater. For purposes
of this representation, such 5% limitation is calculated in accordance with
Xxxxxx Mae's anti-predatory lending requirements as set forth in the Xxxxxx Mae
Guides and "points and fees" (x) include origination, underwriting, broker and
finder fees and charges that the mortgagee imposed as a condition of making the
Mortgage Loan, whether they are paid to the mortgagee or a third party, and (y)
exclude bona fide discount points, fees paid for actual services rendered in
connection with the origination of the Mortgage Loan (such as attorneys' fees,
notaries fees and fees paid for property appraisals, credit reports, surveys,
title examinations and extracts, flood and tax certifications, and home
inspections), the cost of mortgage insurance or credit-risk price adjustments,
the costs of title, hazard, and flood insurance policies, state and local
transfer taxes or fees, escrow deposits for the future payment of taxes and
insurance premiums, and other miscellaneous fees and charges that, in total, do
not exceed 0.25% of the principal amount of such Mortgage Loan. This
representation and warranty is a Deemed Material Breach Representation;
(kkk) Fees Charges. All fees and charges (including finance charges)
and whether or not financed, assessed, collected or to be collected in
connection with the origination and servicing of each Mortgage Loan has been
disclosed in writing to the Mortgagor in accordance with applicable state and
federal law and regulation. This representation and warranty is a Deemed
Material Breach Representation;
(lll) Arbitration. With respect to any Mortgage Loan originated on
or after August 1, 2004, neither the related Mortgage nor the related Mortgage
Note requires the Mortgagor to submit to arbitration to resolve any dispute
arising out of or relating in any way to the Mortgage Loan transaction. This
representation and warranty is a Deemed Material Breach Representation;
(mmm) Option ARM. With respect to each Option ARM Mortgage Loan, (a)
the Seller (or a servicer on its behalf) either did not provide different
payment options after a "teaser period" or, if different payment options were
provided, applied each payment received under the Option ARM Mortgage Loan
correctly in accordance with Accepted Servicing Practices, (b) unless otherwise
set forth on the Mortgage Loan Schedule, the Option ARM Mortgage Loan has no
negative amortization as of the Closing Date and (c) such Option ARM Mortgage
Loans were serviced in accordance with Accepted Servicing Practices and all
payment histories are set forth on the Mortgage Loan Schedule that would be
required to service the Option ARM Mortgage Loans after the Closing Date in
accordance with Accepted Servicing Practices; and
(nnn) Second Lien Mortgage Loans. With respect to each Second Lien
Mortgage Loan:
(i)No Negative Amortization of Related First Lien Loan. With
respect to second liens originated by Originator under an 80/20 program,
the related first lien loan does not permit negative amortization
(excluding Option ARM Mortgage Loans);
(ii) No Default Under First Lien. To the best of Seller's
knowledge, the related first lien loan is in full force and effect, and
there is no default lien, breach,
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violation or event which would permit acceleration existing under such
first lien mortgage or mortgage note, and no event which, with the passage
of time or with notice and the expiration of any grace or cure period,
would constitute a default, breach, violation or event which would permit
acceleration under such first lien loan;
(iii) Right to Cure First Lien. To the best of Seller's
knowledge, the related first lien mortgage does not contain a provision
which prohibits such mortgagee from curing any default under the related
first lien mortgage; and
(iv) Principal Residence. The related Mortgaged Property is the
Mortgagor's principal residence or second home.
This representation and warranty is a Deemed Material and Adverse
Representation.
Subsection 9.03 Remedies for Breach of Representations and
Warranties. 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, (i) within sixty (60) days of
the earlier of either discovery by, or notice to, the Seller of any breach of
the representation or warranty set forth in clause (aaa) of Subsection 9.02, the
Seller shall repurchase such Mortgage Loan at the Repurchase Price, together
with all expenses incurred by the Purchaser as a result of such repurchase and
(ii) any breach of a Deemed Material Breach Representation shall automatically
be deemed to materially and adversely affect the value of the Mortgage Loan and
the interest of the Purchaser therein. In the event that a breach shall involve
any representation or warranty set forth in Subsection 9.01, and such breach
cannot be cured within sixty (60) days of the earlier of either discovery by or
notice to the Seller of such breach, all of the Mortgage Loans shall, at the
Purchaser's option, be repurchased by the Seller at the Repurchase Price.
However, if the breach shall involve a representation or warranty set forth in
Subsection 9.02 (other than the representations and warranties set forth in
clause (aaa) of such Subsection or any Deemed Material Breach Representation)
and the Seller discovers or receives notice of any such breach within one
hundred twenty (120) days of the related Closing Date, the Seller shall, at the
Purchaser's option and provided that the Seller has a Qualified Substitute
Mortgage Loan, rather than repurchase the Mortgage Loan as provided above,
remove such Mortgage Loan (a "Deleted
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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 9.03 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 the 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 related 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 related 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 the 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 cause the Servicer to 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.
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
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Agreement. It is understood and agreed that the obligations of the Seller set
forth in this Subsection 9.03 to cure, substitute for or repurchase a defective
Mortgage Loan and to indemnify the Purchaser, its successors and assigns and the
Successor Servicer as provided in this Subsection 9.03 constitute the sole
remedies respecting a breach of the foregoing representations and warranties.
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 9.04 Repurchase of Mortgage Loans With First Payment
Defaults. If the related Mortgagor fails to make the first Monthly Payment due
after the related Closing Date on or prior to the forty-fifth day following the
related Due Date (a "First Payment Default"), the Seller, at the Purchaser's
option, shall repurchase such Mortgage Loan from the Purchaser at the Repurchase
Price within ten Business Days; provided, that Seller shall not be required to
repurchase any Mortgage Loan for which Purchaser does not notify the Seller of
the First Payment Default within 90 days of the date of such First Payment
Default.
SECTION 10. Closing. Each closing for the purchase and sale of the
Mortgage Loans shall take place on the related Closing Date. At the Purchaser's
option, each closing shall be either: by telephone, confirmed by letter or wire
as the parties shall agree, or conducted in person, at such place as the parties
shall agree.
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 related Closing Date, the Seller shall deliver to
the Purchaser via electronic medium acceptable to the
Purchaser, a listing on a loan-level basis of the necessary
information to compute the Purchase Price of the Mortgage
Loans delivered on the related Closing Date (including accrued
interest), and prepare a Mortgage Loan Schedule;
(ii) all of the representations and warranties of the Seller under
this Agreement shall be true and correct as of the related
Closing Date and no event shall have occurred which, with
notice or the passage of time, would constitute a default
under this Agreement;
(iii) the Purchaser shall have received, or the Purchaser's
attorneys shall have received in escrow, all closing documents
as specified in Section 10 of this Agreement, in such forms as
are agreed upon and acceptable to the Purchaser, duly executed
by all signatories other than the Purchaser as required
pursuant to the terms hereof;
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(iv) the Seller shall have delivered and released to the Custodian
all documents required pursuant to the Custodial Agreement;
and
(v) all other terms and conditions of this Agreement and the
related Purchase Price and Terms Agreement shall have been
complied with.
Subject to the foregoing conditions, the Purchaser shall pay to the
Seller on the related 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 designated by the Seller.
SECTION 11. Closing Documents. 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 Custodial Agreement, dated as of the related Cut-off Date;
3. the related Mortgage Loan Schedule, one copy to be attached
hereto, and one copy to be attached to the Custodian's counterpart of the
Custodial Agreement;
4. an Officer's Certificate, in the form of Exhibit C hereto with
respect to each Seller, including all attachments thereto;
5. Opinion of Counsel of the Seller (who may be an employee of the
Seller), in form and substance acceptable to the Purchaser ("Opinion of Counsel
of the Seller");
6. an Opinion of Counsel of the Custodian (who may be an employee of
the Custodian), in the form of an exhibit to the Custodial Agreement;
7. a Security Release Certification, in the form of Exhibit E or F,
as applicable, hereto executed by any person, as requested by the Purchaser, if
any of the Mortgage Loans have at any time been subject to any security
interest, pledge or hypothecation for the benefit of such person;
8. 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 related Seller by merger or acquired or originated by
the Seller while conducting business under a name other than its present name,
if applicable; and
9. a MERS Report reflecting the Custodian as Investor and no Person
as Interim Funder for each MERS Designated Mortgage Loan.
The Closing Documents to be delivered on each Closing Date shall
consist of fully executed originals of the following documents:
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1. an Assignment and Conveyance in the form of Exhibit I hereto,
including all exhibits;
2. the related Mortgage Loan Schedule, with one copy to be attached
to the related Assignment and Conveyance;
3. each of the documents required to be delivered by the Seller
pursuant to Subsection 6.03 hereof;
4. the initial certification of the Custodian with respect to the
related Mortgage Loan Package as required under the Custodial Agreement in the
form of Exhibit 2 thereto;
5. a Security Release Certification, substantially in the form of
Exhibit E or F, hereto executed by any person, as requested by the Purchaser, if
any of the Mortgage Loans have at any time been subject to any security
interest, pledge or hypothecation for the benefit of such person;
6. 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
7. if requested, by the Purchaser in connection with a material
change in Seller's financial condition or corporate structure, an updated
Officer's Certificate, in the form of Exhibit C hereto, including all
attachments thereto and an updated Opinion of Counsel of the Seller, in the form
of Exhibit D hereto.
The Seller shall bear the risk of loss of the closing documents
until such time as they are received by the Purchaser or its attorneys.
SECTION 12. Costs. The Purchaser shall pay its due diligence fees
and the fees and expenses of its counsel. The Purchaser shall pay its costs,
fees and expenses (including its legal fees) that relate to its ownership of the
Mortgage Loans, including without limitation the costs, fees and expenses
incurred to file and record assignments of mortgage for the Mortgage Loans
(except as otherwise provided herein). The Seller shall pay its costs, fees and
expenses (including its legal fees) that relate to its ownership of the Mortgage
Loans, including without limitation all servicing fees incurred prior to the
related Closing Date, and that relate to the preparation and delivery to the
Purchaser (but not the filing or recording) of assignments in blank of mortgages
for the Mortgage Loans and endorsements in blank of the notes for the Mortgage
Loans. None of the Mortgage Loans have record ownership on the MERS system and
the Seller shall not have any obligation, responsibility or liability to
effectuate record ownership of the Mortgage Loans on the MERS system.
SECTION 13. Cooperation of Seller with a Reconstitution. The Seller
and the Purchaser agree that with respect to some or all of the Mortgage Loans,
after the related Closing Date, on one or more dates (each a "Reconstitution
Date") at the Purchaser's sole option, the
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Purchaser may effect a sale (each, a "Reconstitution") of some or all of the
Mortgage Loans then subject to this Agreement, without recourse, to:
(i) Xxxxxx Xxx under its Cash Purchase Program or MBS Program
(Special Servicing Option) (each a "Xxxxxx Mae Transfer"); or
(ii) Xxxxxxx Mac (the "Xxxxxxx Mac Transfer"); or
(iii) one or more third party purchasers in one or more Whole Loan
Transfers; or
(iv) one or more trusts or other entities to be formed as part of
one or more Securitization Transaction;
provided that, with respect to the Mortgage Loans in each Mortgage Loan Package,
the Seller shall only be required to cooperate with the Purchaser pursuant to
this section, (a) with respect to no more than three Transactions and (b)
subject to the preceding clause (a), with respect to Transactions occurring on
or prior to the date which is one year from the Closing Date.
The Seller agrees to execute in connection with any Agency Transfer,
any and all pool purchase contracts, and/or agreements reasonably acceptable to
the Seller among the Purchaser, the Seller, Xxxxxx Xxx or Xxxxxxx Mac (as the
case may be) and any servicer in connection with a Whole Loan Transfer, a
seller's warranties and servicing agreement or a participation and servicing
agreement in form and substance reasonably acceptable to the Seller, and in
connection with a Securitization Transaction, a pooling and servicing agreement
in form and substance reasonably acceptable to the Seller (collectively the
agreements referred to herein are designated, the "Reconstitution Agreements");
provided that there shall be no more than four transferees of the Purchaser at
any one time.
With respect to each Whole Loan Transfer and each Securitization
Transaction entered into by the Purchaser, the Seller agrees (1) to cooperate
fully with the Purchaser and any prospective purchaser with respect to all
reasonable requests and due diligence procedures; (2) to execute, deliver and
perform all Reconstitution Agreements required by the Purchaser; (3) (a) to
restate the representations and warranties set forth in this Agreement as of the
related Reconstitution Date; provided, that with respect to the representations
and warranties set forth in Section 9.02(b) and 9.02(q), the Seller shall only
restate such representations and warranties as of the related Closing Date, and,
provided further, that with respect to the representation and warranty set forth
in Section 9.02(hh), the Seller's restatement of such representation and
warranty as of the Reconstitution Date shall be qualified "to the best of the
Seller's knowledge", or (b) make the representations and warranties set forth in
the related selling/servicing guide of the master servicer or issuer, as the
case may be, or such representations and warranties as may be required by any
Rating Agency or prospective purchaser of the related securities or such
Mortgage Loans, in connection with such Reconstitution and (4) if a
Reconstitution occurs during the related Interim Period, the Seller agrees to
enter into a sub-servicing agreement with the Purchaser and the related
Successor Servicer mutually acceptable to the parties and service and report on
the Mortgage Loans on a scheduled-scheduled basis. Any such sub-servicing
agreement shall provide that, for so long as any of the Mortgage Loans are being
serviced by the
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Company as part of a securitization transaction and a certificate with respect
to such servicing is required to be furnished by Purchaser or an agent of
Purchaser (such as a master servicer or depositor) under the Xxxxxxxx-Xxxxx Act
of 2002, as amended, and any rules and regulations promulgated thereunder, an
officer of the Company, on or before March 1st of each year, shall execute and
deliver the certification in the form of attached to the Interim Servicing
Agreement as Exhibit 7 to such master servicer or the depositor for the benefit
of such master servicer or depositor and its officers, directors and affiliates.
Should the requirements for such a certificate of Purchaser under the
Xxxxxxxx-Xxxxx Act of 2002 be revised by act of the U.S. Congress, regulation of
the Commission or a published Commission staff statement, the requirements of
the Company under this Section 13 shall be modified accordingly. The Seller
shall use its reasonable best efforts to provide to the master servicer or
issuer, as the case may be, and any other participants in such Reconstitution:
(i) any and all information and appropriate verification of information which
may be reasonably available to the Seller or its affiliates, whether through
letters of its auditors and counsel or otherwise, as the Purchaser or any such
other participant shall request; (ii) such additional representations,
warranties, covenants, opinions of counsel, letters from auditors, and
certificates of public officials or officers of the Seller or the Servicer as
are reasonably believed necessary by the Purchaser or any such other
participant; and (iii) and to execute, deliver and satisfy all conditions set
forth in an indemnity agreement substantially in the form of Exhibit N hereto.
The Seller shall indemnify the Purchaser, each Affiliate designated by the
Purchaser, each Person who controls the Purchaser or such Affiliate and the
Successor Servicer and hold each of them harmless from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments, and any other costs, fees and expenses that each of
them may sustain in any way related to any information provided by or on behalf
of the Seller or the Servicer regarding the Seller, the Servicer, the Seller's
and Servicer's servicing practices or performance, the Mortgage Loans or the
Underwriting Guidelines set forth in any offering document prepared in
connection with any Reconstitution. For purposes of the previous sentence,
"Purchaser" shall mean the Person then acting as the Purchaser under this
Agreement and any and all Persons who previously were "Purchasers" under this
Agreement and "Successor Servicer" shall mean the Person then acting as the
Successor Servicer under this Agreement and any and all Persons who previously
were "Successor Servicers" under this Agreement. Moreover, the Seller agrees to
cooperate with all reasonable requests made by the Purchaser to effect such
Reconstitution Agreements.
In the event the Purchaser has elected to have the Seller or the
Servicer hold record title to the Mortgages, prior to the Reconstitution Date,
the Seller shall prepare an assignment of mortgage in blank or to the
prospective purchaser or trustee, as applicable, from the Seller or the
Servicer, as applicable, acceptable to the prospective purchaser or trustee, as
applicable, for each Mortgage Loan that is part of the Reconstitution and shall
pay all preparation and recording costs associated therewith. In connection with
the Reconstitution, the Seller shall execute or shall cause the Servicer to
execute each assignment of mortgage, track such Assignments of Mortgage to
ensure they have been recorded and deliver them as required by the prospective
purchaser or trustee, as applicable, upon the Seller's receipt thereof.
Additionally, the Seller shall prepare and execute or shall cause the Servicer
to execute, at the direction of the Purchaser, any note endorsement in
connection with any and all seller/servicer agreements.
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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 the Successor
Servicer and hold them harmless against any and all 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 the failure of the Seller to perform its duties
under this Agreement and the Servicer to service the Mortgage Loans in strict
compliance with the terms of this Agreement or any Reconstitution Agreement
entered into pursuant to Section 13. 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 is in any way related to the failure of the Servicer
or the Seller to service and administer the Mortgage Loans in strict compliance
with the terms of this Agreement or any Reconstitution Agreement.
Subsection 14.02 Merger or Consolidation of the Seller. The Seller
will keep in full effect its existence, rights and franchises as a corporation
under the laws of the state of its 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.
Any Person into which the Seller may be merged or consolidated, or
any entity resulting from any merger, conversion or consolidation to which the
Seller shall be a party, or any Person succeeding to the business of the Seller,
shall be the successor of the Seller hereunder, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person shall have a net worth of at least $25,000,000.
SECTION 15. Financial Statements. The Seller understands that in
connection with the Purchaser's marketing of the Mortgage Loans, the Purchaser
shall make available to prospective purchasers audited financial statements of
the Seller for the most recently completed three fiscal years respecting which
such statements are available, as well as a Consolidated Statement of Condition
of the Seller at the end of the last two fiscal years covered by such
Consolidated Statement of Operations. The Seller shall also make available any
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comparable interim statements to the extent any such statements have been
prepared by the Seller (and are available upon request to members or
stockholders of the Seller or the public at large). The Seller, if it has not
already done so, agrees to furnish promptly to the Purchaser copies of the
statements specified above. The Seller shall also make available information on
its servicing performance with respect to loans serviced for others, including
delinquency ratios.
The Seller also agrees to allow reasonable access to a knowledgeable
financial or accounting officer for the purpose of answering questions asked by
any prospective purchaser regarding recent developments affecting the Seller or
the financial statements of the Seller.
SECTION 16. Mandatory Delivery; Grant of Security Interest. The sale
and delivery on the related Closing Date of the Mortgage Loans is mandatory from
and after the date of the execution of the related Purchase Price and Terms
Agreement, it being specifically understood and agreed that each Mortgage Loan
is unique and identifiable on the date hereof and that an award of money damages
would be insufficient to compensate the Purchaser for the losses and damages
incurred by the Purchaser (including damages to prospective purchasers of the
Mortgage Loans) in the event of the Seller's failure to deliver (i) each of the
related Mortgage Loans or (ii) one or more Qualified Substitute Mortgage Loans
or (iii) one or more Mortgage Loans otherwise acceptable to the Purchaser on or
before the related Closing Date. The Seller hereby grants to the Purchaser a
lien on and a continuing security interest in each Mortgage Loan and each
document and instrument evidencing each such Mortgage Loan to secure the
performance by the Seller of its obligations under the related Purchase Price
and Terms Agreement, and the Seller agrees that it shall hold such Mortgage
Loans in custody for the Purchaser subject to the Purchaser's (i) right to
reject any Mortgage Loan (or Qualified Substitute Mortgage Loan) under the terms
of this Agreement and to require another Mortgage Loan (or Qualified Substitute
Mortgage Loan) to be substituted therefor, and (ii) obligation to pay the
Purchase Price for the Mortgage Loans. All rights and remedies of the Purchaser
under this Agreement are distinct from, and cumulative with, any other rights or
remedies under this Agreement or afforded by law or equity and all such rights
and remedies may be exercised concurrently, independently or successively.
SECTION 17. 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 Seller:
New Century Mortgage Corporation
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
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With a copy to:
New Century Mortgage Corporation
00000 XX Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
(ii) if to the Purchaser:
Xxxxxxx Sachs Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx 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 18. 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 19. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts. Each counterpart shall be deemed
to be an original, and all such counterparts shall constitute one and the same
instrument.
SECTION 20. Governing Law. 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 21. 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
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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 22. 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 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. Any such assignment by the Purchaser
shall be accompanied by the delivery and execution of an Assignment and
Assumption Agreement (the "Assignment and Assumption Agreement") in the form
attached hereto as Exhibit G.
SECTION 23. 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 24. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.
SECTION 25. 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;
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(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 26. 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 27. 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 28. Recordation of Assignments of Mortgage. To the extent
permitted by applicable law, each of the Assignments of Mortgage is subject to
recordation in all appropriate public offices for real property records in all
the counties or 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 at its sole option.
SECTION 29. No Solicitation. From and after the related 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 borrower or obligor under any Mortgage Loan to refinance a Mortgage Loan, in
whole or in part, without (i) the prior written consent of the Purchaser; or
(ii) written notice from the related Mortgagor under a Mortgage Loan of such
party's intention to refinance such Mortgage Loan. 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
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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 30. 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 31. 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 32. Confidential Information. The Seller understands and
agrees that this Agreement, the Side Letter, the related Purchase Price and
Terms Letter, the Interim Servicing Agreement, and any other agreements executed
in connection with the sales contemplated hereunder, any agreements executed in
connection with the securitization of the Mortgage Loans, and any offering
circulars or other disclosure documents produced in connection with such
securitization (the "Agreements") are confidential and proprietary to the
Purchaser, and the Seller agrees to hold the terms of the Agreements
confidential and not to
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divulge such documents to anyone except (a) to the extent required by law or
judicial order or to enforce its rights or remedies under the related Purchase
Price and Terms Agreements or the other Agreements, (b) to the extent such
information enters into the public domain other than through the wrongful act of
the Seller, or (c) as is necessary in working with legal counsel, auditors,
agents, rating agencies, taxing authorities or other governmental agencies.
Moreover, the Seller understands and agrees that this Agreement, any other
agreements executed in connection with the sale contemplated hereunder, any
agreements executed in connection with the securitization of the Mortgage Loans,
and any offering circulars or other disclosure documents produced in connection
with such securitization are confidential and proprietary to the Purchaser, and
the Seller agrees to hold such documents confidential and not to divulge such
documents to anyone except (a) to the extent required by law or judicial order
or to enforce its rights or remedies under this letter agreement or the
Agreements, (b) to the extent such information enters into the public domain
other than through the wrongful act of the Seller, or (c) as is necessary in
working with legal counsel, auditors, agents, rating agencies, taxing
authorities or other governmental agencies. The rights and obligations set forth
in this paragraph shall survive the Closing Date and shall not merge into the
closing documents but shall be independently enforceable by the parties hereto.
SECTION 33. Compliance with Regulation AB.
Subsection 33.01 Intent of the Parties; Reasonableness. The
Purchaser and the Seller acknowledge and agree that the purpose of Section 30 of
this Agreement is to facilitate compliance by the Purchaser and any Depositor
with the provisions of Regulation AB and related rules and regulations of the
Commission. Although Regulation AB is applicable by its terms only to offerings
of asset-backed securities that are registered under the Securities Act, the
Company acknowledges that investors in privately offered securities may require
that the Purchaser or any Depositor provide comparable disclosure in
unregistered offerings. References in this Agreement to compliance with
Regulation AB include provision of comparable disclosure in private offerings.
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
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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 33.02 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 33.03 that, except as disclosed in
writing to the Purchaser or such Depositor prior to such date: (i) the Seller is
not aware and has not received notice that any default, early amortization or
other performance triggering event has occurred as to any other securitization
due to any act or failure to act of the Seller; (ii) the Interim Servicer has
not been terminated as servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a servicing performance
test or trigger; (iii) no material noncompliance with the applicable servicing
criteria with respect to other securitizations of residential mortgage loans
involving the Interim Servicer as servicer has been disclosed or reported by the
Seller; (iv) no material changes to the Interim Servicer's policies or
procedures with respect to the servicing function it will perform under the
Interim Servicing Agreement and any Reconstitution Agreement for mortgage loans
of a type similar to the Mortgage Loans have occurred during the three-year
period immediately preceding the related Securitization Transaction; (v) there
are no aspects of the Interim Servicer's financial condition that could have a
material adverse effect on the performance by the Interim Servicer of its
servicing obligations under the Interim Servicing Agreement or any
Reconstitution Agreement; (vi) there are no material legal or governmental
proceedings pending (or known to be contemplated) against the Seller, Interim
Servicer, any Subservicer or any Third-Party Originator; and (vii) there are no
affiliations, relationships or transactions relating to the Seller, Interim
Servicer, any Subservicer or any Third-Party Originator with respect to any
Securitization Transaction and any party thereto identified by the related
Depositor of a type described in Item 1119 of Regulation AB.
(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 33.03, the Seller shall, within five Business
Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or, if
any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Subsection 33.03 Information to Be Provided by the Seller. In
connection with any Securitization Transaction in which Mortgage Loans purchased
from the Seller or any Affiliate of the Seller comprise 20% or more of the
aggregate outstanding cut-off balance of the mortgage loans in such
Securitization Transaction the Seller shall (i) within five Business Days
following request by the Purchaser or any Depositor, provide to the Purchaser
and such Depositor (or, as applicable, cause each Third-Party Originator 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 Section, and (ii) as promptly as
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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 Section.
(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 originators' credit-granting or underwriting criteria for
mortgage loans of similar type(s) as the Mortgage Loans and such other
information as the Purchaser or any Depositor may reasonably request for the
purpose of compliance with Item 1110(b)(2) of Regulation AB;
(C) a description of any material legal or governmental proceedings
pending (or known to be contemplated) against the Seller 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
-54-
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
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(a) of this Section (and any other parties identified in writing by the
requesting party) with respect to such Securitization Transaction, and (ii)
provide to the Purchaser and any Depositor a description of such proceedings,
affiliations or relationships.
Subsection 33.04 Indemnification; Remedies. 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:
(1) (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 33 by or on behalf of the Seller,
or provided under this Section 33 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;
(2) 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 33; or
(3) any breach by the Seller of a representation or warranty
set forth in Subsection 33.02(a) or in a writing furnished pursuant
to Subsection 33.02(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 33.02(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
-56-
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.
(b) (1) 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 33, or any breach by the Seller
of a representation or warranty set forth in Subsection 33.02(a) or in a writing
furnished pursuant to Subsection 33.02(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
33.02(b) to the extent made as of a date subsequent to such closing date, shall
immediately and automatically, without notice or grace period, constitute an
Event of Default with respect to the Seller under this Agreement and any
applicable Reconstitution Agreement, and shall entitle the Purchaser or
Depositor, as applicable, in its sole discretion to terminate the rights and
obligations of the Interim Servicer as servicer under the Interim Servicing
Agreement and/or any applicable Reconstitution Agreement without payment
(notwithstanding anything in this Agreement or any applicable Reconstitution
Agreement to the contrary) of any compensation to the Interim Servicer; provided
that to the extent that any provision of this Agreement and/or any applicable
Reconstitution Agreement expressly provides for the survival of certain rights
or obligations following termination of the Interim Servicer as servicer, such
provision shall be given effect.
[Signatures Commence on Following Page]
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused their
names to be signed by their respective officers thereunto duly authorized, as of
March 1, 2006, to this Mortgage Loan Purchase and Warranties Agreement.
XXXXXXX XXXXX MORTGAGE COMPANY, a New
York limited partnership
(Purchaser)
By: XXXXXXX SACHS REAL ESTATE
FUNDING CORP., a New York
corporation, its General
Partner
By:_________________________________
Name:
Title:
NEW CENTURY MORTGAGE CORPORATION
(Seller)
By:____________________________________
Name:
Title:
Exhibit A
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 the
Custodian, 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 the
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 related Closing Date because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation or because such
Mortgage has been lost or because such public recording office retains the
original recorded Mortgage, the Seller shall deliver or cause to be delivered to
the Custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller (or 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
the Custodian upon receipt thereof by the Seller; or (ii) in the case of a
Mortgage where a public recording office retains the original recorded Mortgage
or in the case where a Mortgage is lost after recordation in a public recording
office, a copy of such Mortgage certified by such public recording office to be
a true and complete copy of the original recorded Mortgage;
(d) the originals of all assumption, modification, consolidation or
extension agreements, if any, with evidence of recording thereon;
(e) 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
A-1
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 "New Century Mortgage Corporation, 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
"New Century Mortgage Corporation, 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 with evidence of recording thereon, or if any such intervening
assignment has not been returned from the applicable recording office or has
been lost or if such public recording office retains the original recorded
assignments of mortgage, the Seller shall deliver or cause to be delivered to
the Custodian, a photocopy of such intervening assignment, together with (i) in
the case of a delay caused by the public recording office, an Officers
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 the Custodian upon receipt
thereof by the Seller; or (ii) in the case of an intervening assignment where a
public recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after recordation in a
public recording office, a copy of such intervening assignment certified by such
public recording office to be a true and complete copy of the original recorded
intervening assignment;
(g) 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.
In the event an Officers Certificate of the Seller is delivered to
the Purchaser because of a delay caused by the public recording office in
returning any recorded document, the Seller shall deliver to the Purchaser,
within 90 days of the related Closing Date, an Officer's Certificate which shall
(i) identify the recorded document, (ii) state that the recorded document has
not been delivered to the Custodian due solely to a delay caused by the public
recording office, (iii) state the amount of time generally required by the
applicable recording office to record and return a document submitted for
recordation, and (iv) specify the date the applicable recorded document will be
delivered to the Custodian. An extension of the date specified in (iv) above may
be requested from the Purchaser, which consent shall not be unreasonably
withheld.
A-2
Exhibit B
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.
B-1
Exhibit C
EXHIBIT C
SELLER'S OFFICER'S CERTIFICATE
I, ____________________, hereby certify that I am the duly
elected [Vice] President of New Century Mortgage Corporation, a [state]
[federally] chartered institution organized under the laws of the [state of
____________] [United States] (the "Company") and further as follows:
1. Attached hereto as Exhibit 1 is a true, correct and complete copy
of the charter of the Company which is in full force and effect on the date
hereof and which has been in effect without amendment, waiver, rescission or
modification
2. Attached hereto as Exhibit 2 is a true, correct and complete copy
of the bylaws of the Company which are in effect on the date hereof and which
have been in effect without amendment, waiver, rescission or modification.
3. Attached hereto as Exhibit 3 is an original certificate of good
standing of the Company issued within ten days of the date hereof, and no event
has occurred since the date thereof which would impair such standing.
4. Attached hereto as Exhibit 4 is a true, correct and complete copy
of the corporate resolutions of the Board of Directors of the Company
authorizing the Company to execute and deliver each of the Flow Mortgage Loan
Purchase and Warranties Agreement, dated as of August 25, 2004, by and between
Xxxxxxx Xxxxx Mortgage Company (the "Purchaser") and the Company (the "Purchase
Agreement"), the Flow Interim Servicing Agreement, dated as of August 25, 2004,
by and between Xxxxxxx Sachs Mortgage Company (the "Purchaser") and the Company
(the "Servicing Agreement," together with the Purchase Agreement, the
"Agreements"), and to endorse the Mortgage Notes and execute the Assignments of
Mortgages by original or facsimile signature, and such resolutions are in effect
on the date hereof and have been in effect without amendment, waiver, rescission
or modification.
5. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the execution, delivery and
performance by the Company of or compliance by the Company with the Agreements,
the sale of the mortgage loans or the consummation of the transactions
contemplated by the agreements; or (ii) any required consent, approval,
authorization or order has been obtained by the Company.
6. Neither the consummation of the transactions contemplated by, nor
the fulfillment of the terms of the Agreements conflicts or will conflict with
or results or will result in a breach of or constitutes or will constitute a
default under the charter or by-laws of the Company, the terms of any indenture
or, to the best of the Company's knowledge, other agreement or instrument to
which the Company is a party or by which it is bound or to which it is subject,
or any statute or order, rule, regulations, writ, injunction or decree of any
court,
C-1
governmental authority or regulatory body to which the Company is subject or by
which it is bound.
7. To the best of my knowledge, there is no action, suit, proceeding
or investigation pending or threatened against the Company which, in my
judgment, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Company or in any material impairment of the right
or ability of the Company to carry on its business substantially as now
conducted or in any material liability on the part of the Company or which would
draw into question the validity of the Agreements, or the mortgage loans or of
any action taken or to be taken in connection with the transactions contemplated
hereby, or which would be likely to impair materially the ability of the Company
to perform under the terms of the Agreements.
8. Each person listed on Exhibit 5 attached hereto who, as an
officer or representative of the Company, signed the Agreements and any other
document delivered or on the date hereof in connection with any purchase
described in the agreements set forth above was, at the respective times of such
signing and delivery, and is now, a duly elected or appointed, qualified and
acting officer or representative of the Company, who holds the office set forth
opposite his or her name on Exhibit 5, and the signatures of such persons
appearing on such documents are their genuine signatures.
9. The Company is duly authorized to engage in the transactions
described and contemplated in the Agreements.
C-2
IN WITNESS WHEREOF, I have hereunto signed my name and affixed the
seal of the Company.
Dated:________________________________ By:__________________________________
Name:_____________________________
Title: [Vice President]
[Seal]
I, ________________________, an [Assistant] Secretary of
______________[COMPANY], hereby certify that ____________ is the duly elected,
qualified and acting [Vice] President of the Company and that the signature
appearing above is [her] [his] genuine signature.
IN WITNESS WHEREOF, I have hereunto signed my name.
Dated:________________________________ By:__________________________________
Name:_____________________________
Title: [Assistant] Secretary ]
C-3
EXHIBIT 5 to
Company's Officer's Certificate
NAME TITLE SIGNATURE
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C-4
EXHIBIT D
FORM OF OPINION OF COUNSEL TO THE SELLER
----------------------------------------
(date)
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
You have requested [our] [my] opinion, as [Assistant] General
Counsel to New Century Mortgage Corporation (the "Company"), with respect to
certain matters in connection with the sale by the Company of the Mortgage Loans
pursuant to that certain Flow Mortgage Loan Purchase and Warranties Agreement by
and between the Company and Xxxxxxx Sachs Mortgage Company (the "Purchaser"),
dated as of March 1, 2006 (the "Purchase Agreement") which sale is in the form
of whole loans and that certain Flow Interim Servicing Agreement by and between
the Company and Xxxxxxx Xxxxx Mortgage Company (the "Purchaser"), dated as of
March 1, 2006 (the "Servicing Agreement," together with the Purchase Agreement,
the "Agreements"). Capitalized terms not otherwise defined herein have the
meanings set forth in the Purchase Agreement.
[We] [I] have examined the following documents:
1. the Agreements;
2. the form of Assignment of Mortgage;
3. the form of endorsement of the Mortgage Notes; and
4. such other documents, records and papers as we have deemed
necessary and relevant as a basis for this opinion.
To the extent [we] [I] have deemed necessary and proper, [we] [I]
have relied upon the representations and warranties of the Company contained in
the Purchase Agreement. [We] [I] have assumed the authenticity of all documents
submitted to [us] [me] as originals, the genuineness of all signatures, the
legal capacity of natural persons and the conformity to the originals of all
documents.
Based upon the foregoing, it is [our] [my] opinion that:
1. The Company is a [type of entity] duly organized, validly
existing and in good standing under the laws of ___________
and is qualified to transact business in, and is in good
standing under, the laws of [the state of incorporation].
D-1
2. The Company has the power to engage in the transactions
contemplated by the Agreements and all requisite power,
authority and legal right to execute and deliver such
Agreements and to perform and observe the terms and conditions
of such Agreements.
3. Each of the Agreements has been duly authorized, executed and
delivered by the Company, and is a legal, valid and binding
agreement enforceable in accordance with its respective terms
against the Company, subject to bankruptcy laws and other
similar laws of general application affecting rights of
creditors and subject to the application of the rules of
equity, including those respecting the availability of
specific performance, none of which will materially interfere
with the realization of the benefits provided thereunder or
with the Purchaser's ownership of the Mortgage Loans.
4. The Company has been duly authorized to allow any of its
officers to execute any and all documents by original
signature in order to complete the transactions contemplated
by the Agreements.
5. The Company has been duly authorized to allow any of its
officers to execute by original [or facsimile] signature the
endorsements to the Mortgage Notes and the Assignments of
Mortgages, and the original [or facsimile] signature of the
officer at the Company executing the endorsements to the
Mortgage Notes and the Assignments of Mortgages represents the
legal and valid signature of said officer of the Company.
6. Either (i) no consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of or
compliance with the Agreements and the sale of the Mortgage
Loans by the Company or the consummation of the transactions
contemplated by the Agreements or (ii) any required consent,
approval, authorization or order has been obtained by the
Company.
7. Neither the consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Agreements conflicts
or will conflict with or results or will result in a breach of
or constitutes or will constitute a default under the charter
or by-laws of the Company, the terms of any indenture or, to
the best of the Company's knowledge, other agreement or
instrument to which the Company is a party or by which it is
bound or to which it is subject, or violates any statute or
order, rule, regulations, writ, injunction or decree of any
court, governmental authority or regulatory body to which the
Company is subject or by which it is bound.
8. There is no action, suit, proceeding or investigation pending
or, to the best of [our] [my] knowledge, threatened against
the Company which, in [our] [my] judgment, either in any one
instance or in the aggregate, may result in any material
adverse change in the business, operations, financial
D-2
condition, properties or assets of the Company or in any
material impairment of the right or ability of the Company to
carry on its business substantially as now conducted or in any
material liability on the part of the Company or which would
draw into question the validity of the Agreements to which it
is a party or the Mortgage Loans or of any action taken or to
be taken in connection with the transactions contemplated
thereby, or which would be likely to impair materially the
ability of the Company to perform under the terms of the
Agreements.
9. The sale of each Mortgage Note and Mortgage as and in the
manner contemplated by the Purchase Agreement and the
Servicing Agreement is sufficient to fully transfer to the
Purchaser all right, title and interest of the Company thereto
as noteholder and mortgagee.
10. The Assignments of Mortgage are in recordable form, except for
the insertion of the name of the assignee, and upon the name
of the assignee being inserted, are acceptable for recording
under the laws of the state where each related Mortgaged
Property is located. The endorsement of the Mortgage Notes,
the delivery to the Purchaser, or its designee, of the
Assignments of Mortgage, and the delivery of the original
endorsed Mortgage Notes to the Purchaser, or its designee, are
sufficient to permit the Purchaser to avail itself of all
protection available under applicable law against the claims
of any present or future creditors of the Company, and are
sufficient to prevent any other sale, transfer, assignment,
pledge or hypothecation of the Mortgages and the Mortgage
Notes by the Company from being enforceable.
This opinion is given to you for your sole benefit, and no other
person or entity is entitled to rely hereon except that the purchaser or
purchasers to which you initially and directly resell the Mortgage Loans may
rely on this opinion as if it were addressed to them as of its date.
Very truly yours,
-------------------------------------
[Name]
[Assistant] General Counsel
D-3
Exhibit E
EXHIBIT E
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
___________________, 200__
[Federal Home Loan Bank of
______(the "Association")]
__________________________
__________________________
__________________________
__________________________
Attention: ___________________________
___________________________
Re: Notice of Sale and Release of Collateral
Dear Sirs:
This letter serves as notice that ________________________[COMPANY]
a [type of entity], organized pursuant to the laws of [the state of
incorporation] (the "Company") has committed to sell to Xxxxxxx Xxxxx Mortgage
Company under a Flow Mortgage Loan Purchase and Warranties Agreement, dated as
of March 1, 2006, certain mortgage loans originated by the Association. The
Company warrants that the mortgage loans to be sold to Xxxxxxx Sachs Mortgage
Company are in addition to and beyond any collateral required to secure advances
made by the Association to the Company.
The Company acknowledges that the mortgage loans to be sold to
Xxxxxxx Xxxxx Mortgage Company shall not be used as additional or substitute
collateral for advances made by the Association. Xxxxxxx Sachs Mortgage Company
understands that the balance of the Company's mortgage loan portfolio may be
used as collateral or additional collateral for advances made by the
Association, and confirms that it has no interest therein.
E-1
Execution of this letter by the Association shall constitute a full
and complete release of any security interest, claim, or lien which the
Association may have against the mortgage loans to be sold to ________________.
Very truly yours,
----------------------------
By:
----------------------------------
Name:
Title:
Date:
Acknowledged and approved:
------------------------------------
By:
---------------------------------
Name:
Title:
Date:
E-2
Exhibit F
EXHIBIT F
FORM OF SECURITY RELEASE CERTIFICATION
--------------------------------------
I. Release of Security Interest
The financial institution named below hereby relinquishes any and
all right, title and interest it may have in all Mortgage Loans to be purchased
by Xxxxxxx Xxxxx Mortgage Company from New Century Mortgage Corporation pursuant
to that certain Flow Mortgage Loan Purchase and Warranties Agreement, dated as
of March 1, 2006, and certifies that all notes, mortgages, assignments and other
documents in its possession relating to such Mortgage Loans have been delivered
and released to Xxxxxxx Sachs Mortgage Company or its designees, as of the date
and time of the sale of such Mortgage Loans to Xxxxxxx Xxxxx Mortgage Company.
Name and Address of Financial Institution
--------------------------------
(name)
--------------------------------
(Address)
By:_____________________________
F-1
II. Certification of Release
----------------------------
The Company named below hereby certifies to Xxxxxxx Sachs Mortgage
Company that, as of the date and time of the sale of the above-mentioned
Mortgage Loans, the security interests in the Mortgage Loans released by the
above-named financial institution comprise all security interests relating to or
affecting any and all such Mortgage Loans. The Company warrants that, as of such
time, there are and will be no other security interests affecting any or all of
such Mortgage Loans.
----------------------------
By:
--------------------------------
Name:
Title:
F-2
Exhibit G
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT, dated ______________, between
__________________________________, a ___________________ corporation
("Assignor") and ________________________________, a __________________
corporation ("Assignee"):
For good and 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:
1. The Assignor hereby grants, transfers, conveys and assigns to
Assignee, as Purchaser, all of the right, title and interest of Assignor with
respect to the mortgage loans listed on Exhibit A attached hereto (the "Mortgage
Loans"), and with respect to such Mortgage Loans, in, to and under (a) that
certain Flow Mortgage Loan Purchase and Warranties Agreement (the "Purchase
Agreement"), and (b) that certain Flow Interim Servicing Agreement, each dated
as of March 1, 2006 among the Purchaser and New Century Mortgage Corporation
(the "Servicing Agreement"); and (c) the Purchase Agreement and the Servicing
Agreement are collectively referred to as the "Agreements").
2. The Assignor warrants and represents to, and covenants with, the
Assignee that:
a. The Assignor is the lawful owner of the Mortgage Loans with
the full right to transfer the Mortgage Loans free from any and all claims and
encumbrances whatsoever;
b. The Assignor has not received notice of, and has no
knowledge of, any offsets, counterclaims or other defenses available to the
Seller with respect to the Agreements or the Mortgage Loans;
c. The Assignor has not waived or agreed to any waiver under,
or agreed to any amendment or other modification of, the Agreements. The
Assignor has no knowledge of, and has not received notice of, any waivers under
or amendments or other modifications of, or assignments of rights or obligations
under, the Agreements; and
d. Neither the Assignor nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans
or any interest in the Mortgage Loans, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Mortgage Loans, or any interest in
the Mortgage Loans or otherwise approached or negotiated with respect to the
Mortgage Loans, or any interest in the Mortgage 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 which would constitute a distribution of the
Mortgage Loans
G-1
under the Securities Act of 1933, as amended (the "Securities Act") or which
would render the disposition of the Mortgage Loans a violation of Section 5 of
the Securities Act or require registration pursuant thereto.
3. The Assignee warrants and represents to, and covenants with, the
Assignor and the Seller pursuant to the Agreements that:
a. The Assignee is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, and has all requisite corporate power and authority to acquire,
own and purchase the Mortgage Loans;
b. The Assignee has full corporate power and authority to
execute, deliver and perform under this Assignment and Assumption Agreement, and
to consummate the transactions set forth herein. The execution, delivery and
performance of the Assignee of this Assignment and Assumption Agreement, and the
consummation by it of the transactions contemplated hereby, have been duly
authorized by all necessary corporate action of the Assignee. This Assignment
and Assumption Agreement has been duly executed and delivered by the Assignee
and constitutes the valid and legally binding obligation of the Assignee
enforceable against the Assignee in accordance with its respective terms;
c. To the best of Assignee's knowledge, no material consent,
approval, order or authorization of, or declaration, filing or registration
with, any governmental entity is required to be obtained or made by the Assignee
in connection with the execution, delivery or performance by the Assignee of
this Assignment and Assumption Agreement, or the consummation by it of the
transactions contemplated hereby;
d. The Assignee agrees to be bound, as Purchaser, by all of
the terms, covenants and conditions of the Agreements, the Mortgage Loans, and
from and after the date hereof, the Assignee assumes for the benefit of each of
the Seller, the Assignor and the Custodian all of the Assignor's obligations as
Purchaser thereunder; including, without limitation, the limitation on
assignment set forth in Section 22 of the Purchase Agreement;
e. The Assignee understands that the Mortgage Loans have not
been registered under the Securities Act or the securities laws of any state;
f. The purchase price being paid by the Assignee for the
Mortgage Loans is in excess of $250,000 and will be paid by cash remittance of
the full purchase price within 60 days of the sale;
g. The Assignee is acquiring the Mortgage Loans for investment
for its own account only and not for any other person;
h. The Assignee considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
investment in the Mortgage Loans;
i. The Assignee has been furnished with all information
regarding the Mortgage Loans that it has requested from the Assignor or the
Seller;
G-2
j. Neither the Assignee nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Mortgage Loans
or any interest in the Mortgage Loans, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Mortgage Loans or any interest in
the Mortgage Loans, or otherwise approached or negotiated with respect to the
Mortgage Loans or any interest in the Mortgage Loans with any person in any
manner which would constitute a distribution of the Mortgage Loans under the
Securities Act or which would render the disposition of the Mortgage Loans a
violation of Section 5 of the Securities Act or require registration pursuant
thereto, nor will it act, nor has it authorized or will it authorize any person
to act, in such manner with respect to the Mortgage Loans; and
k. Either: (1) the Assignee is not an employee benefit plan
("Plan") within the meaning of section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or a plan (also "Plan") within the
meaning of section 4975(e)(1) of the Internal Revenue Code of 1986 ("Code"), and
the Assignee is not directly or indirectly purchasing the Mortgage Loans on
behalf of, investment manager of, as named fiduciary of, as Trustee of, or with
assets of, a Plan; or (2) the Assignee's purchase of the Mortgage Loans will not
result in a prohibited transaction under section 406 of ERISA or section 4975 of
the Code.
4. (a) The Assignee's address for purposes of all notices and
correspondence related to the Mortgage Loans, this Assignment and Assumption
Agreement and the Agreements is:
The Assignee's wire instructions for purposes of all remittances and
payments related to the Mortgage Loans are:
(b) The Assignor's address for purposes for all notices and
correspondence related to the Mortgage Loans and this Assignment and Assumption
Agreement is:
5. This Assignment and Assumption 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, except to the extent preempted by federal law.
6. This Assignment and Assumption Agreement shall inure to the
benefit of the successors and assigns of the parties hereto. This Assignment and
Assumption Agreement may not be assigned by the Assignee without the express
written consent of the Assignor. Any entity into which the Assignor or Assignee
may be merged or consolidated shall, without the requirement for any further
writing, be deemed the Assignor or Assignee, respectively, hereunder.
7. No term or provision of this Assignment and Assumption 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.
8. This Assignment and Assumption Agreement shall survive the
conveyance of the Mortgage Loans and the assignment of the Agreements by the
Assignor.
G-3
9. Notwithstanding the assignment of the Agreements by either the
Assignor or Assignee, this Assignment and Assumption Agreement shall not be
deemed assigned by the Assignor or the Assignee unless assigned by separate
written instrument.
10. For the purpose for facilitating the execution of this
Assignment and Assumption Agreement as herein provided and for other purposes,
this Assignment and Assumption 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.
IN WITNESS WHEREOF, the parties have caused this Assignment and
Assumption Agreement to be executed by their duly authorized officers as of the
date first above written.
--------------------------------------- --------------------------------------
Assignor Assignor
By:____________________________________ By:___________________________________
Name: Name:
Title: Title:
Its:___________________________________ Its:__________________________________
Taxpayer Taxpayer
Identification No. ___________________ Identification No. __________________
G-4
Exhibit H
EXHIBIT H
INTENTIONALLY OMITTED
---------------------
H-1
Exhibit I
EXHIBIT I
ASSIGNMENT AND CONVEYANCE
-------------------------
On this __ day of _________, 200_, New Century Mortgage Corporation,
as the Seller, under that certain Flow Mortgage Loan Purchase and Warranties
Agreement, dated as of March 1, 2006 (the "Agreement") does hereby sell,
transfer, assign, set over and convey to Xxxxxxx Xxxxx Mortgage Company, as
Purchaser under the Agreement all rights, title and interest of the Seller in
and to (a) the Mortgage Loans listed on the related Mortgage Loan Schedule
attached as Exhibit 1 hereto, and (b) the Servicing Rights, together with the
related Mortgage Files and all rights and obligations arising under the
documents contained therein. Pursuant to Section 2 of the Agreement, the Seller
has delivered to the Custodian the documents for each Mortgage Loan to be
purchased as set forth in the Agreement. The 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.
The Seller confirms to the Purchaser that, unless otherwise agreed
upon in writing by the Seller and the Purchaser, the representations and
warranties set forth in Section 7 of the Agreement with respect to the Mortgage
Loans listed on the Mortgage Loan Schedule attached hereto, and the
representations and warranties in Section 6 of the Agreement with respect to the
Seller are true and correct as of the date hereof. The Mortgage Loans have the
pool characteristics set forth on Exhibit 2 hereto.
Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Agreement.
NEW CENTURY MORTGAGE CORPORATION
(Seller)
By:
------------------------------
Name:
Title:
I-1
Exhibit 1 to Assignment and Conveyance
Mortgage Loan Schedule
I-2
Exhibit 2 to Assignment and Conveyance
Pool Characteristics of the Mortgage Loans as delivered on the Closing Date:
I-3
Exhibit J
EXHIBIT J
ORIGINATOR'S UNDERWRITING GUIDELINES
------------------------------------
J-1
Exhibit K
EXHIBIT K
MORTGAGE LOAN SCHEDULE
----------------------
K-1
Exhibit L
EXHIBIT L
INTENTIONALLY OMITTED
---------------------
L-1
Exhibit M
INTENTIONALLY OMITTED
---------------------
M-1
EXHIBIT N
FORM OF INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AND CONTRIBUTION AGREEMENT dated [_______],
200___ ("Agreement") between GS Mortgage Securities Corp., a Delaware
corporation (the "Depositor"), and [___________________], a [_________]
corporation (the "Indemnifying Party").
W I T N E S S E T H:
WHEREAS, the Indemnifying Party or its Affiliate originated or
acquired the Mortgage Loans and subsequently sold the Mortgage Loans to an
Affiliate of the Depositor in anticipation of the securitization transaction;
and
WHEREAS, as an inducement to the Depositor to enter into the
Assignment and Recognition Agreement, to the Underwriter[s] to enter into the
Underwriting Agreement (as defined herein), and to the Initial Purchaser[s] to
enter into the Certificate Purchase Agreement (as defined herein), the
Indemnifying Party wishes to provide for indemnification and contribution on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
Section 1.01 Certain Defined Terms. The following terms shall have
the meanings set forth below, unless the context clearly indicates otherwise:
ABS Informational and Computational Material: Any written
communication as defined in Item 1101(a) of Regulation AB under the 1933 Act and
the 1934 Act, as amended from time to time.
Agreement: This Indemnification and Contribution Agreement, as the
same may be amended in accordance with the terms hereof.
Certificate Purchase Agreement: The Purchase Agreement, dated as of
[______], 200___, [among] the Depositor and the Initial Purchaser[s], relating
to the Privately Offered Certificates.
Exchange Act: The federal Securities Act of 1934, as amended.
Free Writing Prospectus: Any written communication that constitutes
a "free writing prospectus," as defined in Rule 405 under the Securities Act.
N-1
GSMC: Xxxxxxx Sachs Mortgage Company, a New York limited
partnership, and its successors and assigns.
Indemnified Parties: As defined in Section 3.01.
Indemnifying Party Information: (A) All information in the
Prospectus Supplement or the Offering Circular, ABS Informational and
Computational Material or any Free Writing Prospectus or any amendment or
supplement thereto, (i) contained under the headings ["Transaction
Overview--Parties--The Responsible Party"] and ["The Mortgage Loan
Pool--Underwriting Guidelines"] and (ii) regarding the Mortgage Loans, the
related Mortgagors and/or the related Mortgaged Properties (but in the case of
this clause (ii), only to the extent any untrue statement or omission or alleged
untrue statement or omission arises from or is based upon errors or omissions in
the information concerning the Mortgage Loans, the related Mortgagors and/or the
related Mortgaged Properties, as applicable, provided to the Depositor or any
Affiliate thereof by or on behalf of the Indemnifying Party or any Affiliate
thereof), and (B) [and static pool information regarding mortgage loans
originated or acquired by the Seller [and included in the Prospectus Supplement,
the Offering Circular, ABS Informational and Computational Material or the Free
Writing Prospectus] [incorporated by reference from the website located at
______________].
Offering Circular: The offering circular, dated [_______], 200___,
relating to the private offering of the Privately Offered Certificates.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pooling and Servicing Agreement: The Pooling and Servicing
Agreement, dated as of [_______], 200___, among the Depositor, the Indemnifying
Party, [Servicer], as servicer, and [Trustee], as trustee.
Privately Offered Certificates: [__________________], issued
pursuant to the Pooling and Servicing Agreement.
Prospectus Supplement: The prospectus supplement, dated [______],
200___, relating to the public offering of the Publicly Offered Certificates.
Publicly Offered Certificates: [______________________________],
issued pursuant to the Pooling and Servicing Agreement.
Securities Act: The federal Securities Act of 1933, as amended.
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.
N-2
Underwriters: Xxxxxxx, Xxxxx & Co., a New York limited partnership[,
and [____________], a [___________] corporation], and their successors and
assigns.
Underwriting Agreement: The Underwriting Agreement, dated as of
[________], 200__, [among] the Depositor and the Underwriter[s], relating to the
Publicly Offered Certificates.
Section 1.02 Other Terms. Capitalized terms used but not defined
herein shall have the meanings assigned to such terms in the Pooling and
Servicing Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES
(a) Each party hereto represents and warrants that it has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement;
(b) Each party hereto represents and warrants that this Agreement
has been duly authorized, executed and delivered by such party; and
(c) Each party hereto represents and warrants that assuming the due
authorization, execution and delivery by each other party hereto, this Agreement
constitutes the legal, valid and binding obligation of such party.
(d) The Indemnifying Party hereto represents that the Indemnifying
Party Information satisfies the requirements of the applicable provisions of
Regulation AB.
SECTION 3. INDEMNIFICATION
Section 3.01 Indemnification by the Indemnifying Party of the
Depositor and the Underwriters. (a) The Indemnifying Party shall indemnify and
hold harmless the Depositor, GSMC, [each of] the Underwriter[s], the Initial
Purchaser[s], and their respective Affiliates and their respective present and
former directors, officers, partners and each Person, if any, that controls the
Depositor, GSMC, such Underwriter, such Initial Purchaser, or such Affiliate,
within the meaning of either the Securities Act or the Exchange Act
(collectively, the "Indemnified Parties") against any and all losses, claims,
damages, penalties, fines, forfeitures, or liabilities, joint or several, to
which each such Indemnified Party may become subject, under the Securities Act,
the Exchange Act or otherwise, to the extent that such losses, claims, damages,
penalties, fines, forfeitures, or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any breach of the representation and warranty
set forth in Section 2(d) above or (ii) any untrue statement or alleged untrue
statement of any material fact contained in the Prospectus Supplement, the
Offering Circular, the ABS Informational and Computational Material, any Free
Writing Prospectus or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, to the
extent that such untrue statement or alleged untrue statement or omission or
alleged omission relates to information set forth in the Indemnifying Party
Information, and the Indemnifying Party shall in each case reimburse each
Indemnified Party for any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating or defending any such loss,
claim, damage, liability, penalties, fines, forfeitures, or action. The
N-3
Indemnifying Party's liability under this Section 3.01 shall be in addition to
any other liability that the Indemnifying Party may otherwise have.
(b) If the indemnification provided for in this Section 3.01 shall
for any reason be unavailable to an Indemnified Party under this Section 3.01,
then the party which would otherwise be obligated to indemnify with respect
thereto, on the one hand, and the parties which would otherwise be entitled to
be indemnified, on the other hand, shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated herein and
incurred by the parties hereto in such proportions that are appropriate to
reflect the relative fault of the Depositor, GSMC, the Underwriter[s], and the
Initial Purchaser[s], on one hand, and the Indemnifying Party, on the other
hand, in connection with the applicable misstatements or omissions as well as
any other relevant equitable considerations. Notwithstanding the foregoing, no
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
that was not guilty of such fraudulent misrepresentation. For purposes of this
Section 3.01, each director, officer, partner and controlling Person, of the
Depositor, GSMC, the Underwriter[s] and the Initial Purchaser[s] and their
respective Affiliates shall have the same rights to contribution as such Person.
Section 3.02 Notification; Procedural Matters. Promptly after
receipt by an Indemnified Party under Section 3.01 of notice of any claim or the
commencement of any action, such Indemnified Party shall, if a claim in respect
thereof is to be made against the Indemnifying Party under Section 3.01, notify
the Indemnifying Party (or other contributing party) in writing of the claim or
the commencement of such action; provided, however, that the failure to notify
the Indemnifying Party (or other contributing party) shall not relieve it from
any liability which it may have under Section 3.01 except to the extent it has
been materially prejudiced by such failure; and provided further, however, that
the failure to notify the Indemnifying Party shall not relieve it from any
liability which it may have to any Indemnified Party otherwise than under
Section 3.01. In case any such action is brought against any Indemnified Party
and it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall be entitled to participate therein and, to the extent
that, by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party, the Indemnifying
Party elects to assume the defense thereof, it may participate with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that if
the defendants in any such action include both the Indemnified Party and the
Indemnifying Party and the Indemnified Party or parties shall reasonably have
concluded that there may be legal defenses available to it or them and/or other
Indemnified Parties that are different from or additional to those available to
the Indemnifying Party, the Indemnified Party or parties shall have the right to
select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such Indemnified Party or
parties. Upon receipt of notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense of such action and approval by
the Indemnified Party of such counsel, the Indemnifying Party shall not be
liable to such Indemnified Party under this paragraph for any legal or other
expenses subsequently incurred by such Indemnified Party in connection with the
defense thereof, unless (i) the Indemnified Party shall have employed separate
counsel (plus any local counsel) in connection with the assertion of legal
defenses in accordance with the proviso to the immediately preceding sentence,
(ii) the Indemnifying Party shall not have employed counsel reasonably
satisfactory to the Indemnified Party to represent the Indemnified Party within
a reasonable time after notice of commencement
N-4
of the action or (iii) the Indemnifying Party shall have authorized the
employment of counsel for the Indemnified Party at the expense of the
Indemnifying Party. No party shall be liable for contribution with respect to
any action or claim settled without its consent, which consent shall not be
unreasonably withheld. In no event shall the Indemnifying Party be liable for
the fees and expenses of more than one counsel representing the Indemnified
Parties (in addition to any local counsel) separate from its own counsel for all
Indemnified Parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
SECTION 4. GENERAL
Section 4.01 Survival. This Agreement and the obligations of the
parties hereunder shall survive the purchase and sale of the Publicly Offered
Certificates and the Privately Offered Certificates.
Section 4.02 Successors. This Agreement shall inure to the benefit
of and be binding upon the parties hereto, each Indemnified Party and their
respective successors and assigns, and no other Person shall have any right or
obligation hereunder.
Section 4.03 Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to principles of conflict of laws.
Section 4.04 Miscellaneous. Neither this Agreement nor any term
hereof may be changed, waived, discharged or terminated except by a writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. This Agreement may be signed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.
Section 4.05 Notices. All communications hereunder shall be in
writing and shall be deemed to have been duly given when delivered to (a) in the
case of the Depositor, GSMC, the Underwriter[s], or the Initial Purchaser[s], GS
Mortgage Securities Corp., Xxxxxxx Xxxxx Mortgage Company or Xxxxxxx, Sachs &
Co. c/o Goldman, Xxxxx & Co., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Principal Finance Group/Xxxxxxxxxxx X. Xxxxxxx, and (b) in the case
of the Indemnifying Party: [______________], [Address], Attention:
[____________].
Section 4.06 Submission To Jurisdiction; Waivers. The Indemnifying
Party 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;
N-5
(B) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT
COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(C) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET
FORTH HEREIN OR AT SUCH OTHER ADDRESS OF WHICH THE DEPOSITOR SHALL HAVE BEEN
NOTIFIED; AND
(D) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO XXX IN ANY OTHER JURISDICTION.
[SIGNATURE PAGE FOLLOWS]
N-6
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized officers as of the date first above written.
GS MORTGAGE SECURITIES CORP.
By:____________________________________
Name:
Title:
[INDEMNIFYING PARTY]
By:____________________________________
Name:
Title:
N-7
EXHIBIT Q
Flow Interim Servicing Agreement, dated as of March 1, 2006, between Xxxxxxx
Sachs Mortgage Company, as purchaser and New Century Mortgage Corporation, as
interim servicer
See Attached]
O-2
EXHIBIT Q TO EX.-99.1
EXECUTION COPY
FLOW INTERIM SERVICING AGREEMENT
between
XXXXXXX XXXXX MORTGAGE COMPANY,
Purchaser
and
NEW CENTURY MORTGAGE CORPORATION,
Interim Servicer
Dated as of March 1, 2006
CONVENTIONAL FIXED AND ADJUSTABLE RATE RESIDENTIAL MORTGAGE LOANS
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01 Definitions....................................................1
ARTICLE II
SERVICING
Section 2.01 Interim Servicer to Act as Servicer............................7
Section 2.02 Liquidation of Mortgage Loans..................................8
Section 2.03 Collection of Mortgage Loan Payments...........................8
Section 2.04 Establishment of and Deposits to Custodial Account.............8
Section 2.05 Permitted Withdrawals from Custodial Account...................9
Section 2.06 Establishment of and Deposits to Escrow Account...............10
Section 2.07 Permitted Withdrawals from Escrow Account.....................11
Section 2.08 Payment of Taxes, Insurance and Other Charges.................11
Section 2.09 Protection of Accounts........................................12
Section 2.10 Maintenance of Hazard Insurance...............................12
Section 2.11 Maintenance of Fidelity Bond and Errors and Omissions
Insurance....................................................14
Section 2.12 Inspections...................................................14
Section 2.13 Restoration of Mortgaged Property.............................15
Section 2.14 Liquidation Reports...........................................15
Section 2.15 Notification of Adjustments...................................15
Section 2.16 Reports of Foreclosures and Abandonments of Mortgaged
Property.....................................................16
Section 2.17 Credit Reporting..............................................16
ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances...................................................16
Section 3.02 Statements to Purchaser.......................................16
Section 3.03 Advances by Servicer..........................................17
Section 3.04 Principal and Interest Advances...............................17
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ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property...............................17
Section 4.02 Satisfaction of Mortgages and Release of Mortgage Files.......18
Section 4.03 Servicing Compensation........................................18
Section 4.04 Annual Statement as to Compliance.............................18
Section 4.05 Annual Independent Public Accountants' Servicing Report.......19
Section 4.06 Right to Examine Interim Servicer Records.....................19
Section 4.07 Compliance with Xxxxx-Xxxxx-Xxxxxx Act of 1999................19
ARTICLE V
INTERIM SERVICER TO COOPERATE
Section 5.01 Provision of Information......................................19
Section 5.02 Financial Statements; Servicing Facilities....................20
ARTICLE VI
TERMINATION
Section 6.01 Damages.......................................................20
Section 6.02 Termination...................................................20
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the Transfer Date......21
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification...............................................22
Section 8.02 Limitation on Liability of Interim Servicer and Others........23
Section 8.03 Limitation on Resignation and Assignment by Interim
Servicer.....................................................23
Section 8.04 Assignment by Purchaser.......................................24
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 9.01 Due Organization and Authority................................24
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Section 9.02 Ordinary Course of Business...................................24
Section 9.03 No Conflicts..................................................25
Section 9.04 Ability to Service............................................25
Section 9.05 Ability to Perform............................................25
Section 9.06 No Litigation Pending.........................................25
Section 9.07 No Consent Required...........................................25
Section 9.08 No Untrue Information.........................................25
Section 9.09 Prior Servicing...............................................25
ARTICLE X
DEFAULT
Section 10.01 Events of Default.............................................26
Section 10.02 Waiver of Defaults............................................27
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Notices.......................................................27
Section 11.02 Waivers.......................................................28
Section 11.03 Entire Agreement; Amendment...................................28
Section 11.04 Execution; Binding Effect.....................................28
Section 11.05 Headings......................................................28
Section 11.06 Applicable Law................................................28
Section 11.07 Relationship of Parties.......................................28
Section 11.08 Severability of Provisions....................................28
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01 Intent of the Parties; Reasonableness.........................29
Section 12.02 Additional Representations and Warranties of the Interim
Servicer......................................................29
Section 12.03 Information to Be Provided by the Interim Servicer............30
Section 12.04 Servicer Compliance Statement.................................33
Section 12.05 Report on Assessment of Compliance and Attestation............33
Section 12.06 Use of Subservicers and Subcontractors........................34
Section 12.07 Indemnification; Remedies.....................................35
EXHIBITS
EXHIBIT 1 FORM OF MONTHLY REMITTANCE ADVICE
EXHIBIT 2 FORM OF CUSTODIAL ACCOUNT CERTIFICATION
EXHIBIT 3 FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
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EXHIBIT 4 FORM OF ESCROW ACCOUNT CERTIFICATION
EXHIBIT 5 FORM OF ESCROW ACCOUNT LETTER AGREEMENT
EXHIBIT 6 [RESERVED]
EXHIBIT 7 FORM OF ANNUAL CERTIFICATION
EXHIBIT 8 SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
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FLOW INTERIM SERVICING AGREEMENT
This Flow Interim Servicing Agreement (the "Agreement") is entered
into as of the 1st day of March 2006, by and between NEW CENTURY MORTGAGE
CORPORATION (the "Interim Servicer"), a California corporation, and XXXXXXX
XXXXX MORTGAGE COMPANY, a New York limited partnership (the "Purchaser").
WHEREAS, the Purchaser and the Interim Servicer have entered into
a Flow Mortgage Loan Purchase and Warranties Agreement dated as of the date
hereof (the "Purchase Agreement") pursuant to which, from time to time, the
Purchaser shall purchase from the Interim Servicer certain conventional,
residential, fixed and adjustable rate, first and second lien mortgage loans
(the "Mortgage Loans") that are being delivered as whole loans servicing
released; and
WHEREAS, the Purchaser desires to have the Interim Servicer
service the Mortgage Loans in each Mortgage Loan Package during the period
between the related Closing Date and the related Transfer Date (the "Interim
Period"), the Interim Servicer desires to service and administer such Mortgage
Loans on behalf of the Purchaser during the Interim Period, and the parties
desire to provide the terms and conditions of such interim servicing by the
Interim Servicer.
NOW, THEREFORE, in consideration of the mutual covenants made
herein and for other good and valuable consideration the sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. All capitalized terms not otherwise
defined herein have the respective meanings set forth in the Purchase
Agreement. The following terms are defined as follows (except as otherwise
agreed by the parties).
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.
Agreement: This agreement between the Purchaser and the Interim
Servicer for the interim servicing and administration of the Mortgage Loans.
Ancillary Income: All income derived from the Mortgage Loans
(other than payments of principal, interest, Escrow Payments, Servicing Fees
and prepayment penalties attributable to the Mortgage Loans), including but
not limited to interest received on funds deposited in the Custodial Account
or any Escrow Account, all late charges, assumption fees,
escrow account benefits, reinstatement fees, fees received with respect to
checks on bank drafts returned by the related bank for insufficient funds,
assumption fees and similar types of fees arising from or in connection with
any Mortgage Loan to the extent not otherwise payable to the Mortgagor under
applicable law or pursuant to the terms of the related Mortgage Note.
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.
Custodial Account: The separate account or accounts created and
maintained pursuant to Section 2.04.
Depositor: The depositor, as such term is defined in Regulation
AB, with respect to any Securitization Transaction.
Determination Date: The 3rd Business Day of each month, beginning
with the first Remittance Date.
Eligible Investments: Any one or more of the obligations and
securities listed below which investment provides for a date of maturity not
later than one day prior to the Remittance Date in each month (or such other
date as permitted under this Agreement):
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of
America or any agency or instrumentality of the United States of America
the obligations of which are backed by the full faith and credit of the
United States of America ("Direct Obligations");
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository
institution or trust company (including U.S. subsidiaries of foreign
depositories) incorporated or organized under the laws of the United
States of America or any state thereof and subject to supervision and
examination by federal or state banking authorities, so long as at the
time of such investment or the contractual commitment providing for such
investment the commercial paper or other short-term debt obligations of
such depository institution or trust company (or, in the case of a
depository institution or trust company which is the principal
subsidiary of a holding company, the commercial paper or other
short-term debt or deposit obligations of such holding company or
deposit institution, as the case may be) have been rated by each Rating
Agency in its highest short-term rating category or one of its two
highest long-term rating categories;
(iii) repurchase agreements collateralized by Direct Obligations
or securities guaranteed by Xxxxxx Mae or Xxxxxxx Mac with any
registered broker/dealer subject to Securities Investors' Protection
Corporation jurisdiction or any commercial bank insured by the FDIC, if
such broker/dealer or bank has an uninsured, unsecured and unguaranteed
obligation rated by each Rating Agency in its highest short-term rating
category;
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(iv) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States of
America or any state thereof which have a credit rating from each Rating
Agency, at the time of investment or the contractual commitment
providing for such investment, at least equal to one of the two highest
long-term credit rating categories of each Rating Agency; provided,
however, that securities issued by any particular corporation will not
be Eligible Investments to the extent that investment therein will cause
the then outstanding principal amount of securities issued by such
corporation to exceed 20% of the aggregate principal amount of all
Eligible Investments in the Custodial Accounts and the Escrow Accounts;
provided, further, that such securities will not be Eligible Investments
if they are published as being under review with negative implications
from either Rating Agency;
(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 180 days after the date of issuance
thereof) rated by each Rating Agency in its highest short-term rating
category;
(vi) certificates or receipts representing direct ownership
interests in future interest or principal payments on obligations of the
United States of America or its agencies or instrumentalities (which
obligations are backed by the full faith and credit of the United States
of America) held by a custodian in safekeeping on behalf of the holders
of such receipts; and (vii) any other demand, money market, common trust
fund or time deposit or obligation, or interest-bearing or other
security or investment rated in the highest rating category by each
Rating Agency;
provided, however, that (a) any such instrument shall be acceptable to the
Rating Agencies, and (b) no such instrument shall be an Eligible Investment if
such instrument evidences either (i) a right to receive only interest payments
with respect to the obligations underlying such instrument, or (ii) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations.
Escrow Account: The separate account or accounts created and
maintained pursuant to Section 2.06.
Escrow Payment: 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.
Event of Default: Any one of the conditions or circumstances
enumerated in Section 11.01.
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Fidelity Bond: A fidelity bond to be maintained by the Interim
Servicer pursuant to Section 2.11.
Fitch: Fitch, Inc., or its successor in interest.
Xxxxxx Xxx Guides: The Xxxxxx Mae Selling Guide and the Xxxxxx
Xxx Servicing Guide and all amendments or additions thereto.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of insurance policies insuring the Mortgage Loan or the related Mortgaged
Property.
Interim Period: The period between the related Closing Date and
the related Transfer Date.
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.
Moody's: Xxxxx'x Investors Service, Inc., and any successor
thereto.
Mortgage Loan Remittance Rate: With respect to each Mortgage Loan,
the annual rate of interest remitted to the Purchaser, which shall be equal to
the Mortgage Interest Rate minus the Servicing Fee.
PMI Policy: A policy of primary mortgage guaranty insurance issued
by an insurer acceptable under the Underwriting Guidelines and qualified to do
business in the jurisdiction where the Mortgaged Property is located.
Prepayment Interest Shortfall Amount: With respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part during the
Principal Prepayment Period, the amount if any, by which one month's interest
at the related Mortgage Loan Remittance Rate on such Principal Prepayment
exceeds the amount of interest paid in connection with such Principal
Prepayment
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.
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.
Principal Prepayment Period: The month preceding the month in
which the related Remittance Date occurs.
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Purchase Agreement: The Flow Mortgage Loan Purchase and Warranties
Agreement between the Purchaser and the Seller related to the purchase of the
Mortgage Loans dated as of the date hereof.
Purchase Price and Terms Agreement: With respect to each purchase
of a Mortgage Loan Package hereunder, 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.
Qualified Depository: A depository the accounts of which are
insured by the FDIC.
Qualified Insurer: A mortgage guaranty insurance company duly
authorized and licensed where required by law to transact mortgage guaranty
insurance business and approved as an insurer by Xxxxxx Mae or Xxxxxxx Mac.
Rating Agency: Any of Fitch, Moody's or Standard & Poor's, or
their respective successors designated by the Purchaser.
Reconstitution: Any Securitization Transaction or Whole Loan
Transfer.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. xx.xx. 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.
Remittance Date: The 5th Business Day of each month.
REO Disposition: The final sale by the Interim Servicer of any REO
Property.
REO Property: A Mortgaged Property acquired by the Interim
Servicer on behalf of the Purchaser through foreclosure or by deed in lieu of
foreclosure.
SAIF: The Savings Association Insurance Fund, or any successor
thereto.
Securities Act: The Securities Act of 1933, as amended.
Securitization Transaction: Any transaction involving either (1) a
sale or other transfer of some or all of the Mortgage Loans directly or
indirectly to an issuing entity in connection with an issuance of publicly
offered or privately placed, rated or unrated mortgage-backed securities or
(2) an issuance of publicly offered or privately placed, rated or unrated
securities, the payments on which are determined primarily by reference to one
or more portfolios of residential mortgage loans consisting, in whole or in
part, of some or all of the Mortgage Loans.
Servicer: As defined in Section 12.03(c).
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Servicer Information: As defined in Section 12.07(a).
Servicing Advances: All customary, reasonable and necessary "out
of pocket" costs and expenses (including reasonable attorneys' fees and
disbursements) incurred in the performance by the Interim Servicer of its
servicing obligations, including, but not limited to, the cost of (a) the
preservation, restoration and protection of the Mortgaged Property, (b) any
fees relating to any enforcement or judicial proceedings, excluding
foreclosures, (c) foreclosure actions per FHLMC attorney fees and costs
guidelines, (d) the management and liquidation of the Mortgaged Property if
the Mortgaged Property is acquired in satisfaction of the Mortgage, (e) taxes,
assessments, water rates, sewer rents and other charges which are or may
become a lien upon the Mortgaged Property and (f) compliance with the
obligations pursuant to the provisions of this Agreement.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to each Mortgage Loan, the amount of
the annual fee the Purchaser shall pay to the Interim Servicer, which shall,
for a period of one full month, be equal to one-twelfth of the product of (a)
the Servicing Fee Rate and (b) the outstanding principal balance of such
Mortgage Loan as of the first day of such month. Such fee shall be payable
monthly, computed on the basis of the same principal amount and period
respecting which any related interest payment on a Mortgage Loan is computed
and, which amount shall be prorated for any portion of a month during which
the Mortgage Loan is serviced by the Interim Servicer pursuant to this
Agreement. The obligation of the Purchaser to pay the Servicing Fee is limited
to, and the Servicing Fee is payable solely from, the interest portion
(including recoveries with respect to interest from Liquidation Proceeds, to
the extent permitted by Section 2.05) of such Monthly Payment collected by the
Interim Servicer, or as otherwise provided under Section 2.05.
Servicing Fee Rate: 0.50% per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the Interim Servicer consisting of copies of the Mortgage Loan
Documents listed on Exhibit A to the Purchase Agreement and originals of all
documents in the Mortgage File as listed on Exhibit B to the Purchase
Agreement which are not delivered to the Purchaser and
Servicing Officer: Any officer of the Interim Servicer involved in
or responsible for, the administration and servicing of the Mortgage Loans
whose name appears on a list of servicing officers furnished by the Interim
Servicer to the Purchaser upon request, as such list may from time to time be
amended.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies Inc., and any successor thereto.
Static Pool Information: Static pool information as described in
Item 1105(a)(1)-(3) and 1105(c) of Regulation AB.
Subcontractor: Any vendor, subcontractor or other Person that is
not responsible for the overall servicing (as "servicing" is commonly
understood by participants in the mortgage-
-6-
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 Interim 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 the
Interim Servicer under this Agreement or any Reconstitution Agreement that are
identified in Item 1122(d) of Regulation AB.
Transfer Date: The date on which servicing shall be transferred to
a successor servicer, which shall be (a) not later than the date set forth in
the Purchase Price and Terms Agreement or (b) such other date as mutually
agreed by the Interim Servicer and the Purchaser.
Whole Loan Transfer: Any sale or transfer of some or all of the
Mortgage Loans, other than a Securitization Transaction.
ARTICLE II
SERVICING
Section 2.01 Interim Servicer to Act as Servicer. With respect to
the Mortgage Loans in each Mortgage Loan Package purchased by the Purchaser,
from and after the related Closing Date, then during the related Interim
Period, by execution and delivery of the related Purchase Price and Terms
Agreement, which shall contain the related Closing and Transfer Dates therein,
and shall have full power and authority to do any and all things in connection
with such servicing and administration which the Interim Servicer may deem
necessary or desirable, consistent with the terms of this Agreement and with
Accepted Servicing Practices.
The Interim Servicer may not 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. Without limiting
the generality of the foregoing, the Interim Servicer shall continue, and is
hereby authorized and empowered, to execute and deliver on behalf of itself
and the Purchaser, all instruments of satisfaction or cancellation, or of
partial or full release, discharge and all other comparable instruments, with
respect to the Mortgage Loans and with respect to the Mortgaged Properties. If
reasonably required by the Interim Servicer, the Purchaser shall furnish the
Interim Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Interim Servicer to carry out its servicing and
administrative duties under this Agreement.
In servicing and administering the Mortgage Loans, the Interim
Servicer shall employ procedures (including collection procedures) and
exercise the same care that it customarily employs and exercises in servicing
and administering mortgage loans for its own account, giving due consideration
to Accepted Servicing Practices where such practices do not conflict with the
requirements of this Agreement, the Mortgage Loan Documents or applicable law,
and the Purchaser's reliance on the Interim Servicer.
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The Interim Servicer shall keep at its servicing office books and
records in which, subject to such reasonable regulations as it may prescribe,
the Interim Servicer shall note transfers of Mortgage Loans. No transfer of a
Mortgage Loan may be made unless such transfer is in compliance with the terms
hereof. For the purposes of this Agreement, Interim Servicer shall be under no
obligation to deal with any Person with respect to this Agreement or the
Mortgage Loans unless the Interim Servicer has been notified of such transfers
as provided in this Section 2.01. The Purchaser may sell and transfer, in
whole or in part, the Mortgage Loans. Upon notice thereof, Interim Servicer
shall xxxx its books and records to reflect the ownership of the Mortgage
Loans by such assignee, and the previous Purchaser shall be released from its
obligations hereunder. This Agreement shall be binding upon and inure to the
benefit of the Purchaser and Interim Servicer and their permitted successors,
assignees and designees.
Section 2.02 Liquidation of Mortgage Loans. In the event that any
payment due under any Mortgage Loan and not postponed pursuant to Section 2.01
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
Interim Servicer shall take such action as (1) the Interim Servicer would take
under similar circumstances with respect to a similar mortgage loan held for
its own account for investment, (2) shall be consistent with Accepted
Servicing Practices or (3) the Interim Servicer shall determine prudently to
be in the best interest of Purchaser.
Section 2.03 Collection of Mortgage Loan Payments. Continuously
from the date hereof until the related Transfer Date, the Interim Servicer
shall proceed diligently to collect all payments due under each of the
Mortgage Loans when the same shall become due and payable and shall take
special care in ascertaining and estimating Escrow Payments and all other
charges that will become due and payable with respect to the Mortgage Loans
and each related Mortgaged Property, to the end that the installments payable
by the Mortgagors will be sufficient to pay such charges as and when they
become due and payable.
Section 2.04 Establishment of and Deposits to Custodial Account.
The Interim Servicer shall segregate and hold all funds collected and received
pursuant to the Mortgage Loans separate and apart from any of its own funds
and general assets and shall establish and maintain one or more Custodial
Accounts, in the form of time deposit or demand accounts, titled "New Century
Mortgage Corporation in trust for Xxxxxxx Xxxxx Mortgage Company, Residential
Fixed and Adjustable Rate Mortgage Loans, and various Mortgagors." The
Custodial Account shall be established with a Qualified Depository acceptable
to the Purchaser. The Interim Servicer and the Purchaser intend that the
Custodial Accounts shall be special deposit accounts. Any funds deposited in
the Custodial Account shall at all times be fully insured to the full extent
permitted under applicable law. Funds deposited in the Custodial Account may
be drawn on by the Interim Servicer in accordance with Section 2.05. The
creation of any Custodial Account shall be evidenced by a certification in the
form of Exhibit 2 hereto, in the case of an account established with the
Interim Servicer, or by a letter agreement in the form of Exhibit 3 hereto, in
the case of an account held by a depository other than the Interim Servicer. A
copy of such certification or letter agreement shall be furnished to the
Purchaser and, upon request, to any subsequent Purchaser.
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The Interim Servicer shall deposit in the Custodial Account on a
daily basis, and retain therein, the following collections received by the
Interim Servicer after the Cut-off Date:
(i) all payments on account of principal on the Mortgage Loans,
including all Principal Prepayments;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Loan Remittance Rate;
(iii) all Liquidation Proceeds;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 2.10 (other than proceeds to be held in
the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or released to the Mortgagor in accordance with
Section 2.13);
(v) all Condemnation Proceeds which are not applied to the
restoration or repair of the Mortgaged Property or released to the
Mortgagor in accordance with Section 2.15;
(vi) any amount required to be deposited in the Custodial Account
pursuant to Section 2.01, 2.09, 3.01, 4.01 or 4.02;
(vii) any amounts payable in connection with the repurchase of any
Mortgage Loan pursuant to the Purchase Agreement;
(viii) with respect to each Principal Prepayment in full or in
part, the Prepayment Interest Shortfall Amount, if any, for the month of
distribution. Such deposit shall be made from the Servicer's own funds,
without reimbursement therefor up to a maximum amount per month of the
Servicing Fee actually received for such month for the Mortgage Loans;
and
(ix) any prepayment penalties received with respect to any
Mortgage Loan.
The foregoing requirements for deposit into the Custodial Account
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges
and assumption fees, to the extent permitted by Section 4.01, need not be
deposited by the Interim Servicer into the Custodial Account. Any interest
paid on funds deposited in the Custodial Account by the depository institution
shall accrue to the benefit of the Interim Servicer and the Interim Servicer
shall be entitled to retain and withdraw such interest from the Custodial
Account pursuant to Section 2.05.
Section 2.05 Permitted Withdrawals from Custodial Account. The
Interim Servicer shall, from time to time, withdraw funds from the Custodial
Account for the following purposes:
(i) to make payments to the Purchaser in the amounts and in the
manner provided for in Section 3.01;
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(ii) to reimburse itself for unreimbursed Servicing Advances, and
any unpaid Servicing Fees, the Interim Servicer's right to reimburse
itself pursuant to this subclause (ii) with respect to any Mortgage Loan
being limited to related Liquidation Proceeds, Condemnation Proceeds,
Insurance Proceeds and such other amounts as may be collected by the
Interim Servicer from the Mortgagor or otherwise relating to the
Mortgage Loan, it being understood that, in the case of any such
reimbursement, the Interim Servicer's right thereto shall be prior to
the rights of the Purchaser except that, where the Interim Servicer is
required to repurchase a Mortgage Loan pursuant to the Purchase
Agreement or Section 4.02 of this Agreement, the Interim Servicer's
right to such reimbursement shall be subsequent to the payment to the
Purchaser of the Repurchase Price pursuant to such sections and all
other amounts required to be paid to the Purchaser with respect to such
Mortgage Loan;
(iii) to pay itself pursuant to Section 4.03, as servicing
compensation, interest on funds deposited in the Custodial Account;
(iv) to reimburse itself for expenses incurred and reimbursable to
it pursuant to Section 4.03;
(v) to clear and terminate the Custodial Account upon the
termination of this Agreement; and
(vi) to withdraw funds deposited in error.
Section 2.06 Establishment of and Deposits to Escrow Account. The
Interim Servicer shall segregate and hold all funds collected and received
pursuant to a Mortgage Loan constituting Escrow Payments separate and apart
from any of its own funds and general assets and shall establish and maintain
one or more Escrow Accounts, in the form of time deposit or demand accounts
titled, "New Century Mortgage Corporation, in trust for Xxxxxxx Sachs Mortgage
Company Residential Fixed and Adjustable Rate Mortgage Loans, and various
Mortgagors." The Escrow Accounts shall be established with a Qualified
Depository, in a manner which shall provide maximum available insurance
thereunder. The parties hereto intend that the Escrow Account shall be a
special deposit account. Funds deposited in the Escrow Account may be drawn on
by the Interim Servicer in accordance with Section 2.07. The creation of any
Escrow Account shall be evidenced by a certification in the form of Exhibit 4
hereto, in the case of an account established with the Interim Servicer, or by
a letter agreement in the form of Exhibit 5 hereto, in the case of an account
held by a depository other than the Interim Servicer. A copy of such
certification shall be furnished to the Purchaser and, upon request, to any
subsequent Purchaser.
The Interim Servicer shall deposit in the Escrow Account or
Accounts on a daily basis, and retain therein:
(i) all Escrow Payments collected on account of the Mortgage
Loans, for the purpose of effecting timely payment of any such items as
required under the terms of this Agreement; and
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(ii) all amounts representing Insurance Proceeds or Condemnation
Proceeds which are to be applied to the restoration or repair of any
Mortgaged Property.
The Interim Servicer shall make withdrawals from the Escrow
Account only to effect such payments as are required under this Agreement, as
set forth in Section 2.07. The Interim Servicer shall be entitled to retain
any interest paid on funds deposited in the Escrow Account by the depository
institution, other than interest on escrowed funds required by law to be paid
to the Mortgagor. To the extent required by law, the Interim Servicer shall
pay interest on escrowed funds to the Mortgagor notwithstanding that the
Escrow Account may be non-interest bearing or that interest paid thereon is
insufficient for such purposes.
Section 2.07 Permitted Withdrawals from Escrow Account.
Withdrawals from the Escrow Account or Accounts may be made by the Interim
Servicer only:
(i) to effect timely payments of ground rents, taxes, assessments,
water rates, mortgage insurance premiums, condominium charges, fire and
hazard insurance premiums or other items constituting Escrow Payments
for the related Mortgage;
(ii) to reimburse the Interim Servicer for any Servicing Advance
made by the Interim Servicer pursuant to Section 2.08 with respect to a
related Mortgage Loan, but only from amounts received on the related
Mortgage Loan which represent late collections of Escrow Payments
thereunder;
(iii) to refund to any Mortgagor any funds found to be in excess
of the amounts required under the terms of the related Mortgage Loan;
(iv) for transfer to the Custodial Account and application to
reduce the principal balance of the Mortgage Loan in accordance with the
terms of the related Mortgage and Mortgage Note;
(v) for application to restoration or repair of the Mortgaged
Property in accordance with the procedures outlined in Section 2.13;
(vi) to pay to the Interim Servicer, or any Mortgagor to the
extent required by law, any interest paid on the funds deposited in the
Escrow Account;
(vii) to clear and terminate the Escrow Account on the termination
of this Agreement; and
(viii) to withdraw funds deposited in error.
Section 2.08 Payment of Taxes, Insurance and Other Charges. With
respect to each Mortgage Loan, the Interim Servicer shall maintain accurate
records reflecting the status of ground rents, taxes, assessments, water
rates, sewer rents, and other charges which are or may become a lien upon the
Mortgaged Property and the status of fire and hazard insurance coverage and
shall obtain, from time to time, all bills for the payment of such charges
(including renewal premiums) and shall effect payment thereof prior to the
applicable penalty or termination date, employing for such purpose deposits of
the Mortgagor in the Escrow Account which shall have
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been estimated and accumulated by the Interim Servicer in amounts sufficient
for such purposes, as allowed under the terms of the Mortgage. To the extent
that a Mortgage does not provide for Escrow Payments, the Interim Servicer
shall determine that any such payments are made by the Mortgagor at the time
they first become due. The Interim Servicer assumes full responsibility for
the timely payment of all such bills and shall effect timely payment of all
such charges irrespective of each Mortgagor's faithful performance in the
payment of same or the making of the Escrow Payments, and the Interim Servicer
shall make advances from its own funds to effect such payments and such
advances shall constitute Servicing Advances.
In connection with its activities as servicer, the Servicer agrees
to prepare and present, on behalf of itself and the Purchaser, claims to the
insurer under any PMI Policy in a timely fashion in accordance with the terms
of such PMI Policy and, to take such action as shall be necessary to permit
recovery under any PMI Policy. Any amounts collected by the Servicer under any
PMI Policy shall be deposited in the Escrow Account.
Section 2.09 Protection of Accounts. The Interim Servicer may
transfer the Custodial Account or the Escrow Account to a different Qualified
Depository from time to time. Such transfer shall be made only upon obtaining
the consent of the Purchaser, which consent shall not be withheld
unreasonably.
The Interim Servicer shall bear any expenses, losses or damages
sustained by the Purchaser because the Custodial Account and/or the Escrow
Account are not demand deposit accounts.
Amounts on deposit in the Custodial Account and the Escrow Account
may at the option of the Interim Servicer be invested in Eligible Investments;
provided that in the event that amounts on deposit in the Custodial Account or
the Escrow Account exceed the amount fully insured by the FDIC (the "Insured
Amount") the Interim Servicer shall be obligated to invest the excess amount
over the Insured Amount in Eligible Investments on the same Business Day as
such excess amount becomes present in the Custodial Account or the Escrow
Account. Any such Eligible Investment shall mature no later than the
Determination Date next following the date of such Eligible Investment;
provided, however, that if such Eligible Investment is an obligation of a
Qualified Depository (other than the Interim Servicer) that maintains the
Custodial Account or the Escrow Account, then such Eligible Investment may
mature on such Remittance Date. Any such Eligible Investment shall be made in
the name of the Interim Servicer in trust for the benefit of the Purchaser.
All income on or gain realized from any such Eligible Investment shall be for
the benefit of the Interim Servicer and may be withdrawn at any time by the
Interim Servicer. Any losses incurred in respect of any such investment shall
be deposited in the Custodial Account or the Escrow Account, as applicable, by
the Interim Servicer out of its own funds immediately as realized.
Section 2.10 Maintenance of Hazard Insurance. The Interim Servicer
shall cause to be maintained for each Mortgage Loan, hazard insurance such
that all buildings upon the Mortgaged Property are insured by a generally
acceptable insurer rated A:VI or better in the current Best's Key Rating Guide
("Best's") against loss by fire, hazards of extended coverage and such other
hazards as are customary in the area where the Mortgaged Property is located,
in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the
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improvements securing such Mortgage Loan and (ii) the greater of (a) the
outstanding principal balance of the Mortgage Loan and (b) an amount such that
the proceeds thereof shall be sufficient to prevent the Mortgagor or the loss
payee from becoming a co-insurer.
If upon origination of the Mortgage Loan, the related Mortgaged
Property was located in an area identified in the Federal Register by the
Flood 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 with a generally acceptable insurance carrier rated AVI or better
in Best's in an amount representing coverage equal to the lesser of (i) the
minimum amount required, under the terms of coverage, to compensate for any
damage or loss on a replacement cost basis (or the unpaid balance of the
mortgage if replacement cost coverage is not available for the type of
building insured) and (ii) the maximum amount of insurance which is available
under the Flood Disaster Protection Act of 1973, as amended. If at any time
during the term of the Mortgage Loan, the Interim Servicer determines in
accordance with applicable law and pursuant to the Xxxxxx Xxx Guides that a
Mortgaged Property is located in a special flood hazard area and is not
covered by flood insurance or is covered in an amount less than the amount
required by the Flood Disaster Protection Act of 1973, as amended, the Interim
Servicer shall notify the related Mortgagor that the Mortgagor must obtain
such flood insurance coverage, and if said Mortgagor fails to obtain the
required flood insurance coverage within forty-five (45) days after such
notification, the Interim Servicer shall immediately force place the required
flood insurance on the Mortgagor's behalf.
If a Mortgage is secured by a unit in a condominium project, the
Interim Servicer shall verify that the coverage required of the owner's
association, including hazard, flood, liability, and fidelity coverage, is
being maintained in accordance with then current Xxxxxx Mae requirements, and
secure from the owner's association its agreement to notify the Interim
Servicer promptly of any change in the insurance coverage or of any
condemnation or casualty loss that may have a material effect on the value of
the Mortgaged Property as security.
The Interim Servicer shall cause to be maintained on each
Mortgaged Property earthquake or such other or additional insurance as may be
required pursuant to such applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance, or pursuant to the
requirements of any private mortgage guaranty insurer, or as may be required
to conform with Accepted Servicing Practices.
In the event that the Purchaser or the Interim Servicer shall
determine that the Mortgaged Property should be insured against loss or damage
by hazards and risks not covered by the insurance required to be maintained by
the Mortgagor pursuant to the terms of the Mortgage, the Interim Servicer
shall communicate and consult with the Mortgagor with respect to the need for
such insurance and bring to the Mortgagor's attention the desirability of
protection of the Mortgaged Property.
All policies required hereunder shall name the Interim Servicer as
loss payee and shall be endorsed with standard or New York mortgagee clauses,
without contribution, which shall provide for at least 30 days prior written
notice of any cancellation, reduction in amount or material change in
coverage.
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The Interim Servicer shall not interfere with the Mortgagor's
freedom of choice in selecting either his insurance carrier or agent,
provided, however, that the Interim Servicer shall not accept any such
insurance policies from insurance companies unless such companies are rated
A:VI or better in Best's and are licensed to do business in the jurisdiction
in which the Mortgaged Property is located. The Interim Servicer shall
determine that such policies provide sufficient risk coverage and amounts,
that they insure the property owner, and that they properly describe the
property address. The Interim Servicer shall furnish to the Mortgagor a formal
notice of expiration of any such insurance in sufficient time for the
Mortgagor to arrange for renewal coverage by the expiration date; provided,
however, that in the event that no such notice is furnished by the Interim
Servicer, the Interim Servicer shall ensure that replacement insurance
policies are in place in the required coverages and the Interim Servicer shall
be solely liable for any losses in the event coverage is not provided..
Pursuant to Section 2.04, any amounts collected by the Interim
Servicer under any such policies (other than amounts to be deposited in the
Escrow Account and applied to the restoration or repair of the related
Mortgaged Property, or property acquired in liquidation of the Mortgage Loan,
or to be released to the Mortgagor, in accordance with the Interim Servicer's
normal servicing procedures as specified in Section 2.13) shall be deposited
in the Custodial Account subject to withdrawal pursuant to Section 2.05.
Section 2.11 Maintenance of Fidelity Bond and Errors and Omissions
Insurance. The Interim Servicer shall maintain with responsible companies, at
its own expense, a blanket Fidelity Bond and an Errors and Omissions Insurance
Policy, with broad coverage on all officers, employees or other persons acting
in any capacity requiring such persons to handle funds, money, documents or
papers relating to the Mortgage Loans ("Interim Servicer Employees"). Any such
Fidelity Bond and Errors and Omissions Insurance Policy shall be in the form
of the Mortgage Banker's Blanket Bond and shall protect and insure the Interim
Servicer against losses, including forgery, theft, embezzlement, fraud, errors
and omissions and negligent acts of such Interim Servicer Employees. Such
Fidelity Bond and Errors and Omissions Insurance Policy also shall protect and
insure the Interim Servicer against losses in connection with the release or
satisfaction of a Mortgage Loan without having obtained payment in full of the
indebtedness secured thereby. No provision of this Section 2.11 requiring such
Fidelity Bond and Errors and Omissions Insurance Policy shall diminish or
relieve the Interim 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 Guides or by Xxxxxxx Mac in the Xxxxxxx Xxx Xxxxxxx' &
Servicers' Guide. Upon the request of the Purchaser, the Interim Servicer
shall cause to be delivered to the Purchaser a certified true copy of such
fidelity bond and insurance policy and a statement from the surety and the
insurer that such fidelity bond and insurance policy shall in no event be
terminated or materially modified without 30 days' prior written notice to the
Purchaser.
Section 2.12 Inspections. The Servicer shall inspect the Mortgaged
Property as often as deemed necessary by the Servicer to assure itself that
the value of the Mortgaged Property is being preserved. In addition, if any
Mortgage Loan is more than 60 days delinquent, the Servicer immediately shall
inspect the Mortgaged Property (provided that if the Servicer is in
communication with the Mortgagor with respect to bringing the Mortgage Loan
current the
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Servicer shall conduct inspections in accordance with Accepted Servicing
Practices) and shall conduct subsequent inspections in accordance with
Accepted Servicing Practices or as may be required by the primary mortgage
guaranty insurer. The Servicer shall keep a written report of each such
inspection.
Section 2.13 Restoration of Mortgaged Property. The Interim
Servicer need not obtain the approval of the Purchaser prior to releasing any
Insurance Proceeds or Condemnation Proceeds to the Mortgagor to be applied to
the restoration or repair of the Mortgaged Property if such release is in
accordance with Accepted Servicing Practices. At a minimum, the Interim
Servicer shall comply with the following conditions in connection with any
such release of Insurance Proceeds or Condemnation Proceeds:
(i) the Interim Servicer shall receive satisfactory independent
verification of completion of repairs and issuance of any required
approvals with respect thereto;
(ii) the Interim Servicer shall take all steps necessary to
preserve the priority of the lien of the Mortgage, including, but not
limited to requiring waivers with respect to mechanics' and
materialmen's liens;
(iii) the Interim Servicer shall verify that the Mortgage Loan is
not in default; and
(iv) pending repairs or restoration, the Interim Servicer shall
place the Insurance Proceeds or Condemnation Proceeds in the Escrow
Account.
If the Purchaser is named as an additional loss payee, the Interim
Servicer is hereby empowered to endorse any loss draft issued in respect of
such a claim in the name of the Purchaser.
Section 2.14 Liquidation Reports. Upon the foreclosure sale of any
Mortgaged Property or the acquisition thereof by the Purchaser pursuant to a
deed in lieu of foreclosure, the Interim Servicer shall submit to the
Purchaser a liquidation report with respect to such Mortgaged Property.
Section 2.15 Notification of Adjustments. With respect to each
Mortgage Loan, the Interim Servicer shall adjust the Mortgage Interest Rate on
the related Interest Rate Adjustment Date in compliance with the requirements
of applicable law and the related Mortgage and Mortgage Note. The Interim
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 Interest Rate adjustments. The Interim Servicer shall
promptly, upon written request therefor, deliver to the Purchaser such
notifications and any additional applicable data regarding such adjustments
and the methods used to calculate and implement such adjustments. Upon the
discovery by the Interim Servicer or the receipt of notice from the Purchaser
that the Interim Servicer has failed to adjust a Mortgage Interest Rate in
accordance with the terms of the related Mortgage Note, the Interim Servicer
shall immediately deposit in the Custodial Account from its own funds the
amount of any interest loss or deferral caused the Purchaser thereby.
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Section 2.16 Reports of Foreclosures and Abandonments of Mortgaged
Property. Following the foreclosure sale or abandonment of any Mortgaged
Property, the Interim Servicer shall report such foreclosure or abandonment as
required pursuant to Section 6050J of the Code.
Section 2.17 Credit Reporting. The Interim Servicer shall report
the Mortgagor credit files to each of the three credit repositories on a
monthly basis in a timely manner.
ARTICLE III
PAYMENTS TO PURCHASER
Section 3.01 Remittances. On each Remittance Date the Interim
Servicer shall remit by wire transfer of immediately available funds to the
Purchaser all amounts deposited in the Custodial Account as of the close of
business on the Determination Date (net of charges against or withdrawals from
the Custodial Account pursuant to Section 2.05).
With respect to any remittance received by the Purchaser after the
second Business Day following the Business Day on which such payment was due,
the Interim Servicer shall pay to the Purchaser interest on any such late
payment at an annual rate equal to the Prime Rate, adjusted as of the date of
each change, plus three percentage points, but in no event greater than the
maximum amount permitted by applicable law. Such interest shall be deposited
in the Custodial Account by the Interim Servicer on the date such late payment
is made and shall cover the period commencing with the day the payment was due
and ending with the Business Day on which such payment is made, both
inclusive. Such interest shall be remitted along with the distribution payable
on the next succeeding Remittance Date. The payment by the Interim Servicer of
any such interest shall not be deemed an extension of time for payment or a
waiver of any Event of Default by the Interim Servicer.
Section 3.02 Statements to Purchaser. Not later than the
Remittance Date, the Interim Servicer shall furnish to the Purchaser a Monthly
Remittance Advice, with a trial balance report attached thereto, in the form
of Exhibit 1 annexed hereto in hard copy and electronic medium mutually
acceptable to the parties as to the preceding remittance and the period ending
on the preceding Determination Date.
In addition, not more than 60 days after the end of each calendar
year, the Interim Servicer shall furnish to each Person who was a Purchaser at
any time during such calendar year an annual statement in accordance with the
requirements of applicable federal income tax law as to the aggregate of
remittances for the applicable portion of such year.
Such obligation of the Interim Servicer shall be deemed to have
been satisfied to the extent that substantially comparable information shall
be provided by the Interim Servicer pursuant to any requirements of the
Internal Revenue Code as from time to time are in force.
The Interim Servicer shall prepare and file any and all tax
returns, information statements or other filings required to be delivered to
any governmental taxing authority or to the Purchaser pursuant to any
applicable law with respect to the Mortgage Loans and the
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transactions contemplated hereby. In addition, the Interim Servicer shall
provide the Purchaser with such information concerning the Mortgage Loans as
is necessary for the Purchaser to prepare its federal income tax return as the
Purchaser may reasonably request from time to time.
Section 3.03 Advances by Servicer. Except as otherwise provided
herein, the Interim Servicer shall be entitled to first priority reimbursement
pursuant to Section 2.07 hereof for Servicing Advances from recoveries from
the related Mortgagor or from all Liquidation Proceeds and other payments or
recoveries (including Insurance Proceeds and Condemnation Proceeds) with
respect to the related Mortgage Loan.
Section 3.04 Principal and Interest Advances. The Interim Servicer
shall have no obligation to advance any amounts constituting delinquent
principal and interest payments.
ARTICLE IV
GENERAL SERVICING PROCEDURES
Section 4.01 Transfers of Mortgaged Property. The Interim Servicer
shall use its best efforts to enforce any "due-on-sale" provision contained in
any Mortgage or Mortgage Note and to deny assumption by the person to whom the
Mortgaged Property has been or is about to be sold whether by absolute
conveyance or by contract of sale, and whether or not the Mortgagor remains
liable on the Mortgage and the Mortgage Note. When the Mortgaged Property has
been conveyed by the Mortgagor, the Interim Servicer shall, to the extent it
has knowledge of such conveyance, exercise its rights to accelerate the
maturity of such Mortgage Loan under the "due-on-sale" clause applicable
thereto.
If the Interim Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause, the Interim Servicer
shall enter into (i) an assumption and modification agreement with the person
to whom such property has been conveyed, pursuant to which such person becomes
liable under the Mortgage Note and the original Mortgagor remains liable
thereon or (ii) in the event the Interim Servicer is unable under applicable
law to require that the original Mortgagor remain liable under the Mortgage
Note and the Interim Servicer has the prior consent of the primary mortgage
guaranty insurer, a substitution of liability agreement with the purchaser of
the Mortgaged Property pursuant to which the original Mortgagor is released
from liability and the purchaser of the Mortgaged Property is substituted as
Mortgagor and becomes liable under the Mortgage Note. If an assumption fee is
collected by the Interim Servicer for entering into an assumption agreement, a
portion of such fee, up to an amount equal to one-half of one percent (0.5%)
of the outstanding principal balance of the related Mortgage Loan, will be
retained by the Interim Servicer as additional servicing compensation, and any
portion thereof in excess of one-half of one percent (0.5%) shall be deposited
in the Custodial Account for the benefit of the Purchaser. In connection with
any such assumption, neither the Mortgage Interest Rate borne by the related
Mortgage Note, the term of the Mortgage Loan nor the outstanding principal
amount of the Mortgage Loan shall be changed.
To the extent that any Mortgage Loan is assumable, the Interim
Servicer shall inquire diligently into the creditworthiness of the proposed
transferee, and shall use the underwriting criteria for approving the credit
of the proposed transferee which are used by the
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Sellers and their affiliates with respect to underwriting mortgage loans of
the same type as the Mortgage Loans. If the credit of the proposed transferee
does not meet such underwriting criteria, the Interim Servicer diligently
shall, to the extent permitted by the Mortgage or the Mortgage Note and by
applicable law, accelerate the maturity of the Mortgage Loan.
Section 4.02 Satisfaction of Mortgages and Release of Mortgage
Files. Upon the payment in full of any Mortgage Loan, or the receipt by the
Interim Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Interim Servicer shall notify the
Purchaser in the Monthly Remittance Advice as provided in Section 3.02, and
may request the release of any Mortgage Loan Documents from the Purchaser in
accordance with this Section 4.02 hereof.
If the Interim Servicer satisfies or releases a Mortgage without
first having obtained payment in full of the indebtedness secured by the
Mortgage or should the Interim Servicer otherwise prejudice any rights the
Purchaser may have under the mortgage instruments, upon written demand of the
Purchaser, the Interim Servicer shall repurchase the related Mortgage Loan at
the Repurchase Price by deposit thereof in the Custodial Account within 2
Business Days of receipt of such demand by the Purchaser. The Interim Servicer
shall maintain the Fidelity Bond and Errors and Omissions Insurance Policy as
provided for in Section 2.11 insuring the Interim Servicer against any loss it
may sustain with respect to any Mortgage Loan not satisfied in accordance with
the procedures set forth herein.
Section 4.03 Servicing Compensation. As compensation for its
services hereunder, the Interim Servicer shall be entitled to withdraw from
the Custodial Account or to retain from interest payments on the Mortgage
Loans the amount of its Servicing Fee. The Servicing Fee shall be payable
monthly and shall be computed on the basis of the same unpaid principal
balance and for the period respecting which any related interest payment on a
Mortgage Loan is computed. The Servicing Fee shall be payable only at the time
of and with respect to those Mortgage Loans for which payment is in fact made
of the entire amount of the Monthly Payment. The obligation of the Purchaser
to pay the Servicing Fee is limited to, and payable solely from, the interest
portion of such Monthly Payments collected by the Interim Servicer.
Additional servicing compensation in the form of Ancillary Income
shall be retained by the Interim Servicer to the extent not required to be
deposited in the Custodial Account. The Interim Servicer shall be required to
pay all expenses incurred by it in connection with its servicing activities
hereunder and shall not be entitled to reimbursement thereof except as
specifically provided for herein.
Section 4.04 Annual Statement as to Compliance. So long as any
Mortgage Loan are being serviced hereunder, the Interim Servicer shall deliver
to the Purchaser, on or before March 1st each year beginning March 1, 2007,
and on the related Transfer Date an Officer's Certificate, stating that (i) a
review of the activities of the Interim Servicer during the preceding calendar
year and of performance under this Agreement has been made under such
officer's supervision, (ii) the Interim Servicer has complied fully with the
provisions of Article II and Article IV, and (iii) to the best of such
officer's knowledge, based on such review, the Interim Servicer has fulfilled
all its obligations under this Agreement throughout such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default
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known to such officer and the nature and status thereof and the action being
taken by the Interim Servicer to cure such default. In the event that the
Interim Servicer is servicing in a securitization, the Interim Servicer shall
deliver to the Purchaser, on or before March 1st each year beginning March 1,
2007, a certification using the language supplied by the Purchaser in the form
of Exhibit 7 hereto.
Section 4.05 Annual Independent Public Accountants' Servicing
Report. So long as any Mortgage Loans are being serviced hereunder, on or
before March 1st of each year beginning March 1, 2007, the Interim Servicer,
at its expense, shall cause a firm of independent public accountants which is
a member of the American Institute of Certified Public Accountants to furnish
a statement to each Purchaser to the effect that such firm has examined
certain documents and records relating to the servicing of the Mortgage Loans
and this Agreement and that such firm is of the opinion that the provisions of
Article II and Article III have been complied with, and that, on the basis of
such examination conducted substantially in compliance with the Single Audit
Program for Mortgage Bankers, nothing has come to their attention which would
indicate that such servicing has not been conducted in compliance therewith,
except for (i) such exceptions as such firm shall believe to be immaterial,
and (ii) such other exceptions as shall be set forth in such statement.
Section 4.06 Right to Examine Interim Servicer Records. So long as
any Mortgage Loans are being serviced hereunder and for a reasonable period
after servicing has been transferred, the Purchaser shall have the right to
examine and audit any and all of the books, records, or other material
information of the Interim Servicer, whether held by the Interim Servicer or
by another on its behalf, with respect to or concerning this Agreement or the
Mortgage Loans, during business hours or at such other times as may be
reasonable under applicable circumstances, upon reasonable advance notice.
Section 4.07 Compliance with Xxxxx-Xxxxx-Xxxxxx Act of 1999. With
respect to each Mortgage Loan and the related Mortgagor, the Interim Servicer
shall comply with Title V of the Xxxxx-Xxxxx-Xxxxxx Act of 1999, as amended,
and all applicable regulations and guidelines promulgated thereunder, and
shall provide all notices required thereunder using the notice language
supplied by the Purchaser.
ARTICLE V
INTERIM SERVICER TO COOPERATE
Section 5.01 Provision of Information. During the term of this
Agreement, the Interim Servicer shall furnish to the Purchaser such periodic,
special, or other reports or information, whether or not provided for herein,
as shall be necessary, reasonable, or appropriate with respect to the
Purchaser or the purposes of this Agreement. All such reports or information
shall be provided by and in accordance with all reasonable instructions and
directions which the Purchaser may give.
The Interim Servicer shall execute and deliver all such
instruments and take all such action as the Purchaser may reasonably request
from time to time, in order to effectuate the purposes and to carry out the
terms of this Agreement.
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Section 5.02 Financial Statements; Servicing Facilities. So long
as any Mortgage Loan are being serviced hereunder and for a reasonable period
after servicing has been transferred, in connection with marketing the
Mortgage Loans, the Purchaser may make available to a prospective Purchaser a
Consolidated Statement of Operations of the Interim Servicer for the most
recently completed three fiscal years for which such a statement is available,
as well as a Consolidated Statement of Condition at the end of the last two
fiscal years covered by such Consolidated Statement of Operations. The Interim
Servicer also shall make available any comparable interim statements to the
extent any such statements have been prepared by or on behalf of the Interim
Servicer (and are available upon request to members or stockholders of the
Interim Servicer or to the public at large). If it has not already done so,
the Interim Servicer shall furnish promptly to the Purchaser copies of the
statement specified above.
So long as any Mortgage Loan are being serviced hereunder and for
a reasonable period after servicing has been transferred, the Interim Servicer
shall make available to the Purchaser or any prospective Purchaser a
knowledgeable financial or accounting officer for the purpose of answering
questions respecting recent developments affecting the Interim Servicer or the
financial statements of the Interim Servicer, and to permit any prospective
Purchaser to inspect the Interim Servicer's servicing facilities for the
purpose of satisfying such prospective Purchaser that the Interim Servicer has
the ability to service the Mortgage Loans as provided in this Agreement.
ARTICLE VI
TERMINATION
Section 6.01 Damages. The Purchaser shall have the right at any
time to seek and recover from the Interim Servicer any damages or losses
suffered by it as a result of any failure by the Interim Servicer to observe
or perform any duties, obligations, covenants or agreements herein contained
or contained in the Purchase Agreement, or as a result of a party's failure to
remain an approved Xxxxxx Xxx or Xxxxxxx Mac mortgage servicer.
Section 6.02 Termination. This Agreement shall terminate with
respect to the Mortgage Loans or portion thereof transferred on the related
Transfer Date or on such other date as mutually agreed upon by the Purchaser
and the Interim Servicer. The Purchaser may elect to terminate this Agreement
and transfer the servicing from the Interim Servicer prior to the related
Transfer Date with respect to all or any portion of the Mortgage Loans by
providing written notice to the Interim Servicer at least 30 days prior to the
date on which it intends to transfer the servicing of its intent to transfer
the servicing from the Interim Servicer.
In the event the Interim Servicer is terminated pursuant to the
terms of this Agreement, the Interim Servicer agrees to cooperate with the
Purchaser and with any party designated as the successor servicer or
subservicer in transferring the servicing to such successor servicer. In
addition, the Interim Servicer shall be responsible for notifying the related
mortgagors of any transfer of servicing in accordance with the requirements of
the RESPA and the Xxxxxxxx Xxxxxxxx National Affordable Housing Act of 1990,
as amended.
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On or before the related Transfer Date or such other date
specified by the Purchaser in accordance with this paragraph (a) for the
transfer of servicing from the Interim Servicer, the Interim Servicer shall
prepare, execute and deliver to the successor entity designated by the
Purchaser any and all documents and other instruments, place in such
successor's possession all Mortgage Loan Documents necessary or appropriate to
effect the purposes of such notice of termination, including but not limited
to the transfer and endorsement or assignment of the Mortgage Loans and
related documents, at the Interim Servicer's sole expense. The Interim
Servicer shall cooperate with the Purchaser and such successor in effecting
the termination of the Interim Servicer's responsibilities and rights
hereunder.
On the related Transfer Date for each Mortgage Loan, this
Agreement, except for Articles VI, VIII, IX and X which shall survive the
related Transfer Date, shall terminate.
(a) Servicing Advances. On the related Transfer Date, the
Purchaser or its designee shall reimburse the Interim Servicer for any
Servicing Advances with respect to any Mortgage Loan. This Section 6.02(b)
shall survive each Transfer Date.
(b) Additional Termination Provisions. Notwithstanding and in
addition to the foregoing, in the event that (i) a Mortgage Loan becomes
delinquent for a period of 90 days or more (a "Delinquent Mortgage Loan") or
(ii) a Mortgage Loan becomes an REO Property, the Purchaser may at its
election terminate this Agreement with respect to such Delinquent Mortgage
Loan or REO Property, upon 15 days' written notice to the Interim Servicer,
and have servicing transferred to a successor servicer.
ARTICLE VII
BOOKS AND RECORDS
Section 7.01 Possession of Servicing Files Prior to the Transfer
Date. Prior to the related Transfer Date, the contents of each Servicing File
are and shall be held in trust by the Interim Servicer for the benefit of the
Purchaser as the owner thereof. The Interim Servicer shall maintain in the
Servicing File a copy of the contents of each Mortgage File and the originals
of the documents in each Mortgage File not delivered to the Purchaser. The
possession of the Servicing File by the Interim Servicer is at the will of the
Purchaser for the sole purpose of servicing the related Mortgage Loan,
pursuant to this Agreement, and such retention and possession by the Interim
Servicer is in its capacity as Servicer only and at the election of the
Purchaser. The Interim Servicer shall release its custody of the contents of
any Servicing File only in accordance with written instructions from the
Purchaser, unless such release is required as incidental to the Interim
Servicer's servicing of the Mortgage Loans pursuant to this Agreement, or is
in connection with a repurchase of any Mortgage Loan pursuant to the Purchase
Agreement.
The Interim Servicer shall be responsible for maintaining, and
shall maintain, a complete set of books and records for each Mortgage Loan
which shall be marked clearly to reflect the ownership of each Mortgage Loan
by the Purchaser. In particular, the Interim Servicer shall maintain in its
possession, available for inspection by the Purchaser or its designee, and
shall deliver to the Purchaser or its designee upon demand, evidence of
compliance
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with all federal, state and local laws, rules and regulations, and
requirements of Xxxxxx Xxx or Xxxxxxx Mac, including but not limited to
documentation as to the method used in determining the applicability of the
provisions of the Flood Disaster Protection Act of 1973, as amended, to the
Mortgaged Property, documentation evidencing insurance coverage and
eligibility of any condominium project for approval by Xxxxxx Mae and periodic
inspection reports as required by Section 2.12.
The Interim Servicer shall keep at its servicing office books and
records in which, subject to such reasonable regulations as it may prescribe,
the Interim Servicer shall note transfers of Mortgage Loans. No transfer of a
Mortgage Loan may be made unless such transfer is in compliance with the terms
hereof. For the purposes of this Agreement, the Interim Servicer shall be
under no obligation to deal with any person with respect to this Agreement or
the Mortgage Loans unless the books and records show such person as the owner
of the Mortgage Loan. The Purchaser may, subject to the terms of this
Agreement, sell or transfer one or more of the Mortgage Loans. The Purchaser
also shall advise the Interim Servicer of the transfer. Upon receipt of notice
of the transfer, the Interim Servicer shall xxxx its books and records to
reflect the ownership of the Mortgage Loans of such assignee, and shall
release the previous Purchaser from its obligations hereunder with respect to
the Mortgage Loans sold or transferred.
ARTICLE VIII
INDEMNIFICATION AND ASSIGNMENT
Section 8.01 Indemnification. The Interim Servicer agrees to
indemnify the Purchaser and any successor servicer and hold them harmless
against any and all claims, losses, damages, penalties, fines, and
forfeitures, including, but not limited to reasonable and necessary legal fees
and related costs, judgments, and any other costs, fees and expenses that the
Purchaser may sustain in any way related to the failure of Interim Servicer to
(a) perform its duties and service the Mortgage Loans in strict compliance
with the terms of this Agreement and/or (b) comply with applicable law.
Additionally, the Interim Servicer shall indemnify the Purchaser, each
Affiliate designated by the Purchaser and each Person who controls the
Purchaser or such Affiliate and hold each of them harmless from and against
any losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and
expenses that each of them may sustain in any way related to any information
provided by or on behalf of the Interim Servicer regarding the Interim
Servicer, the Interim Servicer's servicing practices or performance, the
Mortgage Loans or the Underwriting Guidelines set forth in any offering
document prepared in connection with any sale or securitization of any
Mortgage Loans. The Interim Servicer immediately shall notify the Purchaser if
a claim is made by a third party with respect to this Agreement, 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 Interim Servicer shall
follow any written instructions received from the Purchaser in connection with
such claim. The Purchaser promptly shall reimburse the Interim Servicer for
all amounts advanced by it pursuant to the preceding sentence except when the
claim is in any way related to the Interim Servicer's indemnification pursuant
to the Purchase Agreement, or the
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failure of the Interim Servicer to (a) service and administer the Mortgage
Loans in strict compliance with the terms of this Agreement and/or (b) comply
with applicable law.
Notwithstanding anything to the contrary contained herein, in no
event shall a termination of this Agreement or the Interim Servicer hereunder
terminate any indemnification obligations of the Interim Servicer under this
Agreement, which obligations shall survive any such termination.
Section 8.02 Limitation on Liability of Interim Servicer and
Others. Neither the Interim Servicer nor any of the directors, officers,
employees or agents of the Interim Servicer shall be under any liability to
the Purchaser for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment,
provided, however, that this provision shall not protect the Interim Servicer
or any such person against any breach of warranties or representations made
herein, or failure to perform its obligations in strict compliance with any
standard of care set forth in this Agreement, or any liability which would
otherwise be imposed by reason of any breach of the terms and conditions of
this Agreement. The Interim Servicer and any director, officer, employee or
agent of the Interim 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 Interim Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties to service the Mortgage loans in accordance with this
Agreement and which in its opinion may involve it in any expense or liability;
provided, however, that the Interim Servicer may, with the consent of the
Purchaser, undertake any such action which it may deem necessary or desirable
in respect to this Agreement and the rights and duties of the parties hereto.
In such event, the Interim Servicer shall be entitled to reimbursement from
the Purchaser of the reasonable legal expenses and costs of such action.
Section 8.03 Limitation on Resignation and Assignment by Interim
Servicer. The Purchaser has entered into this Agreement with the Interim
Servicer and subsequent Purchasers will purchase the Mortgage Loans in
reliance upon the independent status of the Interim Servicer, and the
representations as to the adequacy of its servicing facilities, plant,
personnel, records and procedures, its integrity, reputation and financial
standing, and the continuance thereof. Therefore, the Interim Servicer shall
neither assign this Agreement or the servicing hereunder or delegate its
rights or duties hereunder or any portion hereof or sell or otherwise dispose
of all or substantially all of its property or assets without the prior
written consent of the Purchaser, which consent shall be granted or withheld
in the sole discretion of the Purchaser.
The Interim Servicer shall not resign from the obligations and
duties hereby imposed on it except by mutual consent of the Interim Servicer
and the Purchaser or upon the determination that its duties hereunder are no
longer permissible under applicable law and such incapacity cannot be cured by
the Interim Servicer. Any such determination permitting the resignation of the
Interim Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Purchaser which Opinion of Counsel shall be in form and
substance acceptable to the Purchaser. No such resignation shall become
effective until a successor shall have assumed the Interim Servicer's
responsibilities and obligations hereunder in the manner provided in Section
6.02.
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Without in any way limiting the generality of this Section 8.03,
in the event that the Interim Servicer either shall assign this Agreement or
the servicing responsibilities hereunder or delegate its duties hereunder
(unless the Interim Servicer remains liable hereunder for the performance of
such delegated duties) or any portion thereof or sell or otherwise dispose of
all or substantially all of its property or assets, without the prior written
consent of the Purchaser, then the Purchaser shall have the right to terminate
this Agreement upon notice given as set forth in Section 6.02, without any
payment of any penalty or damages and without any liability whatsoever to the
Interim Servicer or any third party.
Section 8.04 Assignment by Purchaser. The Purchaser shall have the
right, without the consent of the Interim Servicer, to assign, in whole or in
part, its interest under this Agreement with respect to some or all of the
Mortgage Loans, and designate any person to exercise any rights of the
Purchaser hereunder. Upon such assignment of rights and assumption of
obligations, the assignee or designee shall accede to the rights and
obligations hereunder of the Purchaser with respect to such Mortgage Loans and
the Purchaser as assignor shall be released from all obligations hereunder
with respect to such Mortgage Loans from and after the date of such assignment
and assumption. All references to the Purchaser in this Agreement shall be
deemed to include its assignee or designee with respect to such Mortgage
Loans.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES OF SELLER
The Interim Servicer warrants and represents to, and covenants and
agrees with, the Purchaser as follows:
Section 9.01 Due Organization and Authority. The Interim Servicer
is a corporation duly organized, validly existing and in good standing under
the laws of the state of its incorporation and has all licenses necessary to
carry on its business as now being conducted and is licensed, qualified and in
good standing in each state where a 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 Interim Servicer, and in any event the Interim
Servicer is in compliance with the laws of any such state to the extent
necessary to ensure the enforceability of the related Mortgage Loan in
accordance with the terms of this Agreement; the Interim Servicer has the full
corporate 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 or transfer to be delivered pursuant
to this Agreement) by the Interim 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
Interim Servicer; and all requisite corporate action has been taken by the
Interim Servicer to make this Agreement valid and binding upon the Interim
Servicer in accordance with its terms;
Section 9.02 Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the ordinary course of
business of the Interim Servicer;
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Section 9.03 No Conflicts. Neither the execution and delivery of
this Agreement, nor the fulfillment of or compliance with the terms and
conditions of this Agreement, will conflict with or result in a breach of any
of the terms, conditions or provisions of the Interim Servicer's charter or
by-laws or any legal restriction or any agreement or instrument to which the
Interim Servicer is now a party or by which it is bound, or constitute a
default or result in an acceleration under any of the foregoing, or result in
the violation of any law, rule, regulation, order, judgment or decree to which
the Interim Servicer or its property is subject, or impair the ability of the
Purchaser to realize on the Mortgage Loans, or impair the value of the
Mortgage Loans;
Section 9.04 Ability to Service. The Interim Servicer is a
seller/servicer of residential mortgage loans, with the facilities,
procedures, and experienced personnel necessary for the sound servicing of
mortgage loans of the same type as the Mortgage Loans;
Section 9.05 Ability to Perform. The Interim 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;
Section 9.06 No Litigation Pending. There is no action, suit,
proceeding or investigation pending or threatened against the Interim Servicer
which, either in any one instance or in the aggregate, may result in any
material adverse change in the business, operations, financial condition,
properties or assets of the Interim Servicer, or in any material impairment of
the right or ability of the Interim Servicer to carry on its business
substantially as now conducted, or in any material liability on the part of
the Interim Servicer, or which would draw into question the validity of this
Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of the Interim Servicer contemplated herein,
or which would be likely to impair materially the ability of the Interim
Servicer to perform under the terms of this Agreement;
Section 9.07 No Consent Required. No consent, approval,
authorization or order of any court or governmental agency or body is required
for the execution, delivery and performance by the Interim Servicer of or
compliance by the Interim Servicer with this Agreement or the Servicing of the
Mortgage Loans as evidenced by the consummation of the transactions
contemplated by this Agreement, or if required, such approval has been
obtained prior to the related Closing Date;
Section 9.08 No Untrue Information. Neither this Agreement nor any
statement, report or other document furnished or to be furnished pursuant to
this Agreement or in connection with the transactions contemplated hereby
contains any untrue statement of fact or omits to state a fact necessary to
make the statements contained therein not misleading.
Section 9.09 Prior Servicing. Prior to the date hereof, each
Mortgage Loan has been serviced in all material respects in strict compliance
with Accepted Servicing Practices and the Interim Servicer has reported the
Mortgagor credit files to each of the three credit repositories on a monthly
basis in a timely manner.
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ARTICLE X
DEFAULT
Section 10.01 Events of Default. The following shall
constitute an Event of Default under this Agreement on the part of the Interim
Servicer:
(a) any failure by the Interim Servicer to remit to the Purchaser
any payment required to be made under the terms of this Agreement which
continues unremedied for a period of two Business Days after the date upon
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Interim Servicer by the Purchaser; or
(b) the failure by the Interim Servicer duly to observe or perform
in any material respect any other of the covenants or agreements on the part
of the Interim Servicer set forth in this Agreement which continues unremedied
for a period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to the
Interim Servicer by the Purchaser; 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, readjustment of debt, marshaling of assets
and liabilities or similar proceedings, or for the winding-up or liquidation
of its affairs, shall have been entered against the Interim Servicer and such
decree or order shall have remained in force undischarged or unstayed for a
period of 60 days; or
(d) the Interim Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Interim Servicer or of or relating to all or substantially all of its
property; or
(e) the Interim Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take advantage
of any applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its
obligations; or
(f) the Interim Servicer fails to maintain a minimum net worth of
$25,000,000; or
(g) the Interim Servicer attempts to assign its right to servicing
compensation hereunder or the Interim Servicer attempts, without the consent
of the Purchaser, to sell or otherwise dispose of all or substantially all of
its property or assets or to assign this Agreement or the servicing
responsibilities hereunder or to delegate its duties hereunder or any portion
thereof.
In each and every such case, so long as an Event of Default shall
not have been remedied, in addition to whatever rights the Purchaser may have
at law or equity to damages, including injunctive relief and specific
performance, the Purchaser, by notice in writing to the
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Interim Servicer, may terminate all the rights and obligations of the Interim
Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof.
Upon receipt by the Interim Servicer of such written notice, all
authority and power of the Interim Servicer under this Agreement, whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in the
successor appointed pursuant to Section 6.02.
Section 10.02 Waiver of Defaults. By a written notice, the
Purchaser may waive any default by the Interim Servicer in the performance of
its obligations hereunder and its consequences. Upon any waiver of a past
default, such default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly so waived.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Notices. All notices, requests, demands and other
communications which are required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given upon
the delivery or mailing thereof, as the case may be, sent by registered or
certified mail, return receipt requested:
(a) If to Purchaser to:
Xxxxxxx Xxxxx Mortgage Company
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx
(b) If to Interim Servicer to:
New Century Mortgage Corporation
00000 Xxx Xxxxxx Xxx., Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
With a copy to:
New Century Mortgage Corporation
00000 Xxx Xxxxxx Xxx., Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
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Section 11.02 Waivers. Either the Interim Servicer or Purchaser
may upon consent of all parties, by written notice to the others:
(a) Waive compliance with any of the terms, conditions or
covenants required to be complied with by the others hereunder; and
(b) Waive or modify performance of any of the obligations of the
others hereunder.
The waiver by any party hereto of a breach of any provision of
this Agreement shall not operate or be construed as a waiver of any other
subsequent breach.
Section 11.03 Entire Agreement; Amendment. This Agreement and the
Purchase Agreement constitute the entire agreement between the parties with
respect to servicing of the Mortgages during the Interim Period. This
Agreement may be amended and any provision hereof waived, but, only in writing
signed by the party against whom such enforcement is sought.
Section 11.04 Execution; Binding Effect. This Agreement may be
executed in one or more counterparts and by the different parties hereto on
separate counterparts, each of which, when so executed, shall be deemed to be
an original; such counterparts, together, shall constitute one and the same
agreement. Subject to Section 8.03, this Agreement shall inure to the benefit
of and be binding upon the Interim Servicer and the Purchaser and their
respective successors and assigns.
Section 11.05 Headings. Headings of the Articles and Sections in
this Agreement are for reference purposes only and shall not be deemed to have
any substantive effect.
Section 11.06 Applicable Law. This Agreement shall be construed in
accordance with the laws of the State of New York.
Section 11.07 Relationship of Parties. Nothing herein contained
shall be deemed or construed to create a partnership or joint venture between
the parties. The duties and responsibilities of the Interim Servicer shall be
rendered by them as independent contractors and not as an agent of Purchaser.
The Interim Servicer shall have full control of all of its acts, doings,
proceedings, relating to or requisite in connection with the discharge of its
duties and responsibilities under this Agreement.
Section 11.08 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.
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ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01 Intent of the Parties; Reasonableness. The Purchaser
and the Interim Servicer acknowledge and agree that the purpose of Article XII
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. 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. The Interim Servicer acknowledges
that interpretations of the requirements of Regulation AB may change over
time, whether due to interpretive guidance provided by the Commission or its
staff, consensus among participants in the asset-backed securities markets,
advice of counsel, or otherwise, and agrees to comply with requests made by
the Purchaser or any Depositor in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. In
connection with any Securitization Transaction, the Interim Servicer shall
cooperate fully with the Purchaser to deliver to the Purchaser (including any
of its assignees or designees) and any Depositor, any and all statements,
reports, certifications, records and any other information necessary in the
good faith determination of the Purchaser or any Depositor to permit the
Purchaser or such Depositor to comply with the provisions of Regulation AB,
together with such disclosures relating to the Interim Servicer any
Subservicer 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.
Section 12.02 Additional Representations and Warranties of the
Interim Servicer. (a) The Interim Servicer shall be deemed to represent to the
Purchaser and to any Depositor, as of the date on which information is first
provided to the Purchaser or any Depositor under Section 12.03 that, except as
disclosed in writing to the Purchaser or such Depositor prior to such date:
(i) the Interim Servicer is not aware and has not received notice that any
default, early amortization or other performance triggering event has occurred
as to any other securitization due to any act or failure to act of the Interim
Servicer; (ii) the Interim Servicer has not been terminated as servicer in a
residential mortgage loan securitization, either due to a servicing default or
to application of a servicing performance test or trigger; (iii) no material
noncompliance with the applicable servicing criteria with respect to other
securitizations of residential mortgage loans involving the Interim Servicer
as servicer has been disclosed or reported by the Interim Servicer; (iv) no
material changes to the Interim Servicer's policies or procedures with respect
to the servicing function it will perform under this Agreement and any
Reconstitution Agreement for mortgage loans of a type similar to the Mortgage
Loans have occurred during the three-year period immediately preceding the
related Securitization Transaction; (v) there are no aspects of the Interim
Servicer's financial condition that could have a material adverse effect on
the performance by the Interim Servicer of its servicing obligations under
this Agreement or any Reconstitution Agreement; (vi) there are no material
legal or governmental proceedings pending (or known to be contemplated)
against the Interim Servicer or any Subservicer; and (vii) there are no
affiliations, relationships or transactions relating to the Interim Servicer
or any Subservicer with respect to any Securitization Transaction and any
party thereto identified by the related Depositor of a type described in Item
1119 of Regulation AB.
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(b) If so requested by the Purchaser or any Depositor on any date
following the date on which information is first provided to the Purchaser or
any Depositor under Section 12.03, the Interim Servicer shall, within five
Business Days following such request, confirm in writing the accuracy of the
representations and warranties set forth in paragraph (a) of this Section or,
if any such representation and warranty is not accurate as of the date of such
request, provide reasonably adequate disclosure of the pertinent facts, in
writing, to the requesting party.
Section 12.03 Information to Be Provided by the Interim Servicer.
In connection with any Securitization Transaction in which Mortgage Loans
purchased from the Seller or any Affiliate of the Seller comprise 20% or more
of the aggregate outstanding cut-off balance of the mortgage loans in such
Securitization Transaction the Interim Servicer shall (i) within five Business
Days following request by the Purchaser or any Depositor, provide to the
Purchaser and such Depositor (or cause each Subservicer to provide), in
writing and in form and substance reasonably satisfactory to the Purchaser and
such Depositor, the information and materials specified in paragraphs (a), (c)
and (f) of this Section, and (ii) as promptly as practicable following notice
to or discovery by the Interim Servicer, provide to the Purchaser and any
Depositor (in writing and in form and substance reasonably satisfactory to the
Purchaser and such Depositor) the information specified in paragraph (d) of
this Section.
(a) If so requested by the Purchaser or any Depositor, the Interim
Servicer shall provide such information regarding each Subservicer, as is
requested for the purpose of compliance with Items 1103(a)(1), 1117 and 1119
of Regulation AB. Such information shall include, at a minimum:
A) [Reserved];
B) [Reserved];
C) a description of any material legal or governmental
proceedings pending (or known to be contemplated) against the
Interim Servicer and each Subservicer; and
D) a description of any affiliation or relationship between
the Interim Servicer, each Subservicer and any of the following
parties to a Securitization Transaction, as such parties are
identified to the Interim Servicer by the Purchaser or any
Depositor in writing in advance of such Securitization
Transaction:
1) the sponsor;
2) the depositor;
3) the issuing entity;
4) any servicer;
5) any trustee;
-30-
6) any originator;
7) any significant obligor;
8) any enhancement or support provider; and
9) any other material transaction party.
(b) [Reserved].
(c) If so requested by the Purchaser or any Depositor, the Interim
Servicer shall provide such information regarding the Interim Servicer, as
servicer of the Mortgage Loans, and each Subservicer (each of the Interim
Servicer and each Subservicer, for purposes of this paragraph, a "Servicer"),
as is requested for the purpose of compliance with Items 1108 of Regulation
AB. Such information shall include, at a minimum:
A) the Servicer's form of organization;
B) a description of how long the Servicer has been servicing
residential mortgage loans; a general discussion of the Servicer's
experience in servicing assets of any type as well as a more
detailed discussion of the Servicer's experience in, and
procedures for, the servicing function it will perform under this
Agreement and any Reconstitution Agreements; information regarding
the size, composition and growth of the Servicer's portfolio of
residential mortgage loans of a type similar to the Mortgage Loans
and information on factors related to the Servicer that may be
material, in the good faith judgment of the Purchaser or any
Depositor, to any analysis of the servicing of the Mortgage Loans
or the related asset-backed securities, as applicable, including,
without limitation:
1) whether any prior securitizations of mortgage loans
of a type similar to the Mortgage Loans involving the
Servicer have defaulted or experienced an early amortization
or other performance triggering event because of servicing
during the three-year period immediately preceding the
related Securitization Transaction;
2) the extent of outsourcing the Servicer utilizes;
3) whether there has been previous disclosure of
material noncompliance with the applicable servicing
criteria with respect to other securitizations of
residential mortgage loans involving the Servicer as a
servicer during the three-year period immediately preceding
the related Securitization Transaction;
4) whether the Servicer has been terminated as
servicer in a residential mortgage loan securitization,
either due to a servicing default or to application of a
servicing performance test or trigger; and
-31-
5) such other information as the Purchaser or any
Depositor may reasonably request for the purpose of
compliance with Item 1108(b)(2) of Regulation AB;
C) a description of any material changes during the
three-year period immediately preceding the related Securitization
Transaction to the Servicer's policies or procedures with respect
to the servicing function it will perform under this Agreement and
any Reconstitution Agreements for mortgage loans of a type similar
to the Mortgage Loans;
D) information regarding the Servicer's financial condition,
to the extent that there is a material risk that an adverse
financial event or circumstance involving the Servicer could have
a material adverse effect on the performance by the Interim
Servicer of its servicing obligations under this Agreement or any
Reconstitution Agreement;
E) information regarding advances made by the Servicer on
the Mortgage Loans and the Servicer's overall servicing portfolio
of residential mortgage loans for the three-year period
immediately preceding the related Securitization Transaction,
which may be limited to a statement by an authorized officer of
the Servicer to the effect that the Servicer has made all advances
required to be made on residential mortgage loans serviced by it
during such period, or, if such statement would not be accurate,
information regarding the percentage and type of advances not made
as required, and the reasons for such failure to advance;
F) a description of the Servicer's processes and procedures
designed to address any special or unique factors involved in
servicing loans of a similar type as the Mortgage Loans;
G) a description of the Servicer's processes for handling
delinquencies, losses, bankruptcies and recoveries, such as
through liquidation of mortgaged properties, sale of defaulted
mortgage loans or workouts; and
H) information as to how the Servicer defines or determines
delinquencies and charge-offs, including the effect of any grace
period, re-aging, restructuring, partial payments considered
current or other practices with respect to delinquency and loss
experience.
(d) If so requested 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 Interim Servicer shall
(or shall cause each Subservicer to) (i) notify the Purchaser and any
Depositor in writing of (A) any material litigation or governmental
proceedings pending against the Interim Servicer or any Subservicer and (B)
any affiliations or relationships that develop following the closing date of a
Securitization Transaction between the Interim Servicer or any Subservicer and
any of the parties specified in clause (D) of paragraph (a) of this Section
(and any other parties identified in writing by the requesting party)
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with respect to such Securitization Transaction, and (ii) provide to the
Purchaser and any Depositor a description of such proceedings, affiliations or
relationships.
(e) As a condition to the succession to the Interim Servicer or
any Subservicer as servicer or subservicer under this Agreement or any
Reconstitution Agreement by any Person (i) into which the Interim Servicer or
such Subservicer may be merged or consolidated, or (ii) which may be appointed
as a successor to the Interim Servicer or any Subservicer, the Interim
Servicer shall provide to the Purchaser and any Depositor, at least 15
calendar days prior to the effective date of such succession or appointment,
(x) written notice to the Purchaser and any Depositor of such succession or
appointment and (y) in writing and in form and substance reasonably
satisfactory to the Purchaser and such Depositor, all information reasonably
requested by the Purchaser or any Depositor in order to comply with its
reporting obligation under Item 6.02 of Form 8-K with respect to any class of
asset-backed securities.
(f) In addition to such information as the Interim Servicer, as
servicer, is obligated to provide pursuant to other provisions of this
Agreement, if so requested by the Purchaser or any Depositor, the Interim
Servicer shall provide such information reasonably available to the Interim
Servicer regarding the performance or servicing of the Mortgage Loans as is
reasonably required by the Purchaser or any Depositor to facilitate
preparation of distribution reports in accordance with Item 1121 of Regulation
AB and to permit the Purchaser or such Depositor to comply with the provisions
of Regulation AB relating to Static Pool Information regarding the performance
of the Mortgage Loans on the basis of the Purchaser's or such Depositor's
reasonable, good faith interpretation of the requirements of Item
1105(a)(1)-(3) of Regulation AB (including without limitation as to the format
and content of such Static Pool Information).
Section 12.04 Servicer Compliance Statement. On or before March 1
of each calendar year, commencing in 2007, provided that the Interim Servicer
has serviced the Mortgage Loans during the preceding calendar year, the
Interim Servicer shall deliver to the Purchaser and any Depositor a statement
of compliance addressed to the Purchaser and such Depositor and signed by an
authorized officer of the Interim Servicer, to the effect that (i) a review of
the Interim Servicer's activities during the immediately preceding calendar
year (or applicable portion thereof) and of its performance under this
Agreement and any applicable Reconstitution Agreement during such period has
been made under such officer's supervision, and (ii) to the best of such
officers' knowledge, based on such review, the Interim Servicer has fulfilled
all of its obligations under this Agreement and any applicable Reconstitution
Agreement in all material respects throughout such calendar year (or
applicable portion thereof) or, if there has been a failure to fulfill any
such obligation in any material respect, specifically identifying each such
failure known to such officer and the nature and the status thereof.
Section 12.05 Report on Assessment of Compliance and Attestation.
(a) On or before March 1 of each calendar year, commencing in 2007, provided
that the Interim Servicer has serviced the Mortgage Loans during the preceding
calendar year, the Interim Servicer shall:
(i) deliver to the Purchaser and any Depositor a report (in form
and substance reasonably satisfactory to the Purchaser and such
Depositor) regarding the Interim Servicer's assessment of compliance
with the Servicing Criteria during the immediately
-33-
preceding calendar year, as required under Rules 13a-18 and 15d-18 of
the Exchange Act and Item 1122 of Regulation AB. Such report shall be
addressed to the Purchaser and such Depositor and signed by an
authorized officer of the Interim Servicer, and shall address each of
the Servicing Criteria specified on a certification substantially in the
form of Exhibit 8 hereto delivered to the Purchaser concurrently with
the execution of this Agreement;
(ii) deliver to the Purchaser and any Depositor a report of a
registered public accounting firm reasonably acceptable to the Purchaser
and such Depositor that attests to, and reports on, the assessment of
compliance made by the Interim Servicer and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and
the Exchange Act;
(iii) cause each Subservicer, and each Subcontractor determined by
the Company pursuant to Section 12.06(b) to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, to
deliver to the Purchaser and any Depositor an assessment of compliance
and accountants' attestation as and when provided in paragraphs (a) and
(b) of this Section; and
(iv) deliver to the Purchaser, any Depositor and any other Person
that will be responsible for signing the certification (a "Sarbanes
Certification") required by Rules 13a-14(d) and 15d-14(d) under the
Exchange Act (pursuant to Section 302 of the Xxxxxxxx-Xxxxx Act of 2002)
on behalf of an asset-backed issuer with respect to a Securitization
Transaction a certification in the form attached hereto as Exhibit 7.
The Interim Servicer acknowledges that the parties identified in
clause (a)(iv) above may rely on the certification provided by the Interim
Servicer pursuant to such clause in signing a Sarbanes Certification and
filing such with the Commission.
(b) Each assessment of compliance provided by a Subservicer
pursuant to Section 12.05(a)(i) shall address each of the Servicing Criteria
specified on a certification substantially in the form of Exhibit 8 hereto
delivered to the Purchaser concurrently with the execution of this Agreement
or, in the case of a Subservicer subsequently appointed as such, on or prior
to the date of such appointment. An assessment of compliance provided by a
Subcontractor pursuant to Section 12.05(a)(iii) need not address any elements
of the Servicing Criteria other than those specified by the Interim Servicer
pursuant to Section 12.06.
Section 12.06 Use of Subservicers and Subcontractors. The Interim
Servicer shall not hire or otherwise utilize the services of any Subservicer
to fulfill any of the obligations of the Interim Servicer as servicer under
this Agreement or any Reconstitution Agreement unless the Interim Servicer
complies with the provisions of paragraph (a) of this Section. The Interim
Servicer shall not hire or otherwise utilize the services of any
Subcontractor, and shall not permit any Subservicer to hire or otherwise
utilize the services of any Subcontractor, to fulfill any of the obligations
of the Interim Servicer as servicer under this Agreement or any Reconstitution
Agreement unless the Interim Servicer complies with the provisions of
paragraph (b) of this Section.
-34-
(a) It shall not be necessary for the Interim Servicer to seek the
consent of the Purchaser or any Depositor to the utilization of any
Subservicer. The Interim Servicer shall cause any Subservicer used by the
Interim Servicer (or by any Subservicer) for the benefit of the Purchaser and
any Depositor to comply with the provisions of this Section and with Sections
12.02, 12.03(c) and (e), 12.04, 12.05 and 12.07 of this Agreement to the same
extent as if such Subservicer were the Interim Servicer, and to provide the
information required with respect to such Subservicer under Section 12.03(d)
of this Agreement. The Interim Servicer shall be responsible for obtaining
from each Subservicer and delivering to the Purchaser and any Depositor any
servicer compliance statement required to be delivered by such Subservicer
under Section 12.04, any assessment of compliance and attestation required to
be delivered by such Subservicer under Section 12.05 and any certification
required to be delivered to the Person that will be responsible for signing
the Sarbanes Certification under Section 12.05 as and when required to be
delivered.
(b) It shall not be necessary for the Interim Servicer to seek the
consent of the Purchaser or any Depositor to the utilization of any
Subcontractor. The Interim Servicer shall promptly upon request provide to the
Purchaser and any Depositor (or any designee of the Depositor, such as a
master servicer or administrator) a written description (in form and substance
satisfactory to the Purchaser and such Depositor) of the role and function of
each Subcontractor utilized by the Interim Servicer or any Subservicer,
specifying (i) the identity of each such Subcontractor, (ii) which (if any) of
such Subcontractors are "participating in the servicing function" within the
meaning of Item 1122 of Regulation AB, and (iii) which elements of the
Servicing Criteria will be addressed in assessments of compliance provided by
each Subcontractor identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined
to be "participating in the servicing function" within the meaning of Item
1122 of Regulation AB, the Interim Servicer shall cause any such Subcontractor
used by the Interim Servicer (or by any Subservicer) for the benefit of the
Purchaser and any Depositor to comply with the provisions of Sections 12.05
and 12.07 of this Agreement to the same extent as if such Subcontractor were
the Interim Servicer. The Interim Servicer shall be responsible for obtaining
from each Subcontractor and delivering to the Purchaser and any Depositor any
assessment of compliance and attestation required to be delivered by such
Subcontractor under Section 12.05, in each case as and when required to be
delivered.
Section 12.07 Indemnification; Remedies. (a) The Interim Servicer
shall indemnify the Purchaser, each affiliate of the Purchaser, and each of
the following parties participating in a Securitization Transaction: each
sponsor and issuing entity; each Person 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,
-35-
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out of
or based upon:
(i) A) any untrue statement of a material fact contained or
alleged to be contained in any information, report, certification,
accountants' letter or other material provided under this Article XII by
or on behalf of the Interim Servicer, or provided under this Article XII
by or on behalf of any Subservicer or Subcontractor (collectively, the
"Servicer Information"), or B) the omission or alleged omission to state
in the Servicer Information a material fact required to be stated in the
Servicer Information or necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, by way of clarification, that clause (B) of
this paragraph shall be construed solely by reference to the Servicer
Information and not to any other information communicated in connection
with a sale or purchase of securities, without regard to whether the
Servicer Information or any portion thereof is presented together with
or separately from such other information;
(ii) any failure by the Interim Servicer, any Subservicer or any
Subcontractor to deliver any information, report, certification,
accountants' letter or other material when and as required under this
Article XII, including any failure by the Interim Servicer to identify
pursuant to Section 12.06(b) any Subcontractor "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB; or
(iii) any breach by the Interim Servicer of a representation or
warranty set forth in Section 12.02(a) or in a writing furnished
pursuant to Section 12.02(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 Interim
Servicer of a representation or warranty in a writing furnished pursuant
to Section 12.02(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 Interim Servicer shall promptly reimburse the
Purchaser, any Depositor, as applicable, and each Person responsible for the
preparation, execution or filing of any report required to be filed with the
Commission with respect to such Securitization Transaction, or for execution
of a certification pursuant to Rule 13a-14(d) or Rule 15d-14(d) under the
Exchange Act with respect to such Securitization Transaction, for all costs
reasonably incurred by each such party in order to obtain the information,
report, certification, accountants' letter or other material not delivered as
required by the Interim Service, any Subservicer or any Subcontractor.
(b) (i) Any failure by the Seller, Interim Servicer, any
Subservicer or any Subcontractor to deliver any information, report,
certification, accountants' letter or other material when and as required
under this Article XII or under Section 33 of the Purchase Agreement, or any
breach by the Interim Servicer of a representation or warranty set forth in
Section 12.02(a) or in a writing furnished pursuant to Section 12.02(b) or any
breach by the Seller of a representation or warranty set forth in Section
33.02(a) of the Purchase Agreement or in a writing furnished pursuant to
Section 33.02(b) of the Purchase Agreement 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 Interim
Servicer of a
-36-
representation or warranty in a writing furnished pursuant to Section 12.02(b)
or any breach by the Seller of a representation or warranty in a writing
furnished pursuant to Section 33.02(b) of the Purchase Agreement to the extent
made as of a date subsequent to such closing date, shall, except as provided
in clause (ii) of this paragraph, immediately and automatically, without
notice or grace period, constitute an Event of Default with respect to the
Interim Servicer under this Agreement and any applicable Reconstitution
Agreement, and shall entitle the Purchaser or Depositor, as applicable, in its
sole discretion to terminate the rights and obligations of the Interim
Servicer as servicer under this Agreement and/or any applicable Reconstitution
Agreement without payment (notwithstanding anything in this Agreement or any
applicable Reconstitution Agreement to the contrary) of any compensation to
the Interim Servicer; provided that, to the extent that any provision of this
Agreement and/or any applicable Reconstitution Agreement expressly provides
for the survival of certain rights or obligations following termination of the
Interim Servicer as servicer, such provision shall be given effect.
(ii) Any failure by the Interim Servicer, any Subservicer or any
Subcontractor to deliver any information, report, certification or
accountants' letter when and as required under Section 12.04 or 12.05,
including any failure by the Interim Servicer to identify pursuant to
Section 12.06(b) any Subcontractor "participating in the servicing
function" within the meaning of Item 1122 of Regulation AB, which
continues unremedied for ten calendar days after the date on which such
information, report, certification or accountants' letter was required
to be delivered shall constitute an Event of Default with respect to the
Interim Servicer under this Agreement and any applicable Reconstitution
Agreement, and shall entitle the Purchaser or Depositor, as applicable,
in its sole discretion to terminate the rights and obligations of the
Interim Servicer as servicer under this Agreement and/or any applicable
Reconstitution Agreement without payment (notwithstanding anything in
this Agreement to the contrary) of any compensation to the Interim
Servicer; provided that, to the extent that any provision of this
Agreement and/or any applicable Reconstitution Agreement expressly
provides for the survival of certain rights or obligations following
termination of the Interim Servicer as servicer, such provision shall be
given effect.
(iii) The Interim Servicer shall promptly reimburse the Purchaser
(or any designee of the Purchaser, such as a master servicer) and any
Depositor, as applicable, for all reasonable expenses incurred by the
Purchaser (or such designee) or such Depositor, as such are incurred, in
connection with the termination of the Interim Servicer as servicer and
the transfer of servicing of the Mortgage Loans to a successor servicer.
The provisions of this paragraph shall not limit whatever rights the
Purchaser or any Depositor may have under other provisions of this
Agreement and/or any applicable Reconstitution Agreement or otherwise,
whether in equity or at law, such as an action for damages, specific
performance or injunctive relief.
-37-
IN WITNESS WHEREOF, the Purchaser and the Interim Servicer have
caused their names to be signed by their respective officer thereunto duly
authorized, as of March 1, 2006, to this Flow Interim Servicing Agreement.
XXXXXXX XXXXX MORTGAGE COMPANY, a New
York limited partnership
(the Purchaser)
By: XXXXXXX SACHS REAL ESTATE FUNDING
CORP., a New York corporation, its
General Partner
By:____________________________________
Name:
Title:
NEW CENTURY MORTGAGE CORPORATION
(the Interim Servicer)
By:____________________________________
Name:
Title:
EXHIBIT 1
FORM OF MONTHLY REMITTANCE ADVICE
I-1
EXHIBIT 2
FORM OF CUSTODIAL ACCOUNT CERTIFICATION
_______ __, 2006
New Century Mortgage Corporation hereby certifies that it has
established the account described below as a Custodial Account pursuant to
Section 2.04 of the Flow Interim Servicing Agreement, dated as of March 1,
2006. The parties hereto intend that the Custodial Account shall be a special
deposit account.
Title of Account: "New Century Mortgage Corporation in trust for
Xxxxxxx Xxxxx Mortgage Company, Residential Fixed and Adjustable Rate Mortgage
Loans, and various Mortgagors."
Account Number:
Address of office or branch
of the Interim Servicer at
which Account is maintained:
NEW CENTURY MORTGAGE CORPORATION,
Interim Servicer
By:
------------------------------------
Name:
Title:
2-1
EXHIBIT 3
FORM OF CUSTODIAL ACCOUNT LETTER AGREEMENT
_______ __, 2006
To: _________________________
_________________________
__________________________
(the "Depository")
As Interim Servicer under the Flow Interim Servicing Agreement,
dated as of March 1, 2006 (the "Agreement"), we hereby authorize and request
you to establish an account, as a Custodial Account pursuant to Section 2.04
of the Agreement, to be designated as "New Century Mortgage Corporation in
trust for Xxxxxxx Sachs Mortgage Company, Residential Fixed and Adjustable
Rate Mortgage Loans, and various Mortgagors." All deposits in the account
shall be subject to withdrawal therefrom by order signed by the Interim
Servicer. The parties hereto intend that the Custodial Account shall be a
special deposit account. The parties hereto intend that the Custodial Account
shall be a special deposit account. You may refuse any deposit which would
result in violation of the requirement that the account be fully insured as
described below. This letter is submitted to you in duplicate. Please execute
and return one original to us.
NEW CENTURY MORTGAGE CORPORATION,
Interim Servicer
By:
---------------------------------
Name:
Title:
Date:
3-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number __________, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through
the Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF"). The parties hereto intend that the Custodial Account shall be a
special deposit account. This letter shall be construed in accordance with the
laws of the State of New York.
--------------------------------------
Depository
By:
-----------------------------------
Name:
Title:
Date:
3-2
EXHIBIT 4
FORM OF ESCROW ACCOUNT CERTIFICATION
_________ ___, 2006
New Century Mortgage Corporation hereby certifies that it has
established the account described below as an Escrow Account pursuant to
Section 2.06 of the Flow Interim Servicing Agreement, dated as of March 1,
2006. The parties hereto intend that the Escrow Account shall be a special
deposit account.
Title of Account: "New Century Mortgage Corporation, in trust for
Xxxxxxx Xxxxx Mortgage Company Residential Fixed and Adjustable Rate Mortgage
Loans, and various Mortgagors."
Account Number:
Address of office or branch
of the Interim Servicer at
which Account is maintained:
NEW CENTURY MORTGAGE CORPORATION,
Interim Servicer
By:
----------------------------------
Name:
Title:
Date:
4-1
EXHIBIT 5
FORM OF ESCROW ACCOUNT LETTER AGREEMENT
_______ __, 2006
To:________________________
________________________
________________________
(the "Depository")
As Interim Servicer under the Flow Interim Servicing Agreement,
dated as of March 1, 2006, (the "Agreement"), we hereby authorize and request
you to establish an account, as an Escrow Account pursuant to Section 2.06 of
the Agreement, to be designated as "New Century Mortgage Corporation, in trust
for Xxxxxxx Sachs Mortgage Company Residential Fixed and Adjustable Rate
Mortgage Loans, and various Mortgagors." All deposits in the account shall be
subject to withdrawal therefrom by order signed by the Interim Servicer. The
parties hereto intend that the Escrow Account shall be a special deposit
account. You may refuse any deposit which would result in violation of the
requirement that the account be fully insured as described below. This letter
is submitted to you in duplicate. Please execute and return one original to
us.
NEW CENTURY MORTGAGE CORPORATION,
Interim Servicer
By:
----------------------------------
Name:
Title:
Date:
5-1
The undersigned, as Depository, hereby certifies that the above
described account has been established under Account Number ______, at the
office of the Depository indicated above, and agrees to honor withdrawals on
such account as provided above. The full amount deposited at any time in the
account will be insured by the Federal Deposit Insurance Corporation through
the Bank Insurance Fund ("BIF") or the Savings Association Insurance Fund
("SAIF"). The parties hereto intend that the Escrow Account established hereby
shall be a special deposit account. This letter shall be construed in
accordance with the laws of the State of New York.
______________________________________
Depository
By:
-----------------------------------
Name:
Title:
Date:
5-2
EXHIBIT 6
[RESERVED]
6-1
EXHIBIT 7
FORM OF ANNUAL CERTIFICATION
Re: The [ ] agreement, dated as of [ ], 200[ ] (the "Agreement"),
among New Century Mortgage Corporation and Xxxxxxx Xxxxx Mortgage
Co.
I, ________________________________, the _______________________
of New Century Mortgage Corporation (the "Company"), certify to Xxxxxxx Sachs
Mortgage Co., [the Depositor], and the [Master Servicer] [Securities
Administrator] [Trustee], and their officers, with the knowledge and intent
that they will rely upon this certification, that:
(1) I have reviewed the servicer compliance statement of the
Company provided in accordance with Item 1123 of Regulation AB (the
"Compliance Statement"), the report on assessment of the Company's
compliance with the servicing criteria set forth in Item 1122(d) of
Regulation AB (the "Servicing Criteria"), provided in accordance with
Rules 13a-18 and 15d-18 under Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and Item 1122 of Regulation AB (the
"Servicing Assessment"), the registered public accounting firm's
attestation report provided in accordance with Rules 13a-18 and 15d-18
under the Exchange Act and Section 1122(b) of Regulation AB (the
"Attestation Report"), and all servicing reports, officer's certificates
and other information relating to the servicing of the Mortgage Loans by
the Company during 200[ ] that were delivered by the Company to the
[Depositor] [Master Servicer] [Securities Administrator] [Trustee]
pursuant to the Agreement (collectively, the "Company Servicing
Information");
(2) Based on my knowledge, the Company Servicing Information,
taken as a whole, does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
made, in the light of the circumstances under which such statements were
made, not misleading with respect to the period of time covered by the
Company Servicing Information;
(3) Based on my knowledge, all of the Company Servicing
Information required to be provided by the Company under the Agreement
has been provided to the [Depositor] [Master Servicer] [Securities
Administrator] [Trustee];
(4) I am responsible for reviewing the activities performed by the
Company as servicer under the Agreement, and based on my knowledge and
the compliance review conducted in preparing the Compliance Statement
and except as disclosed in the Compliance Statement, the Servicing
Assessment or the Attestation Report, the Company has fulfilled its
obligations under the Agreement; and
(5) The Compliance Statement required to be delivered by the
Company pursuant to the Agreement, and the Servicing Assessment and
Attestation Report required to be provided by the Company and by any
Subservicer or Subcontractor pursuant to the Agreement, have been
provided to the [Depositor] [Master Servicer]. Any material instances of
noncompliance described in such reports have been disclosed to the
7-1
[Depositor] [Master Servicer]. Any material instance of noncompliance
with the Servicing Criteria has been disclosed in such reports.
Date:____________________________________
By:
------------------------------------
Name:
Title:
7-2
EXHIBIT 8
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by New Century
Mortgage Corp. [Subservicer] shall address, at a minimum, the criteria
identified as below as "Applicable Servicing Criteria":
--------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
General Servicing Considerations
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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.
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1122(d)(1)(ii) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such
servicing activities.
--------------------------------------------------------------------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a
back-up servicer for the mortgage loans are maintained.
--------------------------------------------------------------------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the
transaction agreements.
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Cash Collection and Administration
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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.
--------------------------------------------------------------------------------
7-1
--------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
1122(d)(2)(iv) The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements.
--------------------------------------------------------------------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
--------------------------------------------------------------------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized
access.
--------------------------------------------------------------------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original
identification, or such other number of days specified in the
transaction agreements.
--------------------------------------------------------------------------------
Investor Remittances and Reporting
--------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance
with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C)
are filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number
of mortgage loans serviced by the Servicer.
--------------------------------------------------------------------------------
7-2
--------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
--------------------------------------------------------------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within two
business days to the Servicer's investor records, or such
other number of days specified in the transaction agreements.
--------------------------------------------------------------------------------
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree
with cancelled checks, or other form of payment, or custodial
bank statements.
--------------------------------------------------------------------------------
Pool Asset Administration
--------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on mortgage loans is maintained as
required by the transaction agreements or related mortgage
loan documents.
--------------------------------------------------------------------------------
1122(d)(4)(ii) Mortgage loan and related documents are safeguarded as
required by the transaction agreements
--------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
--------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on mortgage loans, including any payoffs, made in
accordance with the related mortgage loan documents are
posted to the Servicer's obligor records maintained no more
than two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated
to principal, interest or other items (e.g., escrow) in
accordance with the related mortgage loan documents.
--------------------------------------------------------------------------------
1122(d)(4)(v) The Servicer's records regarding the mortgage loans agree
with the Servicer's records with respect to an obligor's
unpaid principal balance.
--------------------------------------------------------------------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's
mortgage loans (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
asset documents.
--------------------------------------------------------------------------------
7-3
--------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures
and repossessions, as applicable) are initiated, conducted
and concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
--------------------------------------------------------------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained during
the period a mortgage loan is delinquent in accordance with
the transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities
in monitoring delinquent mortgage loans including, for
example, phone calls, letters and payment rescheduling plans
in cases where delinquency is deemed temporary (e.g., illness
or unemployment).
--------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for mortgage
loans with variable rates are computed based on the related
mortgage loan documents.
--------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's mortgage loan documents, on at least an
annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable
mortgage loan documents and state laws; and (C) such funds
are returned to the obligor within 30 calendar days of full
repayment of the related mortgage loans, or such other number
of days specified in the transaction agreements.
--------------------------------------------------------------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related penalty
or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has
been received by the servicer at least 30 calendar days prior
to these dates, or such other number of days specified in the
transaction agreements.
--------------------------------------------------------------------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment to
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late payment
was due to the obligor's error or omission.
--------------------------------------------------------------------------------
7-4
--------------------------------------------------------------------------------
Applicable
Servicing
Servicing Criteria Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within
two business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
transaction agreements.
--------------------------------------------------------------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
--------------------------------------------------------------------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the transaction agreements.
--------------------------------------------------------------------------------
New Century Mortgage Corporation
[SUBSERVICER]
Date:
---------------------------------
By:
------------------------------------
Name:
Title:
7-5
-43-
EXHIBIT R
Servicing Agreement, dated as of June 30, 2006, between Xxxxx Fargo Bank,
National Association, as servicer and Xxxxxxx Sachs Mortgage Company, as owner
[See Exhibit 99.1 to Form 8-K filed with the Commission on September 12, 2006,
Accession No. 0000905148-06-005684]
O-3
